From: Robin Moran/AA/USEPA/US 

To: "Achanta, Chandana L." <Chandana_L._Achanta@omb.eop.gov> 

Cc: William Charmley/AA/USEPA/US@EPA, Ed 

Nam/AA/USEPA/US@EPA, rebecca.yoon@dot.gov, 

james.tamm@dot.gov, Maureen Delaney/DC/USEPA/US@EPA 

Date: 03/26/2010 03:06 PM 

Subjec

t: 

Revised Preamble sections I, II, III 

Chandana, 

Attached is a revised version of Preamble I, II, and III, including EPA's regulations. All 

changes responsive to inter-agency comments are shown in track changes. 

I understand that NHTSA will separately send to you Preamble section IV. 

Under separate email next, I will send you the four TSD chapters. 

[attachment "Sections I-III and EPA regs for OMB 3-26-10.doc" deleted by Tad 

Wysor/AA/USEPA/US] 

Robin Moran 

Senior Policy Advisor 

Assessment and Standards Division 

U.S. EPA, Office of Transportation and Air Quality 

2000 Traverwood Dr. 

Ann Arbor, MI 48105 

(734) 214-4781 

(734) 214-4821 (fax) 
1 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Parts 85, 86, and 600 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety Administration 

49 CFR Parts 531, 533, 537 and 538 

[EPA–HQ–OAR–2009–0472; FRL_8959-4; NHTSA-2009-0059]

RIN 2060-AP58; RIN 2127-AK50

Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel 

Economy Standards; Final Rule 

AGENCIES: Environmental Protection Agency (EPA) and National Highway Traffic 

Safety Administration (NHTSA). 

ACTION: Final Rule.

_______________________________________________________________________ 

SUMMARY: EPA and NHTSA are issuing this joint Final Rule to establish a National 

Program consisting of new standards for light-duty vehicles that will reduce greenhouse 

gas emissions and improve fuel economy. This joint Final Rule is consistent with the 

National Fuel Efficiency Policy announced by President Obama on May 19, 2009, 

responding to the country’s critical need to address global climate change and to reduce 

oil consumption. EPA is finalizing greenhouse gas emissions standards under the Clean 

Air Act, and NHTSA is finalizing Corporate Average Fuel Economy standards under the 

Energy Policy and Conservation Act, as amended. These standards 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. Under the 

National Program, automobile manufacturers will be able to build a single light-duty 

national fleet that satisfies all requirements under both programs while ensuring that 

consumers still have a full range of vehicle choices. NHTSA’s final rule also constitutes 

the agency’s Record of Decision for purposes of its National Environmental Policy Act 

(NEPA) analysis. 

DATES: This final rule is effective on [Insert date 60 days after publication in the 

Federal Register], sixty days after date of publication in the Federal Register. The 

incorporation by reference of certain publications listed in this regulation is approved by 

the Director of the Federal Register as of [Insert date 60 days after publication in the 

Federal Register]. 

ADDRESSES: EPA and NHTSA have established dockets for this action under Docket 

ID No. EPA-HQ-OAR-2009-0472 and NHTSA-2009-0059, respectively. All documents 

in the docket are listed on the www.regulations.gov web site. Although listed in the 

index, some information is not publicly available, e.g., CBI or other information whose 

disclosure is restricted by statute. Certain other material, such as copyrighted material, is 

not placed on the Internet and will be publicly available only in hard copy form. Publicly 

Deleted: 9, 
2 

available docket materials are available either electronically through 

www.regulations.gov or in hard copy at the following locations: EPA: EPA Docket 

Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, 

DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through 

Friday, excluding legal holidays. The telephone number for the Public Reading Room is 

(202) 566–1744. NHTSA: Docket Management Facility, M-30, U.S. Department of 

Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue, 

SE, Washington, DC 20590. The Docket Management Facility is open between 9 a.m. 

and 5 p.m. Eastern Time, Monday through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: EPA: Tad Wysor, Office of 

Transportation and Air Quality, Assessment and Standards Division, Environmental 

Protection Agency, 2000 Traverwood Drive, Ann Arbor MI 48105; telephone number: 

734-214-4332; fax number: 734-214-4816; email address: wysor.tad@epa.gov, or 

Assessment and Standards Division Hotline; telephone number (734) 214-4636; e-mail 

address asdinfo@epa.gov. NHTSA: Rebecca Yoon, Office of Chief Counsel, National 

Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE, Washington, DC 

20590. Telephone: (202) 366-2992. 

 

SUPPLEMENTARY INFORMATION: 

Does this Action Apply to Me? 

 This action affects companies that manufacture or sell new light-duty vehicles, 

light-duty trucks, and medium-duty passenger vehicles, as defined under EPA’s CAA 

regulations,1

 and passenger automobiles (passenger cars) and non-passenger automobiles 

(light trucks) as defined under NHTSA’s CAFE regulations.2

 Regulated categories and 

entities include: 

Category NAICS 

CodesA

Examples of Potentially Regulated Entities 

Industry 336111 

336112 

Motor vehicle manufacturers. 

Industry 811112 

811198 

541514 

Commercial Importers of Vehicles and Vehicle 

Components. 

A North American Industry Classification System (NAICS) 

 This list is not intended to be exhaustive, but rather provides a guide regarding 

entities likely to be regulated by this action. To determine whether particular activities 

 

1

 “Light-duty vehicle,” “light-duty truck,” and “medium-duty passenger vehicle” are defined in 40 CFR 

86.1803-01. Generally, the term “light-duty vehicle” means a passenger car, the term “light-duty truck” 

means a pick-up truck, sport-utility vehicle, or minivan of up to 8,500 lbs gross vehicle weight rating, and 

“medium-duty passenger vehicle” means a sport-utility vehicle or passenger van from 8,500 to 10,000 lbs 

gross vehicle weight rating. Medium-duty passenger vehicles do not include pick-up trucks. 2

 “Passenger car” and “light truck” are defined in 49 CFR Part 523. 
3 

may be regulated by this action, you should carefully examine the regulations. You may 

direct questions regarding the applicability of this action to the person listed in FOR 

FURTHER INFORMATION CONTACT. 

I. Overview of Joint EPA/NHTSA National Program 

A. Introduction 

1. Building Blocks of the National Program 

2. Public Participation 

B. Summary of the Joint Final Rule and Differences from the Proposal 

1. Joint Analytical Approach 

2. Level of the Standards 

3. Form of the Standards 

4. Program Flexibilities 

5. Coordinated Compliance 

C. Summary of Costs and Benefits of the National Program 

1. Summary of Costs and Benefits of NHTSA's CAFE 

 Standards 

2. Summary of Costs and Benefits of EPA's GHG Standards 

D. Background and Comparison of NHTSA and EPA Statutory Authority 

II. Joint Technical Work Completed for This Final Rule 

A. Introduction 

B. Developing the Future Fleet for Assessing Costs, Benefits, and Effects 

1. Why Did the Agencies Establish a Baseline and Reference Vehicle Fleet? 

2. How Did the Agencies Develop the Baseline Vehicle Fleet? 

3. How Did the Agencies Develop the Projected MY 2011-2016 Vehicle 

Fleet? 

4. How Was the Development of the Baseline and Reference Fleets for this 

Final Rule Different from NHTSA’s Historical Approach? 

5. How Does Manufacturer Product Plan Data Factor into the Baseline Used 

in this Final Rule? 

C. Development of Attribute-Based Curve Shapes 

D. Relative Car-Truck Stringency 

E. Joint Vehicle Technology Assumptions 

1. What Technologies Did the Agencies Consider? 

2. How Did the Agencies Determine the Costs and Effectiveness of Each of 

These Technologies? 

F. Joint Economic Assumptions 

G. What are the Estimated Safety Effects of the Final MYs 2012-2016 CAFE and 

GHG Standards? 

1. What did the Agencies Say in the NPRM with regard to Potential Safety 

Effects? 

2. What Public Comments did the Agencies Receive on the Safety Analysis 

and Discussions in the NPRM? 

3. How has NHTSA Refined its Analysis for Purposes of Estimating the 

Potential Safety Effects of this Final Rule? 
4 

4. What are the Estimated Safety Effects of this Final Rule? 

5. How do the Agencies Plan to Address this Issue Going Forward? 

III. EPA Greenhouse Gas Vehicle Standards 

A. Executive Overview of EPA Rule 

1. Introduction 

2. Why is EPA Establishing this Rule? 

3. What is EPA Adopting? 

4. Basis for the GHG Standards under Section 202(a) 

B. GHG Standards for Light-duty Vehicles, Light-duty Trucks, and Medium-duty 

Passenger Vehicles 

1. What Fleet-wide Emissions Levels Correspond to the CO2 Standards? 

2. What are the CO2 Attribute-based Standards? 

3. Overview of How EPA’s CO2 Standards Will Be Implemented for 

Individual Manufacturers 

4. Averaging, Banking, and Trading Provisions for CO2 Standards 

5. CO2 Temporary Lead-Time Allowance Alternative Standards 

6. Deferment of CO2 Standards for Small Volume Manufacturers with 

Annual Sales Less than 5,000 Vehicles 

7. Nitrous Oxide and Methane Standards 

8. Small Entity Deferment 

C. Additional Credit Opportunities for CO2 Fleet Average Program 

1. Air Conditioning Related Credits 

2. Flexible Fuel and Alternative Fuel Vehicle Credits 

3. Advanced Technology Vehicle Incentives for Electric Vehicles, Plug-in 

Hybrids, and Fuel Cell Vehicles 

4. Off-cycle Technology Credits 

5. Early Credit Options 

D. Feasibility of the Final CO2 Standards 

1. How Did EPA Develop a Reference Vehicle Fleet for Evaluating Further 

CO2 Reductions? 

2. What Are the Effectiveness and Costs of CO2-reducing Technologies? 

3. How Can Technologies be Combined into “Packages” and What is the 

Cost and Effectiveness of Packages? 

4. Manufacturer’s Application of Technology 

5. How Is EPA Projecting that a Manufacturer Decides Between Options to 

Improve CO2 Performance to Meet a Fleet Average Standard? 

6. Why Are the Final CO2 Standards Feasible? 

7. What Other Fleet-Wide CO2 Levels Were Considered? 

E. Certification, Compliance, and Enforcement 

1. Compliance Program Overview 

2. Compliance with Fleet-Average CO2 Standards 

3. Vehicle Certification 

4. Useful Life Compliance 

5. Credit Program Implementation 

6. Enforcement 
5 

7. Prohibited Acts in the CAA 

8. Other Certification Issues 

9. Miscellaneous Revisions to Existing Regulations 

10. Warranty, Defect Reporting, and Other Emission-related Components 

Provisions 

11. Light Duty Vehicles and Fuel Economy Labeling 

F. How Will This Final Rule Reduce GHG Emissions and Their Associated Effects? 

1. Impact on GHG Emissions 

2. Overview of Climate Change Impacts from GHG Emissions 

3. Changes in Global Climate Indicators Associated with the Rule’s GHG 

Emissions Reductions 

G. How Will the Standards Impact Non-GHG Emissions and Their Associated 

Effects? 

1. Upstream Impacts of Program 

2. Downstream Impacts of Program 

3. Health Effects of Non-GHG Pollutants 

4. Environmental Effects of Non-GHG Pollutants 

5. Air Quality Impacts of Non-GHG Pollutants 

H. What Are the Estimated Cost, Economic, and Other Impacts of the Program? 

1. Conceptual Framework for Evaluating Consumer Impacts 

2. Costs Associated with the Vehicle Program 

3. Cost per Ton of Emissions Reduced 

4. Reduction in Fuel Consumption and its Impacts 

5. Impacts on U.S. Vehicle Sales and Payback Period 

6. Benefits of Reducing GHG Emissions 

7. Non-Greenhouse Gas Health and Environmental Impacts 

8. Energy Security Impacts 

9. Other Impacts 

10. Summary of Costs and Benefits 

I. Statutory and Executive Order Reviews 

1. Executive Order 12866: Regulatory Planning and Review 

2. Paperwork Reduction Act 

3. Regulatory Flexibility Act 

4. Unfunded Mandates Reform Act 

5. Executive Order 13132 (Federalism) 

6. Executive Order 13175 (Consultation and Coordination with Indian Tribal 

 Governments) 

7. Executive Order 13045: “Protection of Children from Environmental 

Health Risks and Safety Risks” 

8. Executive Order 13211 (Energy Effects) 

9. National Technology Transfer Advancement Act 

10. Executive Order 12898: Federal Actions to Address Environmental 

Justice in Minority Populations and Low-Income Populations 

J. Statutory Provisions and Legal Authority 
6 

IV. NHTSA Proposal for Passenger Car and Light Truck CAFE Standards for 

MYs 2012-2016

A. Executive Overview of NHTSA Final Rule 

 1. Introduction 

 2. Role of Fuel Economy Improvements in Promoting Energy Independence, 

 Energy Security, and a Low Carbon Economy 

3. The National Program 

4. Review of CAFE Standard Setting Methodology per the President’s 

 January 26, 2009 Memorandum on CAFE Standards for MYs 2011 and 

 Beyond 

 5. Summary of the Final MY 2012-2016 CAFE Standards 

B. Background 

 1. Chronology of Events since the National Academy of Sciences Called for 

 Reforming and Increasing CAFE Standards 

2. Energy Policy and Conservation Act, as Amended by the Energy 

Independence and Security Act 

C. Development and Feasibility of the Proposed Standards 

1. How Was the Baseline and Reference Vehicle Fleet Developed? 

 2. How Were the Technology Inputs Developed? 

 3. How Did NHTSA Develop the Economic Assumptions? 

4. How Does NHTSA Use the Assumptions in its Modeling Analysis? 

5. How Did NHTSA Develop the Shape of the Target Curves for the Final 

Standards? 

D. Statutory Requirements 

1. EPCA, as Amended by EISA 

2. Administrative Procedure Act 

3. National Environmental Policy Act 

E. What Are the Final CAFE Standards? 

1. Form of the Standards 

2. Passenger Car Standards for MYs 2012-2016 

3. Minimum Domestic Passenger Car Standards 

4. Light Truck Standards 

F. How Do the Proposed Standards Fulfill NHTSA’s Statutory Obligations? 

G. Impacts of the Final CAFE Standards 

1. How Will these Standards Improve Fuel Economy and Reduce GHG 

Emissions for MY 2012-2016 Vehicles? 

2. How Will these Standards Improve Fleet-Wide Fuel Economy and Reduce 

GHG Emissions Beyond MY 2016? 

3. How Will these Standards Impact Non-GHG Emissions and their 

Associated Effects? 

4. What are the Estimated Costs and Benefits of these Final Standards? 

5. How Would these Standards Impact Vehicle Sales?

6. What Are the Consumer Welfare Impacts of these Standards? 

7. What Are the Estimated Safety Impacts of these Standards? 

8. What Other Impacts (Quantitative and Unquantifiable) Will these 

Standards Have? 
7 

H. Vehicle Classification 

I. Compliance and Enforcement 

1. Overview 

2. How Does NHTSA Determine Compliance? 

3. What Compliance Flexibilities Are Available under the CAFE Program 

and How Do Manufacturers Use Them? 

 4. Other CAFE Enforcement Issues—Variations in Footprint 

5. Other CAFE Enforcement Issues – Miscellaneous 

J. Other Near-Term Rulemakings Mandated by EISA 

1. Commercial Medium- and Heavy-Duty On-Highway Vehicles and Work 

Trucks 

 2. Consumer Information on Fuel Efficiency and Emissions

K. NHTSA’s Record of Decision 

L. Regulatory Notices and Analyses 

1. Executive Order 12866 and DOT Regulatory Policies and 

Procedures 

 2. National Environmental Policy Act 

 3. Regulatory Flexibility Act 

 4. Executive Order 13132 (Federalism) 

 5. Executive Order 12988 (Civil Justice Reform) 

 6. Unfunded Mandates Reform Act 

 7. Paperwork Reduction Act 

 8. Regulation Identifier Number 

 9. Executive Order 13045 

 10. National Technology Transfer and Advancement Act 

 11. Executive Order 13211 

 12. Department of Energy Review 

 13. Plain Language 

 14. Privacy Act 

I. Overview of Joint EPA/NHTSA National Program 

A. Introduction 

 

The National Highway Traffic Safety Administration (NHTSA) and the 

Environmental Protection Agency (EPA) are each announcing final rules whose benefits 

will address the urgent and closely intertwined challenges of energy independence and 

security and global warming. These rules will implement a strong and coordinated 

federal greenhouse gas (GHG) and fuel economy program for passenger cars, light-dutytrucks, and medium-duty passenger vehicles (hereafter light-duty vehicles), referred to as 

the National Program. The rules will achieve substantial reductions of GHG emissions 

and improvements in fuel economy from the light-duty vehicle part of the transportation 

sector, based on technology that is already being commercially applied in most cases and 

that can be incorporated at a reasonable cost. NHTSA’s final rule also constitutes the 

agency’s Record of Decision for purposes of its NEPA analysis. 

Deleted: greenhouse gas (

Deleted: )
8 

This joint rulemaking is consistent with the President’s announcement on May 19, 

2009 of a National Fuel Efficiency Policy of establishing consistent, harmonized, and 

streamlined requirements that would reduce GHG emissions and improve fuel economy 

for all new cars and light-duty trucks sold in the United States.3 The National Program 

will deliver additional environmental and energy benefits, cost savings, and 

administrative efficiencies on a nationwide basis that would likely not be available under 

a less coordinated approach. The National Program also represents regulatory 

convergence by making it possible for the standards of two different federal agencies and 

the standards of California and other states to act in a unified fashion in providing these 

benefits. The National Program will allow automakers to produce and sell a single fleet 

nationally, mitigating the additional costs that manufacturers would otherwise face in 

having to comply with multiple sets of federal and state standards. This joint notice is 

also consistent with the Notice of Upcoming Joint Rulemaking issued by DOT and EPA 

on May 19, 20094

 and responds to the President’s January 26, 2009 memorandum on 

CAFE standards for model years 2011 and beyond,5

 the details of which can be found in 

Section IV of this joint notice. 

 Climate change is widely viewed as a significant long-term threat to the global 

environment. As summarized in the Technical Support Document for EPA's 

Endangerment and Cause or Contribute Findings under Section 202(a) of the Clear Air 

Act, anthropogenic emissions of GHGs are very likely (90 to 99 percent probability) the 

cause of most of the observed global warming over the last 50 years.6 The primary 

GHGs of concern are carbon dioxide (CO2), methane, nitrous oxide, hydrofluorocarbons, 

perfluorocarbons, and sulfur hexafluoride. Mobile sources emitted 31 percent of all U.S. 

GHGs in 2007 (transportation sources, which do not include certain off-highway sources, 

account for 28 percent) and have been the fastest-growing source of U.S. GHGs since 

1990.8 Mobile sources addressed in the recent endangerment and contribution findings 

under CAA section 202(a)--light-duty vehicles, heavy-duty trucks, buses, and 

motorcycles--accounted for 23 percent of all U.S. GHG in 2007.9

 Light-duty vehicles 

 

3

 President Obama Announces National Fuel Efficiency Policy, The White House, May 19, 2009. 

Available at: http://www.whitehouse.gov/the_press_office/President-Obama-Announces-National-FuelEfficiency-Policy/. Remarks by the President on National Fuel Efficiency Standards, The White House, 

May 19, 2009. Available at: http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-onnational-fuel-efficiency-standards/. 

4

 74 FR 24007 (May 22, 2009). 

5

 Available at: http://www.whitehouse.gov/the_press_office/Presidential_Memorandum_Fuel_Economy/. 

6

 “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, 

http://epa.gov/climatechange/endangerment.html.

8

 U.S. Environmental Protection Agency. 2009. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 

1990-2007. EPA 430-R-09-004. Available at 

http://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf 

9

 U.S. EPA. 2009 Technical Support Document for Endangerment and Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean Air Act. 

Washington, DC. pp. 180-194. Available at 

http://epa.gov/climatechange/endangerment/downloads/Endangerment%20TSD.pdf 

Deleted: greenhouse gas

Deleted: the most

Deleted: According to the 

Intergovernmental Panel on Climate 

Change, 

Deleted: greenhouse gases

Deleted: 7
9 

emit CO2, methane, nitrous oxide, and hydrofluorocarbons and are responsible for nearly 

60 percent of all mobile source GHGs and over 70 percent of Section 202(a) mobile 

source GHGs. For light-duty vehicles in 2007, CO2 emissions represent about 94 percent 

of all greenhouse emissions (including HFCs), and the CO2 emissions measured over the 

EPA tests used for fuel economy compliance represent about 90 percent of total lightduty vehicle GHG emissions.10,11

Improving energy security by reducing our dependence on foreign oil has been a 

national objective since the first oil price shocks in the 1970s. Net petroleum imports 

now account for approximately 60 percent of U.S. petroleum consumption. World crude 

oil production is highly concentrated, exacerbating the risks of supply disruptions and 

price shocks. Tight global oil markets led to prices over $100 per barrel in 2008, with 

gasoline reaching as high as $4 per gallon in many parts of the U.S., causing financial 

hardship for many families. The export of U.S. assets for oil imports continues to be an 

important component of the historically unprecedented U.S. trade deficits. 

Transportation accounts for about two-thirds of U.S. petroleum consumption. Light-duty 

vehicles account for about 60 percent of transportation oil use, which means that they 

alone account for about 40 percent of all U.S. oil consumption. 

 1. Building Blocks of the National Program

The National Program is both needed and possible because the relationship 

between improving fuel economy and reducing CO2 tailpipe emissions is a very direct 

and close one. The amount of those CO2 emissions is essentially constant per gallon 

combusted of a given type of fuel. Thus, the more fuel efficient a vehicle is, the less fuel 

it burns to travel a given distance. The less fuel it burns, the less CO2 it emits in traveling 

that distance.12 While there are emission control technologies that reduce the pollutants 

(e.g., carbon monoxide) produced by imperfect combustion of fuel by capturing or 

converting them to other compounds, there is no such technology for CO2. Further, while 

some of those pollutants can also be reduced by achieving a more complete combustion 

of fuel, doing so only increases the tailpipe emissions of CO2. Thus, there is a single pool 

of technologies for addressing these twin problems, i.e., those that reduce fuel 

consumption and thereby reduce CO2 emissions as well. 

 

a. DOT’s CAFE Program 

In 1975, Congress enacted the Energy Policy and Conservation Act (EPCA), 

mandating that NHTSA establish and implement a regulatory program for motor vehicle 

fuel economy to meet the various facets of the need to conserve energy, including ones 

having energy independence and security, environmental and foreign policy implications. 

 

10 U.S. Environmental Protection Agency. 2009. Inventory of 

U.S. Greenhouse Gas Emissions and Sinks: 1990-2007. EPA 430-R-09-004. 

Available at http://epa.gov/climatechange/emissions/downloads09/GHG2007entire_report-508.pdf 11 U.S. Environmental Protection Agency. RIA, Chapter 2 

12 Panel on Policy Implications of Greenhouse Warming, National Academy of Sciences, National 

Academy of Engineering, Institute of Medicine, “Policy Implications of Greenhouse Warming: Mitigation, 

Adaptation, and the Science Base,” National Academies Press, 1992. p. 287. 

Deleted: four GHGs--

Deleted: --

Deleted: greenhouse gas
10 

Fuel economy gains since 1975, due both to the standards and market factors, have 

resulted in saving billions of barrels of oil and avoiding billions of metric tons of CO2

emissions. In December 2007, Congress enacted the Energy Independence and Securities 

Act (EISA), amending EPCA to require substantial, continuing increases in fuel economy 

standards. 

The CAFE standards address most, but not all, of the real world CO2 emissions 

because a provision in EPCA as originally enacted in 1975 requires the use of the 1975 

passenger car test procedures under which vehicle air conditioners are not turned on 

during fuel economy testing.13 Fuel economy is determined by measuring the amount of 

CO2 and other carbon compounds emitted from the tailpipe, not by attempting to measure 

directly the amount of fuel consumed during a vehicle test, a difficult task to accomplish 

with precision. The carbon content of the test fuel14 is then used to calculate the amount 

of fuel that had to be consumed per mile in order to produce that amount of CO2. Finally, 

that fuel consumption figure is converted into a miles-per-gallon figure. CAFE standards 

also do not address the 5-8 percent of GHG emissions that are not CO2, i.e., nitrous oxide 

(N2O), and methane (CH4) as well as emissions of CO2 and hydrofluorocarbons (HFCs) 

related to operation of the air conditioning system. 

b. EPA’s GHG Standards for Light-duty Vehicles 

Under the Clean Air Act EPA is responsible for addressing air pollutants from 

motor vehicles. On April 2, 2007, the U.S. Supreme Court issued its opinion in 

Massachusetts v. EPA,

15 a case involving EPA's a 2003 denial of a petition for 

rulemaking to regulate GHG emissions from motor vehicles under section 202(a) of the 

Clean Air Act (CAA).16 The Court held that GHGs fit within the definition of air 

pollutant in the Clean Air Act and further held that the Administrator must determine 

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 rejected the argument that EPA cannot regulate 

CO2 from motor vehicles because to do so would de facto tighten fuel economy 

standards, authority over which has been assigned by Congress to DOT. The Court stated 

that “[b]ut that DOT sets mileage standards in no way licenses EPA to shirk its 

environmental responsibilities. EPA has been charged with protecting the public‘s 

‘health’ and ‘welfare’, a statutory obligation wholly independent of DOT’s mandate to 

promote energy efficiency.” The Court concluded that “[t]he two obligations may 

overlap, but there is no reason to think the two agencies cannot both administer their 

 

13 Although EPCA does not require the use of 1975 test procedures for light trucks, those procedures are 

used for light truck CAFE standard testing purposes. 

14 This is the method that EPA uses to determine compliance with NHTSA’s CAFE standards. 

15 549 U.S. 497 (2007). 

16 68 FR 52922 (Sept. 8, 2003). 

Deleted: Greenhouse Gas

Deleted: order of the EPA 

Deleted: ying

Deleted: greenhouse gas

Deleted: greenhouse gases

Deleted: were 

Deleted: s for purposes of
11 

obligations and yet avoid inconsistency.”17 The case was remanded back to the Agency 

for reconsideration in light of the Court’s decision.

18 

 On December 15, 2009, EPA published two findings (74 FR 66496): that 

emissions of GHGs from new motor vehicles and motor vehicle engines contribute to air 

pollution, and that the air pollution may reasonably be anticipated to endanger public 

health and welfare. 

c. California Air Resources Board Greenhouse Gas Program 

In 2004, the California Air Resources Board approved standards for new lightduty vehicles, which regulate the emission of not only CO2, but also other GHGs. Since 

then, thirteen states and the District of Columbia, comprising approximately 40 percent of 

the light-duty vehicle market, have adopted California’s standards. These standards 

apply to model years 2009 through 2016 and require CO2 emissions for passenger cars 

and the smallest light trucks of 323 g/mi in 2009 and 205 g/mi in 2016, and for the 

remaining light trucks of 439 g/mi in 2009 and 332 g/mi in 2016. On June 30, 2009, 

EPA granted California’s request for a waiver of preemption under the CAA.19 The 

granting of the waiver permits California and the other states to proceed with 

implementing the California emission standards. 

In addition, to promote the National Program, California announced its 

commitment to take several actions in support of the National program, including 

revising its program for MYs 2012-2016 such that compliance with the federal GHG 

standards will be deemed to be compliance with California's GHG standards. This will 

allow the single national fleet produced by automakers to meet the two Federal 

requirements and to meet California requirements as well. California is proceeding with 

a rulemaking intended to revise its 2004 regulations to meet its commitments. 

2. Public Participation

The agencies proposed their respective rules on September 28, 2009 (74 FR 

49454), and received a large number of comments representing many perspectives on the 

proposed rule. The agencies received oral testimony at three public hearings in different 

parts of the country, and received written comments from more than 130 organizations, 

including auto manufacturers and suppliers, states, environmental and other nongovernmental organizations (NGOs), and over 129,000 comments from private citizens. 

The vast majority of commenters supported the central tenets of the proposed 

CAFE and GHG programs. That is, there was broad support from most organizations for 

 

17549 U.S. at 531-32. 

18 For further information on Massachusetts v. EPA see the July 30, 2008 Advance Notice of Proposed 

Rulemaking, “Regulating Greenhouse Gas Emissions under the Clean Air Act”, 73 FR 44354 at 44397. 

There is a comprehensive discussion of the litigation’s history, the Supreme Court’s findings, and 

subsequent actions undertaken by the Bush Administration and the EPA from 2007-2008 in response to the 

Supreme Court remand. 

19 74 FR 32744 (July 8, 2009). 

Deleted: 

Deleted: Court remanded the 

Deleted: its findings

Deleted: 
12 

a National Program that achieves a level of 250 gram/mile fleet average CO2, which 

would be 35.5 miles per gallon if the automakers were to meet this CO2 level solely 

through fuel economy improvements. The standards will be phased in over model years 

2012 through 2016 which will allow manufacturers to build a common fleet of vehicles 

for the domestic market. In general, commenters from the automobile industry supported 

the proposed standards as well as the credit opportunities and other compliance 

provisions providing flexibility, while also making some recommendations for changes. 

Environmental and public interest non-governmental organizations (NGOs), as well as 

most states that commented, were also generally supportive of the National Program 

standards. Many of these organizations also expressed concern about the possible impact 

on program benefits, depending on how the credit provisions and flexibilities are 

designed. The agencies also received specific comments on many aspects of the 

proposal. 

Throughout this notice, the agencies discuss many of the key issues arising from 

the public comments and the agencies' responses. In addition, the agencies have 

addressed all of the public comments in the Response to Comments document associated 

with this final rule. 

B. Summary of the Joint Final Rule and Differences from the Proposal 

In this joint rulemaking, EPA is establishing GHG emissions standards under the 

Clean Air Act (CAA), and NHTSA is establishing Corporate Average Fuel Economy 

(CAFE) standards under the Energy Policy and Conservation Action of 1975 (EPCA), as 

amended by the Energy Independence and Security Act of 2007 (EISA). The intention of 

this joint rulemaking is to set forth a carefully coordinated and harmonized approach to 

implementing these two statutes, in accordance with all substantive and procedural 

requirements imposed by law. 

NHTSA and EPA have coordinated closely and worked jointly in developing their 

respective final rules. This is reflected in many aspects of this joint rule. For example, 

the agencies have developed a comprehensive Joint Technical Support Document (TSD) 

that provides a solid technical underpinning for each agency’s modeling and analysis 

used to support their standards. Also, to the extent allowed by law, the agencies have 

harmonized many elements of program design, such as the form of the standard (the 

footprint-based attribute curves), and the definitions used for cars and trucks. They have 

developed the same or similar compliance flexibilities, to the extent allowed and 

appropriate under their respective statutes, such as averaging, banking, and trading of 

credits, and have harmonized the compliance testing and test protocols used for purposes 

of the fleet average standards each agency is finalizing. Finally, under their respective 

statutes, each agency is called upon to exercise its judgment and determine standards that 

are an appropriate balance of various relevant statutory factors. Given the common 

technical issues before each agency, the similarity of the factors each agency is to 

consider and balance, and the authority of each agency to take into consideration the 

standards of the other agency, both EPA and NHTSA are establishing standards that 

result in a harmonized National Program. 
13 

 This joint final rule covers passenger cars, light-duty-trucks, and medium-duty 

passenger vehicles built in model years 2012 through 2016. These vehicle categories are 

responsible for almost 60 percent of all U.S. transportation-related GHG emissions. EPA 

and NHTSA expect that automobile manufacturers will meet these standards by utilizing 

technologies that will reduce vehicle GHG emissions and improve fuel economy. 

Although many of these technologies are available today, the emissions reductions and 

fuel economy improvements finalized in this notice will involve more widespread use of 

these technologies across the light-duty vehicle fleet. These include improvements to 

engines, transmissions, and tires, increased use of start-stop technology, improvements in 

air conditioning systems, increased use of hybrid and other advanced technologies, and 

the initial commercialization of electric vehicles and plug-in hybrids. NHTSA’s and 

EPA’s assessments of likely vehicle technologies that manufacturers will employ to meet 

the standards are discussed in detail below and in the Joint TSD. 

 

The National Program is estimated to result in approximately 960 million metric 

tons of total carbon dioxide equivalent emissions reductions and approximately 1.8 

billion barrels of oil savings over the lifetime of vehicles sold in model years (MYs) 2012 

through 2016. In total, the combined EPA and NHTSA 2012-2016 standards will reduce 

GHG emissions from the U.S. light-duty fleet by approximately 21 percent by 2030 over 

the level that would occur in the absence of the National Program. These actions also will 

provide important energy security benefits, as light-duty vehicles are about 95 percent 

dependent on oil-based fuels. The agencies project that the benefits of the National 

Program will total more than $240 billion at a 3% discount rate, or more than $190 

billion at a 7% discount rate. In the discussion that follows in Sections III and IV, each 

agency explains the related benefits for their individual standards. 

Together, EPA and NHTSA estimate that the average cost increase for a model 

year 2016 vehicle due to the National Program will be less than $1,000. The average 

U.S. consumer who purchases a vehicle outright is estimated to save enough in lower fuel 

costs over the first three years to offset these higher vehicle costs. However, most U.S. 

consumers purchase a new vehicle using credit rather than paying cash and the typical car 

loan today is a five year, 60 month loan. These consumers will see immediate savings 

due to their vehicle’s lower fuel consumption in the form of a net reduction in annual 

costs of $130-$180 throughout the duration of the loan (that is, the fuel savings will 

outweigh the increase in loan payments by $130-$180 per year). Whether a consumer 

takes out a loan or purchases a new vehicle outright, over the lifetime of a model year 

2016 vehicle, the consumer's net savings could be more than $3,000. The average 2016 

MY vehicle will emit 16 fewer metric tons of CO2-equivalent emissions (that is, CO2

emissions plus HFC air conditioning leakage emissions) emissions during its lifetime. 

Assumptions that underlie these conclusions are discussed in greater detail in the 

agencies’ respective regulatory impact analyses and in Section III.H.5 and Section IV.

This joint rule also results in important regulatory convergence and certainty to 

automobile companies. Absent this rule, there would be three separate federal and state 

regimes independently regulating light-duty vehicles to reduce fuel consumption and 

Deleted: will 

Deleted: s

Deleted: their

Deleted: will 

Deleted: should

Deleted: s
14 

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 rule will allow automakers to meet both the NHTSA and EPA requirements 

with a single national fleet, greatly simplifying the industry's technology, investment and 

compliance strategies. In addition, to promote the National Program, California 

announced its commitment to take several actions, including revising its program for 

MYs 2012-2016 such that compliance with the federal GHG standards will be deemed to 

be compliance with California's GHG standards. This will allow the single national fleet 

used by automakers to meet the two Federal requirements and to meet California 

requirements as well. California is proceeding with a rulemaking intended to revise its 

2004 regulations to meet its commitments. EPA and NHTSA are confident that these 

GHG and CAFE standards will successfully harmonize both the federal and state 

programs for MYs 2012-2016 and will allow our country to achieve the increased 

benefits of a single, nationwide program to reduce light-duty vehicle GHG emissions and 

reduce the country’s dependence on fossil fuels by improving these vehicles’ fuel 

economy. 

A successful and sustainable automotive industry depends upon, among other 

things, continuous technology innovation in general, and low GHG emissions and high 

fuel economy vehicles in particular. In this respect, this action will help spark the 

investment in technology innovation necessary for automakers to successfully compete in 

both domestic and export markets, and thereby continue to support a strong economy. 

While this action covers MYs 2012-2016, many stakeholders encouraged EPA 

and NHTSA to also begin working toward standards for MY 2017 and beyond that would 

maintain a single nationwide program. The agencies recognize the importance of and are 

committed to a strong, coordinated national program for light-duty vehicles for model 

years beyond 2016. 

Key elements of the National Program finalized today are the level and form of 

the GHG and CAFE standards, the available compliance mechanisms, and general 

implementation elements. These elements are summarized in the following section, with 

more detailed discussions about EPA’s GHG program following in Section III, and about 

NHTSA’s CAFE program in Section IV. This joint final rule responds to the wide array 

of comments that the agencies received on the proposed rule. This section summarizes 

many of the major comments on the primary elements of the proposal and describes 

whether and how the final rule has changed, based on the comments and additional 

analyses. Major comments and the agencies’ responses to them are also discussed in 

more detail in later sections of this preamble. For a full summary of public comments 

and EPA’s and NHTSA’s responses to them, please see the Response to Comments 

document associated with this final rule. 

1. Joint Analytical Approach

 NHTSA and EPA have worked closely together on nearly every aspect of this 

joint final rule. The extent and results of this collaboration are reflected in the elements 

Deleted: greenhouse gas
15 

of the respective NHTSA and EPA rules, as well as the analytical work contained in the 

Joint Technical Support Document (Joint TSD). The Joint TSD, in particular, describes 

important details of the analytical work that are shared, as well as any differences in 

approach. These include the build up of the baseline and reference fleets, the derivation 

of the shape of the curves that define the standards, a detailed description of the costs and 

effectiveness of the technology choices that are available to vehicle manufacturers, a 

summary of the computer models used to estimate how technologies might be added to 

vehicles, and finally the economic inputs used to calculate the impacts and benefits of the 

rules, where practicable. 

EPA and NHTSA have jointly developed attribute curve shapes that each agency 

is using for its final standards. Further details of these functions can be found in Sections 

III and IV of this preamble as well as Chapter 2 of the Joint TSD. A critical technical 

underpinning of each agency’s analysis is the cost and effectiveness of the various 

control technologies. These are used to analyze the feasibility and cost of potential GHG 

and CAFE standards. A detailed description of all of the technology information 

considered can be found in Chapter 3 of the Joint TSD (and for A/C, Chapter 2 of the 

EPA RIA). This detailed technology data forms the inputs to computer models that each 

agency uses to project how vehicle manufacturers may add those technologies in order to 

comply with the new standards. These are the OMEGA and Volpe models for EPA and 

NHTSA, respectively. The models and their inputs can also be found in the docket. 

Further description of the model and outputs can be found in Sections III and IV of this 

preamble, and Chapter 3 of the Joint TSD. This comprehensive joint analytical approach 

has provided a sound and consistent technical basis for each agency in developing its 

final standards, which are summarized in the sections below. 

The vast majority of public comments expressed strong support for the joint 

analytical work performed for the proposal. Commenters generally agreed with the 

analytical work and its results, and supported the transparency of the analysis and its 

underlying data. Where commenters raised specific points, the agencies have considered 

them and made changes where appropriate. The agencies' further evaluation of various 

technical issues also led to a limited number of changes. A detailed discussion of these 

issues can be found in Section II of this preamble, and the Joint TSD. 

2. Level of the Standards 

In this notice, EPA and NHTSA are establishing two separate sets of standards, 

each under its respective statutory authorities. EPA is setting national CO2 emissions 

standards for light-duty vehicles under section 202 (a) of the Clean Air Act. These 

standards will require these vehicles to meet an estimated combined average emissions 

level of 250 grams/mile of CO2 in model year 2016. NHTSA is setting CAFE standards 

for passenger cars and light trucks under 49 U.S.C. 32902. These standards will require 

manufacturers of those vehicles to meet an estimated combined average fuel economy 

level of 34.1 mpg in model year 2016. The standards for both agencies begin with the 

2012 model year, with standards increasing in stringency through model year 2016. 

They represent a harmonized approach that will allow industry to build a single national 
16 

fleet that will satisfy both the GHG requirements under the CAA and CAFE requirements 

under EPCA/EISA. 

 

Given differences in their respective statutory authorities, however, the agencies’ 

standards include some important differences. Under the CO2 fleet average standards 

adopted under CAA section 202(a), EPA expects manufacturers to take advantage of the 

option to generate CO2-equivalent credits by reducing emissions of hydrofluorocarbons 

(HFCs) and CO2 through improvements in their air conditioner systems. EPA accounted 

for these reductions in developing its final CO2 standards. NHTSA did not do so because 

EPCA does not allow vehicle manufacturers to use air conditioning credits in complying 

with CAFE standards for passenger cars.20 CO2 emissions due to air conditioning 

operation are not measured by the test procedure mandated by statute for use in 

establishing and enforcing CAFE standards for passenger cars. As a result, improvement 

in the efficiency of passenger car air conditioners is not considered as a possible control 

technology for purposes of CAFE. 

These differences regarding the treatment of air conditioning improvements 

(related to CO2 and HFC reductions ) affect the relative stringency of the EPA standard 

and NHTSA standard for MY 2016. The 250 grams per mile of CO2 equivalent 

emissions limit is equivalent to 35.5 mpg21 if the automotive industry were to meet this 

CO2 level all through fuel economy improvements. As a consequence of the prohibition 

against NHTSA’s allowing credits for air conditioning improvements for purposes of 

passenger car CAFE compliance, NHTSA is setting fuel economy standards that are 

estimated to require a combined (passenger car and light truck) average fuel economy 

level of 34.1 mpg by MY 2016. 

The vast majority of public comments expressed strong support for the National 

Program standards, including the stringency of the agencies’ respective standards and the 

phase-in from model year 2012 through 2016. There were a number of comments 

supporting standards more stringent than proposed, and a few others supporting less 

stringent standards, in particular for the 2012-2015 model years. The agencies' 

consideration of comments and their updated technical analyses led to only very limited 

changes in the footprint curves and did not change the agencies’ projections that the 

nationwide fleet will achieve a level of 250 grams/mile by 2016 (equivalent to 35.5 mpg). 

The responses to these comments are discussed in more detail in Sections III and IV, 

respectively, and in the Response to Comments document.

As proposed, NHTSA and EPA’s final standards, like the standards NHTSA 

promulgated in March 2009 for MY 2011, are expressed as mathematical functions 

depending on vehicle footprint. Footprint is one measure of vehicle size, and is 

determined by multiplying the vehicle’s wheelbase by the vehicle’s average track 

 

20 There is no such statutory limitation with respect to light trucks. 

21 The agencies are using a common conversion factor between fuel economy in units of miles per gallon 

and CO2 emissions in units of grams per mile. This conversion factor is 8,887 grams CO2 per gallon 

gasoline fuel. Diesel fuel has a conversion factor of 10,180 grams CO2 per gallon diesel fuel though for the 

purposes of this calculation, we are assuming 100% gasoline fuel. 
17 

width.22 The standards that must be met by each manufacturer's fleet will be determined 

by computing the sales-weighted average (harmonic average for CAFE) of the targets 

applicable to each of the manufacturer’s passenger cars and light trucks. Under these 

footprint-based standards, the levels required of individual manufacturers will depend, as 

noted above, on the mix of vehicles sold. NHTSA's and EPA’s respective standards are 

shown in the tables below. It is important to note that the standards are the attributebased curves established by each agency. The values in the tables below reflect the 

agencies’ projection of the corresponding fleet levels that will result from these attributebased curves. 

As a result of public comments and updated economic and future fleet 

projections, EPA and NHTSA have updated the attribute based curves for this final rule, 

as discussed in detail in Section II.B of this preamble and Chapter 2 of the Joint TSD. 

This update in turn affects costs, benefits, and other impacts of the final standards. Thus, 

the agencies have updated their overall projections of the impacts of the final rule 

standards, and these results are only slightly different from those presented in the 

proposed rule. 

 As shown in Table I.B.2-1, NHTSA’s fleet-wide CAFE-required levels for 

passenger cars under the final standards are projected to increase from 33.3 to 37.8 mpg 

between MY 2012 and MY 2016. Similarly, fleet-wide CAFE levels for light trucks are 

projected to increase from 25.4 to 28.8 mpg. NHTSA has also estimated the average 

fleet-wide required levels for the combined car and truck fleets. As shown, the overall 

fleet average CAFE level is expected to be 34.1 mpg in MY 2016. These numbers do not 

include the effects of other flexibilities and credits in the program. These standards 

represent a 4.3 percent average annual rate of increase relative to the MY 2011 

standards.23 

Table I.B.2-1 Average Required Fuel Economy (mpg) 

under Final CAFE Standards 

2011-base 2012 2013 2014 2015 2016 

Passenger Cars 30.4 33.3 34.2 34.9 36.2 37.8 

Light Trucks 24.4 25.4 26.0 26.6 27.5 28.8 

Combined Cars & Trucks 27.6 29.7 30.5 31.3 32.6 34.1 

Accounting for the expectation that some manufacturers could continue to pay 

civil penalties rather than achieving required CAFE levels, and the ability to use FFV 

credits,24 NHTSA estimates that the CAFE standards will lead to the following average 

 

22 See 49 CFR 523.2 for the exact definition of “footprint.” 

23 Because required CAFE levels depend on the mix of vehicles sold by manufacturers in a model year, 

NHTSA’s estimate of future required CAFE levels depends on its estimate of the mix of vehicles that will 

be sold in that model year. NHTSA currently estimates that the MY 2011 standards will require average 

fuel economy levels of 30.4 mpg for passenger cars, 24.4 mpg for light trucks, and 27.6 mpg for the 

combined fleet. 

24 The penalties are similar in function to essentially unlimited, fixed-price allowances. 
18 

achieved fuel economy levels, based on the projections of what each manufacturer’s fleet 

will comprise in each year of the program:25

Table I.B.2-2 Projected Fleet-Wide Achieved CAFE Levels under the Final 

Footprint-Based CAFE Standards (mpg) 

 2012 2013 2014 2015 2016 

Passenger Cars 32.3 33.5 34.2 35.0 36.2 

Light Trucks 24.5 25.1 25.9 26.7 27.5 

Combined Cars & Trucks 28.7 29.7 30.6 31.5 32.7 

NHTSA is also required by EISA to set a minimum fuel economy standard for 

domestically manufactured passenger cars in addition to the attribute-based passenger car 

standard. The minimum standard “shall be the greater of (A) 27.5 miles per gallon; or 

(B) 92 percent of the average fuel economy projected by the Secretary for the combined 

domestic and non-domestic passenger automobile fleets manufactured for sale in the 

United States by all manufacturers in the model year....”26 

 

Based on NHTSA’s current market forecast, the agency’s estimates of these 

minimum standards under the MY 2012-2016 CAFE standards (and, for comparison, the 

final MY 2011 standard) are summarized below in Table I.B.2-3.27 For eventual 

compliance calculations, the final calculated minimum standards will be updated to 

reflect the average fuel economy level required under the final standards. 

Table I.B.2-3 Estimated Minimum Standard for Domestically Manufactured Passenger 

Cars under MY 2011 and MY 2012-2016 CAFE Standards for Passenger Cars (mpg) 

2011 2012 2013 2014 2015 2016

28.0 30.7 31.4 32.1 33.3 34.7 

EPA is establishing GHG emissions standards, and Table I.B.2-4 provides EPA’s 

estimates of their projected overall fleet-wide CO2 equivalent emission levels.28 The 

g/mi values are CO2 equivalent values because they include the projected use of air 

 

25 NHTSA’s estimates account for availability of CAFE credits for the sale of flexible-fuel vehicles (FFVs), 

and for the potential that some manufacturers will pay civil penalties rather than comply with the CAFE 

standards. This yields NHTSA’s estimates of the real-world fuel economy that will likely be achieved 

under the final CAFE standards. NHTSA has not included any potential impact of car-truck credit transfer 

in its estimate of the achieved CAFE levels. 

26 49 U.S.C. 32902(b)(4). 

27 In the March 2009 final rule establishing MY 2011 standards for passenger cars and light trucks, NHTSA 

estimated that the minimum required CAFE standard for domestically manufactured passenger cars would 

be 27.8 mpg under the MY 2011 passenger car standard. Based on the agency’s current forecast of the MY 

2011 passenger car market, NHTSA now estimates that the minimum required CAFE standard will be 28.0 

mpg in MY 2011. 

28 These levels do not include the effect of flexible fuel credits, transfer of credits between cars and trucks, 

temporary lead time allowance, or any other credits with the exception of air conditioning. 
19 

conditioning (A/C) credits by manufacturers, which include both HFC and CO2

reductions.

Table I.B.2-4 Projected Fleet-Wide Emissions Compliance Levels under the FootprintBased CO2 Standards (g/mi) 

2012 2013 2014 2015 2016 

Passenger Cars 263 256 247 236 225 

Light Trucks 346 337 326 312 298 

Combined Cars & Trucks 295 286 276 263 250 

As shown in Table I.B.2-4, fleet-wide CO2 emission level requirements for cars 

are projected to increase in stringency from 263 to 225 g/mi between MY 2012 and MY 

2016. Similarly, fleet-wide CO2 equivalent emission level requirements for trucks are 

projected to increase in stringency from 346 to 298 g/mi. As shown, the overall fleet 

average CO2 level requirements are projected to increase in stringency from 295 g/mi in 

MY 2012 to 250 g/mi in MY 2016. 

EPA anticipates that manufacturers will take advantage of program flexibilities 

such as flexible fueled vehicle credits and car/truck credit trading. Due to the credit 

trading between cars and trucks, the estimated improvements in CO2 emissions are 

distributed differently than shown in Table I.B.2-4, where full manufacturer compliance 

without credit trading is assumed. Table I.B.2-5 shows EPA’s projection of the achieved 

emission levels of the fleet for MY 2012 through 2016, which does consider the impact 

of car/truck credit transfer and the increase in emissions due to certain program 

flexibilities including flex fueled vehicle credits and the temporary lead time allowance 

alternative standards. The use of optional air conditioning credits is considered both in 

this analysis of achieved levels and of the compliance levels described above. As can be 

seen in Table I.B.2-5, the projected achieved levels are slightly higher for model years 

2012-2015 due to EPA's assumptions about manufacturers' use of the regulatory 

flexibilities, but by model year 2016 the achieved level is projected to be 250 g/mi for the 

fleet. 

Table I.B.2-5 Projected Fleet-Wide Achieved Emission Levels under the 

Footprint-Based CO2 Standards (g/mi) 

2012 2013 2014 2015 2016 

Passenger Cars 267 256 245 234 223 

Light Trucks 365 353 340 324 303 

Combined Cars & Trucks 305 293 280 266 250 

Several auto manufacturers stated that the increasingly stringent requirements for 

fuel economy and GHG emissions in the early years of the program should follow a more 

linear phase-in. The agencies’ consideration of comments and of their updated technical 

analyses did not lead to changes to the phase-in of the standards discussed above. This 

issue is discussed in more detail in Sections II.D, and in Sections III and IV. 
20 

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. Commenters were in general agreement 

with this assessment.29 As noted, these include improvements to the engines such as use 

of gasoline direct injection and downsized engines that use turbochargers to provide 

performance similar to that of larger engines, the use of advanced transmissions, 

increased use of start-stop technology, improvements in tire rolling resistance, reductions 

in vehicle weight, increased use of hybrid and other advanced technologies, and the 

initial commercialization of electric vehicles and plug-in hybrids. EPA is also projecting 

improvements in vehicle air conditioners including more efficient as well as low leak 

systems. All of these technologies are already available today, and EPA’s and NHTSA’s 

assessments are that manufacturers will be able to meet the standards through more 

widespread use of these technologies across the fleet. 

 With respect to the practicability of the standards in terms of lead time, during 

MYs 2012-2016 manufacturers are expected to go through the normal automotive 

business cycle of redesigning and upgrading their light-duty vehicle products, and in 

some cases introducing entirely new vehicles not on the market today. This rule allows 

manufacturers the time needed to incorporate technology to achieve GHG reductions and 

improve fuel economy during the vehicle redesign process. This is an important aspect 

of the rule, as it avoids the much higher costs that would occur if manufacturers needed 

to add or change technology at times other than their scheduled redesigns. This time 

period also provides manufacturers the opportunity to plan for compliance using a multiyear time frame, again consistent with normal business practice. Over these five model 

years, there will be an opportunity for manufacturers to evaluate almost every one of their 

vehicle model platforms and add technology in a cost effective way to control GHG 

emissions and improve fuel economy. This includes redesign of the air conditioner 

systems in ways that will further reduce GHG emissions. Various commenters stated that 

the proposed phase-in of the standards should be introduced more aggressively, less 

aggressively, or in a more linear manner. However, our consideration of these comments 

about the phase-in, as well as our revised analyses, leads us to conclude that the general 

rate of introduction of the standards as proposed remains appropriate. This conclusion is 

also not affected by the slight difference from the proposal in the final footprint-based 

curves. These issues are addressed further in Sections III and IV. 

Both agencies considered other standards as part of the rulemaking analyses, both 

more and less stringent than those proposed. EPA’s and NHTSA’s analyses of 

alternative standards are contained in Sections III and IV of this preamble, respectively, 

as well as the agencies' respective RIAs. 

The CAFE and GHG standards described above are based on determining 

emissions and fuel economy using the city and highway test procedures that are currently 

 

29 The close relationship between emissions of CO2 – the most prevalent greenhouse gas emitted by motor 

vehicles--and fuel consumption, means that the technologies to control CO2 emissions and to improve fuel 

economy overlap to a great degree. 

Deleted: performance
21 

used in the CAFE program. Some environmental and other organizations commented 

that the test procedures should be improved to reflect more real-world driving conditions; 

auto manufacturers in general do not support such changes to the test procedures at this 

time. Both agencies recognize that these test procedures are not fully representative of 

real world driving conditions. For example, EPA has adopted more representative test 

procedures that are used in determining compliance with emissions standards for 

pollutants other than GHGs. These test procedures are also used in EPA’s fuel economy 

labeling program. However, as discussed in Section III, the current information on 

effectiveness of the individual emissions control technologies is based on performance 

over the CAFE test procedures. For that reason, EPA is using the current CAFE test 

procedures for the CO2 standards and is not changing those test procures in this 

rulemaking. NHTSA, as discussed above, is limited by statute in what test procedures 

can be used for purposes of passenger car testing, although there is no such statutory 

limitation with respect to test procedures for trucks. However, the same reasons for not 

changing the truck test procedures apply for CAFE as well. 

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. This is an important issue, and the agencies 

intend to continue to evaluate it in the context of a future rulemaking to address standards 

for model year 2017 and thereafter. This could include consideration of a range of test 

procedure changes to better represent real-world driving conditions in terms of speed, 

acceleration, deceleration, ambient temperatures, use of air conditioners, and the like. 

With respect to air conditioner operation, EPA discusses the public comments on these 

issues and the final procedures for determining emissions credits for controls on air 

conditioners in Section III. 

Finally, based on the information EPA developed in its recent rulemaking that 

updated its fuel economy labeling program to better reflect average real-world fuel 

economy, the calculation of fuel savings and CO2 emissions reductions that will be 

achieved by the CAFE and GHG standards includes adjustments to account for the 

difference between the fuel economy level measured in the CAFE test procedure and the 

fuel economy actually achieved on average under real world driving conditions. These 

adjustments are industry averages for the vehicles’ performance as a whole, however, and 

are not a substitute for the information on effectiveness of individual control technologies 

that will be explored for purposes of a future GHG and CAFE rulemaking. 

 

3. Form of the Standards 

NHTSA and EPA proposed attribute-based standards for passenger cars and light 

trucks. NHTSA adopted an attribute approach based on vehicle footprint in its Reformed 

CAFE program for light trucks for model years 2008-2011,30 and recently extended this 

 

30 71 FR 17566 (Apr. 6, 2006). 
22 

approach to passenger cars in the CAFE rule for MY 2011 as required by EISA.31 The 

agencies also proposed using vehicle footprint as the attribute for the GHG and CAFE 

standards. Footprint is defined as a vehicle’s wheelbase multiplied by its track width -- in 

other words, the area enclosed by the points at which the wheels meet the ground. Most 

commenters that expressed a view on this topic supported basing the standards on an 

attribute, and almost all of these supported the proposed choice of vehicle footprint as an 

appropriate attribute. The agencies continue to believe that the standards are best 

expressed in terms of an attribute, and that the footprint attribute is the most appropriate 

attribute on which to base the standards. These issues are further discussed later in this 

notice and in Chapter 2 of the Joint TSD. 

Under the footprint-based standards, each manufacturer will have a GHG and 

CAFE target unique to its fleet, depending on the footprints of the vehicle models 

produced by that manufacturer. A manufacturer will have separate footprint-based 

standards for cars and for trucks. Generally, larger vehicles (i.e., vehicles with larger 

footprints) will be subject to less stringent standards (i.e., higher CO2 grams/mile 

standards and lower CAFE standards) than smaller vehicles. This is because, generally 

speaking, smaller vehicles are more capable of achieving lower levels of CO2 and higher 

levels of fuel economy than larger vehicles. While a manufacturer’s fleet average 

standard could be estimated throughout the model year based on projected production 

volume of its vehicle fleet, the standard to which the manufacturer must comply will be 

based on its final model year production figures. A manufacturer’s calculation of fleet 

average emissions at the end of the model year will thus be based on the productionweighted average emissions of each model in its fleet. 

The final footprint-based standards are very similar in shape to those proposed. 

NHTSA and EPA include more discussion of the development of the final curves in 

Section II below, with a full discussion in the Joint TSD. In addition, a full discussion of 

the equations and coefficients that define the curves is included in Section III for the CO2

curves and Section IV for the mpg curves. The following figures illustrate the standards. 

First, Figure I.B.3-1 shows the fuel economy (mpg) car standard curve. 

Under an attribute-based standard, every vehicle model has a performance target 

(fuel economy for the CAFE standards, and CO2 g/mile for the GHG emissions 

standards), the level of which depends on the vehicle’s attribute (for this rule, footprint). 

The manufacturers’ fleet average performance is determined by the productionweighted32 average (for CAFE, harmonic average) of those targets. NHTSA and EPA 

are setting CAFE and CO2 emissions standards defined by constrained linear functions 

and, equivalently, piecewise linear functions.33 As a possible option for future 

rulemakings, the constrained linear form was introduced by NHTSA in the 2007 NPRM 

proposing CAFE standards for MY 2011-2015. 

 

31 74 FR 14196 (Mar. 30, 2009). 

32 Based on vehicles produced for sale in the United States. 

33 The equations are equivalent but are specified differently due to differences in the agencies’ respective 

models. 
23 

NHTSA is establishing the attribute curves below for assigning a fuel economy 

level to an individual vehicle’s footprint value, for model years 2012 through 2016. 

These mpg values will be production weighted to determine each manufacturer’s fleet 

average standard for cars and trucks. Although the general model of the equation is the 

same for each vehicle category and each year, the parameters of the equation differ for 

cars and trucks. Each parameter also changes on an annual basis, resulting in the yearly 

increases in stringency. Figure I.B.3-1 below illustrates the passenger car CAFE standard 

curves for model years 2012 through 2016 while Figure I.B.3-2 below illustrates the light 

truck standard curves for model years 2012-2016. The MY 2011 final standards for cars 

and trucks, which are specified by a constrained logistic function rather than a 

constrained linear function, are shown for comparison. 
24 

454035302520

35 40 45 50 55 60 65 70

)gpm(tegraT

Footprint (sf)

2011

20162015201420132012

Figure I.B.3-1 MY 2011 and MY 2012-2016 Passenger Car Fuel Economy Targets 
25 

454035302520

35 40 45 50 55 60 65 70

)gpm(tegraT

Footprint (sf)

20162015201420132012

2011

Figure I.B.3-2. MY 2011 and MY 2012-2016 Light Truck Fuel Economy Targets 
26 

 EPA is establishing the attribute curves below for assigning a CO2 level to an 

individual vehicle’s footprint value, for model years 2012 through 2016. These CO2

values will be production weighted to determine each manufacturer’s fleet average 

standard for cars and trucks. As with the CAFE curves above, the general form of the 

equation is the same for each vehicle category and each year, but the parameters of the 

equation differ for cars and trucks. Again, each parameter also changes on an annual 

basis, resulting in the yearly increases in stringency. Figure I.B.3-3 below illustrates the 

CO2 car standard curves for model years 2012 through 2016 while Figure I.B.3-4 shows 

the CO2 truck standard curves for model years 2012-2016. 
27 

Figure I.B.3-3 CO2 (g/mi) Car Standard Curves 
28 

Figure I.B.3-4 CO2 (g/mi) Truck Standard Curves 
29 

 NHTSA and EPA received a number of comments about the shape of the car and 

truck curves. We address these comments further in Section II.C below as well as in 

Sections III and IV. 

 As proposed, NHTSA and EPA will use the same vehicle category definitions for 

determining which vehicles are subject to the car curve standards versus the truck curve 

standards. In other words, a vehicle classified as a car under the NHTSA CAFE program 

will also be classified as a car under the EPA GHG program, and likewise for trucks. 

Auto industry commenters generally agreed with this approach and believe it is an 

important aspect of harmonization across the two agencies’ programs. Some other 

commenters expressed concern about potential consequences, especially in how cars and 

trucks are distinguished. However, EPA and NHTSA are employing the same car and 

truck definitions for the MY 2012-2016 CAFE and GHG standards as those used in the 

CAFE program for the 2011 model year standards.34 This issue is further discussed for 

the EPA standards in Section III, and for the NHTSA standards in Section IV. This 

approach of using CAFE definitions allows EPA’s CO2 standards and the CAFE 

standards to be harmonized across all vehicles for this program. However, EPA is not 

changing the car/truck definition for the purposes of any other previous rules. 

Generally speaking, a smaller footprint vehicle will have higher fuel economy and 

lower CO2 emissions relative to a larger footprint vehicle when both have the same 

degree of fuel efficiency improvement technology. In this final rule, the standards apply 

to a manufacturers overall fleet, not an individual vehicle, thus a manufacturers fleet 

which is dominated by small footprint vehicles will have a higher fuel economy 

requirement (lower CO2 requirement) than a manufacturers whose fleet is dominated by 

large footprint vehicles. A footprint-based CO2 or CAFE standard can be relatively 

neutral with respect to vehicle size and consumer choice. All vehicles, whether smaller 

or larger, must make improvements to reduce CO2 emissions or improve fuel economy, 

and therefore all vehicles will be relatively more expensive. With the footprint-based 

standard approach, EPA and NHTSA believe there should 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. While targets are 

manufacturer specific, rather than vehicle specific, Table I.B.3-1 illustrates the fact that 

different vehicle sizes will have varying CO2 emissions and fuel economy targets under 

the final standards. 

Table I.B.3-1 Model Year 2016 CO2 and Fuel Economy Targets for Various MY 2008 

Vehicle Types 

Vehicle Example Example Model CO2 Emissions Fuel Economy 

 

34 49 CFR 523. 

Deleted: Generally speaking, a smaller 

footprint vehicle will have higher fuel 

economy and lower CO2 emissions 

relative to a larger footprint vehicle. 
30 

Type Models Footprint (sq. ft.) Target (g/mi) Target (mpg) 

Example Passenger Cars 

Compact 

car Honda Fit 40 206 41.1 

Midsize 

car Ford Fusion 46 230 37.1 

Fullsize 

car Chrysler 300 53 263 32.6 

Example Light-duty Trucks 

Small SUV 

4WD Ford 

Escape 44 259 32.9 

Midsize 

crossover Nissan Murano 49 279 28.2 

Minivan Toyota Sienna 55 303 24.7 

Large 

pickup 

truck 

Chevy 

Silverado 67 348 30.6 

4. Program Flexibilities

 EPA’s and NHTSA’s programs as established in this rule provide compliance 

flexibility to manufacturers, especially in the early years of the National Program. This 

flexibility is expected to provide sufficient lead time for manufacturers to make necessary 

technological improvements and reduce the overall cost of the program, without 

compromising overall environmental and fuel economy objectives. The broad goal of 

harmonizing the two agencies’ standards includes preserving manufacturers’ flexibilities 

in meeting the standards, to the extent appropriate and required by law. The following 

section provides an overview of this final rule’s flexibility provisions. Many auto 

manufacturers commented in support of these provisions as critical to meeting the 

standards in the lead time provided. Environmental groups, some states, and others 

raised concerns about the possibility for windfall credits and loss of program benefits. 

The provisions in the final rule are in most cases the same as those proposed. However 

consideration of the issues raised by commenters has led to modifications in certain 

provisions. These comments and the agencies’ response are discussed in Sections III and 

IV below and in the Response to Comments document. 

a. CO2/CAFE Credits Generated Based on Fleet Average Performance 

 Under this NHTSA and EPA final rule, the fleet average standards that apply to a 

manufacturer’s car and truck fleets are based on the applicable footprint-based curves. At 

the end of each model year, when production of the model year is complete, a 

production-weighted fleet average will be calculated for each averaging set (cars and 

trucks). Under this approach, a manufacturer’s car and/or truck fleet that achieves a fleet 

average CO2/CAFE level better than the standard can generate credits. Conversely, if the 
31 

fleet average CO2/CAFE level does not meet the standard, the fleet would incur debits 

(also referred to as a shortfall). 

 Under the final program, a manufacturer whose fleet generates credits in a given 

model year would have several options for using those credits, including credit carryback, credit carry-forward, credit transfers, and credit trading. These provisions exist in 

the MY 2011 CAFE program under EPCA and EISA, and similar provisions are part of 

EPA’s Tier 2 program for light-duty vehicle criteria pollutant emissions, as well as many 

other mobile source standards issued by EPA under the CAA. The manufacturer will be 

able to carry back credits to offset a deficit that had accrued in a prior model year and 

was subsequently carried over to the current model year. EPCA also provides for this. 

EPCA restricts the carry-back of CAFE credits to three years, and as proposed EPA is 

establishing the same limitation, in keeping with the goal of harmonizing both sets of 

standards. 

 After satisfying any need to offset pre-existing deficits, remaining credits can be 

saved (banked) for use in future years. Under the CAFE program, EISA allows 

manufacturers to apply credits earned in a model year to compliance in any of the five 

subsequent model years.35 As proposed, under the GHG program, EPA is also allowing 

manufacturers to use these banked credits in the five years after the year in which they 

were generated (i.e., five years carry-forward). 

 EISA required NHTSA to establish by regulation a CAFE credits transferring 

program, which NHTSA established in a March 2009 final rule codified at 49 CFR Part 

536, to allow a manufacturer to transfer credits between its vehicle fleets to achieve 

compliance with the standards. For example, credits earned by over-compliance with a 

manufacturer’s car fleet average standard could be used to offset debits incurred due to 

that manufacturer’s not meeting the truck fleet average standard in a given year. EPA’s 

Tier 2 program also provides for this type of credit transfer. As proposed for purposes of 

this rule, EPA allows unlimited credit transfers across a manufacturer’s car-truck fleet to 

meet the GHG standard. This is based on the expectation that this flexibility will facilitate 

manufacturers' ability to comply with the GHG standards in the lead time provided, and 

will allow the required GHG emissions reductions to be achieved in the most cost 

effective way. Under the CAA, unlike under EISA, there is no statutory limitation on 

car-truck credit transfers. Therefore, EPA is not constraining car-truck credit transfers, as 

doing so would reduce the flexibility for lead time, and would increase costs with no 

corresponding environmental benefit. For the CAFE program, however, EISA limits the 

amount of credits that may be transferred, which has the effects of limiting the extent to 

which a manufacturer can rely upon credits in lieu of making fuel economy 

improvements to a particular portion of its vehicle fleet, but also of potentially increasing 

the costs of improving the manufacturer’s overall fleet. EISA also prohibits the use of 

transferred credits to meet the statutory minimum level for the domestic car fleet 

standard.36 These and other statutory limits will continue to apply to the determination of 

compliance with the CAFE standards. 

 

35 49 U.S.C. 32903(a)(2). 

36 49 U.S.C. 32903(g)(4). 
32 

 EISA also allowed NHTSA to establish by regulation a CAFE credit trading 

program, which NHTSA established in the March 2009 final rule at 40 CFR Part 536, to 

allow credits to be traded (sold) to other vehicle manufacturers. As proposed, EPA 

allows credit trading in the GHG program. These sorts of exchanges are typically 

allowed under EPA’s current mobile source emission credit programs, although 

manufacturers have seldom made such exchanges. Under the NHTSA CAFE program, 

EPCA also allows these types of credit trades, although, as with transferred credits, 

traded credits may not be used to meet the minimum domestic car standards specified by 

statute.37 Comments discussing these provisions supported the proposed approach. 

These final provisions are the same as proposed. 

As further discussed in Section IV of this preamble, NHTSA sought to find a way 

to provide credits for improving the efficiency of light truck air conditioners (A/Cs) and 

solicited public comments to that end. The agency did so because the power necessary to 

operate an A/C compressor places a significant additional load on the engine, thus 

reducing fuel economy and increasing CO2 tailpipe emissions. See Section III.C.1 below. 

The agency would have made a similar effort regarding cars, but a 1975 statutory 

provision made it unfruitful even to explore the possibility of administratively proving 

such credits for cars. The agency did not identify a workable way of providing such 

credits for light trucks in the context of this rulemaking. 

b. Air Conditioning Credits Under the EPA Final Rule 

 Air conditioning (A/C) systems contribute to GHG emissions in two ways. 

Hydrofluorocarbon (HFC) refrigerants, which are powerful GHGs, can leak from the A/C 

system (direct A/C emissions). As just noted, operation of the A/C system also places an 

additional load on the engine, which results in additional CO2 tailpipe emissions (indirect 

A/C related emissions). EPA is allowing manufacturers to generate credits by reducing 

either or both types of GHG emissions related to A/C systems. Specifically, EPA is 

establishing a method to calculate CO2 equivalent reductions for the vehicle's 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 that this approach provides manufacturers with a 

highly cost-effective way to achieve a portion of GHG emissions reductions under the 

EPA program. EPA is estimating that manufacturers will on average generate 11 g/mi 

GHG credit toward meeting the 250 g/mi by 2016 (though some companies may generate 

more). EPA will also allow manufacturers to earn early A/C credits starting in MY 2009 

through 2011, as discussed further in a later section. There were many comments on the 

proposed A/C provisions. Nearly every one of these was supportive of EPA including 

A/C control as part of this rule, though there was some disagreement on some of the 

details of the program. The HFC crediting scheme was widely supported. The comments 

mainly were concentrated on indirect A/C related credits. The auto manufacturers and 

suppliers had some technical comments on A/C technologies, and there were many 

concerns with the proposed idle test. EPA has made some minor adjustments in both of 

 

37 49 U.S.C. 32903(f)(2). 

Deleted: pollutants
33 

these areas that we believe are responsive to these concerns. EPA addresses A/C issues 

in greater detail in Section III of this preamble and in Chapter 2 of EPA’s RIA. 

c. Flexible-fuel and Alternative Fuel Vehicle Credits 

EPCA authorizes a compliance flexibility incentive under the CAFE program for 

production of dual-fueled or flexible-fuel vehicles (FFV) and dedicated alternative fuel 

vehicles. FFVs are vehicles that can run both on an alternative fuel and conventional 

fuel. Most FFVs are E85 capable vehicles, which can run on either gasoline or a mixture 

of up to 85 percent ethanol and 15 percent gasoline (E85). Dedicated alternative fuel 

vehicles are vehicles that run exclusively on an alternative fuel. EPCA was amended by 

EISA to extend the period of availability of the FFV incentive, but to begin phasing it out 

by annually reducing the amount of FFV incentive that can be used toward compliance 

with the CAFE standards.38 Although NHTSA expressed concern about the non-use of 

alternative fuel by FFVs in a 2002 report to Congress (Effects of the Alternative Motor 

Fuels Act CAFE Incentives Policy), EISA does not premise the availability of the FFV 

credits on actual use of alternative fuel by an FFV vehicle. Under NHTSA’s CAFE 

program, pursuant to EISA, no FFV credits will be available for CAFE compliance after 

MY 2019.39 For dedicated alternative fuel vehicles, there are no limits or phase-out of 

the credits. As required by the statute, NHTSA will continue to allow the use of FFV 

credits for purposes of compliance with the CAFE standards until the end of the EISA 

phase-out period. 

For the GHG program, as proposed, EPA will allow FFV credits in line with 

EISA limits, but only during the period from MYs 2012 to 2015. After MY 2015, EPA 

will only allow FFV credits based on a manufacturer’s demonstration that the alternative 

fuel is actually being used in the vehicles and based on the vehicle’s actual performance. 

EPA discusses this in more detail in Section III.C of the preamble, including a summary 

of key comments. These provisions are being finalized as proposed, with further 

discussion in Section III.C of how manufacturers can demonstrate that the alternative fuel 

is being used. 

d. Temporary Lead-time Allowance Alternative Standards Under the EPA 

Final Rule 

Manufacturers with limited product lines may be especially challenged in the 

early years of the National Program, and need additional lead time. 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 manufacturer fleets consist entirely of vehicles with very 

high baseline CO2 emissions. Their vehicles are above the CO2 emissions target for that 

vehicle footprint, but do not have other types of vehicles in their production mix with 

 

38 EPCA provides a statutory incentive for production of FFVs by specifying that their fuel economy is 

determined using a special calculation procedure that results in those vehicles being assigned a higher fuel 

economy level than would otherwise occur. This is typically referred to as an FFV credit. 

39 Id.
34 

which to average. Often, these manufacturers pay fines under the CAFE program rather 

than meet the applicable CAFE standard. EPA believes that these technological 

circumstances call for more lead time in the form of a more gradual phase-in of 

standards. 

 EPA is finalizing a temporary lead-time allowance for manufacturers that sell 

vehicles in the U.S. in MY 2009 and for which U.S. vehicle sales in that model year are 

below 400,000 vehicles. This allowance will be available only during the MY 2012-2015 

phase-in years of the program. A manufacturer that satisfies the threshold criteria will be 

able to treat a limited number of vehicles as a separate averaging fleet, which will be 

subject to a less stringent GHG standard.40 Specifically, a standard of 25 percent above 

the vehicle’s otherwise applicable foot-print target level will apply to up to 100,000 

vehicles total, spread over the four year period of MY 2012 through 2015. Thus, the 

number of vehicles to which the flexibility could apply is limited. EPA also is setting 

appropriate restrictions on credit use for these vehicles, as discussed further in Section 

III. By MY 2016, these allowance vehicles must be averaged into the manufacturer’s full 

fleet (i.e., they will no longer be eligible for a different standard). EPA discusses this in 

more detail in Section III.B of the preamble. 

 EPA received comments from several smaller manufacturers that the TLAAS 

program was insufficient to allow manufacturers with very limited product lines to 

comply. These manufacturers commented that they need additional lead time to meet the 

standards, because their CO2 baselines are significantly higher and their vehicle product 

lines are even more limited, reducing their ability to average across their fleets compared 

even to other TLAAS manufacturers. EPA fully summarizes the public comments on the 

TLAAS program, including comments not supporting the program, in Section III.B. In 

summary, in response to the lead time issues raised by manufacturers, EPA is modifying 

the TLAAS program that applies to manufacturers with between 5,000 and 50,000 U.S. 

vehicle sales in MY 2009. EPA believes these provisions are necessary given that, 

compared with other TLAAS manufacturers, these manufacturers have even more limited 

product offerings across which to average and higher baseline CO2 emissions, and thus 

need additional leadtime to meet the standards. These manufactures would have an 

increased allotment of vehicles, a total of 250,000, compared to 100,000 vehicles (for 

other TLAAS-eligible manufacturers). In addition, the TLAAS program for these 

manufacturers would be extended by one year, through MY2016 for these vehicles, for a 

total of five years of eligibility. The other provisions of the TLAAS program would 

continue to apply, such as the restrictions on credit trading and the level of the standard. 

Additional restrictions would also apply to these vehicles, as discussed in Section III. In 

addition, for the smallest volume manufacturers, those with below 5,000 U.S. vehicle 

sales, EPA is not setting standards at this time but is instead deferring standards until a 

future rulemaking. This is the same approach we are using for small businesses. The 

unique issues involved with these manufacturers will be addressed in that future 

 

40 EPCA does not permit such an allowance. Consequently, manufacturers who may be able to take 

advantage of a lead-time allowance under the GHG standards would be required to comply with the 

applicable CAFE standard or be subject to penalties for non-compliance. 

Deleted: .
35 

rulemaking. Further discussion of the public comment on these issues and details on 

these changes from the proposed program are included in Section III. 

e. Additional Credit Opportunities under the Clean Air Act (CAA) 

 EPA is establishing additional opportunities for early credits in MYs 2009-2011 

through over-compliance with a baseline standard. The baseline standard is set to be 

equivalent, on a national level, to the California standards. Credits can 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 providing for early credits based on over-compliance with CAFE, but only 

for vehicles sold in states outside of California and the CAA section 177 states. Under 

the early credit provisions, no early FFV credits would be allowed, except those achieved 

by over-compliance with the California program based on California’s provisions that 

manufacturers demonstrate actual use of the alternative fuel. EPA’s early credits 

provisions are designed to ensure that there would be no double counting of early credits. 

NHTSA notes, however, that credits for overcompliance with CAFE standards during 

MYs 2009-2011 will still be available for manufacturers to use toward compliance in 

future model years, just as before. 

 EPA received comments from some environmental organizations and states 

expressing concern that these early credits were inappropriate windfall credits because 

they provided credits for actions that were not surplus, that is above what would 

otherwise be required for compliance with either state or federal motor vehicle standards. 

This focused on the credits for over-compliance with the California standards generated 

during model years 2009 and perhaps 2010, where according to commenters the CAFE 

requirements were in effect more stringent than the California standards. EPA believes 

that early credits provide a valuable incentive for manufacturers that have implemented 

fuel efficient technologies in excess of their CAFE compliance obligations prior to 

MY2012. With appropriate restrictions, these credits, reflecting over-compliance over a 

three model year time frame (MY2009-2011) and not just over one or two model years, 

will be surplus reductions and not otherwise required by law. Therefore, EPA is 

finalizing these provisions largely as proposed, but in response to comments, with an 

additional restriction on the trading of MY 2009 credits. The overall structure of this 

early credit program addresses concerns about the potential for windfall credits in the 

first one or two model years. This issue is fully discussed in Section III.C. 

EPA is providing an additional temporary incentive to encourage the 

commercialization of advanced GHG/fuel economy control technologies--including 

electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles 

(FCVs)--for model years 2012-2016. EPA’s proposal included an emissions compliance 

value of zero grams/mile for EVs and FCVs, and the electric portion of PHEVs, and a 

multiplier in the range of 1.2 to 2.0, so that each advanced technology vehicle would 

count as greater than one vehicle in a manufacturer’s fleetwide compliance calculation. 

EPA received many comments on the proposed incentives. Many state and 
36 

environmental organization commenters believed that the combination of these incentives 

could undermine the GHG benefits of the rule, and believed the emissions compliance 

values should take into account the net upstream GHG emissions associated with 

electrified vehicles compared to vehicles powered by petroleum based fuel. Auto 

manufacturers generally supported the incentives, some believing the incentives to be a 

critical part of the National Program. Most auto makers supported both the zero 

grams/mile emissions compliance value and the higher multipliers. 

Upon considering the public comments on this issue, EPA is finalizing an 

advanced technology vehicle incentive program that includes a zero gram/mile emissions 

compliance value for EVs and FCVs, and the electric portion of PHEVs, for up to the 

first 200,000 EV/PHEV/FCV vehicles produced by a given manufacturer during 

MY2012-2016 (for a manufacturer that produces less than 25,000 EVs, PHEVs, and 

FCVs in MY2012), or for up to the first 300,000 EV/PHEV/FCV vehicles produced 

during MY2012-2016 (for a manufacturer that produces 25,000 or more EVs, PHEVs, 

and FCVs in MY2012). For any production greater than this amount, the compliance 

value for the vehicle will be greater than zero gram/mile, set at a level that reflects the 

vehicle’s net increase in upstream GHG emissions in comparison to the gasoline vehicle 

it replaces. In addition, EPA is not finalizing a multiplier. EPA will also allow this early 

advanced technology incentive program beginning in MYs 2009-2011. The purpose of 

these provisions is to provide a temporary incentive to promote technologies which have 

the potential to produce very large GHG reductions in the future. The tailpipe GHG 

emissions from EVs, FCVs, and PHEVs operated on grid electricity are zero, and 

traditionally the emissions of the vehicle itself are all that EPA takes into account for 

purposes of compliance with standards set under section 202(a). This has not raised any 

issues for criteria pollutants, as upstream emissions associated with production and 

distribution of the fuel are addressed by comprehensive regulatory programs focused on 

the upstream sources of those emissions. At this time, however, there is no such 

comprehensive program addressing upstream emissions of GHGs, and the upstream GHG 

emissions associated with production and distribution of electricity are higher than the 

corresponding upstream GHG emissions of gasoline or other petroleum based fuels. In 

the future, vehicle fleet electrification combined with advances in low-carbon technology 

in the electricity sector have the potential to transform the transportation sector’s 

contribution to the country’s GHG emissions. EPA will reassess the issue of how to 

address EVs, PHEVs, and FCVs in rulemakings for model years 2017 and beyond, based 

on the status of advanced vehicle technology commercialization, the status of upstream 

GHG control programs, and other relevant factors. Further discussion of the temporary 

advanced technology vehicle incentives, including more detail on the public comments 

and EPA’s response, is found in Section III.C. 

EPA is also providing an option for manufacturers to generate credits for 

employing new and innovative technologies that achieve GHG reductions that are not 

reflected on current test procedures, as proposed. Examples of such “off-cycle” 

technologies might include solar panels on hybrids, adaptive cruise control, and active 

aerodynamics, among other technologies. These three credit provisions are discussed in 

more detail in Section III. 

Deleted: if there were a program to 

control upstream emissions of GHGs, 

then the tailpipe level of zero gram/mile 

from these vehicles has the potential to 

produce very large reductions in GHG 

emissions, and 

Deleted: Recognizing the potential of 

these vehicle technologies for very large 

future reductions, EPA will continue to 

use the tailpipe value of zero gram/mile 

as the compliance value as an incentive 

for the initial production of these 

vehicles.
37 

5. Coordinated Compliance 

Previous NHTSA and EPA regulations and statutory provisions establish ample 

examples on which to develop an effective compliance program that achieves the energy 

and environmental benefits from CAFE and motor vehicle GHG standards. NHTSA and 

EPA have developed a program that recognizes, and replicates as closely as possible, the 

compliance protocols associated with the existing CAA Tier 2 vehicle emission 

standards, and with CAFE standards. The certification, testing, reporting, and associated 

compliance activities closely track current practices and are thus familiar to 

manufacturers. EPA already oversees testing, collects and processes test data, and 

performs calculations to determine compliance with both CAFE and CAA standards. 

Under this coordinated approach, the compliance mechanisms for both programs are 

consistent and non-duplicative. EPA will also apply the CAA authorities applicable to its 

separate in-use requirements in this program. 

The compliance approach allows manufacturers to satisfy the new program 

requirements in the same general way they comply with existing applicable CAA and 

CAFE requirements. Manufacturers would demonstrate compliance on a fleet-average 

basis at the end of each model year, allowing model-level testing to continue throughout 

the year as is the current practice for CAFE determinations. The compliance program 

design establishes a single set of manufacturer reporting requirements and relies on a 

single set of underlying data. This approach still allows each agency to assess 

compliance with its respective program under its respective statutory authority. 

NHTSA and EPA do not anticipate any significant noncompliance under the 

National Program. However, failure to meet the fleet average standards (after credit 

opportunities are exhausted) would ultimately result in the potential for penalties under 

both EPCA and the CAA. The CAA allows EPA considerable discretion in assessment 

of penalties. 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. This is the same mechanism used for EPA’s 

National Low Emission Vehicle and Tier 2 corporate average standards, and to date there 

have been no instances of noncompliance. CAFE penalties are specified by EPCA and 

would be assessed for the entire noncomplying fleet at a rate of $5.50 times the number 

of vehicles in the fleet, times the number of tenths of mpg by which the fleet average falls 

below the standard. In the event of a compliance action arising out of the same facts and 

circumstances, EPA could consider CAFE penalties when determining appropriate 

remedies for the EPA case. 

Several stakeholders commented on the proposed coordinated compliance 

approach. The comments indicated broad support for the overall approach EPA 

proposed. In particular, both regulated industry and the public interest community 

appreciated the attempt to streamline compliance by adopting current practice where 

possible and by coordinating EPA and NHTSA compliance requirements. Thus the final 

compliance program design is largely unchanged from the proposal. Some commenters 
38 

requested additional detail or clarification in certain areas and others suggested some 

relatively narrow technical changes, and EPA has responded to these suggestions. EPA 

and NHTSA summarize these comments and the agencies’ responses in Sections III and 

IV, respectively, below. The Response to Comments document associated with this 

document includes all of the comments and responses of the two agencies. 

C. Summary of Costs and Benefits of the National Program 

 This section summarizes the projected costs and benefits of the CAFE and GHG 

emissions standards. These projections helped inform the agencies’ choices among the 

alternatives considered and provide further confirmation that the final standards are an 

appropriate choice within the spectrum of choices allowable under their respective 

statutory criteria. The costs and benefits projected by NHTSA to result from these CAFE 

standards are presented first, followed by those from EPA’s analysis of the GHG 

emissions standards. 

 For several reasons, the estimates for costs and benefits presented by NHTSA and 

EPA, while consistent, are not directly comparable, and thus should not be expected to be 

identical. Most important, NHTSA and EPA’s standards would require slightly different 

fuel efficiency improvements. EPA’s GHG standard is more stringent in part due to its 

assumptions about manufacturers’ use of air conditioning credits, which result from 

reductions in air conditioning-related emissions of HFCs and CO2. NHTSA was unable 

to make assumptions about manufacturers’ improving the efficiency of air conditioners 

due to statutory limitations. In addition, the CAFE and GHG standards offer different 

program flexibilities, and the agencies’ analyses differ in their accounting for these 

flexibilities (for example, FFVs), primarily because NHTSA is statutorily prohibited from 

considering some flexibilities when establishing CAFE standards, while EPA is not. 

These differences contribute to differences in the agencies’ respective estimates of costs 

and benefits resulting from the new standards. 

 NHTSA performed two analyses: a primary analysis that shows the estimates of 

costs, fuel savings, and related benefits that the agency considered for purposes of 

establishing new CAFE standards, and a supplemental analysis that reflects the agency’s 

best estimate of the potential real-world effects of the CAFE standards, including 

manufacturers’ potential use of FFV credits in accordance with the provisions of EISA 

concerning their availability. Because EPCA prohibits NHTSA from considering the 

ability of manufacturers to use of FFV credits to increase their fleet average fuel 

economy when establishing CAFE standards, the agency’s primary analysis does not 

include them. However, EPCA does not prohibit NHTSA from considering the fact that 

manufacturers may pay civil penalties rather than complying with CAFE standards, and 

NHTSA’s primary analysis accounts for some manufacturers’ tendency to do so. In 

addition, NHTSA’s supplemental analysis of the effect of FFV credits on benefits and 

costs from its CAFE standards, demonstrates the real-world impacts of FFVs, and the 

summary estimates presented in Section IV include these effects. Including the use of 

FFV credits reduces estimated per-vehicle compliance costs of the program. However, as 

shown below, including FFV credits does not significantly change the projected fuel 
39 

savings and CO2 reductions, because FFV credits reduce the fuel economy levels that 

manufacturers achieve not only under the standards, but also under the baseline MY 2011 

CAFE standards. 

Also, EPCA, as amended by EISA, allows manufacturers to transfer credits 

between their passenger car and light truck fleets. However, EPCA also prohibits 

NHTSA from considering manufacturers’ ability to increase their average fuel economy 

through the use of CAFE credits when determining the stringency of the CAFE standards. 

Because of this prohibition, NHTSA’s primary analysis does not account for the extent to 

which credit transfers might actually occur. For purposes of its supplemental analysis, 

NHTSA considered accounting for the possibility that some manufacturers might utilize 

the opportunity under EPCA to transfer some CAFE credits between the passenger car 

and light truck fleets, but determined that in NHTSA’s year-by-year analysis, 

manufacturers’ credit transfers cannot be reasonably estimated at this time.41

EPA made explicit assumptions about manufacturers’ use of FFV credits under 

both the baseline and control alternatives, and its estimates of costs and benefits from the 

GHG standards reflect these assumptions. However, under the GHG standards, FFV 

credits would be available through MY 2015; starting in MY 2016, EPA will only allow 

FFV credits based on a manufacturer’s demonstration that the alternative fuel is actually 

being used in the vehicles and the actual GHG performance for the vehicle run on that 

alternative fuel. 

 EPA’s analysis also assumes that manufacturers would transfer credits between 

their car and truck fleets in the MY 2011 baseline subject to the maximum value allowed 

by EPCA, and that unlimited car-truck credit transfers would occur under the GHG 

standards. Including these assumptions in EPA’s analysis increases the resulting 

estimates of fuel savings and reductions in GHG emissions, while reducing EPA’s 

estimates of program compliance costs. 

 Finally, under the EPA GHG program, there is no ability for a manufacturer to 

intentionally pay fines in lieu of meeting the standard. Under EPCA, however, vehicle 

manufacturers are allowed to pay fines as an alternative to compliance with applicable 

CAFE standards. NHTSA’s analysis explicitly estimates the level of voluntary fine 

payment by individual manufacturers, which reduces NHTSA’s estimates of both the 

costs and benefits of its CAFE standards. In contrast, the CAA does not allow for fine 

payment (civil penalties) in lieu of compliance with emission standards, and EPA’s 

analysis of benefits from its standard thus assumes full compliance. This assumption 

results in higher estimates of fuel savings, of reductions in GHG emissions, and of 

manufacturers’ compliance costs to sell fleets that comply with both NHTSA’s CAFE 

program and EPA’s GHG program. 

 

41 NHTSA’s analysis estimates multi-year planning effects within a context in which each model year is 

represented explicitly, and technologies applied in one model year carry forward to future model years. 

NHTSA does not currently have a reasonable basis to estimate how a manufacturer might, for example, 

weigh the transfer of credits from the passenger car to the light truck fleet in MY 2013 against the potential 

to carry light truck technologies forward from MY 2013 through MY 2016. 
40 

 In summary, the projected costs and benefits presented by NHTSA and EPA are 

not directly comparable, because the GHG emission levels established by EPA include 

air conditioning-related improvements in equivalent fuel efficiency and HFC reductions, 

because of the assumptions incorporated in EPA’s analysis regarding car-truck credit 

transfers, and because of EPA's projection of complete compliance with the GHG 

standards. It should also be expected that overall, EPA’s estimates of GHG reductions 

and fuel savings achieved by the GHG standards will be slightly higher than those 

projected by NHTSA only for the CAFE standards because of the reasons described 

above. For the same reasons, EPA’s estimates of manufacturers’ costs for complying 

with the passenger car and light trucks GHG standards are slightly higher than NHTSA’s 

estimates for complying with the CAFE standards. 

 

 A number of stakeholders commented on NHTSA’s and EPA’s analytical 

assumptions in estimating costs and benefits of the program. These comments and any 

changes from the proposed values are summarized in Section II.F, and further in Sections 

III (for EPA) and IV (for NHTSA); the Response to Comments document presents the 

detailed responses to each of the comments. 

1. Summary of Costs and Benefits of NHTSA's CAFE 

Standards

 Without accounting for the compliance flexibilities that NHTSA is prohibited 

from considering when determining the level of new CAFE standards, since 

manufacturers’ decisions to use those flexibilities are voluntary, NHTSA estimates that 

these fuel economy increases would lead to fuel savings totaling 61 billion gallons 

throughout the useful lives of vehicles sold in MYs 2012-2016. At a 3% discount rate, 

the present value of the economic benefits resulting from those fuel savings is $143 

billion. 

The agency further estimates that these new CAFE standards will lead to 

corresponding reductions in CO2 emissions totaling 655 million metric tons (mmt) during 

the useful lives of vehicles sold in MYs 2012-2016. The present value of the economic 

benefits from avoiding those emissions is $14.5 billion, based on a global social cost of 

carbon value of approximately $21 per metric ton (in 2010, and growing thereafter). 

NHTSA also estimated the benefits associated with three more estimates of a one ton 

GHG reduction in 2010 ($5, $35, and $65), which will likewise grow thereafter. See 

Section II for a more detailed discussion of the social cost of carbon. It is important to 

note that NHTSA’s CAFE standards and EPA’s GHG standards will both be in effect, 

and each will lead to increases in average fuel economy and CO2 emissions reductions. 

The two agencies’ standards together comprise the National Program, and this discussion 

of costs and benefits of NHTSA’s CAFE standards does not change the fact that both the 

CAFE and GHG standards, jointly, are the source of the benefits and costs of the 

National Program. 

 
41 

Table I.C.1-1 NHTSA Fuel Saved (billion gallons) and CO2 Emissions Avoided (mmt) 

under CAFE Standards (without FFV Credits) 

2012 2013 2014 2015 2016 Total 

Fuel (b. gal.) 4.2 8.9 12.5 16.0 19.5 61.0 

CO2 (mmt) 44 94 134 172 210 655 

 Considering manufacturers’ ability to earn credit toward compliance by selling 

FFVs, NHTSA estimates very little change in incremental fuel savings and avoided CO2

emissions, assuming FFV credits would be used toward both the baseline and final 

standards: 

Table I.C.1-2 NHTSA Fuel Saved (billion gallons) and CO2 Emissions Avoided (million 

metric tons, mmt) under CAFE Standards (with FFV Credits) 

2012 2013 2014 2015 2016 Total 

Fuel (b. gal.) 4.9 8.2 11.3 15.0 19.1 58.6 

CO2 (mmt) 53 89 123 163 208 636 

NHTSA estimates that these fuel economy increases would produce other benefits 

both to drivers (e.g., reduced time spent refueling) and to the U.S. (e.g., reductions in the 

costs of petroleum imports beyond the direct savings from reduced oil purchases, as well 

as some disbenefits (e.g., increase traffic congestion) caused by drivers’ tendency to 

travel more when the cost of driving declines (as it does when fuel economy increases). 

NHTSA has estimated the total monetary value to society of these benefits and 

disbenefits, and estimates that the standards will produce significant net benefits to 

society. Using a 3% discount rate, NHTSA estimates that the present value of these 

benefits would total more than $180 billion over the useful lives of vehicles sold during 

MYs 2012-2016. More discussion regarding monetized benefits can be found in Section 

IV of this notice and in NHTSA’s Regulatory Impact Analysis. Note that the benefit 

calculation in Tables I.C.1-3 through 1-6 includes the benefits of reducing CO2

emissions,42 but not the benefits of reducing other GHG emissions. 

Table I.C.1-3 NHTSA Discounted Benefits ($billion) 

under the CAFE Standards (before FFV Credits, using 3 percent Discount Rate) 

 2012 2013 2014 2015 2016 Total 

Passenger Cars 6.8 15.2 21.6 28.7 35.2 107.5 

Light Trucks 5.1 10.7 15.5 19.4 24.3 75.0 

Combined 11.9 25.8 37.1 48 59.5 182.5 

 

42 CO2 benefits for purposes of these tables are calculated using the $21/ton SCC values. Note that net 

present value of reduced GHG emissions is calculated differently than other benefits. The same discount 

rate used to discount the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to 

calculate net present value of SCC for internal consistency. 
42 

Using a 7% discount rate, NHTSA estimates that the present value of these 

benefits would total more than $145 billion over the same time period. 

Table I.C.1-4 NHTSA Discounted Benefits ($billion) 

Under the CAFE Standards (before FFV Credits, using 7 percent Discount Rate) 

2012 2013 2014 2015 2016 Total 

Passenger Cars 5.5 12.3 17.5 23.2 28.6 87.0 

Light Trucks 4.0 8.4 12.2 15.3 19.2 59.2 

Combined 9.5 20.7 29.7 38.5 47.8 146.2 

 

NHTSA estimates that FFV credits could reduce achieved benefits by about 3.8%: 

Table I.C.1-5a NHTSA Discounted Benefits ($billion) 

under the CAFE Standards (with FFV Credits, using a 3 percent Discount Rate) 

2012 2013 2014 2015 2016 Total 

Passenger Cars 7.6 13.7 19.1 25.6 34.0 100.0 

Light Trucks 6.4 10.4 14.6 19.8 24.4 75.6 

Combined 14.0 24.1 33.7 45.4 58.4 175.6 

Table I.C.1-5b NHTSA Discounted Benefits ($billion) 

under the CAFE Standards (with FFV Credits, using a 7 percent Discount Rate) 

2012 2013 2014 2015 2016 Total 

Passenger Cars 6.1 11.1 15.5 20.7 27.6 80.9 

Light Trucks 5.0 8.2 11.5 15.6 19.3 59.7 

Combined 11.2 19.3 27.0 36.4 46.9 140.7 

 NHTSA attributes most of these benefits—about $143 billion (at a 3% discount 

rate and excluding consideration of FFV credits), as noted above—to reductions in fuel 

consumption, valuing fuel (for societal purposes) at the future pre-tax prices projected in 

the Energy Information Administration’s (AEO’s) reference case forecast from the 

Annual Energy Outlook (AEO) 2010 Early Release. NHTSA’s Final Regulatory Impact 

Analysis (FRIA) accompanying this rule presents a detailed analysis of specific benefits 

of the rule. 

Table I.C.1-6 Summary of Benefits Fuel Savings and CO2 Emissions Reduction Due to 

the Rule (before FFV Credits) 

Amount Monetized Value (Discounted) 

3% Discount Rate 7% Discount Rate 

Fuel savings 61.0 billion gallons $143.0 billion $112.0 billion 

CO2 emissions 

reductions 

655 mmt $14.5 billion $14.5 billion 
43 

NHTSA estimates that the increases in technology application necessary to 

achieve the projected improvements in fuel economy will entail considerable monetary 

outlays. The agency estimates that incremental costs for achieving its standards – that is, 

outlays by vehicle manufacturers over and above those required to comply with the MY 

2011 CAFE standards – will total about $52 billion (i.e., during MYs 2012-2016). 

Table I.C.1-7 NHTSA Incremental Technology Outlays ($billion) 

under the CAFE Standards (before FFV Credits) 

2012 2013 2014 2015 2016 Total 

Passenger Cars 4.1 5.4 6.9 8.2 9.5 34.2 

Light Trucks 1.8 2.5 3.7 4.3 5.4 17.6 

Combined 5.9 7.9 10.5 12.5 14.9 51.7 

 NHTSA estimates that use of FFV credits could significantly reduce these 

outlays: 

Table I.C.1-8 NHTSA Incremental Technology Outlays ($billion) 

under CAFE Standards (with FFV Credits) 

2012 2013 2014 2015 2016 Total 

Passenger Cars 2.6 3.6 4.8 6.1 7.5 24.6 

Light Trucks 1.1 1.5 2.5 3.4 4.4 12.9 

Combined 3.7 5.1 7.3 9.5 11.9 37.5 

 The agency projects that manufacturers will recover most or all of these additional 

costs through higher selling prices for new cars and light trucks. To allow manufacturers 

to recover these increased outlays (and, to a much lesser extent, the civil penalties that 

some companies are expected to pay for noncompliance), the agency estimates that the 

standards would lead to increases in average new vehicle prices ranging from $457 per 

vehicle in MY 2012 to $985 per vehicle in MY 2016: 

 

Table I.C.1-9 NHTSA Incremental Increases in Average New Vehicle Costs ($) 

under CAFE Standards (before FFV Credits) 

 2012 2013 2014 2015 2016 

Passenger Cars 505 573 690 799 907 

Light Trucks 322 416 621 752 961 

Combined 434 513 665 782 926 

 

NHTSA estimates that use of FFV credits could significantly reduce these costs, 

especially in earlier model years: 

Table I.C.1-10 NHTSA Incremental Increases in Average New Vehicle Costs ($) 

under CAFE Standards (with FFV Credits) 

 2012 2013 2014 2015 2016 

Passenger Cars 303 378 481 593 713 

Light Trucks 194 260 419 581 784 

Combined 261 333 458 589 737 
44 

 NHTSA estimates, therefore, that the total benefits of these CAFE standards will 

be more than three times the magnitude of the corresponding costs. As a consequence, its 

standards would produce net benefits of $130.7 billion at a 3 percent discount rate (with 

FFV credits, $135.0 billion) or $94.5 billion at a 7 percent discount rate over the useful 

lives of vehicles sold during MYs 2012-2016. 

2. Summary of Costs and Benefits of EPA's GHG Standards

 EPA has analyzed in detail the costs and benefits of the final GHG standards. 

Table I.C.2-1 shows EPA’s estimated lifetime fuel savings and CO2 equivalent emission 

reductions for all vehicles sold in the model years 2012-2016. The values in Table I.C.2-

1 are projected lifetime totals for each model year and are not discounted. As 

documented in EPA’s Final RIA, the potential credit transfer between cars and trucks 

may change the distribution of the fuel savings and GHG emission impacts between cars 

and trucks. As discussed above with respect to NHTSA’s CAFE standards, it is 

important to note that NHTSA’s CAFE standards and EPA’s GHG standards will both be 

in effect, and each will lead to increases in average fuel economy and reductions in CO2

emissions. The two agencies’ standards together comprise the National Program, and this 

discussion of costs and benefits of EPA’s GHG standards does not change the fact that 

both the CAFE and GHG standards, jointly, are the source of the benefits and costs of the 

National Program. 

Table I.C.2-1 EPA’s Estimated 2012-2016 Model Year Lifetime Fuel Saved and GHG

Emissions Avoided 

 2012 2013 2014 2015 2016 Total 

Fuel (billion gallons) 4.0 5.5 7.3 10.5 14.3 41.6 

Fuel (billion barrels) 0.10 0.13 0.17 0.25 0.34 0.99 

Cars 

CO2 EQ (mmt) 49.3 68.5 92.7 134 177 521 

 

Fuel (billion gallons) 3.3 5.0 6.6 9.0 12.2 36.1 

Fuel (billion barrels) 0.08 0.12 0.16 0.21 0.29 0.86 

Light Trucks 

CO2 EQ (mmt) 39.6 61.7 81.6 111 147 441 

 

Fuel (billion gallons) 7.3 10.5 13.9 19.5 26.5 77.7 

Fuel (billion barrels) 0.17 0.25 0.33 0.46 0.63 1.85 

Combined 

CO2 EQ (mmt) 88.8 130 174 244 325 962 

Table I.C.2-2 shows EPA’s estimated lifetime discounted benefits for all vehicles 

sold in model years 2012-2016. Although EPA estimated the benefits associated with 

four different values of a one ton GHG reduction ($5, $21, $35, $65), for the purposes of 

this overview presentation of estimated benefits EPA is showing the benefits associated 

with one of these marginal values, $21 per ton of CO2, in 2007 dollars and 2010 

emissions. Table I.C.2-2 presents benefits based on the $21 value. Section III.H presents 

the four marginal values used to estimate monetized benefits of GHG reductions and 
45 

Section III.H presents the program benefits using each of the four marginal values, which 

represent only a partial accounting of total benefits due to omitted climate change 

impacts and other factors that are not readily monetized. The values in the table are 

discounted values for each model year of vehicles throughout their projected lifetimes. 

The benefits include all benefits considered by EPA such as fuel savings, GHG 

reductions, PM benefits, energy security and other externalities such as reduced refueling 

and accidents, congestion and noise. The lifetime discounted benefits are shown for one 

of four different social cost of carbon (SCC) values considered by EPA. The values in 

Table I.C.2-2 do not include costs associated with new technology required to meet the 

GHG standard. 

 

Table I.C.2-2 EPA’s Estimated 2012-2016 Model Year Lifetime Discounted Benefits 

Assuming the $21/ton SCC Valuea,b,c (billions of 2007 dollars) 

Model Year Discount Rate 2012 2013 2014 2015 2016 Total

3% $21.8 $32.0 $42.8 $60.8 $83.3 $240

7% $17.4 $25.7 $34.2 $48.6 $66.4 $192 a The benefits include all benefits considered by EPA such as the 

economic value of reduced fuel consumption and accompanying savings 

in refueling time, climate-related economic benefits from reducing 

emissions of CO2 (but not other GHGs), economic benefits from reducing 

emissions of PM and other air pollutants that contribute to its formation, 

and reductions in energy security externalities caused by U.S. petroleum 

consumption and imports. The analysis also includes disbenefits 

stemming from additional vehicle use, such as the economic damages 

caused by accidents, congestion and noise. 

b

 Note that net present value of reduced GHG emissions is calculated 

differently than other benefits. The same discount rate used to discount 

the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. 

Refer to Section III.F for more detail. 

c

Monetized GHG benefits exclude the value of reductions in non-CO2

GHG emissions (HFC, CH4 and N2O) expected under this final rule. 

Although EPA has not monetized the benefits of reductions in these nonCO2 emissions, the value of these reductions should not be interpreted as 

zero. Rather, the reductions in non-CO2 GHGs will contribute to this 

rule’s climate benefits, as explained in Section III.F.2. The SCC TSD 

notes the difference between the social cost of non-CO2 emissions and 

CO2 emissions, and specifies a goal to develop methods to value non-CO2

emissions in future analyses. Also, as noted in Section III.H, SCC 

increases over time. The $21/ton value applies to 2010 emissions and 

grows larger over time. 

Table I.C.2-3 shows EPA’s estimated lifetime fuel savings, lifetime CO2 emission 

reductions, and the monetized net present values of those fuel savings and CO2 emission 

reductions. The gallons of fuel and CO2 emission reductions are projected lifetime values 

for all vehicles sold in the model years 2012-2016. The estimated fuel savings in billions 

of barrels and the GHG reductions in million metric tons of CO2 shown in Table I.C.2-3 

are totals for the five model years throughout their projected lifetime and are not 

discounted. The monetized values shown in Table I.C.2-3 are the summed values of the 
46 

discounted monetized-fuel savings and monetized-CO2 reductions for the five model 

years 2012-2016 throughout their lifetimes. The monetized values in Table I.C.2-3 

reflect both a 3 percent and a 7 percent discount rate as noted. 

Table I.C.2-3 EPA’s Estimated 2012-2016 Model Year Lifetime Fuel savings, CO2

Emission Reductions, and Discounted Monetized Benefits at a 3% Discount Rate 

(monetized values in 2007 dollars) 

 Amount $ value 

(billions) 

Fuel savings 1.8 billion barrels $182, 3% discount rate 

$142, 7% discount rate 

CO2e emission reductions 

(CO2 portion valued assuming $21/ton 

CO2 in 2010) 

962 MMT CO2e $17a,b

a

 $17 billion for 858 MMT of reduced CO2 emissions. As noted in Section III.H, the $21/ton value applies 

to 2010 emissions and grows larger over time. Monetized GHG benefits exclude the value of reductions in 

non-CO2 GHG emissions (HFC, CH4 and N2O) expected under this final rule. Although EPA has not 

monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not 

be interpreted as zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate 

benefits, as explained in Section III.F.2. The SCC TSD notes the difference between the social cost of nonCO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2 emissions in 

future analyses. 

b

 Note that net present value of reduced CO2 emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, and 2.5 

percent) is used to calculate net present value of SCC for internal consistency. Refer to Section III.F for 

more detail. 

Table I.C.2-4 shows EPA’s estimated incremental and total technology outlays for 

cars and trucks for each of the model years 2012-2016. The technology outlays shown in 

Table I.C.2-4 are for the industry as a whole and do not account for fuel savings 

associated with the program. 

Table I.C.2-4 EPA’s Estimated Incremental Technology Outlays (billions of 2007 

dollars) 

 2012 2013 2014 2015 2016 Total 

Cars $3.1 $5.0 $6.5 $8.0 $9.4 $31.9 

Trucks $1.8 $3.0 $3.9 $4.8 $6.2 $19.7 

Combined $4.9 $8.0 $10.3 $12.7 $15.6 $51.6 

 

Table I.C.2-5 shows EPA’s estimated incremental cost increase of the average 

new vehicle for each model year 2012-2016. The values shown are incremental to a 

baseline vehicle and are not cumulative. In other words, the estimated increase for 2012 

model year cars is $342 relative to a 2012 model year car absent the National Program. 

The estimated increase for a 2013 model year car is $507 relative to a 2013 model year 

car absent the National Program (not $342 plus $507). 
47 

Table I.C.2-5 EPA’s Estimated Incremental Increase in Average New Vehicle Cost (2007 

dollars per unit) 

2012 2013 2014 2015 2016 

Cars $342 $507 $631 $749 $869

Trucks $314 $496 $652 $820 $1,098

Combined $331 $503 $639 $774 $948

D. Background and Comparison of NHTSA and EPA Statutory Authority 

 Section I.C of the proposal contained a detailed overview discussion of the 

NHTSA and EPA statutory authorities. In addition to the discussion in the proposal, each 

agency discusses comments pertaining to its statutory authority and the agency’s 

responses in Sections III and IV of this notice, respectively. 

II. Joint Technical Work Completed for This Final Rule 

A. Introduction 

In this section NHTSA and EPA discuss several aspects of the joint technical 

analyses on which the two agencies collaborated. These analyses are common to the 

development of each agency’s final standards. Specifically we discuss: the development 

of the vehicle market forecast used by each agency for assessing costs, benefits, and 

effects, the development of the attribute-based standard curve shapes, the determination 

of the relative stringency between the car and truck fleet standards, the technologies the 

agencies evaluated and their costs and effectiveness, and the economic assumptions the 

agencies included in their analyses. The Joint Technical Support Document (TSD) 

discusses the agencies’ joint technical work in more detail. 

 B. Developing the Future Fleet for Assessing Costs, Benefits, and Effects 

1. Why Did the Agencies Establish a Baseline and Reference Vehicle Fleet? 

In order to calculate the impacts of the EPA and NHTSA regulations, it is 

necessary to estimate the composition of the future vehicle fleet absent these regulations, 

to provide a reference point relative to which costs, benefits, and effects of the 

regulations are assessed. As in the proposal, EPA and NHTSA have developed this 

comparison fleet in two parts. The first step was to develop a baseline fleet based on 

model year 2008 data. The second step was to project that fleet into model years 2011-

2016. This is called the reference fleet. The third step was to modify that MY 2011-

2016 reference fleet such that it had sufficient technology to meet the MY 2011 CAFE 

standards. This final version of the reference fleet is the light-duty fleet estimated to exist 

in MY 2012-2016 in the absence of today’s standards, based on the assumption that 

manufacturers would continue to meet the MY 2011 CAFE standards (or pay civil 
48 

penalties allowed under EPCA43) in the absence of further increases in the stringency of 

CAFE standards. Each agency used this approach to develop a final reference fleet to use 

in its modeling. All of the agencies’ estimates of emission reductions, fuel economy 

improvements, costs, and societal impacts are developed in relation to the respective 

reference fleets. 

EPA and NHTSA proposed a transparent approach to developing the baseline and 

reference fleets, largely working from publicly available data. This proposed approach 

differed from previous CAFE rules, which relied on confidential manufacturers’ product 

plan information to develop the baseline. Most of the public comments to the NPRM 

addressing this issue supported this methodology for developing the inputs to the rule's 

analysis. Because the input sheets can be made public, stakeholders can verify and check 

EPA’s and NHTSA’s modeling, and perform their own analyses with these datasets. In 

this final rulemaking, EPA and NHTSA are using an approach very similar to that 

proposed, continuing to rely on publicly available data as the basis for the baseline and 

reference fleets. 

2. How Did the Agencies Develop the Baseline Vehicle Fleet? 

At proposal, EPA and NHTSA developed a baseline fleet comprised of model 

year 2008 data gathered from EPA’s emission certification and fuel economy database. 

MY 2008 was used as the basis for the baseline vehicle fleet because it was the most 

recent model year for which a complete set of data is publicly available. This remains the 

case. Manufacturers are not required to submit final sales and mpg figures for MY 2009 

until April 2010, 44 after the CAFE standard’s mandated promulgation date. 

Consequently, in this final rule, EPA and NHTSA made no changes to the method or the 

results of the MY 2008 baseline fleet used at proposal, except for some specific 

corrections to engineering inputs for some vehicle models reflected in the market forecast 

input to NHTSA’s CAFE model. More details about how the agencies constructed this 

baseline fleet can be found in Chapter 1.2 of the Joint TSD. Corrections to engineering 

inputs for some vehicle models in the market forecast input to NHTSA’s CAFE model 

are discussed in Chapter 2 of the Joint TSD. 

3. How Did the Agencies Develop the Projected MY 2011-2016 Vehicle 

Fleet? 

EPA and NHTSA have 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). This projection utilizes a number 

of technical and econometric models which are designed to reflect both economic and 

 

43 That is, the manufacturers who have traditionally paid fines under EPCA instead of complying with the 

CAFE standards were “allowed,” for purposes of the reference fleet, to reach only the CAFE level at which 

paying fines became more cost-effective than adding technology, even if that fell short of the MY 2011 

standards. 

44 40 CFR 600.512-08, Model Year Report 
49 

regulatory conditions expected to exist in the future. In support of its projection of fuel 

use by light-duty vehicles, EIA projects sales of new cars and light trucks. In the 

proposal, the agencies used the three reports published by EIA as part of the AEO 2009. 

We also stated that updated versions of these reports could be used in the final rules 

should AEO timely issue a new version. EIA published an early version of its AEO 2010 

in December 2009, and the agencies are making use of it in this final rulemaking. The 

differences in projected sales in the 2009 report (used in the NPRM) and the early 2010 

report are very small, so NHTSA and EPA have decided to simply scale the NPRM 

volumes for cars and trucks (in the aggregate) to match those in the 2010 report. We thus 

employ the sales projections from the scaled updated 2009 Annual Energy Outlook, 

which is equivalent to AEO 2010 Early Release, for the final rule. The scaling factors for 

each model year are presented in Chapter 1 of the Joint TSD for this final rule.

The agencies recognize that AEO 2010 Early Release does include some impacts 

of future projected increases in CAFE stringency. We have closely examined the 

difference between AEO 2009 and AEO 2010 Early Release and we believe the 

differences in total sales and the car/truck split attributed to considerations of the standard 

in the final rule are small.45

In the AEO 2010 Early Release, EIA projects that total light-duty vehicle sales 

will gradually recover from their currently depressed levels by around 2013. In 2016, car 

sales are projected to be 9.4 million (57 percent) and truck sales are projected to be 7.1 

million (43 percent). Although the total level of sales of 16.5 million units is similar to 

pre-2008 levels, the fraction of car sales is projected to be higher than that existing in the 

2000-2007 timeframe. This projection reflects the impact of higher fuel prices, as well as 

EISA’s requirement that the new vehicle fleet average at least 35 mpg by MY 2020. The 

agencies note that AEO does not represent the fleet at a level of detail sufficient to 

explicitly account for the reclassification—promulgated as part of NHTSA’s final rule for 

MY 2011 CAFE standards—of a number of 2-wheel drive sport utility vehicles from the 

truck fleet to the car fleet for MYs 2011 and after. Sales projections of cars and trucks 

for future model years can be found in the Joint TSD for these final rules. 

In addition to a shift towards more car sales, sales of segments within both the car 

and truck markets have been changing and are expected to continue to change. 

Manufacturers are introducing more crossover models which offer much of the utility of 

SUVs but use more car-like designs. The AEO 2010 report does not, however, 

distinguish such changes within the car and truck classes. In order to reflect these 

changes in fleet makeup, EPA and NHTSA considered several other available forecasts. 

EPA purchased and shared with NHTSA forecasts from two well-known industry 

analysts, CSM Worldwide (CSM), and J.D. Powers. NHTSA and EPA decided to use the 

 

45 The agencies have also looked at the impact of the rule in EIA’s projection, and concluded that the 

impact was small. EPA and NHTSA have evaluated the differences between the AEO 2010 (early draft) 

and AEO 2009 and found little difference in the fleet projections (or fuel prices). This analysis can be 

found in the memo to the docket: Kahan, A. and Pickrell, D. Memo to Docket EPA-HQ-OAR-2009-0472 

and Docket NHTSA-2009-0059. "Energy Information Administration’s Annual Energy Outlook 2009 and 

2010." March 24, 2010.
50 

forecast from CSM, modified as described below, for several reasons presented in the 

NPRM preamble46 and draft Joint TSD. The changes between company market share 

and industry market segments were most significant from 2011-2014, while for 2014-

2015 the changes were relatively small. Noting this, and lacking a credible forecast of 

company and segment shares after 2015, the agencies assumed 2016 market share and 

market segments to be the same as for 2015. 

CSM Worldwide provides quarterly sales forecasts for the automotive industry. 

In the NPRM, the agencies identified a concern with the 2nd quarter CSM forecast that 

was used as a basis for the projection. CSM projections at that time were based on an 

industry that was going through a significant financial transition, and as a result the 

market share forecasts for some companies were impacted in surprising ways. As the 

industry’s situation has settled somewhat over the past year, the 4th quarter projection 

appears to address this issue – for example, it shows nearly a two-fold increase in sales 

for Chrysler compared to significant loss of market share shown for Chrysler in the 2nd

quarter projection. Additionally, some commenters, such as GM, recognized that the 

fleet appeared to include an unusually high number of large pickup trucks.47 In fact, the 

agencies discovered (independently of the comments) that CSM’s standard forecast 

included all vehicles below 14,000 GVWR, including class 2b and 3 heavy duty vehicles, 

which are not regulated by this final rule.48 The commenters were thus correct that light 

duty reference fleet projections at proposal had more full size trucks and vans due to the 

mistaken inclusion of the heavy duty versions of those vehicles. The agencies requested 

a separate data forecast from CSM that filtered their 4th quarter projection to exclude 

these heavy duty vehicles. The agencies then used this filtered 4th quarter forecast for the 

final rule. A detailed comparison of the market by manufacturer can be found in the final 

TSD. For the public’s reference, copies of the 2nd, 3rd, and 4th quarter CSM forecasts 

have been placed in the docket for this rulemaking.49

We then projected the CSM forecasts for relative sales of cars and trucks by 

manufacturer and by market segment onto the total sales estimates of AEO 2010. Tables 

II.B.3-1 and II.B.3-2 show the resulting projections for the reference 2016 model year 

and compare these to actual sales that occurred in baseline 2008 model year. Both tables 

show sales using the traditional definition of cars and light trucks. 

Table II.B.3-1 Annual Sales of Light-Duty Vehicles by Manufacturer in 2008 and 

Estimated for 2016 

 

46 See, e.g., 74 FR 49484. 

47 GM argued that the unusually large volume of large pickups led to higher overall requirements for those 

vehicles. As discussed below, the agencies’ analysis for the final rule corrects the number of large pickups. 

With this correction and other updates to the agencies’ market forecast and other analytical inputs, the 

target functions defining the final standards (and achieving the average required performance levels 

defining the national program) are very similar to those from the NPRM, especially for light trucks, as 

illustrated below in Figures II.C-7 and II.C-8. 

48 These include the Ford F-250 & F-350, Econoline E-250, & E-350; Chevy Express, Silverado 2500, & 

3500; GMC Savana, Dodge 2500, & 3500; among others. 

49 The CSM Sales Forecast Excel file (“CSM North America Sales Forecasts 2Q09 3Q09 4Q09 for the 

Docket”) is available in the docket (Docket EPA-HQ-OAR-2009-0472). 
51 

 Cars Light Trucks Total 

2008 MY 2016 MY 2008 MY 2016 MY 2008 MY 2016 MY 

BMW 

 

291,796 424,923 61,324 171,560 353,120 596,482 

Chrysler 

 

537,808 340,908 1,119,397 525,128 1,657,205 866,037 

Daimler 

 

208,052 272,252 79,135 126,880 287,187 399,133 

Ford 

 

709,583 1,118,727 1,158,805 1,363,256 1,868,388 2,481,983 

General Motors 

 

1,370,280 230,705 1,749,227 95,054 3,119,507 325,760 

Honda 

 

899,498 1,283,937 612,281 1,585,828 1,511,779 2,869,766 

Hyundai 

 

270,293 811,214 120,734 671,437 391,027 1,482,651 

Kia 

 

145,863 401,372 135,589 211,996 281,452 613,368 

Mazda 

 

191,326 455,643 111,220 210,717 302,546 666,360 

Mitsubishi 

 

76,701 350,055 24,028 144,992 100,729 495,047 

Porsche 

 

18,909 49,914 18,797 88,754 37,706 138,668 

Nissan 

 

653,121 33,471 370,294 16,749 1,023,415 50,220 

Subaru 

 

149,370 876,677 49,211 457,114 198,581 1,333,790 

Suzuki 

 

68,720 97,466 45,938 26,108 114,658 123,574 

Tata 

 

9,596 65,806 55,584 42,695 65,180 108,501 

Toyota 

 

1,143,696 2,069,283 1,067,804 1,249,719 2,211,500 3,319,002 

Volkswagen 

 

290,385 586,011 26,999 124,703 317,384 710,011 

Total 

 

7,034,997 9,468,365 6,806,367 7,112,689 13,841,364 16,580,353 

Table II.B.3-2 Annual Sales of Light-Duty Vehicles by Market Segment in 2008 and 

Estimated for 2016 

Cars Light Trucks 

2008 MY 2016 MY 2008 MY 2016 MY 
52 

Full-Size Car 829,896 530,945 Full-Size Pickup 1,331,989 1,379,036 

Luxury Car 1,048,341 1,548,242 Mid-Size Pickup 452,013 332,082 

Mid-Size Car 2,166,849 2,550,561 Full-Size Van 33,384 65,650 

Mini Car 617,902 1,565,373 Mid-Size Van 719,529 839,194 

Small Car 1,912,736 2,503,566 Mid-Size MAV* 110,353 116,077 

Specialty Car 459,273 769,679 Small MAV 231,265 62,514 

 Full-Size SUV* 559,160 232,619 

 Mid-Size SUV 436,080 162,502 

 Small SUV 196,424 108,858 

 Full-Size CUV* 264,717 260,662 

 Mid-Size CUV 923,165 1,372,200 

 Small CUV 1,548,288 2,181,296 

Total Sales** 7,034,997 9,468,365 6,806,367 7,079,323 

* MAV – Multi-Activity Vehicle, SUV – Sport Utility Vehicle, CUV – Crossover Utility Vehicle 

**Total Sales are based on the classic Car/Truck definition. 

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 requires more detailed information about each vehicle model. This is 

described in greater detail in Chapter 1 of the final 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. 

The first step for both cars and trucks was to break down each manufacturer’s 

2008 sales according to the market segment definitions used by CSM. For example, the 

agencies found that Ford’s50 cars sales in 2008 were broken down as shown in Table 

II.B.3-3: 

Table II.B.3-3: Breakdown of Ford’s 2008 Car Sales 

Full-size cars 160,857 units 

Mid-size Cars 170,399 units 

Small/Compact Cars 180,249 units 

 

50 Note: In the NPRM, Ford’s 2008 sales per segment, and the total number of cars was different than 

shown here. The change in values is due to a correction of vehicle segments for some of Ford’s vehicles. 
53 

Subcompact/Mini Cars None 

Luxury cars 87,272 units 

Specialty cars 110,805 units 

 

EPA and NHTSA then adjusted each manufacturer’s sales of each of its car 

segments (and truck segments, separately) so that the manufacturer’s total sales of cars 

(and trucks) matched the total estimated for each future model year based on AEO and 

CSM forecasts. For example, as indicated in Table II.B.3-1, Ford’s total car sales in 2008 

were 709,583 units, while the agencies project that they will increase to 1,113,333 units 

by 2016. This represents an increase of 56.9 percent. Thus, the agencies increased the 

2008 sales of each Ford car segment by 56.9 percent. This produced estimates of future 

sales which matched total car and truck sales per AEO and the manufacturer breakdowns 

per CSM. However, the sales splits by market segment would not necessarily match 

those of CSM (shown for 2016 in Table II.B.3-2). 

In order to adjust the market segment mix for cars, the agencies first adjusted 

sales of luxury, specialty and other cars. Since the total sales of cars for each 

manufacturer were already set, any changes in the sales of one car segment had to be 

compensated by the opposite change in another segment. For the luxury, specialty and 

other car segments, it is not clear how changes in sales would be compensated. For 

example, if luxury car sales decreased, would sales of full-size cars increase, mid-size 

cars, and so on? The agencies have assumed that any changes in the sales of cars within 

these three segments were compensated for by proportional changes in the sales of the 

other four car segments. For example, for 2016, the figures in Table II.B.3-2 indicate that 

luxury car sales in 2016 are 1,548,242 units. Luxury car sales are 1,048,341 units in 

2008. However, after adjusting 2008 car sales by the change in total car sales for 2016 

projected by EIA and a change in manufacturer market share per CSM, luxury car sales 

decreased to 1,523,171 units. Thus, overall for 2016, luxury car sales had to increase by 

25,071 units or 6 percent. The agencies accordingly increased the luxury car sales by 

each manufacturer by this percentage. The absolute decrease in luxury car sales was 

spread across sales of full-size, mid-size, compact and subcompact cars in proportion to 

each manufacturer’s sales in these segments in 2008. The same adjustment process was 

used for specialty cars and the “other cars” segment defined by CSM. 

The agencies used a slightly different approach to adjust for changing sales of the 

remaining four car segments. Starting with full-size cars, the agencies again determined 

the overall percentage change that needed to occur in future year full-size car sales after 

1) adjusting for total sales per AEO 2010, 2) adjusting for manufacturer sales mix per 

CSM and 3) adjusting the luxury, specialty and other car segments, in order to meet the 

segment sales mix per CSM. Sales of each manufacturer’s large cars were adjusted by 

this percentage. However, instead of spreading this change over the remaining three 

segments, the agencies assigned the entire change to mid-size vehicles. The agencies did 

so because the CSM data followed the trend of increasing volumes of smaller cars while 

reducing volumes of larger cars. If a consumer had previously purchased a full-size car, 

we thought it unlikely that their next purchase would decrease by two size categories, 
54 

down to a subcompact. It seemed more reasonable to project that they would drop one 

vehicle size category smaller. Thus, the change in each manufacturer’s sales of full-size 

cars was matched by an opposite change (in absolute units sold) in mid-size cars. 

The same process was then applied to mid-size cars, with the change in mid-size 

car sales being matched by an opposite change in compact car sales. This process was 

repeated one more time for compact car sales, with changes in sales in this segment being 

matched by the opposite change in the sales of subcompacts. The overall result was a 

projection of car sales for model years 2012-2016--the reference fleet--which matched 

the total sales projections of the AEO forecast and the manufacturer and segment splits of 

the CSM forecast. These sales splits can be found in Chapter 1 of the Joint TSD for this 

final rule. 

As mentioned above, the agencies applied a slightly different process to truck 

sales, because the agencies could not confidently project how the change in sales from 

one segment preferentially went to or came from another particular segment. Some trend 

from larger vehicles to smaller vehicles would have been possible. However, the CSM 

forecasts indicated large changes in total sport utility vehicle, multi-activity vehicle and 

cross-over sales which could not be connected. Thus, the agencies applied an iterative, 

but straightforward process for adjusting 2008 truck sales to match the AEO and CSM 

forecasts. 

The first three steps were exactly the same as for cars. EPA and NHTSA broke 

down each manufacturer’s truck sales into the truck segments as defined by CSM. The 

agencies then adjusted all manufacturers’ truck segment sales by the same factor so that 

total truck sales in each model year matched AEO projections for truck sales by model 

year. The agencies then adjusted each manufacturer’s truck sales by segment 

proportionally so that each manufacturer’s percentage of total truck sales matched that 

forecast by CSM. This again left the need to adjust truck sales by segment to match the 

CSM forecast for each model year. 

In the fourth step, the agencies adjusted the sales of each truck segment by a 

common factor so that total sales for that segment matched the combination of the AEO 

and CSM forecasts. For example, projected sales of large pickups across all 

manufacturers were 1,286,184 units in 2016 after adjusting total sales to match AEO’s 

forecast and adjusting each manufacturer’s truck sales to match CSM’s forecast for the 

breakdown of sales by manufacturer. Applying CSM’s forecast of the large pickup 

segment of truck sales to AEO’s total sales forecast indicated total large pickup sales of 

1,379,036 units. Thus, we increased each manufacturer’s sales of large pickups by 7 

percent.51 The agencies applied the same type of adjustment to all the other truck 

segments at the same time. The result was a set of sales projections which matched 

AEO’s total truck sales projection and CSM’s market segment forecast. However, after 

this step, sales by manufacturer no longer met CSM’s forecast. Thus, we repeated step 

 

51 Note: In the NPRM this example showed 29 percent instead of 7 percent. The significant decrease was 

due to using the filtered 4th quarter CSM forecast. Commenters, such as GM, had commented that we had 

too many full-size trucks and vans, and this change addresses their comment. 
55 

three and adjusted each manufacturer’s truck sales so that they met CSM’s forecast. The 

sales of each truck segment (by manufacturer) were adjusted by the same factor. The 

resulting sales projection matched AEO’s total truck sales projection and CSM’s 

manufacturer forecast, but sales by market segment no longer met CSM’s forecast. 

However, the difference between the sales projections after this fifth step was closer to 

CSM’s market segment forecast than it was after step three. In other words, the sales 

projection was converging to the desired result. The agencies repeated these adjustments, 

matching manufacturer sales mix in one step and then market segment in the next a total 

of 19 times. At this point, we were able to match the market segment splits exactly and 

the manufacturer splits were within 0.1 percent of our goal, which is well within the 

needs of this analysis. 

The next step in developing the reference fleets was to characterize the vehicles 

within each manufacturer-segment combination. In large part, this was based on the 

characterization of the specific vehicle models sold in 2008 -- i.e., the vehicles 

comprising the baseline fleet. EPA and NHTSA chose to base our estimates of detailed 

vehicle characteristics on 2008 sales for several reasons. One, these vehicle 

characteristics are not confidential and can thus be published here for careful review by 

interested parties. Two, because it is constructed beginning with actual sales data, this 

vehicle fleet is limited to vehicle models known to satisfy consumer demands in light of 

price, utility, performance, safety, and other vehicle attributes. 

As noted above, the agencies gathered most of the information about the 2008 

baseline vehicle fleet from EPA’s emission certification and fuel economy database. The 

data obtained from this source included vehicle production volume, fuel economy, engine 

size, number of engine cylinders, transmission type, fuel type, etc. EPA’s certification 

database does not include a detailed description of the types of fuel economyimproving/CO2-reducing technologies considered in this final rule. Thus, the agencies 

augmented this description with publicly available data which includes more complete 

technology descriptions from Ward’s Automotive Group.52 In a few instances when 

required vehicle information (such as vehicle footprint) was not available from these two 

sources, the agencies obtained this information from publicly accessible internet sites 

such as Motortrend.com and Edmunds.com.53 

The projections of future car and truck sales described above apply to each 

manufacturer’s sales by market segment. The EPA emissions certification sales data are 

available at a much finer level of detail, essentially vehicle configuration. As mentioned 

above, the agencies placed each vehicle in the EPA certification database into one of the 

CSM market segments. The agencies then totaled the sales by each manufacturer for 

each market segment. If the combination of AEO and CSM forecasts indicated an 

increase in a given manufacturer’s sales of a particular market segment, then the sales of 

all the individual vehicle configurations were adjusted by the same factor. For example, 

if the Prius represented 30 percent of Toyota’s sales of compact cars in 2008 and 

Toyota’s sales of compact cars in 2016 was projected to double by 2016, then the sales of 

 

52 Note that WardsAuto.com is a fee-based service, but all information is public to subscribers. 

53 Motortrend.com and Edmunds.com are free, no-fee internet sites. 
56 

the Prius were doubled, and the Prius sales in 2016 remained 30 percent of Toyota’s 

compact car sales. 

The projection of average footprint for both cars and trucks remained virtually 

constant over the years covered by the final rulemaking. This occurrence is strictly a 

result of the CSM projections. There are a number of trends that occur in the CSM 

projections that caused the average footprint to remain constant. First, as the number of 

subcompacts increases, so do the number of 2-wheel drive crossover vehicles (that are 

regulated as cars). Second, truck volumes have many segment changes during the 

rulemaking time frame. There is no specific footprint related trend in any segment that 

can be linked to the unchanging footprint, but there is a trend that non-pickups’ volumes 

will move from truck segments that are ladder frame to those that are unibody-type 

vehicles. A table of the footprint projections is available in the TSD as well as further 

discussion on this topic. 

4. How Was the Development of the Baseline and Reference Fleets for this 

Final Rule Different from NHTSA’s Historical Approach?

 NHTSA has historically based its analysis of potential new CAFE standards on 

detailed product plans the agency has requested from manufacturers planning to produce 

light vehicles for sale in the United States. Although the agency has not attempted to 

compel manufacturers to submit such information, most major manufacturers and some 

smaller manufacturers have voluntarily provided it when requested. 

 

The proposal discusses many of the advantages and disadvantages of the market 

forecast approach used by the agencies, including the agencies’ interest in examining 

product plans as a check on the reference fleet developed by the agencies for this 

rulemaking. One of the primary reasons for the request for data in 2009 was to obtain 

permission from the manufacturers to make public their product plan information for 

model years 2010 and 2011. There are a number of reasons that this could be 

advantageous in the development of a reference fleet. First, some known changes to the 

fleet may not be captured by the approach of solely using publicly available information. 

For example, the agencies’ current market forecast includes some vehicles for which 

manufacturers have announced plans for elimination or drastic production cuts such as 

the Chevrolet Trailblazer, the Chrysler PT Cruiser, the Chrysler Pacifica, the Dodge 

Magnum, the Ford Crown Victoria, the Mercury Sable, the Pontiac Grand Prix, the 

Pontiac G5 and the Saturn Vue. These vehicle models appear explicitly in market inputs 

to NHTSA’s analysis, and are among those vehicle models included in the aggregated 

vehicle types appearing in market inputs to EPA’s analysis. However, 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.54

 

54 An example of this is in the GM Pontiac line, which is in the process of being phased out during the 

course of this rulemaking. GM has similar vehicles within their other brands (like Chevy) that will 

presumable pick up the loss in Pontiac share. We model this simply by leaving the Pontiac brand in. 
57 

Second, the agencies’ market forecast does not include some forthcoming vehicle 

models, such as the Chevrolet Volt, the Ford Fiesta and several publicly announced 

electric vehicles, including the announcements from Nissan regarding the Leaf. Nor does 

it include several MY 2009 or 2010 vehicles, such as the Honda Insight, the Hyundai 

Genesis and the Toyota Venza, as our starting point for defining specific vehicle models 

in the reference fleet was Model Year 2008. Additionally, the market forecast does not 

account for publicly announced technology introductions, such as Ford’s EcoBoost 

system, whose product plans specify which vehicles and how many are planned to have 

this technology. Chrysler Group LLC has announced plans to offer small- and mediumsized cars using Fiat powertrains. Were the agencies to rely on manufacturers’ product 

plans (that were submitted), the market forecast would account for not only these specific 

examples, but also for similar examples that have not yet been announced publicly. 

Some commenters, such as CBD and NESCAUM, suggested that the agencies’ 

omission of known future vehicles and technologies in the reference fleet causes 

inaccuracies, which CBD further suggested could lead the agencies to set lower 

standards. On the other hand, CARB commented that “the likely impact of this omission 

is minor.” Because the agencies’ analysis examines the costs and benefits of 

progressively adding technology to manufacturers’ fleets, the omission of future vehicles 

and technologies primarily affects how much additional technology (and, therefore, how 

much incremental cost and benefit) is available relative to the point at which the 

agencies’ examination of potential new standards begins. Thus, in fact, the omission only 

reflects the reference fleet, rather than the agencies’ conclusions regarding how stringent 

the standards should be. This is discussed further below. The agencies believe the 

above-mentioned comments by CBD, NESCAUM, and others are based on a 

misunderstanding of the agencies’ approach to analyzing potential increases in regulatory 

stringency. The agencies also note that manufacturers do not always use technology 

solely to increase fuel economy, and that use of technology to increase vehicles’ 

acceleration performance or utility would probably make that technology unavailable 

toward more stringent standards. Considering the incremental nature of the agencies’ 

analysis, and the counterbalancing aspects of potentially omitted technology in the 

reference fleet, the agencies believe their determination of the stringency of new 

standards has not been impacted by any such omissions. 

Moreover, EPA and NHTSA believe that not including such vehicles after MY 

2008 does not significantly impact our estimates of the technology required to comply 

with the standards. If included, these vehicles could increase the extent to which 

manufacturers are, in the reference case, expected to over-comply with the MY 2011 

CAFE standards, and could thereby make the new standards appear to cost less and yield 

less benefit relative to the reference case. However, in the agencies’ judgment, 

production of the most advanced technology vehicles, such as the Chevy Volt or the 

Nissan Leaf (for example), will most likely be too limited during MY 2011 through MY 

2016 to significantly impact manufacturers’ compliance positions. While we are 

projecting the characteristics of the future fleet by extrapolating from the MY 2008 fleet, 

the primary difference between the future fleet and the 2008 fleet in the same vehicle 
58 

segment is the use of additional CO2-reducing and fuel-saving technologies. Both the 

NHTSA and EPA models add such technologies to evaluate means of complying with the 

standards, and the costs of doing so. Thus, our future projections of the vehicle fleet 

generally shift vehicle designs towards those more likely to be typical of newer vehicles. 

Compared to using product plans that show continued fuel economy increases planned 

based on expectations that CAFE standards will continue to increase, this approach helps 

to clarify the costs and benefits of the new standards, as the costs and benefits of all fuel 

economy improvements beyond those required by the MY 2011 CAFE standards are 

being assigned to the final rules. In some cases, the “actual” (vs. projected or “modeled”) 

new vehicles being introduced into the market by manufacturers are done so in 

anticipation of this rulemaking. On the other hand, manufacturers may plan to continue 

using technologies to improve vehicle performance and/or utility, not just fuel economy. 

Our approach prevents some of these actual technological improvements and their 

associated cost and fuel economy improvements from being assumed in the reference 

fleet. Thus, the added technology will not be considered to be free (or having no 

benefits) for the purposes of this rule. 

In this regard, the agencies further note that manufacturer announcements 

regarding forward models (or future vehicle models) need not be accepted automatically. 

Manufacturers tend to limit accurate production intent information in these releases for 

reasons such as: (a) competitors will closely examine their information for data in their 

product planning decisions; (b) the press coverage of forward model announcements is 

not uniform, meaning highly anticipated models have more coverage and materials than 

models that may be less exciting to the public and consistency and uniformity cannot be 

ensured with the usage of press information; and (c) these market projections are subject 

to change (sometimes significant), and manufacturers may not want to give the 

appearance of being indecisive, or under/over-confident to their shareholders and the 

public with premature release of information. 

NHTSA has evaluated the use of public manufacturer forward model press 

information to update the vehicle fleet inputs to the baseline and reference fleet. The 

challenges in this approach are evidenced by the continuous stream of manufacturer press 

releases throughout a defined rulemaking period. Manufacturers’ press releases suffer 

from the same types of inaccuracies that many commenters believe can affect product 

plans. Manufacturers can often be overly optimistic in their press releases, both on 

projected date of release of new models and on sales volumes. 

More generally and more critically, as discussed in the proposal and as endorsed 

by many of the public comments, there are several advantages to the approach used by 

the agencies in this final rule. Most importantly, today’s market forecast is much more 

transparent. The information sources used to develop today’s market forecast are all 

either in the public domain or available commercially. Another significant advantage of 

today’s market forecast is the agencies’ ability to assess more fully the incremental costs 

and benefits of the proposed standards. In addition, by developing baseline and reference 

fleets from common sources, the agencies have been able to avoid some errors—perhaps 

related to interpretation of requests—that have been observed in past responses to 
59 

NHTSA’s requests. An additional advantage of the approach used for this proposal is a 

consistent projection of the change in fuel economy and CO2 emissions across the various 

vehicles from the application of new technology. With the approach used for this final 

rule, the baseline market data comes from actual vehicles (on the road today) which have 

actual fuel economy test data (in contrast to manufacturer estimates of future product fuel 

economy) – so there is no question what is the basis for the fuel economy or CO2

performance of the baseline market data as it is. 

 

5. How Does Manufacturer Product Plan Data Factor into the Baseline used 

in this Final Rule? 

In the spring and fall of 2009, many manufacturers submitted product plans in 

response to NHTSA’s recent requests that they do so. NHTSA and EPA both have 

access to these plans, and both agencies have reviewed them in detail. A small amount of 

product plan data was used in the development of the baseline. The specific pieces of 

data are: 

• Wheelbase 

• Track Width Front 

• Track Width Rear 

• EPS (Electric Power Steering) 

• ROLL (Reduced Rolling Resistance) 

• LUB (Advance Lubrication i.e. low weight oil) 

• IACC (Improved Electrical Accessories) 

• Curb Weight 

• GVWR (Gross Vehicle Weight Rating) 

The track widths, wheelbase, curb weight, and GVWR for vehicles could have 

been looked up on the internet (159 were), but were taken from the product plans when 

available for convenience. To ensure accuracy, a sample from each product plan was 

used as a check against the numbers available from Motortrend.com. These numbers will 

be published in the baseline file since they can be easily looked up on the internet. On 

the other hand, EPS, ROLL, LUB, and IACC are difficult to determine without using 

manufacturer’s product plans. These items will not be published in the baseline file, but 

the data has been aggregated into the agencies’ baseline in the technology effectiveness 

and cost effectiveness for each vehicle in a way that allows the baseline for the model to 

be published without revealing the manufacturer’s data. 

Also, some technical information that manufacturers have provided in product 

plans regarding specific vehicle models is, at least insofar as NHTSA and EPA have been 

able to determine, not available from public or commercial sources. While such gaps do 

not bear significantly on the agencies’ analysis, the diversity of pickup configurations 

necessitated utilizing a sales-weighted average footprint value55 for many manufacturers’ 

 

55 A full-size pickup might be offered with various combinations of cab style (e.g., regular, extended, crew) 

and box length (e.g., 51⁄2’, 61⁄2’, 8’) and, therefore, multiple footprint sizes. CAFE compliance data for MY 

2008 data does not contain footprint information, and does not contain information that can be used to 

reliably identify which pickup entries correspond to footprint values estimable from public or commercial 
60 

pickups. Since our modeling only utilizes footprint in order to estimate each 

manufacturer’s CO2 or fuel economy standard and all the other vehicle characteristics are 

available for each pickup configuration, this approximation has no practical impact on the 

projected technology or cost associated with compliance with the various standards 

evaluated. The only impact which could arise would be if the relative sales of the various 

pickup configurations changed, or if the agencies were to explore standards with a 

different shape. This would necessitate recalculating the average footprint value in order 

to maintain accuracy. 

Additionally, as discussed in the NPRM, in an effort to update the 2008 baseline 

to account for the expected changes in the fleet in the near-term model years 2009-2011 

described above, NHTSA requested permission from the manufacturers to make this 

limited product plan information public. Unfortunately, virtually no manufacturers 

agreed to allow the use of their data after 2009 model year. A few manufacturers, such as 

GM and Ford, stated we could use their 2009 product plan data after the end of 

production (December 31), but this would not have afforded us sufficient time to do the 

analysis for the final rule. Since the agencies were unable to obtain consistent updates, 

the baseline and reference fleets were not updated beyond 2008 model year for the final 

rule. The 2008 baseline fleet and projections were instead updated using the latest AEO 

and CSM data as discussed earlier. 

 NHTSA and EPA recognize that the approach applied for the current rule gives 

transparency and openness of the vehicle market forecast high priority, and 

accommodates minor inaccuracies that may be introduced by not accounting for future 

product mix changes anticipated in manufacturers’ confidential product plans. For any 

future fleet analysis that the agencies are required to perform, NHTSA and EPA plan to 

request that manufacturers submit product plans and allow some public release of 

information. In performing this analysis, the agencies plan to reexamine potential 

tradeoffs between transparency and technical reasonableness, and to explain resultant 

choices.

C. Development of Attribute-Based Curve Shapes 

In the NPRM, NHTSA and EPA proposed to set attribute-based CAFE and CO2

standards that are defined by a mathematical function for MYs 2012-2016 passenger cars 

and light trucks. EPCA, as amended by EISA, expressly requires that CAFE standards 

for passenger cars and light trucks be based on one or more vehicle attributes related to 

 sources. Therefore, the agencies have used the known production levels of average values to represent all 

variants of a given pickup line (e.g., all variants of the F-150 and the Sierra/Silverado) in order to calculate 

the sales-weighted average footprint value for each pickup family. Again, this has no impact on the results 

of our modeling effort, although it would require re-estimation if we were to examine light truck standards 

of a different shape. In the extreme, one single footprint value could be used for every vehicle sold by a 

single manufacturer as long as the fuel economy standard associated with this footprint value represented 

the sales-weighted, harmonic average of the fuel economy standards associated with each vehicle’s 

footprint values. 
61 

fuel economy, and be expressed in the form of a mathematical function.56 The CAA has 

no such requirement, though in past rules, EPA has relied on both universal and attributebased standards (e.g., for nonroad engines, EPA uses the attribute of horsepower). 

However, given the advantages of using attribute-based standards and given the goal of 

coordinating and harmonizing CO2 standards promulgated under the CAA and CAFE 

standards promulgated under EPCA, EPA also proposed to issue standards that are 

attribute-based and defined by mathematical functions. There was consensus in the 

public comments that EPA should develop attribute-based CO2 standards. 

 

Comments received in response to the agencies’ decision to base standards on 

vehicle footprint were largely supportive. Several commenters (BMW, NADA, 

NESCAUM) expressed support for attribute-based (as opposed to flat or universal) 

standards generally, and agreed with EPA’s decision to harmonize with NHTSA in this 

respect. Many commenters (Aluminum Association, BMW, ICCT, NESCAUM, NY 

DEC, Schade, Toyota) also supported the agencies’ decision to continue setting CAFE 

standards, and begin setting GHG standards, on the basis of vehicle footprint, although 

one commenter (NJ DEP) opposed the use of footprint due to concern that it encourages 

manufacturers to upsize vehicles and undercut the gains of the standard. Of the 

commenters supporting the use of footprint, several focused on the benefits of 

harmonization—both between EPA and NHTSA, and between the U.S. and the rest of the 

world. BMW commented, for example, that many other countries use weight-based 

standards rather than footprint-based. While BMW did not object to NHTSA’s and 

EPA’s use of footprint-based standards, it emphasized the impact of this nonharmonization on manufacturers who sell vehicles globally, and asked the agencies to 

consider these effects. NADA supported the use of footprint, but cautioned that the 

agencies must be careful in setting the footprint curve for light trucks to ensure that 

manufacturers can continue to provide functionality like 4WD and towing/hauling 

capacity. 

 

Some commenters requested that the agencies consider other or more attributes in 

addition to footprint, largely reiterating comments submitted to the MYs 2011-2015 

CAFE NPRM. Cummins supported the agencies using a secondary attribute to account 

for towing and hauling capacity in large trucks, for example, while Ferrari asked the 

agencies to consider a multi-attribute approach incorporating curb weight, maximum 

engine power or torque, and/or engine displacement, as it had requested in the previous 

round of CAFE rulemaking. An individual, Mr. Kenneth Johnson, commented that 

weight-based standards would be preferable to footprint-based ones, because weight 

correlates better with fuel economy than footprint, because the use of footprint does not 

necessarily guarantee safety the way the agencies say it does, and because weight-based 

standards would be fairer to manufacturers. 

 In response, EPA and NHTSA continue to believe that the benefits of footprintattribute-based standards outweigh any potential drawbacks raised by commenters, and 

that harmonization between the two agencies should be the overriding goal on this issue. 

 

56 49 U.S.C. 32902(a)(3)(A). 
62 

As discussed by NHTSA in the MY 2011 CAFE final rule,57 the agencies believe that the 

possibility of gaming is lowest with footprint-based standards, as opposed to weightbased or multi-attribute-based standards. Specifically, standards that incorporate weight, 

torque, power, towing capability, and/or off-road capability in addition to footprint would 

not only be significantly more complex, but by providing degrees of freedom with respect 

to more easily-adjusted attributes, they would make it less certain that the future fleet 

would actually achieve the average fuel economy and CO2 levels projected by the 

agencies. The agencies recognize 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. The agencies are therefore finalizing MYs 2012-2016 CAFE 

and GHG standards based on footprint. 

 The agencies also recognize that there could be benefits for a number of 

manufacturers if there was greater international harmonization of fuel economy and GHG 

standards, but this is largely a question of how stringent standards are and how they are 

enforced. It is entirely possible that footprint-based and weight-based systems can 

coexist internationally and not present an undue burden for manufacturers if they are 

carefully crafted. Different countries or regions may find different attributes appropriate 

for basing standards, depending on the particular challenges they face – from fuel prices, 

to family size and land use, to safety concerns, to fleet composition and consumer 

preference, to other environmental challenges besides climate change. The agencies 

anticipate working more closely with other countries and regions in the future to consider 

how to mitigate these issues in a way that least burdens manufacturers while respecting 

each country’s need to meet its own particular challenges. 

Under an attribute-based standard, every vehicle model has a performance target 

(fuel economy and CO2 emissions for CAFE and CO2 emissions standards, respectively), 

the level of which depends on the vehicle’s attribute (for the proposal, footprint). The 

manufacturers’ fleet average performance is determined by the production-weighted58

average (for CAFE, harmonic average) of those targets. NHTSA and EPA are 

promulgating CAFE and CO2 emissions standards defined by constrained linear functions 

and, equivalently, piecewise linear functions.59 As a possible option for future 

rulemakings, the constrained linear form was introduced by NHTSA in the 2007 NPRM 

proposing CAFE standards for MY 2011-2015. Described mathematically, the proposed 

constrained linear function was defined according to the following formula:60

1

1 1

, ,

TARGET

MIN MAX c FOOTPRINT d

a b

= ⎡ ⎤ ⎛ ⎞ ⎜ ⎟ × + ⎢ ⎥ ⎣ ⎦ ⎝ ⎠

 

57 See 74 FR 14359 (Mar. 30, 2009). 

58 Production for sale in the United States. 

59 The equations are equivalent but are specified differently due to differences in the agencies’ respective 

models. 

60 This function is linear in fuel consumption but not in fuel economy. 
63 

where 

TARGET = the fuel economy target (in mpg) applicable to vehicles of a given 

footprint (FOOTPRINT, in square feet), 

a = the function’s upper limit (in mpg), 

b = the function’s lower limit (in mpg), 

c = the slope (in gpm per square foot) of the sloped portion of the function, 

d = the intercept (in gpm) of the sloped portion of the function (that is, the value 

the sloped portion would take if extended to a footprint of 0 square feet, and 

the MIN and MAX functions take the minimum and maximum, respectively, of the 

included values; for example, MIN(1,2) = 1, MAX(1,2) = 2, and 

MIN[MAX(1,2),3)]=2. 

 Because the format is linear on a gallons-per-mile basis, not on a miles-per-gallon 

basis, it is plotted as fuel consumption below. Graphically, the constrained linear form 

appears as shown in Figure II.C-1. 
64 

0.0500.0450.0400.0350.0300.0250.0200.0150.0100.0050.000

35 40 45 50 55 60 65 70

Footprint (sf)

Fuel Consumption (gpm) 1/LIMIT UPPER 1/LIMIT LOWER INTERCEPT SLOPE

Figure II.C-1 The Shape of the Constrained Linear Form 
65 

The specific form and stringency for each fleet (passenger car and light trucks) 

and model year are defined through specific values for the four coefficients shown above. 

EPA proposed the equivalent equation below for assigning CO2 targets to an 

individual vehicle’s footprint value. Although the general model of the equation is the 

same for each vehicle category and each year, the parameters of the equation differ for 

cars and trucks and for each model year. Described mathematically, EPA’s proposed 

piecewise linear function was as follows: 

Target = a, if x ≤ l 

Target = cx + d, if l < x ≤ h 

Target = b, if x > h 

 

In the constrained linear form similar in form to the fuel economy equation above, this 

equation takes the simplified form: 

Target = MIN [ MAX ( c * x + d , a) , b] 

where 

Target = the CO2 target value for a given footprint (in g/mi) 

a = the minimum target value (in g/mi CO2)

61

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) 

 Graphically, piecewise linear form, like the constrained linear form, appears as 

shown in Figure II.C-2. 

 

61 These a, b, d coefficients differ from the a, b, d coefficients in the constrained linear fuel economy 

equation primarily by a factor of 8887 (plus an additive factor for air conditioning). 
66 

30 35 40 45 50 55 60 65 70 Footprint (sq feet)

CO2 (gram/mile) or 

Fuel Consumption (gallons/mile)

lower limit = l Intercept = d

upper limit = h

slope = c

min = a

max = b

Figure II.C-2 The Shape of the Piecewise Linear Form 
67 

As for the constrained linear form, the specific form and stringency of the 

piecewise linear function for each fleet (passenger car and light trucks) and model year 

are defined through specific values for the four coefficients shown above. 

For purposes of the proposed rules, NHTSA and EPA developed the basic curve 

shapes using methods similar to those applied by NHTSA in fitting the curves defining 

the MY 2011 standards. The first step involved defining the relevant vehicle 

characteristics in the form used by NHTSA’s CAFE model (e.g., fuel economy, footprint, 

vehicle class, technology) described in Section II.B of this preamble and in Chapter 1 of 

the Joint TSD. However, because the baseline fleet utilizes a wide range of available fuel 

saving technologies, NHTSA used the CAFE model to develop a fleet to which all of the 

technologies discussed in Chapter 3 of the Joint TSD62 were applied, except dieselization 

and strong hybridization. This was accomplished by taking the following steps: (1) 

treating all manufacturers as unwilling to pay civil penalties rather than applying 

technology, (2) applying any technology at any time, irrespective of scheduled vehicle 

redesigns or freshening, and (3) ignoring “phase-in caps” that constrain the overall 

amount of technology that can be applied by the model to a given manufacturer’s fleet. 

These steps helped to increase technological parity among vehicle models, thereby 

providing a better basis (than the baseline or reference fleets) for estimating the statistical 

relationship between vehicle size and fuel economy. 

In fitting the curves, NHTSA and EPA also continued to fit the sloped portion of 

the function to vehicle models between the footprint values at which the agencies 

continued to apply constraints to limit the function’s value for both the smallest and 

largest vehicles. Without a limit at the smallest footprints, the function—whether logistic 

or linear—can reach values that would be unfairly burdensome for a manufacturer that 

elects to focus on the market for small vehicles; depending on the underlying data, an 

unconstrained form, could result in stringency levels that are technologically infeasible 

and/or economically impracticable for those manufacturers that may elect to focus on the 

smallest vehicles. On the other side of the function, without a limit at the largest 

footprints, the function may provide no floor on required fuel economy. Also, the safety 

considerations that support the provision of a disincentive for downsizing as a 

compliance strategy apply weakly, if at all, to the very largest vehicles. Limiting the 

function’s value for the largest vehicles leads to a function with an inherent absolute 

minimum level of performance, while remaining consistent with safety considerations. 

Before fitting the sloped portion of the constrained linear form, NHTSA and EPA 

selected footprints above and below which to apply constraints (i.e., minimum and 

maximum values) on the function. The agencies believe that the linear form performs 

well in describing the observed relationship between footprint and fuel consumption or 

CO2 emissions for vehicle models within the footprint ranges covering most vehicle 

 

62 The agencies excluded diesel engines and strong hybrid vehicle technologies from this exercise (and only 

this exercise) because the agencies expect that manufacturers would not need to rely heavily on these 

technologies in order to comply with the proposed standards. NHTSA and EPA did include diesel engines 

and strong hybrid vehicle technologies in all other portions of their analyses. 
68 

models, but that the single (as opposed to piecewise) linear form does not perform well in 

describing this relationship for the smallest and largest vehicle models. For passenger 

cars, the agency noted that several manufacturers offer small, sporty coupes below 41 

square feet, such as the BMW Z4 and Mini, Honda S2000, Mazda MX-5 Miata, Porsche 

Carrera and 911, and Volkswagen New Beetle. Because such vehicles represent a small 

portion (less than 10 percent) of the passenger car market, yet often have performance, 

utility, and/or structural characteristics that could make it technologically infeasible 

and/or economically impracticable for manufacturers focusing on such vehicles to 

achieve the very challenging average requirements that could apply in the absence of a 

constraint, EPA and NHTSA proposed to “cut off” the linear portion of the passenger car 

function at 41 square feet. The agencies recognize that for manufacturers who make 

small vehicles in this size range, there is some incentive to downsize to make it easier to 

meet the target. However, at the same time, the agencies believe that there is a limit to 

the market for ever-smaller cars. Most consumers likely have some minimum expectation 

about interior volume, among other things. The agencies thus believe that the number of 

consumers who will want vehicles smaller than 41sq ft to be downsized even further is 

extremely small, and that the incentive to downsize, if present, will be minimal. For 

consistency, the agency proposed to ”cut off” the light truck function at the same 

footprint, although no light trucks are currently offered below 41 square feet. The 

agencies further noted that above 56 square feet, the only passenger car model present in 

the MY 2008 fleet were four luxury vehicles with extremely low sales volumes—the 

Bentley Arnage and three versions of the Rolls Royce Phantom. NHTSA and EPA 

therefore also proposed to “cut off” the linear portion of the passenger car function at 56 

square feet. Finally, the agencies noted that although public information is limited 

regarding the sales volumes of the 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. EPA and NHTSA therefore proposed to “cut off” the linear portion of 

the light truck function at 66 square feet. 

Having developed a set of vehicle emissions and footprint data which represent 

the benefit of all non-diesel, non-hybrid technologies, we determined the initial values for 

parameters c and d were determined for cars and trucks separately. c and d were initially 

set at the values for which the average (equivalently, sum) of the absolute values of the 

differences was minimized between the “maximum technology” fleet fuel consumption 

(within the footprints between the upper and lower limits) and the straight line of the 

function defined above at the same corresponding vehicle footprints. That is, c and d 

were determined by minimizing the average absolute residual, commonly known as the 

MAD (Mean Absolute Deviation) approach, of the corresponding straight line. 

Finally, NHTSA calculated the values of the upper and lower parameters (a and 

b) based on the corresponding footprints discussed above (41 and 56 square feet for 

passenger cars, and 41 and 66 square feet for light trucks). 

The result of this methodology is shown below in Figures II.C-3 and II.C-4 for 

passenger cars and light trucks, respectively. The fitted curves are shown with the 

Deleted: do the same for
69 

underlying “maximum technology” passenger car and light truck fleets. For passenger 

cars, the mean absolute deviation of the sloped portion of the function was 14 percent. 

For trucks, the corresponding MAD was 10 percent. 
70 

0.0600.0550.0500.0450.0400.0350.0300.0250.0200.0150.0100.0050.000

35 40 45 50 55 60 65 70 75 80

Footprint (sf)

Fuel Consumption (gpm)

Figure II.C-3 “Maximum Technology” Passenger Fleet with Fitted Constrained Linear Function 
71 

0.0600.0550.0500.0450.0400.0350.0300.0250.0200.0150.0100.0050.000

35 40 45 50 55 60 65 70 75 80

Footprint (sf)

Fuel Consumption (gpm)

Figure II.C--4 “Maximum Technology” Light Truck with Fitted Constrained Linear Function 
72 

The agencies used these functional forms as a starting point to develop 

mathematical functions defining the actual proposed standards as discussed above. The 

agencies then transposed these functions vertically (i.e., on a gpm or CO2 basis, 

uniformly downward) to produce the same fleetwide fuel economy (and CO2 emission 

levels) for cars and light trucks described in the NPRM. 

A number of public comments generally supported the agencies’ choice of 

attribute-based mathematical functions, as well as the methods applied to fit the function. 

Ferrari indicated support for the use of a constrained linear form rather than a constrained 

logistic form, support for the application of limits on the functions’ values, support for a 

generally less steep passenger car curve compared to MY 2011, and support for the 

inclusion of all manufacturers in the analysis used to fit the curves. ICCT also supported 

the use of a constrained linear form. Toyota expressed general support for the methods 

and outcome, including a less-steep passenger car curve, and the application of limits on 

fuel economy targets applicable to the smallest vehicles. The UAW commented that the 

shapes and levels of the curves are reasonable. 

Other commenters suggested that changes to the agencies’ methods and results 

would yield better outcomes. GM suggested that steeper curves would provide a greater 

incentive for limited-line manufacturers to apply technology to smaller vehicles. GM 

argued that steeper and, in their view, fairer curves could be obtained by using salesweighted least-squares regression rather than minimization of the unweighted mean 

absolute deviation. Conversely, students from UC Santa Barbara commented that the 

passenger car and light truck curves should be flatter and should converge over time in 

order to encourage the market to turn, as the agencies’ analysis assumes it will, away 

from light trucks and toward passenger cars. 

NADA commented that there should be no “cut-off” points (i.e., lower limits or 

floors), because these de facto “backstops” might limit consumer choice, especially for 

light trucks—a possibility also suggested by the Alliance. The Alliance and several 

individual manufacturers also commented that the cut-off point for light trucks should be 

shifted to 72 square feet (from the proposed 66 square feet), arguing that the 

preponderance of high-volume light truck models with footprints greater than 66 square 

feet is such that a 72 square foot cut-off point makes it unduly challenging for 

manufacturers serving the large pickup market and thereby constitutes a de facto

backstop. Also, with respect to the smallest light truck models, Honda commented that 

the cut-off point should be set at the point defining the smallest 10 percent of the fleet, 

both for consistency with the passenger car cut-off point, and to provide a greater 

incentive for manufacturers to downsize the smallest light truck models (which provide 

greater functionality than passenger cars). 

Other commenters focused on whether the agencies should have separate curves 

for different fleets or whether they should have a single curve that applied to both 

passenger cars and light trucks. This issue is related, to some extent, to commenters who 

discussed whether car and truck definitions should change. CARB, Ford, and Toyota 
73 

supported separate curves for cars and trucks, generally stating that different fleets have 

different functional characteristics and these characteristics are appropriately addressed 

by separate curves. Likewise, AIAM, Chrysler, and NADA supported leaving the current 

definitions of car and truck the same. CBD, ICCT, and NESCAUM supported a single 

curve, based on concerns about manufacturers gaming the system and reclassifying 

passenger cars as light trucks in order to obtain the often-less stringent light truck 

standard, which could lead to lower benefits than anticipated by the agencies. 

In addition, the students from UC Santa Barbara reported being unable to 

reproduce the agencies’ analysis to fit curves to the passenger car and light truck fleets, 

even when using the model, inputs, and external analysis files posted to NHTSA’s web 

site when the NPRM was issued. 

Having considered public comments, NHTSA and EPA have re-examined the 

development of curves underlying the standards proposed in the NPRM, and are 

promulgating standards based on the same underlying curves. The agencies have made 

this decision considering that, while EISA mandates that CAFE standards be defined by a 

mathematical function in terms of one or more attributes related to fuel economy, neither 

EISA nor the CAA require that the mathematical function be limited to the observed or 

theoretical dependence of fuel economy on the selected attribute or attributes. As a 

means by which CAFE and GHG standards are specified, the mathematical function can 

and does properly play a normative role. Therefore, NHTSA and EPA have concluded 

that, as supported by comments, the mathematical function can reasonably be based on a 

blend of analytical and policy considerations, as discussed below and in the Joint 

Technical Support Document. 

With respect to GM’s recommendation that NHTSA and EPA use weighted leastsquares 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 Mean Absolute Deviation (MAD) rather 

than weighted least-squares analysis. First, projected model-specific sales volumes in the 

agencies’ market forecast cover an extremely wide range, such that, as discussed in 

NHTSA’s rulemaking for MY 2011, while unweighted regression gives low-selling 

vehicle models and high-selling vehicle models equal emphasis, sales-weighted 

regression would give some vehicle models considerably more emphasis than other 

vehicle models.63 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. On the other hand, sales 

 

63 For example, the agencies’ market forecast shows MY 2016 sales of 187,000 units for Toyota’s 2WD 

Sienna, and shows 27 model configurations with MY 2016 sales of fewer than 100 units. Similarly, the 

agencies’ market forecast shows MY 2016 sales of 268,000 for the Toyota Prius, and shows 29 model 

configurations with MY 2016 sales of fewer than 100 units. Sales-weighted analysis would give the 

Toyota Sienna and Prius more than a thousand times the consideration of many vehicle model 

configurations. Sales-weighted analysis would, therefore, cause a large number of vehicle model 

configurations to be virtually ignored. See discussion in NHTSA’s final rule for MY 2011 passenger car 

and light truck CAFE standards, 74 FR 14368 (Mar. 30, 2009), and in NHTSA’s NPRM for that 

rulemaking, 73 FR 24423-24429 (May 2, 2008).
74 

weighted regression would allow the difference between other vehicle attributes to be 

reflected in the analysis, and also would reflect consumer demand. 

Second, even after NHTSA’s “maximum technology” analysis to increase 

technological parity of vehicle models before fitting curves, the agencies’ market forecast 

contains many significant outliers. As discussed in NHTSA’s rulemaking for MY 2011, 

MAD is a statistical procedure that has been demonstrated to produce more efficient 

parameter estimates than least-squares analysis in the presence of significant outliers.64 

In addition, the agencies remain concerned that the steeper curves resulting from 

weighted least-squares analysis would increase the risk that energy savings and 

environmental benefits would be lower than projected, because the steeper curves would 

provide a greater incentive to increase sales of larger vehicles with lower fuel economy 

levels. Based on these technical considerations and these concerns regarding potential 

outcomes, the agencies have decided not to re-fit curves using weighted least-squares 

analysis, but note that they may reconsider using least-squares regression in future 

analysis. 

NHTSA and EPA have considered GM’s comment that steeper curves would 

provide a greater incentive for limited-line manufacturers to apply technology to smaller 

vehicles. While the agencies agree that a steeper curve would, absent any changes in 

fleet mix, tend to shift average compliance burdens away from GM and toward 

companies that make smaller vehicles, the agencies are concerned, as stated above, that 

steeper curves would increase the risk that induced increases in vehicle size could erode 

projected energy and environmental benefits. 

NHTSA and EPA have also considered the comments by the students from UC 

Santa Barbara indicating that the passenger car and light truck curves should be flatter 

and should converge over time. The agencies conclude that flatter curves would reduce 

the incentives intended in shifting from “flat” CAFE standards to attribute-based CAFE 

and GHG standards—those being the incentive to respond to attribute-based standards in 

ways that minimize compromises in vehicle safety, and the incentive for more 

manufacturers (than primarily those selling a wider range of vehicles) across the range of 

the attribute to have to increase the application of fuel-saving technologies. With regard 

to whether the agencies should set separate curves or a single one, NHTSA also notes that 

EPCA requires NHTSA to establish standards separately for passenger cars and light 

 

64 Id. 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). 
75 

trucks, and thus concludes that the standards for each fleet should be based on the 

characteristics of vehicles in each fleet. In other words, the passenger car curve should 

be based on the characteristics of passenger cars, and the light truck curve should be 

based on the characteristics of light trucks—thus to the extent that those characteristics 

are different, an artificially-forced convergence would not accurately reflect those 

differences. However, such convergence could be appropriate depending on future trends 

in the light vehicle market, specifically further reduction in the differences between 

passenger car and light truck characteristics. While that trend was more apparent when 

car-like 2WD SUVs were classified as light trucks, it seems likely to diminish for the 

model year vehicles subject to these rules as the truck fleet will be more purely “trucklike” than has been the case in recent years. 

NHTSA and EPA have also considered comments on the maxima and minima 

that the agencies have applied to “cut off” the linear function underlying the proposed 

curves for passenger cars and light trucks. Contrary to NADA’s suggestion that there 

should be no such cut-off points, the agencies conclude that curves lacking maximum 

fuel economy targets (i.e., minimum CO2 targets) would result in average fuel economy 

and GHG requirements that would not be technologically feasible or economically 

practicable for manufacturers concentrating on those market segments. In addition, 

minimum fuel economy targets (i.e., maximum CO2 targets) are important to mitigate the 

risk to energy and environmental benefits of potential market shifts toward large vehicles. 

The agencies also disagree with comments by the Alliance and several individual 

manufacturers that the cut-off point for light trucks should be shifted to 72 square feet 

(from the proposed 66 square feet) to ease compliance burdens facing manufacturers 

serving the large pickup market. Such a shift would increase the risk that energy and 

environmental benefits of the standards would be compromised by induced increases in 

the sales of large pickups, in situations where the increased compliance burden is feasible 

and appropriate. Also, the agencies’ market forecast suggests that most of the light trucks 

models with footprints larger than 66 square feet have curb weights near or above 5,000 

pounds. This suggests, in turn, that in terms of highway safety, there is little or no need 

to discourage downsizing of light trucks with footprints larger than 66 square feet. 

Based on these energy, environmental, technological feasibility, economic practicability, 

and safety considerations, the agencies conclude that the light truck curve should be cut 

off at 66 square feet, as proposed, rather than at 72 square feet. The agencies also 

disagree with Honda’s suggestion that the cut-off point for the smallest trucks be shifted 

to a larger footprint value, because doing so could potentially increase the incentive to 

reclassify vehicles in that size range as light trucks, and could thereby increase the 

possibility that energy and environmental benefits of the rule would be less than 

projected. 

Finally, considering comments by the UC Santa Barbara students regarding 

difficulties reproducing NHTSA’s analysis, NHTSA reexamined its analysis, and 

discovered some erroneous entries in model inputs underlying the analysis used to 

develop the curves proposed in the NPRM. These errors are discussed in NHTSA’s final 

Regulatory Impact Analysis (FRIA) and have since been corrected. They include the 

following: incorrect valvetrain phasing and lift inputs for many BMW engines, incorrect 
76 

indexing for some Daimler models, incorrectly enabled valvetrain technologies for rotary 

engines and Atkinson cycle engines, omitted baseline applications of cylinder 

deactivation in some Honda and GM engines, incorrect valve phasing codes for some 4-

cylinder Chrysler engines, omitted baseline applications of advanced transmissions in 

some VW models, incorrectly enabled advanced electrification technologies for several 

hybrid vehicle models, and incorrect DCT effectiveness estimates for subcompact 

passenger cars. These errors, while not significant enough to impact the overall analysis 

of stringency, did affect the fitted slope for the passenger car curve and would have 

prevented precise replication of NHTSA’s NPRM analysis by outside parties. 

After correcting these errors and repeating the curve development analysis 

presented in the NPRM, NHTSA obtained the curves shown below in Figures II.C-5 and 

II.C-6 for passenger cars and light trucks, respectively. The fitted curves are shown with 

the underlying “maximum technology” passenger car and light truck fleets. For 

passenger cars, the mean absolute deviation of the sloped portion of the function was 14 

percent. For trucks, the corresponding MAD was 10 percent. 
77 

0.0600.0550.0500.0450.0400.0350.0300.0250.0200.0150.0100.0050.000

35 40 45 50 55 60 65 70 75 80

Footprint (sf)

Fuel Consumption (gpm)

Figure II.C-5 Revised “Maximum Technology” Passenger Fleet with Fitted Constrained Linear Function 
78 

 

0.0600.0550.0500.0450.0400.0350.0300.0250.0200.0150.0100.0050.000

35 40 45 50 55 60 65 70 75 80

)mpg(noitpmusnoCleuF

Footprint (sf)

Figure II.C-6 Revised “Maximum Technology” Light Truck with Fitted Constrained Linear Function 
79 

 This refitted passenger car curve is similar to that presented in the NPRM, and the 

refitted light truck curve is nearly identical the corresponding curve in the NPRM. 

However, the slope of the refitted passenger car curve is about 27 percent steeper (on a 

gpm per sf basis) than the curve presented in the NPRM. For passenger cars and light 

trucks, respectively, Figures II.C-7 and II.C-8 show the results of adjustment—discussed 

in the next section—of the above curves to yield the average required fuel economy 

levels corresponding to the final standards. 
80 

454035302520

35 40 45 50 55 60 65 70 75 80

)gpm(tegraT

Footprint (sf)

NPRMFinalRe-Fitted

Figure II.C-7 MY 2016 Passenger Car Targets: NPRM, Final Rule, and if Using Re-Fitted Curve 
81 

454035302520

35 40 45 50 55 60 65 70 75 80

)gpm(tegraT

Footprint (sf)

NPRMFinalRe-Fitted

Figure II.C-8 MY 2016 Light Truck Targets: NPRM, Final Rule, and if Using Re-Fitted Curve 
82 

While the resultant light truck curves are visually indistinguishable from one 

another, the refitted curve for passenger cars 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 energy and 

environmental benefits by increasing incentives for the passenger car market to shift 

toward larger vehicles. 

Also, the agencies note that the refitted passenger car curve produces only a 

slightly closer fit to the corrected fleet than would the curve estimated in the NPRM; with 

respect to the corrected fleet (between the “cut off” footprint values, and after the 

“maximum technology” analysis discussed above), the mean absolute deviation for the 

refitted curve is 13.887 percent, and that of a refitted curve held to the original slope is 

13.933 percent. In other words, the data support the original slope very nearly as well as 

they support the refitted slope. 

Considering NHTSA’s and EPA’s concerns regarding the change in incentives 

that would result from a refitted curve for passenger cars, and considering that the data 

support the original curves about as well as they would support refitted curves, the 

agencies are finalizing CAFE and GHG standards based on the curves presented in the 

NPRM. 

 

 Finally, regarding some commenters’ inability to reproduce the agencies’ NPRM 

analysis, NHTSA believes that its correction of the errors discussed above and its release 

(on NHTSA’s web site) of the updated Volpe model and all accompanying inputs and 

external analysis files should enable outside parties to independently reproduce the 

agencies’ analysis. If outside parties continue to experience difficulty in doing so, we 

encourage them to contact NHTSA, and the agency will do its best to provide assistance. 

Thus, in summary, the agencies’ approach to developing the attribute-based 

mathematical functions for MY 2012-2016 CAFE and CO2 standards represents the 

agencies’ best technical judgment and consideration of potential outcomes at this time, 

and we are confident that the conclusions have resulted in appropriate and reasonable 

standards. The agencies recognize, however, that aspects of these decisions may merit 

updating or revision in future analysis to support CAFE and CO2 standards or for other 

purposes. Consistent with best rulemaking practices, the agencies will take a fresh look 

at all assumptions and approaches to curve fitting, appropriate attributes, and 

mathematical functions in the context of future rulemakings. 

The agencies also recognized in the NPRM the possibility that lower fuel prices 

could lead to lower fleetwide fuel economy (and higher CO2 emissions) than projected in 

this rule. One way of addressing that concern is through the use of a universal 

standard—that is, an average standard set at a (single) absolute level. This is often 
83 

described as a “backstop standard.” The agencies explained that under the CAFE 

program, EISA requires such a minimum average fuel economy standard for domestic 

passenger cars, but is silent with regard to similar backstops for imported passenger cars 

and light trucks, while under the CAA, a backstop could be adopted under section 202(a) 

assuming it could be justified under the relevant statutory criteria. NHTSA and EPA also 

noted that the flattened portions of the curves at the largest footprints directionally 

address the issue of a backstop (i.e., the mpg “floor” or gpm “ceiling” applied to the 

curves provides a universal and absolute value for that range of footprints). The agencies 

sought 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. 

 The agencies received a number of comments regarding the need for a backstop 

beyond NHTSA’s alternative minimum standard. Comments were divided fairly evenly 

between support for and opposition to additional backstop standards. The following 

organizations supported the need for EPA and NHTSA to have explicit backstop 

standards: American Council for an Energy Efficient Economy (ACEEE), American 

Lung Association, California Air Resources Board (CARB), Environment America, 

Environment Defense Fund, Massachusetts Department of Environmental Protection, 

Natural Resources Defense Council (NRDC), Northeast States for Coordinated Air Use 

Management (NESCAUM), Public Citizen and Safe Climate Campaign, Sierra Club, 

State of Washington Department of Ecology, Union of Concerned Scientists, and a 

number of private citizens. Commenters in favor of additional backstop standards for all 

fleets for both NHTSA and EPA65 generally stated that the emissions reductions and fuel 

savings expected to be achieved by MY 2016 depended on assumptions about fleet mix 

that might not come to pass, and that various kinds of backstop standards or “ratchet 

mechanisms”66 were necessary to ensure that those reductions were achieved in fact. In 

addition, some commenters67 stated that manufacturers might build larger vehicles or 

more trucks during MYs 2012-2016 than the agencies project, for example, because 1) 

any amount of slope in target curves encourages manufacturers to upsize, and 2) lower 

targets for light trucks than for passenger cars encourage manufacturers to find ways to 

reclassify vehicles as light trucks, such as by dropping 2WD versions of SUVs and 

offering only 4WD versions, perhaps spurred by NHTSA’s reclassification of 2WD 

SUVs as passenger cars. Both of these mechanisms will be addressed further below. 

Some commenters also discussed EPA authority under the CAA to set backstops,68

agreeing with EPA’s analysis that section 202 (a) allows such standards since EPA has 

wide discretion under that section to craft standards. 

The following organizations opposed a backstop: Alliance of Automobile 

Manufacturers (AAM), Association of International Automobile Manufacturers (AIAM), 

 

65 ACEEE, American Lung Association, CARB, Christopher Lish, Environment America, EDF, MA DEP, 

NRDC, NESCAUM, Public Citizen, Sierra Club et al., SCAQMD, UCS, WA DE 66 Commenters generally defined a “ratchet mechanism” as an automatic re-calculation of stringency to 

ensure cumulative goals are reached by 2016, even if emissions reductions and fuel savings fall short in the 

earlier years covered by the rulemaking. 

67 CBD, MA DEP, NJ DEP, Public Citizen, Sierra Club et al., UCS 68 CARB, Public Citizen, Sierra Club et al.
84 

Ford Motor Company, National Automobile Dealers Association (NADA), Toyota Motor 

Company, and the United Auto Workers Union. Commenters stating that additional 

backstops would not be necessary disagreed that upsizing was likely,69 and emphasized 

the anti-backsliding characteristics of the target curves. Others argued that universal 

absolute standards as backstops could restrict consumer choice of vehicles. Commenters 

making legal arguments under EPCA/EISA70 stated that Congress’ silence regarding 

backstops for imported passenger cars and light trucks should be construed as a lack of 

authority for NHTSA to create further backstops. Commenters making legal arguments 

under the CAA71 focused on the lack of clear authority under the CAA to create multiple 

GHG emissions standards for the same fleets of vehicles based on the same statutory 

criteria, and opposed EPA taking steps that would reduce harmonization with NHTSA in 

standard setting. Furthermore, AIAM indicated that EISA’s requirement that the 

combined (car and truck) fuel economy level reach at least 35 mpg by 2020 itself 

constitutes a backstop.72 One individual73 commented that while additional backstop 

standards might be necessary given optimism of fleet mix assumptions, both agencies’ 

authorities would probably need to be revised by Congress to clarify that backstop 

standards (whether for individual fleets or for the national fleet as a whole) were 

permissible. 

 In response, EPA and NHTSA remain confident that their projections of the 

future fleet mix are reliable, and that future changes in the fleet mix of footprints and 

sales are not likely to lead to more than modest changes in projected emissions reductions 

or fuel savings.74 Both agencies thus remain confident in these fleet projections and the 

 

69 For example, the Alliance and Toyota said that upsizing would not be likely because (1) it 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; (2) it may require expensive 

platform changes; (3) target curves become increasingly more stringent from year to year, which reduces 

the benefits of upsizing; and (4) the mpg floor and gpm ceiling for the largest vehicles (the point at which 

the curve is “cut off”) discourages manufacturers from continuing to upsize beyond a point because doing 

so makes it increasingly difficult to meet the flat standard at that part of the curve. 

70 AIAM, Alliance, Ford, NADA, Toyota 

71 Alliance, Ford, NADA, UAW 

72 NHTSA and EPA agree with AIAM that the EISA 35 mpg requirement in MY 2020 has a backstop-like 

function, in that it requires a certain level of achieved fleetwide fuel economy by a certain date, although it 

is not literally a backstop standard. Considering that NHTSA’s MY 2011 CAFE standards increased 

projected average fuel economy requirements (relative to the MY 2010 standards) at a significantly faster 

rate than would be required to achieve the 35-in-2020 requirement, and considering that the standards being 

finalized today would increase projected average combined fuel economy requirements to 34.1 mpg in MY 

2016, four years before MY 2020, the agencies believe that the U.S. vehicle market would have to shift in 

highly unexpected ways in order to put the 35-in-2020 requirement at risk, even despite the fact that due to 

the attribute-based standards, average fuel economy requirements will vary depending on the mix of 

vehicles produced for sale in the U.S. in each model year. The agencies further emphasize that both 

NHTSA and EPA plan to conduct and document retrospective analyses to evaluate how the market’s 

evolution during the rulemaking timeframe compares with the agencies’ forecasts employed for this 

rulemaking. Additionally, we emphasize that both agencies have the authority, given sufficient lead time, 

to revise their standards upwards if necessary to avoid missing the 35-in-2020 requirement. 

73 Schade 

74 For reference, 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 
85 

resulting emissions reductions and fuel savings from the standards. As explained in 

Section II.B above, the agencies’ projections of the future fleet are based on the most 

transparent information currently available to the agencies. In addition, there are only a 

relatively few model years at issue. Moreover, market trends today are consistent with 

the agencies’ estimates, showing shifts from light trucks to passenger cars and increased 

emphasis on fuel economy from all vehicles. 

Finally, the shapes of the 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’ fuel economy mapped against their footprint), 

the agencies believe that there is little real benefit to be gained by a manufacturer 

upsizing their vehicles. As discussed above, the agencies’ analysis indicates that, for 

passenger car models with footprints falling between the two flattened portions of the 

corresponding 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 the agencies are 

promulgating today. This difference suggests that manufacturers would, if anything, 

have more to gain 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 flatted portions of the corresponding curve, the slope of fuel economy 

with respect to footprint is nearly identical to the curve the agencies are promulgating 

today. This suggests that, within this range, manufacturers would typically have little 

incentive to either incrementally increase or reduce vehicle footprint. The agencies 

recognize 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. 

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 

 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 the agencies’ 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. 
86 

approximately 205 to 315 gram/mile75 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 manufacturers only when there is a failure to achieve the projected 

reductions across the industry as a whole. 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. 

The concept of a ratchet mechanism recognizes this problem, 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 limited number of model years covered by this rulemaking and the short leadtime 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 

 Additionally, we do not believe that the risk of vehicle upsizing or changing 

vehicle offerings to “game” the passenger car and light truck definitions is as great as 

commenters imply for the model years in question.76 The changes that commenters 

suggest manufacturers might make are neither 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 

models. Additionally, increasing the footprint of vehicles requires platform changes, 

which usually requires a product redesign phase (the agencies estimate that this occurs on 

 

75 Based on estimated standards presented in Tables III.B.1-1 and III.B.1-2. 

76 We note that NHTSA’s recent clarification of the light truck definitions has significantly reduced the 

potential for gaming, and resulted in the reclassification of over a million vehicles from the light truck to 

the passenger car fleet. 
87 

average once every 5 years for most models). 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.77 The agencies are confident that the anticipated increases in average fuel 

economy and reductions in average CO2 emission rates can be achieved without 

backstops under EISA or the CAA. As noted above, the agencies plan to conduct 

retrospective analysis to monitor progress. Both agencies have the authority to revise 

standards if warranted, as long as sufficient lead time is provided. 

The agencies acknowledge that the MY 2016 fleet emissions and fuel economy 

goals of 250 g/mi and 34.1 mpg for EPA and NHTSA respectively are estimates and not 

standards (the MY 2012-2016 curves are the standards). Changes in fuel prices, 

consumer preferences, and/or vehicle survival and mileage accumulation rates could 

result in either smaller or larger oil and GHG savings. As explained above and elsewhere 

in the rule, the agencies believe that the possibility of not meeting (or, alternatively, 

exceeding) fuel economy and emissions goals exists, but is not likely Given this, and 

given the potential complexities in designing an appropriate backstop, the agencies 

believe the balance here points to not adopting additional backstops at this time for the 

MYs 2012-2016 standards other than NHTSA’s finalizing of the ones required by 

EPCA/EISA for domestic passenger cars. Nevertheless, the agencies recognize there are 

many factors that are inherently uncertain which can affect projections in the future, 

including fuel price and other factors which are unrelated to the standards contained in 

this final rule. Such factors can affect consumer preferences and are difficult to predict. 

At this time and based on the available information, the agencies have not included a 

backstop for model years 2012–2016. However, if circumstances change in the future in 

unanticipated ways, the agencies may revisit the issue of a backstop in the context of a 

future rulemaking either for model years 2012-2016 or as needed for standards for model 

years beyond 2016. This issue will be discussed further in Sections III and IV. 

D. Relative Car-Truck Stringency 

The agencies proposed fleetwide standards with the projected levels of stringency 

of 34.1 mpg or 250 g/mi in MY 2016 (as well as the corresponding intermediate year 

fleetwide standards) for NHTSA and EPA respectively. To determine the relative 

stringency of passenger car and light truck standards for those model years, the agencies 

were concerned that increasing the difference between the car and truck standards (either 

by raising the car standards or lowering the truck standards) could encourage 

manufacturers to build fewer cars and more trucks, likely to the detriment of fuel 

economy and CO2 reductions.78 In order to maintain consistent car/truck standards, the 

 

77 Increasing the GVWR of a light truck (assuming this was the only goal) can be accomplished in a 

number of ways, and must include consideration of: (1) redesign of wheel axles; (2) improving the vehicle 

suspension; (3) changes in tire specification (which will likely affect ride quality); (4) vehicle dynamics 

development (especially with vehicles equipped with electronic stability control); and (5) brake redesign. 

Depending on the vehicle, some of these changes may be easier or more difficult than others. 

78 For example, since many 2WD SUVs are classified as passenger cars, manufacturers have already 

warned that high car standards relative to truck standards could create an incentive for them to drop the 

2WD version and sell only the 4WD version. 

Deleted: If, during the timeframe of 

this rule, the agencies observe a 

significant shift in the manufacturer’s 

product mix resulting in a relaxation of 

their estimated targets, NHTSA and EPA 

will reconsider options, both for MYs 

2012-2016 and future rulemakings. 
88 

agencies applied a constant ratio between the estimated average required performance 

under the passenger car and light truck standards, in order to maintain a stable set of 

incentives regarding vehicle classification. 

To calculate relative car-truck stringency for the proposal, the agencies explored a 

number of possible alternatives, and for the reasons described in the proposal used the 

Volpe model in order to estimate stringencies at which net benefits would be maximized. 

The agencies have followed the same approach in calculating the relative car-truck 

stringency for the final standards promulgated today. Further details of the development 

of this approach can be found in Section IV of this preamble as well as in NHTSA’s RIA 

and EIS. NHTSA examined passenger car and light truck standards that would produce 

the proposed combined average fuel economy levels from Table I.B.2-2 above. NHTSA 

did so by shifting downward the curves that maximize net benefits, holding the relative 

stringency of passenger car and light truck standards constant at the level determined by 

maximizing net benefits, such that the average fuel economy required of passenger cars 

remained 31 percent higher than the average fuel economy required of light trucks. This 

methodology resulted in the average fuel economy levels for passenger cars and light 

trucks during MYs 2012-2016 as shown in Table I.B.1-1. The following chart illustrates 

this methodology of shifting the standards from the levels maximizing net benefits to the 

levels consistent with the combined fuel economy standards in this final rule. 
89 

454035302520

2011 2012 2013 2014 2015 2016

)gpm(EFderiuqeR.evA

Model Year

Combined (National Policy)Cars (Maximizing Net Benefits)Trucks (Maximizing Net Benefits)Combined (Maximizing Net Benefits)Cars (Pending)Trucks (Pending)Combined (Pending)

Passenger CarsCombined Ave.Light Trucks

Figure II.D-1 Shifting the Standards from the Maximizing Net Benefit Levels to the Levels Consistent with the Combined 

Fuel Economy Standards in this Rule 
90 

The final car and truck standards for EPA (Table I.B.1-4 above) were 

subsequently determined by first converting the average required fuel economy levels to 

average required CO2 emission rates, and then applying the expected air conditioning 

credits for 2012-2016. These A/C credits are shown in the following table. Further 

details of the derivation of these factors can be found in Section III of this preamble or in 

the EPA RIA. 

Table II.D-1 Expected Fleet A/C Credits (in CO2 equivalent g/mi) from 2012-2016

Average Technology 

Penetration 

Average 

credit 

for cars 

Average 

credit for 

trucks 

Average 

credit for 

combined 

fleet 

2012 28%79 3.4 3.8 3.5 

2013 40% 4.8 5.4 5.0 

2014 60% 7.2 8.1 7.5 

2015 80% 9.6 10.8 10.0 

2016 85% 10.2 11.5 10.6 

The agencies sought comment on the use of this methodology for apportioning the 

fleet stringencies to relative car and truck standards for 2012-2016. General Motors 

commented that, compared to the passenger car standard, the light truck standard is too 

stringent because “the most fuel efficient cars and small trucks already meet the 2016 

MY requirements” but “the most fuel efficient large trucks must increase fuel economy 

by 20 percent to meet the 2016 MY requirements.” GM recommended that the agencies 

relax stringency specifically for large pickups, such as the Silverado. 

The agencies disagree with the premise of the comment that the standard is too 

stringent under the applicable statutory provisions because some existing large trucks are 

not already meeting a later model year standard. Our analysis shows that the standards 

are not too stringent for manufacturers selling these vehicles. The agencies’ analyses 

demonstrate a means by which manufacturers could apply cost-effective technologies in 

order to achieve the standards, and we have provided adequate lead time for the 

technology to be applied. More important, the agencies’ analysis demonstrate that the 

fleetwide emission standards for MY 2016 are technically feasible, for example by 

implementing technologies such as engine downsizing, turbocharging, direct injection, 

improving accessories and tire rolling resistance, etc. 

GM did not comment on the use of the methodology applied by the agencies to 

develop the gap between the passenger car and light truck standards—only on the 

outcome of the methodology. For the reasons discussed below, the agencies maintain 

that the methodology applied above provides an appropriate basis to determine the gap 

 

79 We assume slightly higher A/C penetration in 2012 than was assumed in the proposal only to correct for 

rounding that occurred in the curve setting process. 
91 

between the passenger car and light truck standards, and disagree with GM’s arguments 

that the outcome is unfair. 

First, GM’s argument incorrectly suggests that every individual vehicle model 

must achieve its fuel economy and emissions targets. CAFE standards and new GHG 

emissions standards apply to fleetwide average performance, not model-specific 

performance, even though average required levels are based on average model-specific 

targets, and the agencies’ analysis demonstrates that GM and other manufacturers of 

large trucks can cost-effectively comply with the new standards. 

Second, GM implies that every manufacturer must be challenged equally with 

respect to fuel economy and emissions. Although NHTSA and EPA maintain that 

attribute-based CAFE and GHG emissions standards can more evenly balance 

compliance challenges, attribute-based standards are not intended to and cannot make 

these challenges equal, and while the agencies are mindful of the potential impacts of the 

standards on the relative competitiveness of different vehicle manufacturers, there is 

nothing in EPCA or the CAA80 requiring that these challenges be equal. 

We have also already addressed and rejected GM’s suggestion of shifting the “cut 

off” point for light trucks from 66 square feet to 72 square feet, thereby “dropping the 

floor” of the target function for light trucks. As discussed in the preceding section, this is 

so as not to forego the rules’ energy and environmental benefits, and because there is 

little or no safety basis to discourage downsizing of the largest light trucks. 

Finally, NHTSA and EPA disagree with GM’s claim that the outcome of the 

agencies’ approach is unfairly burdensome for light trucks as compared to passenger cars. 

Based on the agencies’ market forecast, NHTSA’s analysis indicates that incremental 

technology outlays could, on average, be comparable for passenger cars and light trucks 

under the final CAFE standards, and further indicates that the ratio of total benefits to 

total costs could be greater under the final light truck standards than under the final 

passenger car standards. 

 

80 As NHTSA explained in the NPRM, the Conference Report for EPCA, as enacted in 1975, makes clear, 

and the case law affirms, “a determination of maximum feasible average fuel economy should not be keyed 

to the single manufacturer which might have the most difficulty achieving a given level of average fuel 

economy.” CEI-I, 793 F.2d 1322, 1352 (D.C. Cir. 1986). Instead, NHTSA is compelled “to weigh the 

benefits to the nation of a higher fuel economy standard against the difficulties of individual automobile 

manufacturers.” Id. The law permits CAFE standards exceeding the projected capability of any particular 

manufacturer as long as the standard is economically practicable for the industry as a whole. Similarly, 

EPA is afforded great discretion under section 202 (a) of the CAA to balance issues of technical feasibility, 

cost, adequacy of lead time, and safety, and certainly is not required to do so in a manner that imposes 

regulatory obligations uniformly on each manufacturer. See NRDC v. EPA, 655 F. 2d 318, 322, 328 (D.C. 

Cir. 1981) (wide discretion afforded by the statutory factors, and EPA predictions of technical feasibility 

afforded considerable discretion subject to constraints of reasonableness EPA predictions of technical 

feasibility afforded considerable discretion subject to constraints of reasonableness); and cf. International 

Harvester Co. v. Ruckelshaus, 479 F. 2d 615, 640 (D.C. Cir. 1973) ( “as long as feasible technology 

permits the demand for new passenger automobiles to be generally met, the basic requirements of the Act 

would be satisfied, even though this might occasion fewer models and a more limited choice of engine 

types”). 
92 

E. Joint Vehicle Technology Assumptions 

Vehicle technology assumptions, i.e., assumptions about technologies' cost, 

effectiveness, and the rate at which they can be incorporated into new vehicles, are often 

controversial as they have a significant impact on the levels of the standards. The 

agencies must, therefore, take great care in developing and justifying these estimates. In 

developing technology inputs for the analysis of the MY 2012-2016 standards, the 

agencies reviewed the technology assumptions that NHTSA used in setting the MY 2011 

standards, the comments that NHTSA received in response to its May 2008 Notice of 

Proposed Rulemaking (NPRM), and the comments received in response to the NPRM for 

this rule. This review is consistent with the request by President Obama in his January 26 

memorandum to DOT. In addition, the agencies reviewed the technology input estimates 

identified in EPA’s July 2008 Advance Notice of Proposed Rulemaking. The review of 

these documents was supplemented with updated information from more current 

literature, new product plans from manufacturers, and from EPA certification testing. 

As a general matter, EPA and NHTSA believe that the best way to derive 

technology cost estimates is to conduct real-world tear down studies. Most of the 

commenters on this issue agreed. The advantages not only lie in the rigor of the 

approach, but also in its transparency. These studies break down each technology into its 

respective components, evaluate the costs of each component, and build up the costs of 

the entire technology based on the contribution of each component and the processes 

required to integrate them. As such, tear down studies require a significant amount of 

time and are very costly. EPA has been conducting tear down studies to assess the costs 

of vehicle technologies under a contract with FEV. Further details for this methodology 

is described below and in the TSD. 

 Due to the complexity and time incurred in a tear down study, only a few 

technologies evaluated in this rulemaking have been costed in this manner thus far. The 

agencies prioritized the technologies to be costed first based on how prevalent the 

agencies believed they might be likely to be during the rulemaking time frame, and based 

on their anticipated cost-effectiveness. The agencies believe that the focus on these 

important technologies (listed below) is sufficient for the analysis in this rule, but EPA is 

continuing to analyze more technologies beyond this rule as part of studies both already 

underway and in the future. For most of the other technologies, because tear down 

studies were not yet available, the agencies decided to pursue, to the extent possible, the 

Bill of Materials (BOM) approach as outlined in NHTSA’s MY 2011 final rule. A 

similar approach was used by EPA in the EPA 2008 Staff Technical Report. This 

approach was recommended to NHTSA by Ricardo, an international engineering 

consulting firm retained by NHTSA to aid in the analysis of public comments on its 

proposed standards for MYs 2011-2015 because of its expertise in the area of fuel 

economy technologies. A BOM approach is one element of the process used in tear 

down studies. The difference is that under a BOM approach, the build up of cost 

estimates is conducted based on a review of cost and effectiveness estimates for each 

component from available literature, while under a tear down study, the cost estimates 
93 

which go into the BOM come from the tear down study itself. To the extent that the 

agencies departed from the MY 2011 CAFE final rule estimates, the agencies explained 

the reasons and provided supporting analyses in the Technical Support Document. 

Similarly, the agencies followed a BOM approach for developing the technology 

effectiveness estimates, insofar as the BOM developed for the cost estimates helped to 

inform the appropriate effectiveness values derived from the literature review. The 

agencies supplemented the information with results from available simulation work and 

real world EPA certification testing. 

The agencies would also like to note that per the Energy Independence and 

Security Act (EISA), the National Academies of Sciences has been conducting a study 

for NHTSA to update Chapter 3 of their 2002 NAS Report, which presents technology 

effectiveness estimates for light-duty vehicles. The update takes a fresh look at that list 

of technologies and their associated cost and effectiveness values. The updated NAS 

report was expected to be available on September 30, 2009, but has not been completed 

and released to the public. The results from this study thus are unavailable for this 

rulemaking. The agencies look forward to considering the results from this study as part 

of the next round of rulemaking for CAFE/GHG standards. 

1. What Technologies Did the Agencies Consider?

The agencies considered over 35 vehicle technologies that manufacturers could 

use to improve the fuel economy and reduce CO2 emissions of their vehicles during MYs 

2012-2016. The majority of the technologies described in this section are readily 

available, well known, and could be incorporated into vehicles once production decisions 

are made. Other technologies considered may not currently be in production, but are 

beyond the research phase and under development, and are expected to be in production 

in the next few years. These are technologies which can, for the most part, be applied 

both to cars and trucks, and which are capable of achieving significant improvements in 

fuel economy and reductions in CO2 emissions, at reasonable costs. The agencies did not 

consider technologies in the research stage because the lead time available for this rule is 

not sufficient to move most of these technologies from research to production. 

The technologies considered in the agencies’ analysis are briefly described below. 

They fall into five broad categories: engine technologies, transmission technologies, 

vehicle technologies, electrification/accessory technologies, and hybrid technologies. For 

a more detailed description of each technology and their costs and effectiveness, we refer 

the reader to Chapter 3 of the Joint TSD, Chapter III of NHTSA’s FRIA, and Chapter 1 

of EPA’s final RIA. Technologies to reduce CO2 and HFC emissions from air 

conditioning systems are discussed in Section III of this preamble and in EPA’s final 

RIA. 

Types of engine technologies that improve fuel economy and reduce CO2

emissions include the following: 
94 

• Low-friction lubricants – low viscosity and advanced low friction lubricants oils 

are now available with improved performance and better lubrication. If 

manufacturers choose to make use of these lubricants, they would need to make 

engine changes and possibly conduct durability testing to accommodate the lowfriction lubricants. 

• Reduction of engine friction losses – can be achieved through low-tension piston 

rings, roller cam followers, improved material coatings, more optimal thermal 

management, piston surface treatments, and other improvements in the design of 

engine components and subsystems that improve engine operation. 

• Conversion to dual overhead cam with dual cam phasing – as applied to overhead 

valves designed to increase the air flow with more than two valves per cylinder 

and reduce pumping losses.

• Cylinder deactivation – deactivates the intake and exhaust valves and prevents 

fuel injection into some cylinders during light-load operation. The engine runs 

temporarily as though it were a smaller engine which substantially reduces 

pumping losses.

• Variable valve timing – alters the timing of the intake valve, exhaust valve, or 

both, primarily to reduce pumping losses, increase specific power, and control 

residual gases.

• Discrete variable valve lift – increases efficiency by optimizing air flow over a 

broader range of engine operation which reduces pumping losses. Accomplished 

by controlled switching between two or more cam profile lobe heights. 

• Continuous variable valve lift – is an electromechanically controlled system in 

which valve timing is changed as lift height is controlled. This yields a wide 

range of performance optimization and volumetric efficiency, including enabling 

the engine to be valve throttled. 

• Stoichiometric gasoline direct-injection technology – injects fuel at high pressure 

directly into the combustion chamber to improve cooling of the air/fuel charge 

within the cylinder, which allows for higher compression ratios and increased 

thermodynamic efficiency. 

• Combustion restart – can be used in conjunction with gasoline direct-injection 

systems to enable idle-off or start-stop functionality. Similar to other start-stop 

technologies, additional enablers, such as electric power steering, accessory drive 

components, and auxiliary oil pump, might be required. 

• Turbocharging and downsizing – increases the available airflow and specific 

power level, allowing a reduced engine size while maintaining performance. This 

reduces pumping losses at lighter loads in comparison to a larger engine.
95 

• Exhaust-gas recirculation boost – increases the exhaust-gas recirculation used in 

the combustion process to increase thermal efficiency and reduce pumping losses. 

• Diesel engines – have several characteristics that give superior fuel efficiency, 

including reduced pumping losses due to lack of (or greatly reduced) throttling, 

and a combustion cycle that operates at a higher compression ratio, with a very 

lean air/fuel mixture, relative to an equivalent-performance gasoline engine. This 

technology requires additional enablers, such as NOx trap catalyst after-treatment 

or selective catalytic reduction NOx after-treatment. The cost and effectiveness 

estimates for the diesel engine and aftertreatment system utilized in this final rule 

have been revised from the NHTSA MY 2011 CAFE final rule. Additionally, the 

diesel technology option has been made available to small cars in the Volpe and 

OMEGA models. Though this is not expected to make a significant difference in 

the modeling results, the agencies agreed with the commenters that supported 

such a revision. 

Types of transmission technologies considered include: 

• Improved automatic transmission controls – optimizes shift schedule to maximize 

fuel efficiency under wide ranging conditions, and minimizes losses associated 

with torque converter slip through lock-up or modulation. 

• Six-, seven-, and eight-speed automatic transmissions – the gear ratio spacing and 

transmission ratio are optimized to enable the engine to operate in a more efficient 

operating range over a broader range of vehicle operating conditions. 

• Dual clutch or automated shift manual transmissions – are similar to manual 

transmissions, but the vehicle controls shifting and launch functions. A dualclutch automated shift manual transmission uses separate clutches for evennumbered and odd-numbered gears, so the next expected gear is pre-selected, 

which allows for faster and smoother shifting.

• Continuously variable transmission – commonly uses V-shaped pulleys 

connected by a metal belt rather than gears to provide ratios for operation. Unlike 

manual and automatic transmissions with fixed transmission ratios, continuously 

variable transmissions can provide fully variable and an infinite number of 

transmission ratios that enable the engine to operate in a more efficient operating 

range over a broader range of vehicle operating conditions. 

• Manual 6-speed transmission –offers an additional gear ratio, often with a higher 

overdrive gear ratio, than a 5-speed manual transmission. 

Types of vehicle technologies considered include: 

• Low-rolling-resistance tires – have characteristics that reduce frictional losses 

associated with the energy dissipated in the deformation of the tires under load, 

thereby improving fuel economy and reducing CO2 emissions. 
96 

• Low-drag brakes – reduce the sliding friction of disc brake pads on rotors when 

the brakes are not engaged because the brake pads are pulled away from the 

rotors. 

• Front or secondary axle disconnect for four-wheel drive systems – provides a 

torque distribution disconnect between front and rear axles when torque is not 

required for the non-driving axle. This results in the reduction of associated 

parasitic energy losses. 

• Aerodynamic drag reduction – is achieved by changing vehicle shape or reducing 

frontal area, including skirts, air dams, underbody covers, and more aerodynamic 

side view mirrors. 

• Mass reduction and material substitution – Mass reduction encompasses a variety 

of techniques ranging from improved design and better component integration to 

application of lighter and higher-strength materials. Mass reduction is further 

compounded by reductions in engine power and ancillary systems (transmission, 

steering, brakes, suspension, etc.). The agencies recognize there is a range of 

diversity and complexity for mass reduction and material substitution 

technologies and there are many techniques that automotive suppliers and 

manufacturers are using to achieve the levels of this technology that the agencies 

have modeled in our analysis for the final standards. 

Types of electrification/accessory and hybrid technologies considered include: 

• Electric power steering (EPS) – is an electrically-assisted steering system that has 

advantages over traditional hydraulic power steering because it replaces a 

continuously operated hydraulic pump, thereby reducing parasitic losses from the 

accessory drive.

• Improved accessories (IACC) – may include high efficiency alternators, 

electrically driven (i.e., on-demand) water pumps and cooling fans. This excludes 

other electrical accessories such as electric oil pumps and electrically driven air 

conditioner compressors. The latter is covered explicitly within the A/C credit 

program. 

• Air Conditioner Systems – These technologies include improved hoses, 

connectors and seals for leakage control. They also include improved 

compressors, expansion valves, heat exchangers and the control of these 

components for the purposes of improving tailpipe CO2 emissions as a result of 

A/C use. These technologies are discussed later in this preamble and covered 

separately in the EPA RIA. 

• 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 
97 

other enablers, this system replaces a common alternator with a belt-driven 

enhanced power starter-alternator, and a revised accessory drive system.

• Higher Voltage Stop-Start/Belt Integrated Starter Generator (BISG) – provides 

idle-stop capability and uses a higher voltage battery with increased energy 

capacity over typical automotive batteries. The higher system voltage allows the 

use of a smaller, more powerful electric motor. This system replaces a standard 

alternator with an enhanced power, higher voltage, higher efficiency starteralternator, that is belt driven and that can recover braking energy while the vehicle 

slows down (regenerative braking).

• Integrated Motor Assist (IMA)/Crank integrated starter generator (CISG) – 

provides idle-stop capability and uses a high voltage battery with increased 

energy capacity over typical automotive batteries. The higher system voltage 

allows the use of a smaller, more powerful electric motor and reduces the weight 

of the wiring harness. This system replaces a standard alternator with an 

enhanced power, higher voltage, higher efficiency starter-alternator that is 

crankshaft mounted and can recover braking energy while the vehicle slows down 

(regenerative braking).

• 2-mode hybrid (2MHEV) – is a hybrid electric drive system that uses an 

adaptation of a conventional stepped-ratio automatic transmission by replacing 

some of the transmission clutches with two electric motors that control the ratio of 

engine speed to vehicle speed, while clutches allow the motors to be bypassed. 

This improves both the transmission torque capacity for heavy-duty applications 

and reduces fuel consumption and CO2 emissions at highway speeds relative to 

other types of hybrid electric drive systems.

• Power-split hybrid (PSHEV) – a hybrid electric drive system that replaces the 

traditional transmission with a single planetary gearset and a motor/generator. 

This motor/generator uses the engine to either charge the battery or supply 

additional power to the drive motor. A second, more powerful motor/generator is 

permanently connected to the vehicle’s final drive and always turns with the 

wheels. The planetary gear splits engine power between the first motor/generator 

and the drive motor to either charge the battery or supply power to the wheels.

• Plug-in hybrid electric vehicles (PHEV) – are hybrid electric vehicles with the 

means to charge their battery packs from an outside source of electricity (usually 

the electric grid). These vehicles have larger battery packs with more energy 

storage and a greater capability to be discharged than other hybrids. They also 

use a control system that allows the battery pack to be substantially depleted 

under electric-only or blended mechanical/electric operation. 

• Electric vehicles (EV) – are vehicles with all-electric drive and with vehicle 

systems powered by energy-optimized batteries charged primarily from grid 

electricity. 
98 

The cost estimates for the various hybrid systems have been revised from the 

estimates used in the MY 2011 CAFE final rule, in particular with respect to estimated 

battery costs. 

2. How did the Agencies Determine the Costs and Effectiveness of Each of 

These Technologies?

As mentioned above, EPA and NHTSA believe that the best way to derive 

technology cost estimates is to conduct real-world tear down studies. To date, the costs 

of the following five technologies have been evaluated with respect to their baseline (or 

replaced) technologies. For these technologies noted below, the agencies relied on the 

tear down data available and scaling methodologies used in EPA’s ongoing study with 

FEV. Only the cost estimate for the first technology on the list below was used in the 

NPRM. The others were completed subsequent to the publication of the NPRM. 

1. Stoichiometric gasoline direct injection and turbo charging with engine 

downsizing (T-DS) for a large DOHC 4 cylinder engine to a small DOHC 

(dual overhead cam) 4 cylinder engine. 

2. Stoichiometric gasoline direct injection and turbo charging with engine 

downsizing for a SOHC single overhead cam) 3 valve/cylinder V8 engine 

to a SOHC V6 engine. 

3. Stoichiometric gasoline direct injection and turbo charging with engine 

downsizing for a DOHC V6 engine to a DOHC 4 cylinder engine. 

4. 6-speed automatic transmission replacing a 5-speed automatic 

transmission. 

5. 6-speed wet dual clutch transmission (DCT) replacing a 6-speed automatic 

transmission. 

 This costing methodology has been published and gone through a peer review.81 

Using this tear down costing methodology, FEV has developed costs for each of the 

above technologies. In addition, FEV and EPA extrapolated the engine downsizing costs 

for the following scenarios that were outside of the noted study cases:82

1. Downsizing a SOHC 2 valve/cylinder V8 engine to a DOHC V6. 

2. Downsizing a DOHC V8 to a DOHC V6. 

3. Downsizing a SOHC V6 engine to a DOHC 4 cylinder engine. 

4. Downsizing a DOHC 4 cylinder engine to a DOHC 3 cylinder engine. 

 The agencies relied on the findings of FEV in part for estimating the cost of these 

technologies in this rulemaking. However, for some of the technologies, NHTSA and 

EPA modified FEV’s estimated costs. FEV made the assumption that these technologies 

would be mature when produced in large volumes (450,000 units or more). The agencies 

believe that there is some uncertainty regarding each manufacturer’s near-term ability to 

 

81 EPA-420-R-09-020; EPA docket number EPA-HQ-OAR-2009-0472-11282 and 11285 

82 “Binning of FEV Costs to GDI, Turbo-charging, and Engine Downsizing,” memorandum to Docket 

EPA-HQ-OAR-2009-0472, from Michael Olechiw, U.S. EPA, dated March 25, 2010. 

Deleted: XX the methodology for 

which can be found in a memo to the 

docket titled " "

Deleted: 
99 

employ the technology at the volumes assumed in the FEV analysis. There is also the 

potential for near term (earlier than 2016) supplier-level Engineering, Design and Testing 

(ED&T) costs to be in excess of those considered in the FEV analysis as existing 

equipment and facilities are converted to production of new technologies. The agencies 

have therefore decided to average the FEV results with the NPRM values in an effort to 

account for these near-term factors. This methodology was done for the following 

technologies: 

1. Converting a port-fuel injected (PFI) DOHC I4 to a turbocharged-downsizedstoichiometric GDI DOHC I3. 

2. Converting a PFI DOHC V6 engine to a T-DS-stoichiometric GDI DOHC I4. 

3. Converting a PFI SOHC V6 engine to a T-DS-stoichiometric GDI DOHC I4. 

4. Converting a PFI DOHC V8 engine to a T-DS-stoichiometric GDI DOHC V6. 

5. Converting a PFI SOHC 3V V8 engine to a T-DS-stoichiometric GDI DOHC 

V6. 

6. Converting a PFI SOHC 2V V8 engine to a T-DS-stoichiometric GDI DOHC 

V6. 

7. Replacing a 4-speed automatic transmission with a 6-speed automatic 

transmission. 

8. Replacing a 5-speed automatic transmission with a 6-speed automatic 

transmission. 

9. Replacing a 6-speed automatic transmission with a 6-speed wet dual clutch 

transmission. 

For the I4 to Turbo GDI I4 study applied in the NPRM, the agencies requested 

from FEV an adjusted cost estimate which accounted for these uncertainties as an 

adjustment to the base technology burden rate.83 These new costs are used in the final 

rules. These details are also further described in the memo to the docket.84 The 

confidential information provided by manufacturers as part of their product plan 

submissions to the agencies or discussed in meetings between the agencies and the 

manufacturers and suppliers served largely as a check on publicly-available data. 

For the other technologies, considering all sources of information (including 

public comments) and using the BOM approach, the agencies worked together 

intensively to determine component costs for each of the technologies and build up the 

costs accordingly. Where estimates differ between sources, we have used our 

engineering judgment to arrive at what we believe to be the best available cost estimate, 

and explained the basis for that exercise of judgment in the TSD. Building on NHTSA’s 

 

83 Burden costs include the following fixed and variable costs: rented and leased equipment; manufacturing 

equipment depreciation; plant office equipment depreciation; utilities expense; insurance (fire and general); 

municipal taxes; plant floor space (equipment and plant offices); maintenance of manufacturing equipment 

- non-labor; maintenance of manufacturing building - general, internal and external, parts, and labor; 

operating supplies; perishable and supplier-owned tooling; all other plant wages (excluding direct, indirect 

and MRO labor); returnable dunnage maintenance; and intra-company shipping costs (see EPA-HQ-OAR2009-0472-0149). 

84 “Binning of FEV Costs to GDI, Turbo-charging, and Engine Downsizing,” memorandum to Docket 

EPA-HQ-OAR-2009-0472, from Michael Olechiw, U.S. EPA, dated March 25, 2010.

Deleted: XX Reference memo to 

docket.
100 

estimates developed for the MY 2011 CAFE final rule and EPA’s Advance Notice of 

Proposed Rulemaking, which relied on the EPA 2008 Staff Technical Report,85 the 

agencies took a fresh look at technology cost and effectiveness values for purposes of the 

joint rulemaking under the National Program. For costs, the agencies reconsidered both 

the direct or “piece” costs and indirect costs of individual components of technologies. 

For the direct costs, the agencies followed a bill of materials (BOM) approach employed 

in NHTSA’s MY 2011 final rule based on recommendation from Ricardo, Inc., as 

described above. EPA used a similar approach in the EPA 2008 Staff Technical Report. 

A bill of materials, in a general sense, is a list of components or sub-systems that make 

up a system—in this case, an item of fuel economy-improving technology. In order to 

determine what a system costs, one of the first steps is to determine its components and 

what they cost. 

NHTSA and EPA estimated these components and their costs based on a number 

of sources for cost-related information. The objective was to use those sources of 

information considered to be most credible for projecting the costs of individual vehicle 

technologies. For example, while NHTSA and Ricardo engineers had relied considerably 

in the MY 2011 final rule on the 2008 Martec Report for costing contents of some 

technologies, upon further joint review and for purposes of the MY 2012-2016 standards, 

the agencies decided that some of the costing information in that report was no longer 

accurate due to downward trends in commodity prices since the publication of that report. 

The agencies reviewed, then revalidated or updated cost estimates for individual 

components based on new information. Thus, while NHTSA and EPA found that much 

of the cost information used in NHTSA’s MY 2011 final rule and EPA’s staff report was 

consistent to a great extent, the agencies, in reconsidering information from many 

sources,86,87,88,89,90,91,92 revised several component costs of several major technologies: 

turbocharging with engine downsizing (as described above), mild and strong hybrids, 

diesels, stoichiometric gasoline direct injection fuel systems, and valve train lift 

technologies. These are discussed at length in the Joint TSD and in NHTSA’s final RIA. 

 

85 EPA Staff Technical Report: Cost and Effectiveness Estimates of Technologies Used to Reduce LightDuty Vehicle Carbon Dioxide Emissions. EPA420-R-08-008, March 2008. 

86 National Research Council, “Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) 

Standards,” National Academy Press, Washington, DC (2002) (the “2002 NAS Report”), available at 

http://www.nap.edu/openbook.php?isbn=0309076013 (last accessed August 7, 2009-update) 

87 Northeast States Center for a Clean Air Future (NESCCAF), “Reducing Greenhouse Gas Emissions from 

Light-Duty Motor Vehicles,” 2004 (the “2004 NESCCAF Report”), available at 

http://www.nesccaf.org/documents/rpt040923ghglightduty.pdf (last accessed August 7, 2009-update) 

88 “Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Public Hearing to Consider 

Adoption of Regulations to Control Greenhouse Gas Emissions from Motor Vehicles,” California 

Environmental Protection Agency, Air Resources Board, August 6, 2004. 

89 Energy and Environmental Analysis, Inc., “Technology to Improve the Fuel Economy of Light Duty 

Trucks to 2015,” 2006 (the “2006 EEA Report”), Docket EPA-HQ-OAR-2009-0472 

90 Martec, “Variable Costs of Fuel Economy Technologies,” June 1, 2008, (the “2008 Martec Report”) 

available at Docket No. NHTSA-2008-0089-0169.1 

91 Vehicle fuel economy certification data 

92 Confidential data submitted by manufacturers in response to the March 2009 and other requests for 

product plans. 
101 

Once costs were determined, they were adjusted to ensure that they were all 

expressed in 2007 dollars using a ratio of GDP values for the associated calendar years,93

and indirect costs were accounted for using the ICM (indirect cost multiplier) approach 

explained in Chapter 3 of the Joint TSD, rather than using the traditional Retail Price 

Equivalent (RPE) multiplier approach. A report explaining how EPA developed the ICM 

approach can be found in the docket for this rule. The comments addressing the ICM 

approach were generally positive and encouraging. However, one commenter suggested 

that we had mischaracterized the complexity of a few of our technologies, which would 

result in higher or lower markups than presented in the NPRM. That commenter also 

suggested that we had used the ICMs as a means of placing a higher level of 

manufacturer learning on the cost estimates. The latter comment is not true and the 

methodology behind the ICM approach is explained in detail in the reports that are 

available in the docket for this rule.94 The former is open to debate given the subjective 

nature of the engineering analysis behind it, but upon further thought both agencies 

believe that the complexities used in the NPRM were appropriate and have, therefore, 

carried those forward into the final rule. We discuss this in greater detail in the Response 

to Comments document. 

Regarding estimates for technology effectiveness, NHTSA and EPA also 

reexamined the estimates from NHTSA’s MY 2011 final rule and EPA’s ANPRM and 

2008 Staff Technical Report, which were largely consistent with NHTSA’s 2008 NPRM 

estimates. The agencies also reconsidered other sources such as the 2002 NAS Report, 

the 2004 NESCCAF report, recent CAFE compliance data (by comparing similar 

vehicles with different technologies against each other in fuel economy testing, such as a 

Honda Civic Hybrid versus a directly comparable Honda Civic conventional drive), and 

confidential manufacturer estimates of technology effectiveness. NHTSA and EPA 

engineers reviewed effectiveness information from the multiple sources for each 

technology and ensured that such effectiveness estimates were based on technology 

hardware consistent with the BOM components used to estimate costs. The agencies also 

carefully examined the pertinent public comments. Together, they compared the multiple 

estimates and assessed their validity, taking care to ensure that common BOM definitions 

and other vehicle attributes such as performance, refinement, and drivability were taken 

into account. However, because the agencies’ respective models employ different 

numbers of vehicle subclasses and use different modeling techniques to arrive at the 

standards, direct comparison of BOMs was somewhat more complicated. To address this 

and to confirm that the outputs from the different modeling techniques produced the same 

result, NHTSA and EPA developed mapping techniques, devising technology packages 

and mapping them to corresponding incremental technology estimates. This approach 

helped compare the outputs from the incremental modeling technique to those produced 

 

93 NHTSA examined the use of the CPI multiplier instead of GDP for adjusting these dollar values, but 

found the difference to be exceedingly small – only $0.14 over $100. 

94 Rogozhin, Alex, Michael Gallaher, and Walter McManus, “Automobile Industry Retail Price Equivalent 

and Indirect Cost Multipliers,” EPA 420-R-09-003, Docket EPA Docket EPA-HQ-OAR-2009-0472-0142, 

February 2009, http://epa.gov/otaq/ld-hwy/420r09003.pdf; A. Rogozhin et al., International Journal of 

Production Economics 124 (2010) 360–368, Volume 124, Issue 2, April 2010.
102 

by the technology packaging approach to ensure results that are consistent and could be 

translated into the respective models of the agencies. 

In general, most effectiveness estimates used in both the MY 2011 final rule and 

the 2008 EPA staff report were determined to be accurate and were carried forward 

without significant change first into the NPRM, and now into these final rules. When 

NHTSA and EPA’s estimates for effectiveness diverged slightly due to differences in 

how the agencies apply technologies to vehicles in their respective models, we report the 

ranges for the effectiveness values used in each model. There were only a few comments 

on the technology effectiveness estimates used in the NPRM. Most of the technologies 

that were mentioned in the comments were the more advanced technologies that are not 

assumed to have large penetrations in the market within the timeframe of this rule, 

notably hybrid technologies. Even if the effectiveness figures for hybrid vehicles were 

adjusted, it would have made little difference in the NHTSA and EPA analysis of the 

impacts and costs of the rule. The response to comments document has more specific 

responses to these comments. 

The agencies note that the effectiveness values estimated for the technologies 

considered in the modeling analyses may represent average values, and do not reflect the 

enormous spectrum of possible values that could result from adding the technology to 

different vehicles. For example, while the agencies have estimated an effectiveness of 

0.5 percent for low friction lubricants, each vehicle could have a unique effectiveness 

estimate depending on the baseline vehicle’s oil viscosity rating. Similarly, the reduction 

in rolling resistance (and thus the improvement in fuel economy and the reduction in CO2

emissions) due to the application of low rolling resistance tires depends not only on the 

unique characteristics of the tires originally on the vehicle, but on the unique 

characteristics of the tires being applied, characteristics which must be balanced between 

fuel efficiency, safety, and performance. Aerodynamic drag reduction is much the 

same—it can improve fuel economy and reduce CO2 emissions, but it is also highly 

dependent on vehicle-specific functional objectives. For purposes of the final standards, 

NHTSA and EPA believe that employing average values for technology effectiveness 

estimates, as adjusted depending on vehicle subclass, is an appropriate way of 

recognizing the potential variation in the specific benefits that individual manufacturers 

(and individual vehicles) might obtain from adding a fuel-saving technology. 

Chapter 3 of the Joint Technical Support Document contains a detailed 

description of our assessment of vehicle technology cost and effectiveness estimates. 

The agencies note that the technology costs included in this final rule take into account 

only those associated with the initial build of the vehicle. Although comments were 

received to the NPRM that suggested there could be additional maintenance required with 

some new technologies (e.g., turbocharging, hybrids, etc.), and that additional 

maintenance costs could occur as a result, the agencies do not believe that the amount of 

additional cost will be significant in the timeframe of this rulemaking, based on the 

relatively low application rates for these technologies. The agencies will undertake a 

more detailed review of these potential costs in preparation for the next round of 

CAFE/GHG standards. 
103 

F. Joint Economic Assumptions

The agencies’ final analysis of alternative CAFE and GHG standards for the 

model years covered by this final rulemaking rely on a range of forecast information, 

economic estimates, and input parameters. This section briefly describes the agencies’ 

choices of specific parameter values. These economic values play a significant role in 

determining the benefits of both CAFE and GHG standards. 

In reviewing these variables and the agency’s estimates of their values for 

purposes of this final rule, NHTSA and EPA reconsidered previous comments that 

NHTSA had received, reviewed newly available literature, and reviewed comments 

received in response to the proposed rule. For this final rule, we made three major 

changes to the economic assumptions. First, we revised the technology costs to reflect 

more recently available data. Second, we updated fuel price and transportation demand 

assumptions to reflect the Annual Energy Outlook (AEO) 2010 Early Release. Third, we 

have updated our estimates of the social cost of carbon (SCC) based on a recent 

interagency process. The key economic assumptions are summarized below, and are 

discussed in greater detail in Section III (EPA) and Section IV (NHTSA), as well as in 

Chapter 4 of the Joint TSD, Chapter VIII of NHTSA’s RIA and Chapter 8 of EPA’s RIA. 

• Costs of fuel economy-improving technologies – These estimates are presented in 

summary form above and in more detail in the agencies’ respective sections of 

this preamble, in Chapter 3 of the Joint TSD, and in the agencies’ respective 

RIAs. The technology cost estimates used in this analysis are intended to 

represent manufacturers’ direct costs for high-volume production of vehicles with 

these technologies and sufficient experience with their application so that all cost 

reductions due to “learning curve” effects have been fully realized. Costs are then 

modified by applying near-term indirect cost multipliers ranging from 1.11 to 

1.64 to the estimates of vehicle manufacturers’ direct costs for producing or 

acquiring each technology to improve fuel economy, depending on the 

complexity of the technology and the time frame over which costs are estimated. 

This accounts for both the direct and indirect costs associated with implementing 

new technologies in response to this final rule. The technology cost estimates for 

a select group of technologies have changed since the NPRM. These changes, as 

summarized in Section II.E and in Chapter 3 of the Joint TSD, were made in 

response to updated cost estimates available to the agencies shortly after 

publication of the NPRM, not in response to comments. In general, commenters 

were supportive of the cost estimates used in the NPRM and the transparency of 

the methodology used to generate them. 

• Potential opportunity costs of improved fuel economy – This estimate addresses 

the possibility that achieving the fuel economy improvements required by 

alternative CAFE or GHG standards would require manufacturers to compromise 

the performance, carrying capacity, safety, or comfort of their vehicle models. If 

it did so, the resulting sacrifice in the value of these attributes to consumers would 

Deleted: 
104 

represent an additional cost of achieving the required improvements, and thus of 

manufacturers’ compliance with stricter standards. Currently the agencies assume 

that these vehicle attributes do not change, and include the cost of maintaining 

these attributes as part of the cost estimates for technologies. However, it is 

possible that the technology cost estimates do not include adequate allowance for 

the necessary efforts by manufacturers to maintain vehicle performance, carrying 

capacity, and utility while improving fuel economy and reducing GHG emissions. 

While, in principle, consumer vehicle demand models can measure these effects, 

these models do not appear to be robust across specifications, since authors derive 

a wide range of willingness-to-pay values for fuel economy from these models, 

and there is not clear guidance from the literature on whether one specification is 

clearly preferred over another. This issue is discussed in EPA’s RIA, Section 

8.1.2 and NHTSA’s RIA Section VIII.H. The agencies requested comment on 

how to estimate explicitly the changes in vehicle buyers’ welfare from the 

combination of higher prices for new vehicle models, increases in their fuel 

economy, and any accompanying changes in vehicle attributes such as 

performance, passenger- and cargo-carrying capacity, or other dimensions of 

utility. Commenters did not provide recommendations for how to evaluate the 

quality of different models or identify a model appropriate for the agencies’ 

purposes. Some commenters expressed various concerns about the use of existing 

consumer vehicle choice models. While EPA and NHTSA are not using a 

consumer vehicle choice model to analyze the effects of this rule, we continue to 

investigate these models. 

• The on-road fuel economy “gap” – Actual fuel economy levels achieved by lightduty vehicles in on-road driving fall somewhat short of their levels measured 

under the laboratory-like test conditions used by NHTSA and EPA to establish 

compliance with the final CAFE and GHG standards. The agencies use an onroad fuel economy gap for light-duty vehicles of 20 percent lower than published 

fuel economy levels. For example, if the measured CAFE fuel economy value of 

a light truck is 20 mpg, the on-road fuel economy actually achieved by a typical 

driver of that vehicle is expected to be 16 mpg (20*.80).95 NHTSA previously 

used this estimate in its MY 2011 final rule, and the agencies confirmed it based 

on independent analysis for use in this FRM. No substantive comments were 

received on this input. 

• Fuel prices and the value of saving fuel – Projected future fuel prices are a critical 

input into the preliminary economic analysis of alternative standards, because 

they determine the value of fuel savings both to new vehicle buyers and to 

society. For the proposed rule, the agencies had relied on the then most recent 

fuel price projections from the U.S. Energy Information Administration’s (EIA) 

Annual Energy Outlook (AEO) 2009 (Revised Updated). However, for this final 

rule, the agencies have updated the analyses based on AEO 2010 (December 2009 

 

95 U.S. Environmental Protection Agency, Final Technical Support Document, Fuel Economy Labeling of 

Motor Vehicle Revisions to Improve Calculation of Fuel Economy Estimates, EPA420-R-06-017, 

December 2006. 
105 

Early Release) Reference Case forecasts of inflation-adjusted (constant-dollar) 

retail gasoline and diesel fuel prices, which represent the EIA’s most up-to-date 

estimate of the most likely course of future prices for petroleum products.96 AEO 

2010 includes slightly lower petroleum prices compared to AEO 2009. 

The forecasts of fuel prices reported in EIA’s AEO 2010 Early Release Reference 

Case extends through 2035, compared to the AEO 2009 which only went through 

2030. As in the proposal, fuel prices beyond the time frame of AEO’s forecast 

were estimated using an average growth rate. 

While EIA revised AEO 2010, the vehicle MPG standards are similar to those that 

were published in AEO 2009. No substantive comments were received on the 

use of AEO as a source of fuel prices.97

• Consumer valuation of fuel economy and payback period – In estimating the 

value of fuel economy improvements that would result from alternative CAFE 

and GHG standards to potential vehicle buyers, the agencies assume that buyers 

value the resulting fuel savings over only part of the expected lifetime of the 

vehicles they purchase. Specifically, we assume that buyers value fuel savings 

over the first five years of a new vehicle’s lifetime, and that buyers discount the 

value of these future fuel savings using rates of 3% and 7%. The five-year figure 

represents the current average term of consumer loans to finance the purchase of 

new vehicles. One commenter argued that higher-fuel-economy vehicles should 

have higher resale prices than vehicles with lower fuel economy, but did not 

provide supporting data. This revision, if made, would increase the net benefits of 

the rule. Another commenter supported the use of a five-year payback period for 

this analysis. In the absence of data to support changes, EPA and NHTSA have 

kept the same assumptions. 

• Vehicle sales assumptions – The first step in estimating lifetime fuel consumption 

by vehicles produced during a model year is to calculate the number of vehicles 

expected to be produced and sold.98 The agencies relied on the AEO 2010 Early 

Release for forecasts of total vehicle sales, while the baseline market forecast 

 

96 Energy Information Administration, Annual Energy Outlook 2010, Early Release Reference Case 

(December 2009), Table 12. Available at http://www.eia.doe.gov/oiaf/aeo/aeoref_tab.html (last accessed 

February 02, 2010). 

97 Kahan, A. and Pickrell, D. Memo to Docket EPA-HQ-OAR-2009-0472 and Docket NHTSA-2009-0059. 

"Energy Information Administration’s Annual Energy Outlook 2009 and 2010." March 24, 2010.

98 Vehicles are defined to be of age 1 during the calendar year corresponding to the model year in which 

they are produced; thus for example, model year 2000 vehicles are considered to be of age 1 during 

calendar year 2000, age 2 during calendar year 2001, and to reach their maximum age of 26 years during 

calendar year 2025. NHTSA considers the maximum lifetime of vehicles to be the age after which less 

than 2 percent of the vehicles originally produced during a model year remain in service. Applying these 

conventions to vehicle registration data indicates that passenger cars have a maximum age of 26 years, 

while light trucks have a maximum lifetime of 36 years. See Lu, S., NHTSA, Regulatory Analysis and 

Evaluation Division, “Vehicle Survivability and Travel Mileage Schedules,” DOT HS 809 952, 8-11 

(January 2006). Available at http://www-nrd.nhtsa.dot.gov/Pubs/809952.pdf (last accessed Feb. 15, 2010).

Deleted: XX Cite memo to docket 

concerning this issue.
106 

developed by the agencies (see Section II.B) divided total projected sales into 

sales of cars and light trucks. 

• Vehicle survival assumptions -- We then applied updated values of age-specific 

survival rates for cars and light trucks to these adjusted forecasts of passenger car 

and light truck sales to determine the number of these vehicles remaining in use 

during each year of their expected lifetimes. No substantive comments were 

received on vehicle survival assumptions. 

• Total vehicle use – We then calculated the total number of miles that cars and 

light trucks produced in each model year will be driven during each year of their 

lifetimes using estimates of annual vehicle use by age tabulated from the Federal 

Highway Administration’s 2001 National Household Transportation Survey 

(NHTS),99 adjusted to account for the effect on vehicle use of subsequent 

increases in fuel prices. Due to the lower fuel prices projected in AEO 2010, the 

average vehicle is estimated to be used slightly more (~3 percent) over its lifetime 

than assumed in the proposal. In order to insure that the resulting mileage 

schedules imply reasonable estimates of future growth in total car and light truck 

use, we calculated the rate of growth in annual car and light truck mileage at each 

age that is necessary for total car and light truck travel to increase at the rates 

forecast in the AEO 2010 Early Release Reference Case. The growth rate in 

average annual car and light truck use produced by this calculation is 

approximately 1.1 percent per year.100 This rate was applied to the mileage 

figures derived from the 2001 NHTS to estimate annual mileage during each year 

of the expected lifetimes of MY 2012-2016 cars and light trucks. 101 While 

commenters requested further detail on the assumptions regarding total vehicle 

use, no specific issues were raised. 

• Accounting for the rebound effect of higher fuel economy – The rebound effect 

refers to the fraction of fuel savings expected to result from an increase in vehicle 

fuel economy – particularly an increase required by the adoption of more stringent 

CAFE and GHG standards – that is offset by additional vehicle use. The increase 

in vehicle use occurs because higher fuel economy reduces the fuel cost of 

driving, typically the largest single component of the monetary cost of operating a 

vehicle, and vehicle owners respond to this reduction in operating costs by driving 

slightly more. We received comments supporting our proposed value of 10 

percent, although we also received comments recommending higher and lower 

values. However, we did not receive any new data or comments that justify 

revising the 10 percent value for the rebound effect at this time. 

 

99 For a description of the Survey, see http://nhts.ornl.gov/quickStart.shtml (last accessed July 27, 2009). 100 It was not possible to estimate separate growth rates in average annual use for cars and light trucks, 

because of the significant reclassification of light truck models as passenger cars discussed previously. 101 While the adjustment for future fuel prices reduces average mileage at each age from the values derived 

from the 2001 NHTS, the adjustment for expected future growth in average vehicle use increases it. The 

net effect of these two adjustments is to increase expected lifetime mileage by about 18 percent for 

passenger cars and about 16 percent for light trucks. 
107 

• Benefits from increased vehicle use – The increase in vehicle use from the 

rebound effect provides additional benefits to their owners, who may make more 

frequent trips or travel farther to reach more desirable destinations. This 

additional travel provides benefits to drivers and their passengers by improving 

their access to social and economic opportunities away from home. These 

benefits are measured by the net “consumer surplus” resulting from increased 

vehicle use, over and above the fuel expenses associated with this additional 

travel. We estimate the economic value of the consumer surplus provided by 

added driving using the conventional approximation, which is one half of the 

product of the decline in vehicle operating costs per vehicle-mile and the resulting 

increase in the annual number of miles driven. Because it depends on the extent 

of improvement in fuel economy, the value of benefits from increased vehicle use 

changes by model year and varies among alternative standards. 

• The value of increased driving range – By reducing the frequency with which 

drivers typically refuel their vehicles, and by extending the upper limit of the 

range they can travel before requiring refueling, improving fuel economy and 

reducing GHG emissions thus provides some additional benefits to their owners. 

No direct estimates of the value of extended vehicle range are readily available, so 

the agencies’ analysis calculates the reduction in the annual number of required 

refueling cycles that results from improved fuel economy, and applies DOTrecommended values of travel time savings to convert the resulting time savings 

to their economic value.102 Please see the Chapter 4 of the Joint TSD for details. 

• Added costs from congestion, crashes and noise – Although it provides some 

benefits to drivers, increased vehicle use associated with the rebound effect also 

contributes to increased traffic congestion, motor vehicle accidents, and highway 

noise. Depending on how the additional travel is distributed over the day and on 

where it takes place, additional vehicle use can contribute to traffic congestion 

and delays by increasing traffic volumes on facilities that are already heavily 

traveled during peak periods. These added delays impose higher costs on drivers 

and other vehicle occupants in the form of increased travel time and operating 

expenses, increased costs associated with traffic accidents, and increased traffic 

noise. The agencies rely on estimates of congestion, accident, and noise costs 

caused by automobiles and light trucks developed by the Federal Highway 

Administration to estimate the increased external costs caused by added driving 

due to the rebound effect.103 

• Petroleum consumption and import externalities – U.S. consumption and imports 

of petroleum products also impose costs on the domestic economy that are not 

 

102 Department of Transportation, Guidance Memorandum, “The Value of Saving Travel Time: 

Departmental Guidance for Conducting Economic Evaluations,” Apr. 9, 1997. 

http://ostpxweb.dot.gov/policy/Data/VOT97guid.pdf (last accessed Feb. 15, 2010); update available at

http://ostpxweb.dot.gov/policy/Data/VOTrevision1_2-11-03.pdf (last accessed Feb. 15, 2010). 

103 These estimates were developed by FHWA for use in its 1997 Federal Highway Cost Allocation Study; 

http://www.fhwa.dot.gov/policy/hcas/final/index.htm (last accessed Feb. 15, 2010). 
108 

reflected in the market price for crude petroleum, or in the prices paid by 

consumers of petroleum products such as gasoline. In economics literature on 

this subject, these costs include (1) higher prices for petroleum products resulting 

from the effect of U.S. oil import demand on the world oil price (“monopsony 

costs”); (2) the expected costs from the risk of disruptions to the U.S. economy 

caused by sudden reductions in the supply of imported oil to the U.S.; and (3) 

expenses for maintaining a U.S. military presence to secure imported oil supplies 

from unstable regions, and for maintaining the strategic petroleum reserve (SPR) 

to cushion against resulting price increases.104 Reducing U.S. imports of crude 

petroleum or refined fuels can reduce the magnitude of these external costs. Any 

reduction in their total value that results from lower fuel consumption and 

petroleum imports represents an economic benefit of setting more stringent 

standards over and above the dollar value of fuel savings itself. Since the 

agencies are taking a global perspective with respect to the estimate of the social 

cost of carbon for this rulemaking, the agencies do not include the value of any 

reduction in monopsony payments as a benefit from lower fuel consumption, 

because those payments from a global perspective represent a transfer of income 

from consumers of petroleum products to oil suppliers rather than a savings in 

real economic resources. Similarly, the agencies do not include any savings in 

budgetary outlays to support U.S. military activities among the benefits of higher 

fuel economy and the resulting fuel savings. Based on a recently-updated ORNL 

study, we estimate that each gallon of fuel saved that results in a reduction in U.S. 

petroleum imports (either crude petroleum or refined fuel) will reduce the 

expected costs of oil supply disruptions to the U.S. economy by $0.169 (2007$). 

Each gallon of fuel saved as a consequence of higher standards is anticipated to 

reduce total U.S. imports of crude petroleum or refined fuel by 0.95 gallons.105 

The energy security analysis conducted for this rule estimates that the world price 

of oil will fall modestly in response to lower U.S. demand for refined fuel. One potential 

result of this decline in the world price of oil would be an increase in the consumption of 

petroleum products outside the U.S., which would in turn lead to a modest increase in 

emissions of greenhouse gases, criteria air pollutants, and airborne toxics from their 

refining and use. While additional information would be needed to analyze this “leakage 

effect” in detail, NHTSA provides a sample estimate of its potential magnitude in its 

 

104 See, e.g., Bohi, Douglas R. and W. David Montgomery (1982). Oil Prices, Energy Security, and Import 

Policy Washington, DC: Resources for the Future, Johns Hopkins University Press; Bohi, D. R., and M. A. 

Toman (1993). "Energy and Security: Externalities and Policies," Energy Policy 21:1093-1109; and 

Toman, M. A. (1993). "The Economics of Energy Security: Theory, Evidence, Policy," in A. V. Kneese 

and J. L. Sweeney, eds. (1993). Handbook of Natural Resource and Energy Economics, Vol. III. 

Amsterdam: North-Holland, pp. 1167-1218.

105 Each gallon of fuel saved is assumed to reduce imports of refined fuel by 0.5 gallons, and the volume of 

fuel refined domestically by 0.5 gallons. Domestic fuel refining is assumed to utilize 90 percent imported 

crude petroleum and 10 percent domestically-produced crude petroleum as feedstocks. Together, these 

assumptions imply that each gallon of fuel saved will reduce imports of refined fuel and crude petroleum 

by 0.50 gallons + 0.50 gallons*90 percent = 0.50 gallons + 0.45 gallons = 0.95 gallons. 
109 

Final EIS.106 This analysis indicates that the leakage effect is likely to offset only a 

modest fraction of the reductions in emissions projected to result from the rule.

 EPA and NHTSA received comments about the treatment of the monopsony 

effect, macroeconomic disruption effect, and the military costs associated with the energy 

security benefits of this rule. The agencies did not receive any comments that justify 

changing the energy security analysis. As a result, the agencies continue to only use the 

macroeconomic disruption component of the energy security analysis under a global 

context when estimating the total energy security benefits associated with this rule. 

Further, the Agencies did not receive any information that they could use to quantity that 

component of military costs directly related to energy security, and thus did not modify 

that part of its analysis. A more complete discussion of the energy security analysis can 

be found in Chapter 4 of the Joint TSD, and Sections III and IV of this preamble. 

• Air pollutant emissions

o Impacts on criteria air pollutant emissions – While reductions in domestic 

fuel refining and distribution that result from lower fuel consumption will 

reduce U.S. emissions of criteria pollutants, additional vehicle use 

associated with the rebound effect will increase emissions of these 

pollutants. Thus the net effect of stricter standards on emissions of each 

criteria pollutant depends on the relative magnitudes of reduced emissions 

from fuel refining and distribution, and increases in emissions resulting 

from added vehicle use. Criteria air pollutants emitted by vehicles and 

during fuel production include carbon monoxide (CO), hydrocarbon 

compounds (usually referred to as “volatile organic compounds,” or 

VOC), nitrogen oxides (NOX), fine particulate matter (PM2.5), and sulfur 

oxides (SOX). It is assumed that the emission rates (per mile) stay 

constant for future year vehicles.

o Economic value of reductions in criteria air pollutants – For the purpose 

of the joint technical analysis, EPA and NHTSA estimate the economic 

value of the human health benefits associated with reducing exposure to 

PM2.5 using a “benefit-per-ton” method. These PM2.5-related benefit-perton estimates provide the total monetized benefits to human health (the 

sum of reductions in premature mortality and premature morbidity) that 

result from eliminating one ton of directly emitted PM2.5, or one ton of a 

pollutant that contributes to secondarily-formed PM2.5 (such as NOX, SOX, 

and VOCs), from a specified source. Chapter 4.2.9 of the Technical 

Support Document that accompanies this rule includes a description of 

these values. Separately, EPA also conducted air quality modeling to 

estimate the change in ambient concentrations of criteria pollutants and 

used this as a basis for estimating the human health benefits and their 

economic value. Section III.H.7 presents these benefits estimates.

 

106 NHTSA Final Environmental Impact Statement: Corporate Average Fuel Economy Standards, 

Passenger Cars and Light Trucks, Model Years 2012-2016, February 2010, page 3-14. Deleted: .
110 

o Reductions in GHG emissions – Emissions of carbon dioxide and other 

GHGs occur throughout the process of producing and distributing 

transportation fuels, as well as from fuel combustion itself. By reducing 

the volume of fuel consumed by passenger cars and light trucks, higher 

standards will thus reduce GHG emissions generated by fuel use, as well 

as throughout the fuel supply cycle. The agencies estimated the increases 

of GHGs other than CO2, including methane and nitrous oxide, from 

additional vehicle use by multiplying the increase in total miles driven by 

cars and light trucks of each model year and age by emission rates per 

vehicle-mile for these GHGs. These emission rates, which differ between 

cars and light trucks as well as between gasoline and diesel vehicles, were 

estimated by EPA using its recently-developed Motor Vehicle Emission 

Simulator (Draft MOVES 2010).107 Increases in emissions of non-CO2

GHGs are converted to equivalent increases in CO2 emissions using 

estimates of the Global Warming Potential (GWP) of methane and nitrous 

oxide.

o Economic value of reductions in CO2 emissions - EPA and NHTSA 

assigned a dollar value to reductions in CO2 emissions using the marginal 

dollar value (i.e., cost) of climate-related damages resulting from carbon 

emissions, also referred to as “social cost of carbon” (SCC). The SCC is 

intended to measure the monetary value society places on impacts 

resulting from increased GHGs, such as property damage from sea level 

rise, forced migration due to dry land loss, and mortality changes 

associated with vector-borne diseases. Published estimates of the SCC 

vary widely as a result of uncertainties about future economic growth, 

climate sensitivity to GHG emissions, procedures used to model the 

economic impacts of climate change, and the choice of discount rates. 

EPA and NHTSA received extensive comments about how to improve the 

characterization of the SCC and have since developed new estimates 

through an interagency modeling exercise. The comments addressed 

various issues, such as discount rate selection, treatment of uncertainty, 

and emissions and socioeconomic trajectories, and justified the revision of 

SCC for the final rule. The modeling exercise involved running three 

integrated assessment models using inputs agreed upon by the interagency 

group for climate sensitivity, socioeconomic and emissions trajectories, 

and discount rates. A more complete discussion of SCC can be found in 

the Technical Support Document, Social Cost of Carbon for Regulatory 

Impact Analysis Under Executive Order 12866 (hereafter, "SCC TSD"); 

 

107 The MOVES model assumes that the per-mile rates at which cars and light trucks emit these GHGs are 

determined by the efficiency of fuel combustion during engine operation and chemical reactions that occur 

during catalytic after-treatment of engine exhaust, and are thus independent of vehicles’ fuel consumption 

rates. Thus MOVES’ emission factors for these GHGs, which are expressed per mile of vehicle travel, are 

assumed to be unaffected by changes in fuel economy. 

Deleted: greenhouse gases (

Deleted: )

Deleted: Section XX
111 

revised SCC estimates corresponding to assumed values of the discount 

rate are shown in Table II.F-1.

108 

 Table II.F-1 Social Cost of CO2, 2010 (in 2007 dollars) 

Discount Rate 5% 3% 2.5% 3% 

Source of 

Estimate 

Mean of Estimates Values 95th

percentile 

estimate 

2010 Estimate $5 $21 $35 $65 

• Discounting future benefits and costs—Discounting future fuel savings and other 

benefits is intended to account for the reduction in their value to society when 

they are deferred until some future date, rather than received immediately. The 

discount rate expresses the percent decline in the value of these benefits—as 

viewed from today’s perspective—for each year they are deferred into the future. 

In evaluating the non-climate related benefits of the final standards, the agencies 

have employed discount rates of both 3 percent and 7 percent. We received some 

comments on the discount rates used in the proposal, most of which were directed 

at the discount rates used to value future fuel savings and the rates used to value 

of the social cost of carbon. In general, commenters were supporting one of the 

discount rates over the other, although some suggested that our rates were too 

high or too low. We have revised the discounting used when calculating the net 

present value of social cost of carbon as explained in Sections III.H. and VI but 

have not revised our discounting procedures for other costs or benefits. 

For the reader’s reference, Table II.F-2 below summarizes the values used to 

calculate the impacts of each final standard. The values presented in this table are 

summaries of the inputs used for the models; specific values used in the agencies’ 

respective analyses may be aggregated, expanded, or have other relevant adjustments. 

See the respective RIAs for details. 

The agencies recognize that each of these values has some degree of uncertainty, 

which the agencies further discuss in the Joint TSD.The agencies have conducted a range 

of sensitivities and present them in their respective RIAs. For example, NHTSA has 

conducted a sensitivity analysis on several assumptions including (1) forecasts of future 

fuel prices, (2) the discount rate applied to future benefits and costs, (3) the magnitude of 

the rebound effect, (4) the value to the U.S. economy of reducing carbon dioxide 

emissions, (5) inclusion of the monopsony effect, and (6) the reduction in external 

 

108 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, available in docket EPA-HQOAR-2009-0472. 

Deleted: .

Deleted: In recognition of the 

uncertainties inherent in making these 

projections, addition, t
112 

economic costs resulting from lower U.S. oil imports. This information is provided in 

NHTSA’s RIA. 

Table II.F-2 Economic Values for Benefits Computations (2007$)

Fuel Economy Rebound Effect 10%

"Gap" between test and on-road MPG 20%

Value of refueling time per ($ per vehicle-hour) $ 24.64

Average tank volume refilled during refueling stop 55%

Annual growth in average vehicle use 1.15%

Fuel Prices (2012-50 average, $/gallon)

Retail gasoline price $3.66

Pre-tax gasoline price $3.29

Economic Benefits from Reducing Oil Imports ($/gallon)

"Monopsony" Component $ 0.00

Price Shock Component $ 0.17

Military Security Component $ 0.00

Total Economic Costs ($/gallon) $ 0.17

Emission Damage Costs (2020, $/ton or $/metric ton)

Carbon monoxide $ 0

Volatile organic compounds (VOC) $ 1,300

Nitrogen oxides (NOX) – vehicle use $ 5,100

Nitrogen oxides (NOX) – fuel production and distribution $ 5,300

Particulate matter (PM2.5) – vehicle use $ 240,000

Particulate matter (PM2.5) – fuel production and distribution $ 290,000,

Sulfur dioxide (SO2) $ 31,000

Carbon dioxide (CO2) emissions in 2010

$ 5

$ 21

$ 35

$ 65

Annual Increase in CO2 Damage Cost

variable, 

depending 

on estimate

External Costs from Additional Automobile Use ($/vehicle-mile)

Congestion $ 0.054

Accidents $ 0.023

Noise $ 0.001

Total External Costs $ 0.078

External Costs from Additional Light Truck Use ($/vehicle-mile)

Congestion $0.048

Accidents $0.026

Noise $0.001

Total External Costs $0.075

Discount Rates Applied to Future Benefits 3%, 7%
113 

G. What are the Estimated Safety Effects of the Final MYs 2012-2016 

CAFE and GHG Standards? 

The primary goals of the final CAFE and GHG standards are to reduce fuel 

consumption and GHG emissions, but in addition to these intended effects, the agencies 

must consider the potential of the standards to affect vehicle safety, 109 which the 

agencies have assessed in evaluating the appropriate levels at which to set the final 

standards. Safety trade-offs associated with fuel economy increases have occurred in the 

past, and the agencies must be mindful of the possibility of future ones. These past safety 

trade-offs occurred because manufacturers chose, at the time, to build smaller and lighter 

vehicles - partly in response to CAFE standards - rather than adding more expensive fuelsaving technologies (and maintaining vehicle size and safety), and the smaller and lighter 

vehicles did not fare as well in crashes as larger and heavier vehicles. Historically, as 

shown in FARS data analyzed by NHTSA, the safest vehicles have been heavy and large, 

while the vehicles with the highest fatal-crash rates have been light and small, both 

because the crash rate is higher for small/light vehicles and because the fatality rate per 

crash is higher for small/light vehicle crashes. 

Changes in relative safety are related to shifts in the distribution of vehicles on the 

road. A policy that induces a widening in the size distribution of vehicles on the road, 

could result in negative impacts on safety. The primary mechanism in this rulemaking 

for mitigating the potential negative effects on safety is the application of footprint-based 

standards, which create a disincentive for manufacturers to produce smaller-footprint 

vehicles. Manufacturers have stated, however, that they will reduce vehicle weight as 

one of the cost-effective means of increasing fuel economy and reducing CO2 emissions, 

and the agencies have incorporated this expectation into our modeling analysis 

supporting today’s final standards. NHTSA’s previous analyses examining the 

relationship between vehicle mass and fatalities found fatality increases as vehicle weight 

and size were reduced, but these previous analyses did not differentiate between weight 

reductions and size (i.e., weight and footprint) reductions. Also, as recommended by the 

NAS, the footprint-based curves flatten out for larger-footprint vehicles to avoid giving 

an incentive to upsize.

The question of the effect of changes in vehicle mass on safety in the context of 

fuel economy is a complex question that poses serious analytic challenges and has been a 

contentious issue for many years, as discussed by a number of commenters to the NPRM. 

This contentiousness arises, at least in part, from the difficulty of isolating vehicle mass 

from other confounding factors (e.g., driver behavior, or vehicle factors such as engine 

size and wheelbase). In addition, several vehicle factors have been closely related 

historically, such as vehicle mass, wheelbase, and track width. The issue has been 

reviewed and analyzed in the literature for more than two decades. For the reader’s 

reference, much more information about safety in the CAFE context is available in 

Chapter IX of NHTSA’s FRIA. Chapter 7.6 of EPA’s final RIA also contained 

additional discussion on mass and safety. 

 

109 In this rulemaking document, vehicle safety is defined as societal fatality rates which include fatalities to 

occupants of all the vehicles involved in the collisions, plus any pedestrians.

Deleted: 
114 

Over the past several years, as also discussed by a number of commenters to the 

NPRM, contention has arisen with regard to the applicability of analysis of historical 

crash data to future safety effects due to mass reduction. The agencies recognize that 

there are a host of factors that may make future mass reduction different than what is 

reflected in the historical data. For one, the footprint-based standards have been carefully 

developed by the agencies so that they do not encourage vehicle footprint reductions as a 

way of meeting the standards, but so that they do encourage application of fuel-saving 

technologies, including mass reduction. This in turn encourages manufacturers to find 

ways to separate mass reduction from footprint reduction, which will very likely result in 

a future relationship between mass and fatalities that is safer than the historical 

relationship. However, as manufacturers pursue these methods of mass reduction, the 

fleet moves further away from the historical trends, which the agencies recognize. 

NHTSA’s NPRM analysis of the safety effects of the proposed CAFE standards 

was based on NHTSA’s 2003 report concerning mass and size reduction in MYs 1991-

1999 vehicles, and evaluated a “worst-case scenario” in which the safety effects of the 

combined reductions of both mass and size for those vehicles were determined for the 

future passenger car and light truck fleets.110 In the NPRM analysis, mass and size could 

not be separated from one another, resulting in what NHTSA recognized was a larger 

safety disbenefit than was likely under the MYs 2012-2016 footprint-based CAFE 

standards. NHTSA emphasized, however, that actual fatalities would likely be less than 

these “worst-case” estimates, and possibly significantly less, based on the various factors 

discussed in the NPRM that could reduce the estimates, such as careful mass reduction 

through material substitution, etc. 

For the final rule, as discussed in the NPRM and in recognition of the importance 

of conducting analysis that better reflects, within the limits of our current knowledge, the 

potential safety effects of future mass reduction in response to the final CAFE and GHG 

standards that is highly unlikely to involve concurrent reductions in footprint, NHTSA 

has revised its analysis in consultation with EPA. Perhaps the most important change has 

been that NHTSA agreed with commenters that it was both possible and appropriate to 

separate the effect of mass reductions from the effect of footprint reductions. NHTSA 

thus performed a new statistical analysis, hereafter referred to as the 2010 Kahane 

analysis, of the MYs 1991-99 vehicle database from its 2003 report (now including rather 

than excluding 2-door cars in the passenger car fleet), assessing relationships between 

fatality risk, mass, and footprint for both passenger cars and LTVs (light trucks and 

vans).111 As part of its results, the new report presents an “upper-estimate scenario,” a 

“lower-estimate scenario,” and an “unmodified regression scenario” representing 

 

110 The analysis excluded 2-door cars. 111 “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. The text of the report may be 

found in Chapter IX of NHTSA’ FRIA, where it constitutes a section of that chapter. We note that this 

report has not yet been externally peer-reviewed, but that NHTSA had 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.

Deleted: “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 at Docket No. 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.
115 

potential safety effects of future mass reductions without corresponding vehicle size 

reductions, that assume, by virtue of being a cross-sectional analysis of historical data, 

that historical relationships between vehicle mass and fatalities are maintained. The 

“actual regression result scenario” and “lower-estimate scenario” are based on NHTSA’s 

judgment as a vehicle safety agency, and are not meant to convey any more or less 

likelihood in the results, but more to convey a sense of bounding for potential safety 

effects of reducing mass while holding footprint constant. The upper-estimate scenario 

reflects potential safety effects given the report’s finding that that, using the one-step 

regression method of the 2003 Kahane report, the regression coefficients show that mass 

and footprint each accounted for about half the fatality increase associated with 

downsizing in a cross-sectional analysis of MYs 1991-1999 cars. A similar effect was 

found for lighter LTVs. Applying the same regression method to heavier LTVs, 

however, the coefficients indicated a significant societal fatality reduction when mass, 

but not footprint, is reduced in the heavier LTVs.112 Fatalities are reduced primarily 

because mass reduction in the heavier LTVs will reduce risk to occupants of the other 

cars and lighter LTVs involved in collisions with these heavier LTVs.113 Thus, even in 

the “upper-estimate scenario,” the potential fatality increases associated with mass 

reduction in the passenger cars would be to a large extent offset by the benefits of mass 

reduction in the heavier LTVs. 

The lower-estimate scenario, in turn, reflects NHTSA’s estimate of potential 

safety effects if future mass reduction is accomplished entirely through material 

substitution, smart design,114 and component integration, among other things, that can 

reduce mass without perceptibly changing a vehicle’s shape, functionality, or safety 

performance, maintaining structural strength without compromising other aspects of 

safety. If future mass reduction follows this path, it could limit the added risk close to 

only the effects of mass per se (the ability to transfer momentum to other vehicles or 

objects in a collision), resulting in estimated effects in passenger cars that are 

substantially smaller than in the upper-estimate scenario based directly on the regression 

results. The lower-estimate scenario also covers both passenger cars and LTVs. 

 

112 Conversely, the coefficients indicate a significant increase if footprint is reduced. 113 We note that there may be some (currently non-quantifiable) welfare losses for purchasers of these 

heavier LTVs, the mass of which is reduced in response to these final standards. This is due to the fact that 

in certain crashes, as discussed below and in greater detail in Chapter IX of the NHTSA FRIA, more mass 

will always be helpful (although certainly in other crashes, the amount of mass reduction modeled by the 

agency will not be enough to have any significant effect on driver/occupant safety). However, we believe 

the effects of this will likely be minor. Consumer welfare impacts of the final rule are discussed in more 

detail in Chapter VIII of the NHTSA FRIA. 

114 Manufacturers may reduce mass through “smart design” using computer aided engineering (CAE) tools 

that can be used to better optimize load paths within structures by reducing stresses and bending moments 

applied to structures. This allows better optimization of the sectional thicknesses of structural components 

to reduce mass while maintaining or improving the function of the component. Smart designs also 

integrate separate parts in a manner that reduces mass by combining functions or the reduced use of 

separate fasteners. In addition, some “body on frame” vehicles are redesigned with a lighter “unibody” 

construction. 

Deleted: upper-estimate scenario

Deleted: by things like

Deleted: implement 

Deleted: through
116 

Overall, based on the new analyses, NHTSA estimated that fatality effects could 

be markedly less than those estimated in the “worst-case scenario” presented in the 

NPRM. The agencies believe that the overall effect of mass reduction in cars and LTVs 

may be close to zero, and may possibly be beneficial in terms of the fleet as a whole if 

mass reduction is carefully applied in the future (as with careful material substitution and 

other methods of mass reduction that can reduce mass without perceptibly changing a 

car’s shape, functionality, or safety performance, and maintain its structural strength 

without making it excessively rigid). This is especially important if the mass reduction in 

the heavier LTVs is greater (in absolute terms) than in passenger cars, as discussed 

further below and in the 2010 Kahane report. 

The following sections will address how the agencies addressed potential safety 

effects in the NPRM for the proposed standards, how commenters responded, and the 

work that NHTSA has done since the NPRM to revise its estimates of potential safety 

effects for the final rule. The final section discusses some of the agencies’ plans for the 

future with respect to potential analysis and studies to further enhance our understanding 

of this important and complex issue. 

1. What did the Agencies Say in the NPRM with regard to Potential Safety 

Effects?

In the NPRM preceding these final standards, NHTSA’s safety assessment 

derived from the agency’s belief that some of these vehicle factors, namely vehicle mass 

and footprint, could not be accurately separated. NHTSA relied on the 2003 study by Dr. 

Charles Kahane, which estimates the effect of 100-pound reductions in MYs 1991-1999 

heavy light trucks and vans (LTVs), light LTVs, heavy passenger cars, and light 

passenger cars.115 The study compares the fatality rates of LTVs and cars to quantify 

differences between vehicle types, given drivers of the same age/gender, etc. In that 

analysis, the effect of “weight reduction” is not limited to the effect of mass per se, but 

includes all the factors, such as length, width, structural strength, safety features, and size 

of the occupant compartment, that were naturally or historically confounded with mass in 

MYs 1991-1999 vehicles. The rationale was that adding length, width, or strength to a 

vehicle historically also made it heavier. 

NHTSA utilized the relationships between mass and safety from Kahane (2003), 

expressed as percentage increases in fatalities per 100-pound mass reduction, and 

examined the mass effects assumed in the NPRM modeling analysis. While previous 

CAFE rulemakings had limited mass reduction as a “technology option” to vehicles over 

5,000 pounds GVWR, both NHTSA’s and EPA’s modeling analyses in the NPRM 

included mass reduction of up to 5-10 percent of baseline curb weight, depending on 

vehicle subclass, in response to recently-submitted manufacturer product plans as well as 

public statements indicating that these levels were possible and likely. 5-10 percent 

represented a maximum bound; EPA’s modeling, for example, included average vehicle 

 

115 Kahane, Charles J., Ph.D., “Vehicle Weight, Fatality Risk and Crash Compatibility of Model Year 1991-

99 Passenger Cars and Light Trucks,” DOT HS 809 662, October 2003, Executive Summary. Available at 

http://www.nhtsa.dot.gov/cars/rules/regrev/evaluate/809662.html (last accessed March 10, 2010). 
117 

weight reductions of 4 percent between MYs 2011 and 2016, although the average pervehicle mass reduction was greater in absolute terms for light trucks than for passenger 

cars. NHTSA’s assumptions for mass reduction were also limited by lead time such that 

mass reductions of 1.5 percent were included for redesigns occurring prior to MY 2014, 

and mass reductions of 5-10 percent were only “achievable” in redesigns occurring in 

MY 2014 or later. NHTSA further assumed that mass reductions would be limited to 5 

percent for small vehicles (e.g., subcompact passenger cars), and that reductions of 10 

percent would only be applied to the larger vehicle types (e.g., large light trucks). 

Based on these assumptions of how manufacturers might comply with the 

standards, NHTSA examined the effects of the identifiable safety trends over the lifetime 

of the vehicles produced in each model year. The effects were estimated on a year-byyear basis, assuming that certain known safety trends would result in a reduction in the 

target population of fatalities from which the mass effects are derived.116 Using this 

method, NHTSA found a 12.6 percent reduction in fatality levels between 2007 and 

2020. The estimates derived from applying Kahane’s 2003 percentages to a baseline of 

2007 fatalities were then multiplied by 0.874 to account for changes that the agency 

believed would take place in passenger car and light truck safety between the 2007 

baseline on-road fleet used for that particular analysis and year 2020. 117

NHTSA and EPA both emphasized that the safety effect estimates in the NPRM 

needed to be understood in the context of the 2003 Kahane report, which is based upon a 

cross-sectional analysis of the actual on-road safety experience of 1991-1999 vehicles. 

For those vehicles, heavier usually also meant larger-footprint. Hence, the numbers in 

those analyses were used to predict the safety-related fatalities that could occur in the 

unlikely event that weight reduction for MYs 2012-2016 is accomplished entirely by 

reducing mass and reducing footprint. Any estimates derived from those analyses 

represented a “worst-case” estimate of safety effects, for several reasons. 

 First, manufacturers are far less likely to reduce mass by “downsizing” (making 

vehicles smaller overall) under the current attribute-based standards, because the 

standards are based on vehicle footprint. The selection of footprint as the attribute in 

setting CAFE and GHG standards helps to reduce the incentive to alter a vehicle’s 

physical dimensions. This is because as footprint decreases, the corresponding fuel 

 

116 NHTSA explained that there are several identifiable safety trends that are already in place or expected to 

occur in the foreseeable future and that were not accounted for in the study. For example, two important 

new safety standards that have already been issued and will be phasing in during the rulemaking time 

frame. Federal Motor Vehicle Safety Standard No. 126 (49 CFR 571.126) will require electronic stability 

control in all new vehicles by MY 2012, and the upgrade to Federal Motor Vehicle Safety Standard No. 

214 (Side Impact Protection, 49 CFR 571.214) will likely result in all new vehicles being equipped with 

head-curtain air bags by MY 2014.116 Additionally, the agency stated that it anticipates continued 

improvements in driver (and passenger) behavior, such as higher safety belt use rates. All of these will 

tend to reduce the absolute number of fatalities resulting from mass reductions. Thus, while the percentage 

increases in Kahane (2003) was applied, the reduced base resulted in smaller absolute increases than those 

that were predicted in the 2003 report.

117 Blincoe, L. and Shankar, U, “The Impact of Safety Standards and Behavioral Trends on Motor Vehicle 

Fatality Rates,” DOT HS 810 777, January 2007. See Table 4 comparing 2020 to 2007 (37,906/43,363 = 

12.6% reduction (1-.126 = .874)

Deleted: minimize

Deleted: reduce 
118 

economy/GHG emission target becomes more stringent.118 The shape of the footprint 

curves themselves have also been designed to be approximately “footprint neutral” within 

the sloped portion of the functions – that is, to neither encourage manufacturers to 

increase the footprint of their fleets, nor to decrease it. Upsizing also is discouraged 

through a flattening of the curves at larger footprints. For further discussion on these 

aspects of the standards, please see Section II.C above and Chapter 2 of the joint TSD. 

However, as discussed in Sections III.H.1 and IV.G.6 below, the agencies acknowledge 

some uncertainty regarding how consumer purchases will change in response to the 

vehicles designed to meet the MYs 2012-2016 standards. This could potentially affect 

the mix of vehicles sold in the future, including the mass and footprint distribution. 

As a result, the agencies found it likely that a significant portion of the mass 

reduction in the MY 2012-2016 vehicles would be accomplished by strategies, such as 

material substitution, smart design, reduced powertrain requirements,119 and mass 

compounding, that have a lesser safety effect than the prevalent 1980s strategy of simply 

making the vehicles smaller. The agencies noted that to the extent that future mass 

reductions could be achieved by these methods—without any accompanying reduction in 

the size or structural strength of the vehicle—then the fatality increases associated with 

the mass reductions anticipated by the model as a result of the proposed standards could 

be significantly smaller than those in the worst-case scenario. 

However, even though the agencies recognized that these methods of mass 

reduction could be technologically feasible in the rulemaking time frame, and included 

them as such in our modeling analyses, the agencies diverged as to how potential safety 

effects accompanying such methods of mass reduction could be evaluated, particularly in 

relation to the worst-case scenario presented by NHTSA. NHTSA stated that it could not 

predict how much smaller those increases would be for any given mixture of mass 

reduction methods, since the data on the safety effects of mass reduction alone (without 

size reduction) was not available due to the low numbers of vehicles in the current onroad fleet that have utilized these technologies extensively. Further, to the extent that 

mass reductions were accomplished through use of light, high-strength materials, 

NHTSA emphasized that there would be significant additional costs that would need to 

be determined and accounted for than were reflected in the agency’s proposal. 

 

118 We note, however, that vehicle footprint is not synonymous with vehicle size. Since the footprint is 

only that portion of the vehicle between the front and rear axles, 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, or 

to other portions of the vehicle outside the wheels. The crush space provided by those portions of a vehicle 

can make important contributions to managing crash energy. NHTSA noted in the NPRM that at least one 

manufacturer has confidentially indicated plans to reduce overhang as a way of reducing mass on some 

vehicles during the rulemaking time frame. Additionally, simply because footprint-based standards create 

no incentive to downsize vehicles, does not mean that manufacturers may not choose to do so if doing so 

makes it easier to meet the overall standard (as, for example, if the smaller vehicles are so much lighter that 

they exceed their targets by much greater amounts). 

119 Reduced powertrain requirements do not include a reduction in performance. When vehicle mass is 

reduced, engine torque and transmission gearing can be altered so that acceleration performance is held 

constant instead of improving. A detailed discussion is included in Chapter 3 of the Technical Support 

Document. 
119 

 Additionally, NHTSA emphasized that while it thought material substitution and 

other methods of mass reduction could considerably lessen the potential safety effects 

compared to the historical trend, NHTSA also stated that it did not believe the effects in 

passenger cars would be smaller than zero. EPA disagreed with this, and stated in the 

NPRM that the safety effects could very well be smaller than zero. Even though 

footprint-based standards discourage downsizing as a way of “balancing out” sales of 

larger/heavier vehicles, they do not discourage manufacturers from reducing crush space 

in overhang areas or from reducing structural support as a way of taking out mass.120 

Moreover, NHTSA’s analysis had also found that lighter cars have a higher involvement 

rate in fatal crashes, even after controlling for the driver’s age, gender, urbanization, and 

region of the country. Being unable to explain this clear trend in the crash data, NHTSA 

stated that it must assume that mass reduction is likely to be associated with higher fatalcrash rates, no matter how the weight reduction is achieved. 

NHTSA also noted in the NPRM that several studies by Dynamic Research, Inc. 

(DRI) had been repeatedly cited to the agency in support of the proposition that reducing 

vehicle mass while maintaining track width and wheelbase would lead to significant 

safety benefits. In its 2005 studies, one of which was published and peer-reviewed 

through the Society of Automotive Engineers as a technical paper, DRI attempted to 

assess the independent effects of vehicle weight and size (in terms of wheelbase and track 

width) on safety, and presented results indicating that reducing vehicle weight tends to 

reduce fatalities, but that reducing vehicle wheelbase and track width tends to increase 

fatalities. DRI’s analysis was based on FARS data for MYs 1985-1998 passenger cars 

and 1985-1997 light trucks, similar to the MYs 1991-1999 car and truck data used in the 

2003 Kahane report. However, DRI included 2-door passenger cars, while the 2003 

Kahane report excluded those vehicles out of concern that their inclusion could bias the 

results of the regression analysis, because a significant proportion of MYs 1991-1999 2-

door cars were sports and “muscle” cars, which have particularly high fatal crash rates for 

their relatively short wheelbases compared to the rest of the fleet. While in the NPRM 

NHTSA rejected the results of the DRI studies based in part on this concern, the agencies 

note that upon further consideration, NHTSA has agreed for this final rule that the 

inclusion of 2-door cars in regression analysis of historical data is appropriate, and indeed 

has no overly-biasing effects. 

The 2005 DRI studies also differed from the 2003 Kahane report in terms of their 

estimates of the effect of vehicle weight on rollover fatalities. The 2003 Kahane report 

analyzed a single variable, curb weight, as a surrogate for both vehicle size and weight, 

and found that curb weight reductions would increase rollover fatalities. The DRI study, 

in contrast, attempted to analyze curb weight, wheelbase, and track width separately, and 

found that curb weight reduction would decrease rollover fatalities, while wheelbase 

reduction and track width reduction would increase them. DRI suggested that heavier 

vehicles may have higher rollover fatalities for two reasons: first, because taller vehicles 

tend to be heavier, so the correlation between vehicle height and weight and vehicle 

 

120 However, we recognize that FMVSS and NCAP ratings may limit the manufacturer’s ability to reduce 

crush space or structural support. 
120 

center-of-gravity height may make heavier vehicles more rollover-prone; and second, 

because heavier vehicles may have been less rollover-crashworthy due to FMVSS No. 

216’s constant (as opposed to proportional) requirements for MYs 1995-1999 vehicles 

weighing more than 3,333 lbs unloaded. 

Overall, DRI’s 2005 studies found a reduction in fatalities for cars (580 in the first 

study, and 836 in the second study) and for trucks (219 in the first study, 682 in the 

second study) for a 100 pound reduction in curb weight without accompanying wheelbase 

or track width reductions. In the NPRM, NHTSA disagreed with the results of the DRI 

studies, out of concern that DRI’s inclusion of 2-door cars in its analysis biased the 

results, and because NHTSA was unable to reproduce DRI’s results despite repeated 

attempts. NHTSA stated that it agreed intuitively with DRI’s conclusion that vehicle 

mass reductions without accompanying size reductions (as through substitution of a 

heavier material for a lighter one) would be less harmful than downsizing, but without 

supporting real-world data and unable to verify DRI’s results, NHTSA stated that it could 

not conclude that mass reductions would result in safety benefits. EPA, in contrast, 

believed that DRI’s results contained some merit, in particular because of the study 

separated the effects of mass and size and EPA stated that applying them using the curb 

weight reductions in EPA’s modeling analysis would show an overall reduction of 

fatalities for the proposed standards. 

On balance, both agencies recognized that mass reduction could be an important 

tool for achieving higher levels of fuel economy and reducing CO2 emissions, and 

emphasized that NHTSA’s fatality estimates represented a worst-case scenario for the 

potential effects of the proposed standards, and that actual fatalities will be less than these 

estimates, possibly significantly less, based on the various factors discussed in the NPRM 

that could reduce the estimates. The agencies sought comment on the safety analysis and 

discussions presented in the NPRM. 

2. What Public Comments did the Agencies Receive on the Safety Analysis 

and Discussions in the NPRM?

 Several dozen commenters addressed the safety issue. Claims and arguments 

made by commenters in response to the safety effects analysis and discussion in the 

NPRM tended to follow several general themes, as follows: 

• NHTSA’s safety effects estimates are inaccurate because they do not account for: 

o While NHTSA’s study only considers vehicles from MYs 1991-1999, 

more recently-built vehicles are safer than those, and future vehicles will 

be safer still; 

o Lighter vehicles are safer than heavier cars in terms of crash-avoidance, 

because they handle and brake better; 

o Fatalities are linked more to other factors than mass; 

o The structure of the standards reduces/contributes to potential safety 

effects from mass reduction; 

o NHTSA could mitigate additional safety effects from mass reduction, if 

Deleted: Comments

Deleted: the fact that
121 

there are any, by simply regulating safety more; 

o Casualty risks range widely for vehicles of the same weight or footprint, 

which skews regression analysis and makes computer simulation a better 

predictor of the safety effects of mass reduction; 

• DRI’s analysis shows that lighter vehicles will save lives, and NHTSA reaches 

the opposite conclusion without disproving DRI’s analysis; 

o Possible reasons that NHTSA and DRI have reached different 

conclusions: 

 NHTSA’s study should distinguish between reductions in size and 

reductions in weight like DRI’s; 

 NHTSA’s study should include two-door cars; 

 NHTSA’s study should have used different assumptions; 

 NHTSA’s study should include confidence intervals; 

o NHTSA should include a “best-case” estimate in its study; 

o NHTSA should not include a “worst-case” estimate in its study; 

The agencies recognize that the issue of the potential safety effects of mass 

reduction, which was one of the many factors considered in the balancing that led to the 

agencies’ conclusion as to appropriate stringency levels for the MYs 2012-2016 

standards, is of great interest to the public and could possibly be a more significant factor 

in regulators’ and manufacturers’ decisions with regard to future standards beyond MY 

2016. The agencies are committed to analyzing this issue thoroughly and holistically 

going forward, based on the best available science, in order to further their closely related 

missions of safety, energy conservation, and environmental protection. We respond to 

the issues and claims raised by commenters in turn below. 

NHTSA’s estimates are inaccurate because NHTSA’s study only considers vehicles from 

MYs 1991-1999, but more recently-built vehicles are safer than those, and future vehicles 

will be safer still

 A number of commenters (CAS, Adcock, NACAA, NJ DEP, NY DEC, UCS, and 

Wenzel) argued that the 2003 Kahane report, on which the “worst-case scenario” in the 

NPRM was based, is outdated because it considers the relationship between vehicle 

weight and safety in MYs 1991-1999 passenger cars. These commenters generally stated 

that data from MYs 1991-1999 vehicles provide an inaccurate basis for assessing the 

relationship between vehicle weight and safety in current or future vehicles, because the 

fleets of vehicles now and in the future are increasingly different from that 1990s fleet 

(more crossovers, fewer trucks, lighter trucks, etc.), with different vehicle shapes and 

characteristics, different materials, and more safety features. Several of these 

commenters argued that NHTSA should conduct an updated analysis for the final rule 

using more recent data – Wenzel, for example, stated that an updated regression analysis 

that accounted for the recent introduction of crossover SUVs would likely find reduced 

casualty risk, similar to DRI’s previous finding using fatality data. CEI, in contrast, 

argued that the “safety trade-off” would not be eliminated by new technologies and 

attribute-based standards, because additional weight inherently makes a vehicle safer to 

its own occupants, citing the 2003 Kahane report, while AISI argued that Desapriya had 

Deleted: R

Deleted: may 

Deleted: concerns 
122 

found that passenger car drivers and occupants are two times more likely to be injured 

than drivers and occupants in larger pickup trucks and SUVs. 

 Several commenters (Adcock, CARB, Daimler, NESCAUM, NRDC, Public 

Citizen, UCS, Wenzel) suggested that NHTSA’s analysis was based on overly 

pessimistic assumptions about how manufacturers would choose to reduce mass in their 

vehicles, because manufacturers have a strong incentive in the market to build vehicles 

safely. Many of these commenters stated that several manufacturers have already 

committed publicly to fairly ambitious mass reduction goals in the mid-term, but several 

stated further that NHTSA should not assume that manufacturers will reduce the same 

amount of mass in all vehicles, because it is likely that they will concentrate mass 

reduction in the heaviest vehicles, which will improve compatibility and decrease 

aggressivity in the heaviest vehicles. Daimler emphasized that all vehicles will have to 

comply with the Federal Motor Vehicle Safety Standards, and will likely be designed to 

test well in NHTSA’s NCAP tests. 

Other commenters (Aluminum Association, CARB, CAS, ICCT, MEMA, NRDC, 

U.S. Steel) also emphasized the need for NHTSA to account for the safety benefits to be 

expected in the future from use of advanced materials for lightweighting purposes and 

other engineering advances. The Aluminum Association stated that advanced vehicle 

design and construction techniques using aluminum can improve energy management and 

minimize adverse safety effects of their use,121 but that NHTSA’s safety analysis could 

not account for those benefits if it were based on MYs 1991-1999 vehicles. CAS, ICCT, 

and U.S. Steel discussed similar benefits for more recent and future vehicles built with 

high strength steel (HSS), although U.S. Steel cautioned that given the stringency of the 

proposed standards, manufacturers would likely be encouraged to build smaller and 

lighter vehicles in order to achieve compliance, which fare worse in head-on collisions 

than larger, heavier vehicles. AISI, in contrast to U.S. Steel, stated that in its research 

with the Auto/Steel Partnership and in programs supported by DOE, it had found that the 

use of new Advanced HSS steel grades could enable mass of critical crash structures, 

such as front rails and bumper systems, to be reduced by 25 percent without degrading 

performance in standard NHTSA frontal or IIHS offset instrumented crash tests 

compared to their “heavier counterparts.” 

Agencies’ response: 

NHTSA, in consultation with EPA and DOE, plans to begin updating the MYs 

1991-1999 database on which NHTSA’s safety analyses in the NPRM and final rule are 

based in the next several months in order to analyze the differences in safety effects 

against vehicles built in more recent model years. As this task will take at least a year to 

complete, beginning it immediately after the NPRM would not have enabled the agency 

 

121 The Aluminum Association (NHTSA-2009-0059-0067.3) stated that its research on vehicle safety 

compatibility between an SUV and a mid-sized car, done jointly with DRI, shows that reducing the weight 

of a heavier SUV by 20% (a realistic value for an aluminum-intensive vehicle) could reduce the combined 

injury rate for both vehicles by 28% in moderately severe crashes. The commenter stated that it would 

keep NHTSA apprised of its results as its research progressed. Based on the information presented, 

NHTSA believes that this research appears to agree with NHTSA’s latest analysis, which finds that a 

reduction in weight for the heaviest vehicles may improve overall fleet safety.
123 

to complete it and then conduct a new analysis during the period between the NPRM and 

the final rule. 

For purposes of this final rule, however, we believe that using the same MYs 

1991-1999 database as that used in the 2003 Kahane study provides a reasonable basis for 

attempting to estimate safety effects due to reductions in mass. While commenters often 

stated that updating the database would help to reveal the effect of recently-introduced 

lightweight vehicles with extensive material substitution, there have in fact not yet been a 

significant number of vehicles with substantial mass reduction/material substitution to 

analyze, and they must also show up in the crash databases for NHTSA to be able to add 

them to its analysis. Based on NHTSA’s research, specifically, on three statistical 

analyses over a 12-year period (1991-2003) covering a range of 22 model years (1978-

1999), NHTSA believes that the relationships between mass, size, and safety change 

slowly over time, although we recognize that they may change somewhat more rapidly in 

the future.122 As the on-road fleet gains increasing numbers of vehicles with increasing 

amounts of different methods of mass reduction applied to them, we may begin to discern 

changes in the crash databases due to the presence of these vehicles, but any such 

changes are likely to be slow and evolutionary, particularly in the context of MYs 2000-

2009 vehicles. The agencies do expect that further analysis of historical data files will 

provide the most robust basis practicable for estimating the potential safety effects that 

might occur with future reductions in vehicle mass. However, we recognize that 

estimates derived from analysis of historical data, like estimates from any other type of 

analysis (including simulation-based analysis, which cannot feasibly cover all relevant 

scenarios), will be uncertain in terms of predicting actual future outcomes with respect to 

a vehicle fleet, driving population, and operating environment that does not yet exist. 

 

The agencies also recognize that more recent vehicles have more safety features 

than 1990s vehicles, which are likely to make them safer overall. To account for this, 

NHTSA did adjust the results of both its NPRM and final rule analysis to include known 

safety improvements, like ESC and increases in seat belt use, that have occurred since 

MYs 1991-1999.123 However, simply because newer vehicles have more safety 

countermeasures, does not mean that the weight/safety relationship necessarily changes. 

More likely, it would change the target population (the number of fatalities) to which one 

would apply the weight/safety relationship. Thus, we still believe that some mass 

reduction techniques for both passenger cars and light trucks can make them less safe, in 

certain crashes as discussed in NHTSA’s FRIA, than if mass had not been reduced.124

 

122 NHTSA notes the CAS’ comments regarding changes in the vehicle fleets since the introduction of 

CAFE standards in the late 1970s, but believes they apply more to the differences between late 1970s 

through 1980s vehicles and 2010s vehicles than to the differences between 1990s and 2010s vehicles. 

NHTSA believes that the CAS comments regarding the phase-out of 1970s vehicles and their replacement 

with safer, better fuel-economy-achieving 1980s vehicles paint with rather too large a brush to be relevant 

to the main discussion of whether the 2003 Kahane report database can reasonably be used to estimate 

safety effects of mass reduction for the MYs 2012-2016 fleet. 

123 See NHTSA FRIA Chapter IX. 124 If one has a vehicle (vehicle A), and both reduces the vehicle’s mass and adds new safety equipment to 

it, thus creating a variant (vehicle A1), the variant might conceivably have a level of overall safety for its 

occupants is equal to that of the original vehicle (vehicle A). However, vehicle A1 might not be as safe as 
124 

As for NHTSA’s assumptions about mass reduction, in its analysis, NHTSA 

generally assumed that lighter vehicles could be reduced in weight by 5 percent while 

heavier light trucks could be reduced in weight by 10 percent. NHTSA recognizes that 

manufacturers might choose a different mass reduction scheme than this, and that its 

quantification of the estimated effect on safety would be different if they did. We 

emphasize that our estimates are based on the assumptions we have employed and are 

intended to help the agency consider the potential effect of the final standards on vehicle 

safety. Thus, based on the 2010 Kahane analysis, reductions in weight for the heavier 

light trucks would have positive overall safety effects,125 while mass reductions for 

passenger cars and smaller light trucks would have negative overall safety effects. 

NHTSA’s estimates are inaccurate because they do not account for the fact that lighter 

vehicles are safer than heavier cars in terms of crash-avoidance, because they handle 

and brake better 

ICCT stated that lighter vehicles are better able to avoid crashes because they 

“handle and brake slightly better,” arguing that size-based standards encourage lighterweight car-based SUVs with “significantly better handling and crash protection” than 

1996-1999 mid-size SUVs, which will reduce both fatalities and fuel consumption. ICCT 

stated that NHTSA did not include these safety benefits in its analysis. DRI also stated 

that its 2005 report found that crash avoidance improves with reduction in curb weight 

and/or with increases in wheelbase and track, because “Crash avoidance can depend, 

amongst other factors, on the vehicle directional control and rollover characteristics.” 

DRI argued that, therefore, “These results indicate that vehicle weight reduction tends to 

decrease fatalities, but vehicle wheelbase and track reduction tends to increase fatalities.” 

Agencies’ response: 

In fact, NHTSA’s regression analysis of crash fatalities per million registration 

years measures the effects of crash avoidance, if there are any, as well as 

crashworthiness. Given that the historical empirical data for passenger cars show a trend 

of higher crash rates for lighter cars, it is unclear whether lighter cars have, in the net, 

superior crash avoidance, although the agencies recognize that they may have advantages 

in certain individual situations. EPA presents a discussion of improved accident 

avoidance as vehicle mass is reduced in Chapter 7.6 of its final RIA. The important point 

to emphasize is that it depends on the situation – it would oversimplify drastically to 

point to one situation in which extra mass helps or hurts and then extrapolate effects for 

crash avoidance across the board based on only that. 

For example, the relationship of vehicle mass to rollover and directional stability 

is more complex than commenters imply. For rollover, it is true that if heavy pickups 

 second variant (vehicle A2) of vehicle A, one that is produced by adding to vehicle A the same new safety 

equipment added to the first variant, but this time without any mass reduction. 

125 This is due to the beneficial effect on the occupants of vehicles struck by the downweighted larger 

vehicles. 
125 

were always more top-heavy than lighter pickups of the same footprint, their higher 

center of gravity could make them more rollover-prone, yet some mass can be placed so 

as to lower a vehicle’s center of gravity and make it less rollover-prone. For mass 

reduction to be beneficial in rollover crashes, then, it must take center of gravity height 

into account along with other factors such as passenger compartment design and 

structure, suspension, the presence of various safety equipment, and so forth. 

Similarly, for directional stability, it is true that having more mass increases the 

“understeer gradient” of cars – i.e., it reinforces their tendency to proceed in a straight 

line and slows their response to steering input, which would be harmful where prompt 

steering response is essential, such as in a double-lane-change maneuver to avoid an 

obstacle. Yet more mass and a higher understeer gradient could help when it is better to 

remain on a straight path, such as on a straight road with icy patches where wheel slip 

might impair directional stability. Thus, while less vehicle mass can sometimes improve 

crash avoidance capability, there can also be situations when more vehicle mass can help 

in other kinds of crash avoidance. 

Further, NHTSA’s research suggests that additional vehicle mass may be even 

more helpful, as will be discussed in Chapter IX of NHTSA’s FRIA, when the average 

driver’s response to a vehicle’s maneuverability is taken into account. Lighter cars have 

historically (1976-2009) had higher collision-involvement rates than heavier cars – even 

in multi-vehicle crashes where directional and rollover stability is not particularly an 

issue.126 Based on our analyses using nationally-collected FARS and GES data, drivers 

of lighter cars are more likely to be the culpable party in a 2-vehicle collision, even after 

controlling for footprint, the driver’s age, gender, urbanization, and region of the country. 

Thus, based on this data, it appears that lighter cars may not be driven as well as 

heavier cars, although it is unknown why this is so. If poor drivers intrinsically chose 

light cars (self-selection), it might be evidenced by an increase in antisocial driving 

behavior (such as DWI, drug involvement, speeding, or driving without a license) as car 

weight decreases, after controlling for driver age and gender – in addition to the increases 

in merely culpable driver behavior (such as failure to yield the right of way). But 

analyses in NHTSA’s 2003 report did not show an increase in antisocial driver behavior 

in the lighter cars paralleling their increase in culpable involvements. 

NHTSA also hypothesizes that certain aspects of lightness and/or smallness in a 

car may give a driver a perception of greater maneuverability that ultimately results in 

driving with less of a “safety margin,” e.g., encouraging them to weave in traffic. That 

may appear paradoxical at first glance, as maneuverability is, in the abstract, a safety 

plus. Yet the situation is not unlike powerful engines that could theoretically enable a 

 

126 See, e.g., NHTSA (2000). Traffic Safety Facts 1999. Report No. DOT HS 809 100. Washington, DC: 

National Highway Traffic Safety Administration, p. 71; Najm, W.G., Sen, B., Smith, J.D., and Campbell, 

B.N. (2003). Analysis of Light Vehicle Crashes and Pre-Crash Scenarios Based on the 2000 General 

Estimates System, Report No. DOT HS 809 573. Washington, DC: National Highway Traffic Safety 

Administration, p. 48. 
126 

driver to escape some hazards, but in reality have long been associated with high crash 

and fatality rates.127

NHTSA’s estimates are inaccurate because fatalities are linked more to other factors 

than mass 

Tom Wenzel stated that the safety record of recent model year crossover SUVs 

indicates that weight reduction in this class of vehicles (small to mid-size SUVs) resulted 

in a reduction in fatality risk. Wenzel argued that NHTSA should acknowledge that other 

vehicle attributes may be as important, if not more important, than vehicle weight or 

footprint in terms of occupant safety, such as unibody construction as compared to 

ladder-frame, lower bumpers, and less rigid frontal structures, all of which make 

crossover SUVs more compatible with cars than truck-based SUVs. 

Marc Ross commented that fatalities are linked more strongly to intrusion than to 

mass, and stated that research by safety experts in Japan and Europe suggests the main 

cause of serious injuries and deaths is intrusion due to the failure of load-bearing 

elements to properly protect occupants in a severe crash. Ross argued that the results 

from this project have “overturned the original views about compatibility,” which thought 

that mass and the mass ratio were the dominant factors. Since footprint-based standards 

will encourage the reduction of vehicle weight through materials substitution while 

maintaining size, Ross stated, they will help to reduce intrusion and consequently 

fatalities, as the lower weight reduces crash forces while maintaining size preserves crush 

space. Ross argued that this factor was not considered by NHTSA in its discussion of 

safety. ICCT agreed with Ross’ comments on this issue. 

In previous comments on NHTSA rulemakings and in several studies, Wenzel and 

Ross have argued generally that vehicle design and “quality” is a much more important 

determinant of vehicle safety than mass. In comments on the NPRM, CARB, NRDC, 

Sierra Club, and UCS echoed this theme. 

ICCT commented as well that fatality rates in the EU are much lower than rates in 

the U.S., even though the vehicles in the EU fleet tend to be smaller and lighter than 

those in the U.S. fleet. Thus, ICCT argued, “This strongly supports the idea that vehicle 

and highway design are far more important factors than size or weight in vehicle safety.” 

ICCT added that “It also suggests that the rise in SUVs in the U.S. has not helped reduce 

fatalities.” CAS also commented that Germany’s vehicle fleet is both smaller and lighter 

than the American fleet, and has lower fatality rates. 

Agencies’ response: 

 

127 Robertson, L.S. (1991), “How to Save Fuel and Reduce Injuries in Automobiles,” The Journal of 

Trauma, Vol. 31, pp. 107-109; Kahane, C.J. (1994). Correlation of NCAP Performance with Fatality Risk 

in Actual Head-On Collisions, NHTSA Technical Report No. DOT HS 808 061. Washington, DC: 

National Highway Traffic Safety Administration, http://www-nrd.nhtsa.dot.gov/Pubs/808061.PDF, pp. 4-

7. 
127 

NHTSA and EPA agree that there are many features that affect safety. While 

crossover SUVs have lower fatality rates than truck-based SUVs, there are no analyses 

that attribute the improved safety to mass alone, and not to other factors such as the lower 

center of gravity or the unibody construction of these vehicles. While a number of 

improvements in safety can be made, they do not negate the potential that another 100 

lbs. could make a passenger car or crossover vehicle safer for its occupants, because of 

the effects of mass per se as discussed in NHTSA’s FRIA, albeit similar mass reductions 

could make heavier LTVs safer to other vehicles without necessarily harming their own 

drivers and occupants. Moreover, in the 2004 response to docket comments, NHTSA 

explained that the significant relationship between mass and fatality risk persisted even 

after controlling for vehicle price or nameplate, suggesting that vehicle “quality” as cited 

by Wenzel and Ross is not necessarily more important than vehicle mass. 

As for reductions in intrusions due to material substitution, the agencies agree 

generally that the use of new and innovative materials may have the potential to reduce 

crash fatalities, but such vehicles have not been introduced in large numbers into the 

vehicle fleet. The agencies will continue to monitor the situation, but ultimately the 

effects of different methods of mass reduction on overall safety in the real world (not just 

in simulations) will need to be analyzed when vehicles with these types of mass reduction 

are on the road in sufficient quantities to provide statistically significant results. For 

example, a vehicle that is designed to be much stiffer to reduce intrusion is likely to have 

a more severe crash pulse and thus impose greater forces on the occupants during a crash, 

and might not necessarily be good for elderly and child occupant safety in certain types 

of crashes. Such trade-offs make it difficult to estimate overall results accurately without 

real world data. The agencies will continue to evaluate and analyze such real world data 

as it becomes available, and will keep the public informed as to our progress. 

ICCT’s comment illustrates the fact that different vehicle fleets in different 

countries can face different challenges. EPA and NHTSA do not believe that the fact that 

the EU vehicle fleet is generally lighter than the U.S. fleet is the exclusive reason, or even 

the primary factor, for the EU’s lower fatality rates. The data ICCT cites do not account 

for significant differences between the US and EU such as belt usage, drunk driving, 

rural/urban roads, driving culture, etc. 

The structure of the standards reduces/contributes to potential safety risks from mass 

reduction 

Since switching in 2006 to setting attribute-based light truck CAFE standards, 

NHTSA has emphasized that one of the benefits of a footprint-based standard is that it 

discourages manufacturers from building smaller, less safe vehicles to achieve CAFE 

compliance by “balancing out” their larger vehicles, and thus avoids a negative safety 

consequence of increasing CAFE stringency.128 Some commenters on the NPRM 

 

128 We note that commenters were divided on whether they believed there was a clear correlation between 

vehicle size/weight and safety (CEI, Congress of Racial Equality, Heritage Foundation, IIHS, Spurgeon, 

University of PA Environmental Law Project) or whether they believed that the correlation was less clear, 

Deleted: S

Deleted: exist in
128 

(Daimler, IIHS, NADA, NRDC, Sierra Club et al.) agreed that footprint-based standards 

would protect against downsizing and help to mitigate safety risks, while others stated 

that there would still be safety risks even with footprint-based standards – CEI, for 

example, argued that mass reduction inherently creates safety risks, while IIHS and 

Porsche expressed concern about footprint-based standards encouraging manufacturers to 

manipulate wheelbase, which could reduce crush space and worsen vehicle handling. 

U.S. Steel and AISI both commented that the “aggressive schedule” for the proposed 

increases in stringency could encourage manufacturers to build smaller, lighter vehicles 

in order to comply. 

Some commenters also focused on the shape and stringency of the target curves 

and their potential effect on vehicle safety. IIHS agreed with the agencies’ tentative 

decision to cut off the target curves at the small-footprint end. Regarding the safety 

effect of the curves requiring less stringent targets for larger vehicles, while IIHS stated 

that increasing footprint is good for safety, CAS, Wenzel, and the UCSB students stated 

that decreasing footprint may be better for safety in terms of risk to occupants of other 

vehicles. Daimler, Wenzel, and the University of PA Environmental Law Project 

commented generally that more similar passenger car and light truck targets at identical 

footprints (as Wenzel put it, a single target curve) would improve fleet compatibility and 

thus, safety, by encouraging manufacturers to build more passenger cars instead of light 

trucks. 

Agencies’ response: 

 The agencies continue to believe that footprint-based standards help to mitigate 

potential safety risks from downsizing if the target curves maintain sufficient slope, 

because, based on NHTSA’s analysis, larger-footprint vehicles are safer than smallerfootprint vehicles.129 The structure of the footprint-based curves will also discourage the 

upsizing of vehicles. Nevertheless, we recognize that footprint-based standards are not a 

panacea – NHTSA’s analysis continues to show that there was a historical relationship 

between lower vehicle mass and increased safety risk in passenger cars even if footprint 

is maintained, and there are ways that manufacturers may increase footprint that either 

improve or reduce vehicle safety, as indicated by IIHS and Porsche. 

 With regard to whether the agencies should set separate curves or a single one, 

NHTSA also notes in Section II.C that EPCA requires NHTSA to establish standards 

separately for passenger cars and light trucks, and thus concludes that the standards for 

each fleet should be based on the characteristics of vehicles in each fleet. In other words, 

the passenger car curve should be based on the characteristics of passenger cars, and the 

light truck curve should be based on the characteristics of light trucks—thus to the extent 

that those characteristics are different, an artificially-forced convergence would not 

accurately reflect those differences. However, such convergence could be appropriate 

depending on future trends in the light vehicle market, specifically further reduction in 

 for example because they believed that vehicle design was more important than vehicle mass (CARB, 

Public Citizen). 

129 See Chapter IX of NHTSA’s FRIA. 

Deleted: Although the agencies’ did so 

in relation to concerns about the 

feasibility of attribute-based standards as 

applied to manufacturers emphasizing 

small vehicles, IIHS’s comments suggest 

IIHS is not concerned with the standards’ 

resultant neutrality with respect to 

incremental reductions in the size of the 

smallest vehicles. 
129 

the differences between passenger car and light truck characteristics. While that trend 

was more apparent when car-like 2WD SUVs were classified as light trucks, it seems 

likely to diminish for the model year vehicles subject to these rules as the truck fleet will 

be more purely “truck-like” than has been the case in recent years. 

NHTSA’s estimates are inaccurate because NHTSA could mitigate additional safety risks 

from mass reduction, if there are any, by simply regulating safety more 

 Since NHTSA began considering the potential safety risks from mass reduction in 

response to increased CAFE standards, some commenters have suggested that NHTSA 

could mitigate those safety risks, if any, by simply regulating more.130 In response to the 

safety analysis presented in the NPRM, several commenters stated that NHTSA should 

develop additional safety regulations to require vehicles to be designed more safely, 

whether to improve compatibility (Adcock, NY DEC, Public Citizen, UCS), to require 

seat belt use (CAS, UCS), to improve rollover and roof crush resistance (UCS), or to 

improve crashworthiness generally by strengthening NCAP and the star rating system 

(Adcock). Wenzel commented further that “Improvements in safety regulations will have 

a greater effect on occupant safety than FE standards that are structured to maintain, but 

may actually increase, vehicle size.” 

Agencies’ response: 

 NHTSA appreciates the commenters’ suggestions and notes that the agency is 

continually striving to improve motor vehicle safety consistent with its mission. As noted 

above, improving safety in other areas affects the target population that the 

mass/footprint relationship could affect, but it does not necessarily change the 

relationship. 

 The 2010 Kahane analysis discussed in this final rule evaluates the relative safety 

risk when vehicles are made lighter than they might otherwise be absent the final MYs 

2012-2016 standards. It does consider the effect of known safety regulations as they are 

projected to affect the target population. 

 

Casualty risks range widely for vehicles of the same weight or footprint, which skews 

regression analysis and makes computer simulation a better predictor of the safety effects 

of mass reduction 

Wenzel commented that he had found, in his most recent work, after accounting 

for drivers and crash location, that there is a wide range in casualty risk for vehicles with 

the same weight or footprint. Wenzel stated that for drivers, casualty risk does generally 

decrease as weight or footprint increases, especially for passenger cars, but the degree of 

 

130 See, e.g., MY 2011 CAFE final rule, 74 FR 14403-05 (Mar. 30, 2009). 
130 

variation in the data for vehicles (particularly light trucks) at a given weight or footprint 

makes it difficult to say that a decrease in weight or footprint will necessarily result in 

increased casualty risk. In terms of risk imposed on the drivers of other vehicles, Wenzel 

stated that risk increases as light truck weight or footprint increases. 

Wenzel further stated that because a regression analysis can only consider the 

average trend in the relationship between vehicle weight/size and risk, it must “ignore” 

vehicles that do not follow that trend. Wenzel therefore recommended that the agency 

employ computer crash simulations for analyzing the effect of vehicle weight reduction 

on safety, because they can “pinpoint the effect of specific vehicle designs on safety,” 

and can model future vehicles which do not yet exist and are not bound to analyzing 

historical data. Wenzel cited, as an example, a DRI simulation study commissioned by 

the Aluminum Association (Kebschull 2004), which used a computer model to simulate 

the effect of changing SUV mass or footprint (without changing other attributes of the 

vehicle) on crash outcomes, and showed a 15 percent net decrease in injuries, while 

increasing wheelbase by 4.5 inches while maintaining weight showed a 26 percent net 

decrease in serious injuries. 

Agencies’ response: 

The agencies have reviewed Mr. Wenzel’s draft report for DOE to which he 

referred in his comments, but based on NHTSA’s work do not find such a wide range of 

safety risk for vehicles with the same weight, although we agree there is a range of risk 

for a given footprint. Wenzel found that for drivers, casualty risk does generally decrease 

as weight or footprint increases, especially for passenger cars, and that in terms of risk 

imposed on the drivers of other vehicles, risk increases as light truck weight or footprint 

increases, but concluded that the variation in the data precluded the possibility of drawing 

any conclusions. In the 2010 Kahane study presented in the FRIA, NHTSA undertook a 

similar analysis in which it correlated weight to fatality risk for vehicles of essentially the 

same footprint.131 The “decile analysis,” provided as a check on the trend/direction of 

NHTSA’s regression analysis, shows that societal fatality risk generally increases and 

rarely decreases for lighter relative to heavier cars of the same footprint. Thus, while Mr. 

Wenzel was reluctant to draw a conclusion, NHTSA believes that both our research and 

Mr. Wenzel’s appear to point to the same conclusion. We agree that there is a wide range 

in casualty risk among cars of the same footprint, but we find that that casualty risk is 

correlated with weight. The correlation shows that heavier cars have lower overall 

societal fatality rates than lighter cars of very similar footprint. 

The agencies agree that simulation can be beneficial in certain circumstances. 

NHTSA cautions, however, that it is difficult for a simulation analysis to capture the full 

range of variations in crash situations in the way that a statistical regression analysis 

does. Vehicle crash dynamics are complex, and small changes in initial crash conditions 

(such as impact angle or closing speed) can have large effects on injury outcome. This 

condition is a consequence of variations in the deformation mode of individual 

components (e.g., buckling, bending, crushing, material failure, etc.) and how those 

 

131 Subsections 2.4 and 3.3 of new report. 
131 

variations affect the creation and destruction of load paths between the impacting object 

and the occupant compartment during the crash event. It is therefore difficult to predict 

and assess structural interactions using computational methods when one does not have a 

detailed, as-built geometric and material model. Even when a complete model is 

available, prudent engineering assessments require extensive physical testing to verify 

crash behavior and safety. Despite all this, the agencies recognize that detailed crash 

simulations can be useful in estimating the relative structural effects of design changes 

over a limited range of crash conditions, and will continue to evaluate the appropriate use 

of this tool in the future. 

Simplified crash simulations can also be valuable tools, but only when employed 

as part of a comprehensive analytical program. They are especially valuable in 

evaluating the relative effect and associated confidence intervals of feasible design 

alternatives. For example, the method employed by Nusholtz et al.

132 could be used by a 

vehicle designer to estimate the benefit of incremental changes in mass or wheelbase as 

well as the tradeoffs that might be made between them once that designer has settled on a 

preliminary design. A key difference between the research by Nusholtz and the research 

by Kebschull that Mr. Wenzel cited133 is in their suggested applications. The former is 

useful in evaluating proposed alternatives early in the design process – Nusholtz 

specifically warns that the model provides only “general insights into the overall risk ... 

and cannot be used to obtain specific response characteristics.” Mr. Wenzel implies the 

latter can “isolate the effect of specific design changes, such as weight reduction” and 

thus quantify the fleet-wide effect of substantial vehicle redesigns. Yet while Kebschull 

reports injury reductions to three significant digits, there is no validation that vehicle 

structures of the proposed weight and stiffness are even feasible with current technology. 

Thus, while the agencies agree that computer simulations can be useful tools, we also 

recognize the value of statistical regression analysis for determining fleet-wide effects, 

because it inherently incorporates all real-world factors in historical safety assessments.

DRI’s analysis shows that lighter vehicles will save lives, and NHTSA reaches the 

opposite conclusion without disproving DRI’s analysis

 

132 Nusholtz, G.S., G. Rabbiolo, and Y. Shi, “Estimation of the Effects of Vehicle Size and Mass on CrashInjury Outcome Through Parameterized Probability Manifolds,” Society of Automotive Engineers (2003), 

Document No. 2003-01-0905. Available at http://www.sae.org/technical/papers/2003-01-0905 (last 

accessed Feb. 15, 2010). 

133 Mr. Wenzel cites the report by Kebschull et al [2004, DRI-TR-04-04-02] as an example of what he 

regards as the effective use of computer crash simulation. NHTSA does not concur that this analysis 

represents a viable analytical method for evaluating the fleet-wide tradeoffs between vehicle mass and 

societal safety. The simulation method employed was not a full finite element representation of each major 

structural component in the vehicles in question. Instead, an Articulated Total Body (ATB) representation 

was constructed for each of two representative vehicles. In the ATB model, large structural subsystems 

were represented by a single ellipsoid. Consolidated load-deflection properties of these subsystems and the 

joints that tie them together were “calibrated” for an ATB vehicle model by requiring that it reproduce the 

acceleration pulse of a physical NHTSA crash test. NHTSA notes that vehicle simulation models that are 

calibrated to a single crash test configuration (e.g., a longitudinal NCAP test into a rigid wall) are often illequipped to analyze alternative crash scenarios (e.g., vehicle-to-vehicle crashes at arbitrary angles and 

lateral offsets).
132 

 The difference between NHTSA’s results and DRI’s results for the relationship 

between vehicle mass and on vehicle safety has been at the crux of this issue for several 

years. While NHTSA offered some theories in the NPRM as to why DRI might have 

found a safety benefit for mass reduction, NHTSA’s work since then has enabled it to 

identify what we believe is the most likely reason for DRI’s findings. The potential near 

multicollinearity of the variables of curb weight, track width, and wheelbase creates some 

degree of concern that any regression models with those variables could inaccurately 

calibrate their effects. However, based on its own experience with statistical analysis, 

NHTSA believes that the specific two-step regression model used by DRI increases this 

concern, because it weakens relationships between curb weight and dependent variables 

by splitting the effect of curb weight across the two regression steps. 

 

 The comments below are in response to NHTSA’s theories in the NPRM about 

the source of the differences between NHTSA’s and DRI’s results. The majority of them 

are answered more fully in the 2010 Kahane report included in NHTSA’s FRIA, but we 

respond to them in this document as well for purposes of completeness. 

NHTSA and DRI may have reached different conclusions because NHTSA’s study does 

not distinguish between reductions in size and reductions in weight like DRI’s 

Several commenters (CARB, CBD, EDF, ICCT, NRDC, and UCS) stated that 

DRI had been able to separate the effect of size and weight in its analysis, and in so doing 

proved that there was a safety benefit to reducing weight without reducing size. The 

commenters suggested that if NHTSA properly distinguished between reductions in size 

and reductions in weight, it would find the same result as DRI. 

Agencies’ response: 

 In the 2010 Kahane analysis presented in the FRIA, NHTSA did attempt to 

separate the effects of vehicle size and weight by performing regression analyses with 

footprint (or alternatively track width and wheelbase) and curb weight as separate 

independent variables. For passenger cars, NHTSA found that the regressions attribute 

the fatality increase due to downsizing about equally to mass and footprint – that is, the 

effect of reducing mass alone is about half the effect of reducing mass and reducing 

footprint. Unlike DRI’s results, NHTSA’s regressions for passenger cars and for lighter 

LTVs did not find a safety benefit to reducing weight without reducing size; while 

NHTSA did find a safety benefit for reducing weight in the heaviest LTVs, the 

magnitude of the benefit as compared to DRI’s was significantly smaller. NHTSA 

believes that these differences in results may be an artifact of DRI’s two-step regression 

model, as explained above. 

NHTSA and DRI may have reached different conclusions because NHTSA’s study does 

not include two-door cars like DRI’s 

One of NHTSA’s primary theories in the NPRM as to why NHTSA and DRI’s 

results differed related to DRI’s inclusion in its analysis of 2-door cars. NHTSA had 

Deleted: risk 

Deleted: risk
133 

excluded those vehicles from its analysis on the grounds that 2-door cars had a 

disproportionate crash rate (perhaps due to their inclusion of muscle and sports cars) 

which appeared likely to skew the regression. Several commenters argued that NHTSA 

should have included 2-door cars in its analysis. DRI and James Adcock stated that 2-

door cars should not be excluded because they represent a significant portion of the lightduty fleet, while CARB and ICCT stated that because DRI found safety benefits whether 

2-door cars were included or not, NHTSA should include 2-door cars in its analysis. 

Wenzel also commented that NHTSA should include 2-door cars in subsequent analyses, 

stating that while his analysis of MY 2000-2004 crash data from 5 states indicates that, in 

general, 4-door cars tend to have lower fatality risk than 2-door cars, the risk is even 

lower when he accounts for driver age/gender and crash location. Wenzel suggested that 

the increased fatality risk in the 2-door car population seemed primarily attributable to 

the sports cars, and that that was not sufficient grounds to exclude all 2-door cars from 

NHTSA’s analysis. 

Agencies’ response: 

The agencies agree that 2-door cars can be included in the analysis, and NHTSA 

retracts previous statements that DRI’s inclusion of them was incorrect. In its 2010 

analysis, NHTSA finds that it makes little difference to the results whether 2-door cars 

are included, partially included, or excluded from the analysis. Thus, analyses of 2-door 

and 4-door cars combined, as well as other combinations, have been included in the 

analysis. That said, no combination of 2-door and 4-door cars resulted in NHTSA’s 

finding a safety benefit for passenger cars due to mass reduction. 

NHTSA and DRI may have reached different conclusions due to different assumptions

DRI commented that the differences found between its study and NHTSA’s may 

be due to the different assumptions about the linearity of the curb weight effect and 

control variable for driver age, vehicle age, road conditions, and other factors. NHTSA’s 

analysis was based on a two-piece linear model for curb weight with two different weight 

groups (less than 2,950 lbs., and greater than or equal to 2.950 lbs). The DRI analysis 

assumed a linear model for curb weight with a single weight group. Additionally, DRI 

stated that NHTSA’s use of eight control variables (rather than three control variables 

like DRI used) for driver age introduces additional degrees of freedom into the 

regressions, which it suggested may be correlated with the curb weight, wheelbase, and 

track width, and/or other control variables. DRI suggested that this may also affect the 

results and cause or contribute to the differences in outcomes between NHTSA and DRI. 

Agencies’ response: 

NHTSA’s FRIA documents that NHTSA analyzed its database using both a single 

parameter for weight (a linear model) and two parameters for weight (a two-piece linear 

model). In both cases, the logistic regression responded identically, allocating the same 

way between weight, wheelbase, track width, or footprint.134 Thus, NHTSA does not 

 

134 Subsections 2.2 and 2.3 of new report 
134 

believe that the differences between its results and DRI’s results are due to whether the 

studies used a single weight group or two weight groups. 

The FRIA also documents that NHTSA examined NHTSA’s use of eight control 

variables for driver age (ages 14-30, 30-50, 50-70, 70+ for males and females separately , 

versus DRI’s use of three control variables for age (FEMALE = 1 for females, 0 for 

males, YOUNGDRV = 35-AGE for drivers under 35, 0 for all others, OLDMAN = 

AGE-50 for males over 50, 0 for all others; OLDWOMAN = AGE-45 for females over 

45, 0 for all others) to see if that affected the results. NHTSA ran its analysis using the 

eight control variables and again using three control variables for age, and obtained 

similar results each time.135 Thus, NHTSA does not believe that the differences between 

its results and DRI’s results are due to the number of control variables used for driver 

age. 

NHTSA’s and DRI’s conclusions may be similar if confidence intervals are taken into 

account 

DRI commented that NHTSA has not reported confidence intervals, while DRI 

has reported them in its studies. Thus, DRI argued, it is not possible to determine 

whether the confidence intervals overlap and whether the differences between NHTSA’s 

and DRI’s analyses are statistically significant. 

Agencies’ response: 

NHTSA has included confidence intervals for the main results of the 2010 

Kahane analysis, as shown in Chapter IX of NHTSA’s FRIA. For passenger cars, the 

NHTSA results are a statistically significant increase in fatalities with a 100 pound 

reduction while maintaining track width and wheelbase (or footprint); the DRI results are 

a statistically significant decrease in fatalities with a 100 pound reduction while 

maintaining track width and wheelbase. The DRI results are thus outside the confidence 

bounds of the NHTSA results and do not overlap. 

NHTSA should include a “best-case” estimate in its study 

Several commenters (Center for Auto Safety, NRDC, Public Citizen, Sierra Club 

et al., and Wenzel) urged NHTSA to include a “best-case” estimate in the final rule, 

showing scenarios in which lives were saved rather than lost. Public Citizen stated that 

there would be safety benefits to reducing the weight of the heaviest vehicles while 

leaving the weight of the lighter vehicles unchanged, and that increasing the number of 

smaller vehicles would provide safety benefits to pedestrians, bicyclists, and 

motorcyclists. Sierra Club et al. stated that new materials, smart design, and lighter, 

more advanced engines can all improve fuel economy while maintaining or increasing 

vehicle safety. Both Center for Auto Safety and Sierra Club argued that the agency 

should have presented a “best-case” scenario to balance out the “worst-case” scenario 

presented in the NPRM, especially if NHTSA itself believed that the worst-case scenario 

 

135 Id.
135 

was not inevitable. NRDC requested that NHTSA present both a “best-case” and a “most 

likely” scenario. Wenzel simply stated that NHTSA did not present a “best-case” 

scenario, despite DRI’s finding in 2005 that fatalities would be reduced if track width 

was held constant. 

Agencies’ response: 

NHTSA has included an “upper estimate” and a “lower estimate” in the new 2010 

Kahane analysis. The lower estimate assumes that mass reduction will be accomplished 

entirely by material substitution or other techniques that do not perceptibly change a 

vehicle’s shape, structural strength, or ride quality. The lower estimate examines specific 

crash modes and is meant to reflect the increase in fatalities for the specific crash modes 

in which a reduction in mass per se in the case vehicle would result in a reduction in 

safety: namely, collisions with larger vehicles not covered by the regulations (e.g., trucks 

with a GVWR over 10,000 lbs), collisions with partially-movable objects (e.g., some 

trees, poles, parked cars, etc.), and collisions of cars or light LTVs with heavier LTVs – 

as well as the specific crash modes where a reduction in mass per se in the case vehicle 

would benefit safety: namely, collisions of heavy LTVs with cars or lighter LTVs. 

NHTSA believes that this is the effect of mass per se, i.e., the effects of reduced mass 

will generally persist in these crashes regardless of how the mass is reduced. The lower 

estimate attempts to quantify that scenario, although any such estimate is hypothetical 

and subject to considerable uncertainty. NHTSA believes that a “most likely” scenario 

cannot be determined with any certainty, and would depend entirely upon agency 

assumptions about how manufacturers intend to reduce mass in their vehicles. While we 

can speculate upon the potential effects of different methods of mass reduction, we 

cannot predict with any certainty what manufacturers will ultimately do. 

NHTSA should not include a “worst-case” estimate in its study 

NRDC, Public Citizen and Sierra Club et al. commented that NHTSA should 

remove the “worst-case scenario” estimate from the rulemaking, generally because it was 

based on an analysis that evaluated historical vehicles, and future vehicles would be 

sufficiently different to render the “worst-case scenario” inapplicable. 

Agencies’ response: 

NHTSA stated in the NPRM that the “worst-case scenario” addressed the effect of 

a kind of downsizing (i.e., mass reduction accompanied by footprint reduction) that was 

not likely to be a consequence of attribute-based CAFE standards, and that the agency 

would refine its analysis of such a scenario for the final rule. NHTSA has not used the 

“worst-case scenario” in the final rule. Instead, we present three scenarios: the first is an 

estimate based directly on the regression coefficients of weight reduction while 

maintaining footprint in the statistical analyses of historical data. As discussed above, 

presenting this scenario is possible because NHTSA attempted to separate the effects of 

weight and footprint reduction in the new analysis. However, even the new analysis of 

LTVs produced some coefficients that NHTSA did not consider entirely plausible. 

Deleted: was able
136 

NHTSA also presents an “upper estimate” in which those coefficients for the LTVs were 

adjusted based on additional analyses and expert opinion as a safety agency and a “lower 

estimate,” which estimates the effect if mass reduction is accomplished entirely by 

safety-conscious technologies such as material substitution. 

3. How has NHTSA Refined its Analysis for Purposes of Estimating the 

Potential Safety Effects of this Final Rule?

During the past months, NHTSA has extensively reviewed the literature on 

vehicle mass, size, and fatality risk. NHTSA now agrees with DRI and other commenters 

that it is essential to analyze the effect of mass independently from the effects of size 

parameters such as wheelbase, track width, or footprint – and that the NPRM’s “worstcase” scenario based on downsizing (in which weight, wheelbase, and track width could 

all be changed) is not useful for that purpose. The agency should instead provide 

estimates that better reflect the more likely effect of the regulation - estimating the effect 

of mass reduction that maintains footprint. 

Yet it is more difficult to analyze multiple, independent parameters than a single 

parameter (e.g., curb weight), because there is a potential concern that the near 

multicollinearity of the parameters – the strong, natural and historical correlation of mass 

and size – can lead to inaccurate statistical estimates of their effects.136 NHTSA has 

performed new statistical analyses of its historical database of passenger cars, light 

trucks, and vans (LTVs) from its 2003 report (now including also 2-door cars), assessing 

relationships between fatality risk, mass, and footprint. They are described in 

Subsections 2.2 (cars) and 3.2 (LTVs) of the 2010 Kahane report presented in Chapter IX 

of the FRIA. While the potential concerns associated with near multicollinearity are 

inherent in regression analyses with multiple size/mass parameters, NHTSA believes that 

the analysis approach in the 2010 Kahane report, namely a single-step regression 

analysis, generally reduces those concerns137 and models the trends in the historical data. 

The results differ substantially from DRI’s, based on a two-step regression analysis. 

Subsections 2.3 and 2.4 of the 2010 Kahane report attempt to account for the differences 

primarily by applying selected techniques from DRI’s analyses to NHTSA’s database. 

The statistical analyses – logistic regressions – of trends in MYs 1991-1999 

vehicles generate one set of estimates of the possible effects of reducing mass by 100 

pounds while maintaining footprint. While these effects might conceivably carry over to 

 

136 Greene, W. H. (1993). Econometric Analysis, Second Edition. New York: Macmillan Publishing 

Company, pp. 266-268; Allison, P.D. (1999), Logistic Regression Using the SAS System. Cary, NC: SAS 

Institute Inc., pp. 48-51. The report shows variance inflation factor (VIF) scores in the 5-7 range for curb 

weight, wheelbase, and track width (or, alternatively, curb weight and footprint) in NHTSA’s database, 

exceeding the 2.5 level where near multicollinearity begins to become a concern in logistic regression 

analyses. 

137 NHTSA believes that, given the near multicollinearity of the independent variables, the two-step 

regression augments the possibility of estimating inaccurate coefficients for curb weight, because it 

weakens relationships between curb weight and dependent variables by splitting the effect of curb weight 

across the two regression steps as discussed further in Subsection 2.3 of NHTSA’s report.

Deleted: minimizes 

Deleted: hazards

Deleted: NHTSA believes that the twostep regression is more hazardous 

because it weakens relationships between 

curb weight and dependent variables by 

splitting the effect of curb weight across 

the two regression steps, as discussed 

further below. 
137 

future mass reductions, there are two reasons that future safety effects of mass reduction 

could differ from projections from historical data: 

• The statistical analyses are “cross-sectional” analyses that estimate the increase in 

fatality rates for vehicles weighing n-100 pounds relative to vehicles weighing n 

pounds, across the spectrum of vehicles on the road, from the lightest to the 

heaviest. They do not directly compare the fatality rates for a specific make and 

model before and after a 100–pound reduction from that model. Instead, they use 

the differences across makes and models as a surrogate for the effects of actual 

reductions within a specific model; those cross-sectional differences could include 

trends that are statistically, but not causally related to mass. 

• The manner in which mass changed across MY 1991-1999 vehicles might not be 

consistent with future mass reductions, due to the availability of newer materials 

and design methods. 

Therefore, Subsections 2.5 and 3.4 of the 2010 Kahane report supplement those 

estimates with one or more scenarios in which some of the logistic regression coefficients 

are replaced by numbers based on additional analyses and NHTSA’s judgment of the 

likely effect of mass per se (the ability to transfer momentum to other vehicles or objects 

in a collision) and of what trends in the historical data could be avoided by current massreduction technologies such as materials substitution. The various scenarios may be 

viewed as a plausible range of point estimates for the effects of mass reduction while 

maintaining footprint, but they should not be construed as upper and lower bounds. 

Furthermore, being point estimates, they are themselves subject to uncertainties, such as, 

for example, the sampling errors associated with statistical analyses. 

 The principal findings and conclusions of the 2010 Kahane report are as follows: 

Passenger cars: This database with the one-step regression method of the 2003 

Kahane report estimates an increase of 700-800 fatalities when curb weight is reduced by 

100 pounds and footprint is reduced by 0.65 square feet (the historic average footprint 

reduction per 100-pound mass reduction in cars). The regression attributes the fatality 

increase about equally to curb weight and to footprint. The results are approximately the 

same whether 2-door cars are fully included or partially included in the analysis or 

whether only 4-door cars are included (as in the 2003 report). Regressions by curb 

weight, track width and wheelbase produce findings quite similar to the regressions by 

curb weight and footprint, but the results with the single “size” variable, footprint, rather 

than the two variables, track width and wheelbase vary even less with the inclusion or 

exclusion of 2-door cars. 

In Subsection 2.3 of the new report, a two-step regression method that resembles 

(without exactly replicating) the approach by DRI, when applied to the same (NHTSA’s) 

crash and registration data, estimates a large benefit when mass is reduced, offset by even 

larger fatality increases when track width and wheelbase (or footprint) are reduced. 

NHTSA believes that the benefit estimated by this method is inaccurate, due to the 
138 

potential concerns with the near multicollinearity of the parameters (curb weight, track 

width, and wheelbase)138 even though the analysis is theoretically unbiased139. Almost 

any analysis incorporating those parameters has a possibility of inaccurate coefficients 

due to near multicollinearity; however, based on our own experience with other 

regression analyses of crash data, NHTSA believes a DRI-type two-step method 

augments the possibility of estimating inaccurate coefficients for curb weight, because it 

weakens relationships between curb weight and dependent variables by splitting the 

effect of curb weight across the two regression steps. 

In Subsection 2.4 of the new report, as a check on the results from the regression 

methods, NHTSA also performed what we refer to as “decile” analyses: simpler, tabular 

data analysis that compares fatality rates of cars of different mass but similar footprint. 

Decile analysis is not a precise tool because it does not control for confounding factors 

such as driver age/gender or the specific type of car, but it may be helpful in identifying 

the general directional trend in the data when footprint is held constant and curb weight 

varies. The decile analyses show that fatality risk in MY 1991-1999 cars generally 

increased and rarely decreased for lighter relative to heavier cars of the same footprint. 

They suggest that the historical, cross-sectional trend was generally in the lighter ↔ more 

fatalities direction and not in the opposite direction, as might be suggested by the 

regression coefficients from the method that resembles DRI’s approach. 

The regression coefficients from NHTSA’s one-step method suggest that mass 

and footprint each accounted for about half the fatality increase associated with 

downsizing in a cross-sectional analysis of 1991-1999 cars. They estimate the historical 

difference in societal fatality rates (i.e., including fatalities to occupants of all the vehicles 

involved in the collisions, plus any pedestrians) of cars of different curb weights but the 

same footprint. They may be considered an “upper-estimate scenario” of the effect of 

future mass reduction – if it were accomplished in a manner that resembled the historical 

cross-sectional trend – i.e., without any particular regard for safety (other than not to 

reduce footprint). 

However, NHTSA believes that future vehicle design is likely to take advantage 

of safety-conscious technologies such as materials substitution that can reduce mass 

without perceptibly changing a car’s shape or ride and maintain its structural strength. 

This could avoid much of the risk associated with lighter and smaller vehicles in the 

historical analyses, especially the historical trend toward higher crash-involvement rates 

 

138 As evidenced by VIF scores in the 5-7 range, exceeding the 2.5 level where near multicollinearity 

begins to become a concern in logistic regression analyses. 

139 Subsection 2.3 of the 2010 Kahane report attempts to explain why the two-step method, when applied to 

NHTSA’s 2003 database, produces results a lot like DRI’s, but it does not claim that DRI obtained its 

results from its own database for exactly those reasons. NHTSA did not analyze DRI’s database. The twostep method is “theoretically unbiased” in the sense that it seeks to estimate the same parameters as the 

one-step analysis. 
139 

for lighter and smaller vehicles.140 It could thereby shrink the added risk close to just the 

effects of mass per se (the ability to transfer momentum to other vehicles or objects in a 

collision). Subsection 2.5 of the 2010 Kahane report attempts to quantify a “lowerestimate scenario” for the potential effect of mass reduction achieved by safety-conscious 

technologies; the estimated effects are substantially smaller than in the upper-estimate 

scenario based directly on the regression results. 

We note, again, that the preceding paragraph is conditional. Nothing in the CAFE 

standard requires manufacturers to use material substitution or, more generally, take a 

safety-conscious approach to mass reduction.141 Federal Motor Vehicle Safety Standards 

include performance tests that verify historical improvements in structural strength and 

crashworthiness, but few FMVSS provide test information that sheds light about how a 

vehicle rides or otherwise helps explain the trend toward higher crash-involvement rates 

for lighter and smaller vehicles. It is possible that using material substitution and other 

current mass reduction methods could avoid the historical trend in this area, but that 

remains to be studied as manufacturers introduce more of these vehicles into the on-road 

fleet in coming years. A detailed discussion of methods currently used for reducing the 

mass of passenger cars and light trucks is included in Chapter 3 of the Technical Support 

Document.

LTVs: The principal difference between LTVs and passenger cars is that mass 

reduction in the heavier LTVs is estimated to have significant societal benefits, in that it 

reduces the fatality risk for the occupants of cars and light LTVs that collide with the 

heavier LTVs. By contrast, footprint (size) reduction in LTVs has a harmful effect (for 

the LTVs’ own occupants), as in cars. The regression method of the 2003 Kahane report 

applied to the database of that report estimates a societal increase of 231 fatalities when 

curb weight is reduced by 100 pounds and footprint is reduced by 0.975 square feet (the 

historic average footprint reduction per 100-pound mass reduction in LTVs). But the 

regressions attribute an overall reduction of 266 fatalities to the 100-pound mass 

reduction and an increase of 497 fatalities to the .975-square-foot footprint reduction. The 

regression results constitute one of the scenarios for the possible societal effects of future 

mass reduction in LTVs. 

However, NHTSA cautions that some of the regression coefficients, even by 

NHTSA’s preferred method, might not accurately model the historical trend in the data, 

possibly due to near multicollinearity of curb weight and footprint or because of the 

interaction of both of these variables with LTV type.142 Based on supplementary 

 

140 This is discussed in greater depth in Subsections 2.1 and 2.5 of the 2010 Kahane report. The historic 

trend toward higher crash-involvement rates for lighter and smaller vehicles is documented in IIHS 

Advisory No. 5, July 1988, http://www.iihs.org/research/advisories/iihs_advisory_5.pdf; IIHS News 

Release, February 24, 1998, http://www.iihs.org/news/1998/iihs_news_022498.pdf; Auto Insurance Loss 

Facts, September 2009, http://www.iihs.org/research/hldi/fact_sheets/CollisionLoss_0909.pdf.

141 Footprint-based standards do not specify how or where to remove mass while maintaining footprint, nor 

do they categorically forbid footprint reductions, even if they discourage them. 

142 For example, mid-size SUVs of the 1990s typically had high mass relative to their short wheelbase and 

footprint (and exceptionally high rates of fatal rollovers); minivans typically have low mass relative to their 

Deleted: IIHS Advisory No. 5, July 

1988, 

http://www.iihs.org/research/advisories/ii

hs_advisory_5.pdf; IIHS News Release, 

February 24, 1998, 

http://www.iihs.org/news/1998/iihs_news

_022498.pdf; Auto Insurance Loss Facts, 

September 2009, 

http://www.iihs.org/research/hldi/fact_sh

eets/CollisionLoss_0909.pdf.
140 

analyses and discussion in Subsections 3.3 and 3.4, the new report defines an additional 

upper-estimate scenario that NHTSA believes may more accurately reflect the historical 

trend in the data and a lower-estimate scenario that may come closer to the effects of 

mass per se. All three scenarios, however, attribute a societal fatality reduction to mass 

reduction in the heavier LTVs. 

Overall effects of mass reduction while maintaining footprint in cars and LTVs:

The immediate purpose of the new report’s analyses of relationships between fatality 

risk, mass, and footprint is to develop the four parameters that the Volpe model needs in 

order to predict the safety effects, if any, of the modeled mass reductions in MYs 2012-

2016 cars and LTVs over the lifetime of those vehicles. The four numbers are the overall 

percentage increases or decreases, per 100-pound mass reduction while holding footprint 

constant, in crash fatalities involving: (1) cars < 2,950 pounds (which was the median 

curb weight of cars in MY 1991-1999), (2) cars ≥ 2,950 pounds, (3) LTVs < 3,870 

pounds (which was the median curb weight of LTVs in those model years), and (4) LTVs 

≥ 3,870 pounds. Here are the percentage effects for each of the three alternative 

scenarios, again, the “upper-estimate scenario” and the “lower-estimate scenario” being 

developed based on NHTSA’s expert opinion as a vehicle safety agency: 

Fatality Increase per 100-Pound Reduction (%)143

Actual Regression 

Result Scenario 

NHTSA Expert 

Opinion UpperEstimate Scenario144

NHTSA Expert 

Opinion LowerEstimate Scenario 

Cars < 2,950 pounds 2.21 2.21 1.02 

Cars > 2,950 pounds 0.90 0.90 0.44 

LTVs < 3,870 pounds 0.17 0.55 0.41 

LTVs > 3,870 pounds -1.90 -0.62 -0.73 

In all three scenarios, the estimated effects of a 100-pound mass reduction while 

maintaining footprint are an increase in fatalities in cars < 2,950 pounds, substantially 

smaller increases in cars ≥ 2,950 pounds and LTVs < 3,870 pounds, and a societal benefit 

for LTVs ≥ 3,870 pounds (because it reduces fatality risk to occupants of cars and lighter 

LTVs they collide with). These are the estimated effects of reducing each vehicle by 

 footprint (and low fatality rates); heavy-duty pickup trucks used extensively for work tend to have more 

mass, for the same footprint, as basic full-sized pickup trucks that are more often used for personal 

transportation. 

143 Reducing mass by 100 pounds in these vehicles is estimated to have the listed percentage effect on 

fatalities in crashes involving these vehicles. For example, if these vehicles are involved in crashes that 

result in 10,000 fatalities, 2.21 means that if mass is reduced by 100 pounds, fatalities will increase to 

10,221 and -0.73 means fatalities will decrease to 9,927. In the scenario based on actual regression results, 

the 1.96-sigma sampling errors in the above estimates are ±0.91 percentage points for cars < 2,950 pounds 

and also for cars ≥ 2,950 pounds, ±0.82 percentage points for LTVs < 3,870 pounds, and ±1.18 percentage 

points for LTVs ≥ 3,870 pounds. In other words, the fatality increase in the cars < 2,950 pounds and the 

societal fatality reduction attributed to mass reduction in the LTVs ≥ 3,870 pounds are statistically 

significant. The sampling errors associated with the scenario based on actual regression results perhaps 

also indicate the general level of statistical noise in the other two scenarios.

144 For passenger cars, the upper-estimate scenario is the actual-regression-result scenario. 
141 

exactly 100 pounds. However, the actual mass reduction will vary by make, model, and 

year. The aggregate effect on fatalities can only be estimated by attempting to forecast, 

as NHTSA has using inputs to the Volpe model, the mass reductions by make and model. 

It should be noted, however, that a 100-pound reduction would be 5 percent of the mass 

of a 2000-pound car but only 2 percent of a 5000-pound LTV. Thus, a forecast that mass 

will decrease by an equal or greater percentage in the heavier vehicles than in the lightest 

cars would be proportionately more influenced by the benefit for mass reduction in the 

heavy LTVs than by the fatality increases in the other groups; it is likely to result in an 

estimated net benefit under one or more of the scenarios. It should also be noted, again, 

that the three scenarios are point estimates and are subject to uncertainties, such as the 

sampling errors associated with the regression results. In the scenario based on actual 

regression results, the 1.96-sigma sampling errors in the above estimates are + 0.91 

percentage points for cars 2,950 pounds and also for cars > 2,950 pounds, + 0.82 

percentage points for LTVs < 3,870 pounds, and + 1.18 percentage points for LTVs >

3,870 pounds. In other words, the fatality increase in the cars < 2,950 pounds and the 

societal fatality reduction attributed to mass reduction in the LTVs > 3,870 pounds are 

statistically significant. The sampling errors associated with the scenario based on actual 

regression results perhaps also indicate the general level of statistical noise in the other 

two scenarios. 

4. What are the Estimated Safety Effects of this Final Rule?

The table below shows the estimated safety effects of the modeled reduction in 

vehicle mass provided in the NPRM and in this final rule in order to meet the MYs 2012-

2016 standards, based on the analysis described briefly above and in much more detail in 

Chapter IX of the FRIA. These are combined results for passenger cars and light trucks. 

A positive number is an estimated increase in fatalities and a negative number (shown in 

parentheses) is an estimated reduction in fatalities over the lifetime of the model year 

vehicles compared to the MY 2011 baseline fleet. 

MY 

2012

MY 

2013

MY 

2014

MY 

2015

MY 

2016

NPRM “Worst Case” 34 54 194 313 493 

NHTSA Expert Opinion 

Final Rule Upper 

Estimate

9 14 26 24 22

NHTSA Expert Opinion 

Final Rule Lower 

Estimate

2 4 (17) (53) (80)

Actual Regression 

Result Scenario 0 2 (94) (206) (301) 

NHTSA emphasizes that the table above is based on the NHTSA’s assumptions 

about how manufacturers might choose to reduce the mass of their vehicles in response to 

the final rule, which are very similar to EPA’s assumptions. In general, as discussed 

above, the agencies assume that mass will be reduced by as much as 10 percent in the 
142 

heaviest LTVs but only by as much as 5 percent in other vehicles and that substantial 

mass reductions will take place only in the year that models are redesigned. The actual 

mass reduction that is likely to occur in response to the standards will of course vary by 

make and model, depending on each manufacturer’s particular approach, with likely 

more opportunity for the largest LTVs that still use separate frame construction. 

The “upper estimate” presented above, as discussed in the FRIA, assumes only 

that manufacturers will reduce vehicle mass without reducing footprint. Thus, under such 

a scenario, safety effects could be somewhat adverse if, for example, manufacturers 

chose to reduce crush space associated with vehicle overhang as a way of reducing mass 

without changing footprint. The “lower estimate,” in turn, is based on the assumption 

that manufacturers will reduce vehicle mass solely through methods like material 

substitution, which (under these assumptions) fully maintain not only footprint but also 

all structural integrity, and other aspects of vehicle safety. Under these scenarios, safety 

effects could be worse if mass reduction was not undertaken thoughtfully to maintain 

existing safety levels, but could also be better if it was undertaken with a thorough and 

extensive vehicle redesign to maximize both mass reduction and safety. 

 And finally, while NHTSA does not believe that the “worst-case” scenario 

presented in the NPRM is likely to occur during the MYs 2012-2016 timeframe, we 

cannot guarantee that manufacturers will never choose to reduce vehicle footprint, 

particularly if market forces lead to increased sales of small vehicles in response to sharp 

increases in the price of petroleum, though this case would not be in direct response to 

the CAFE/GHG standards. Thus, we cannot completely reject the worst-case scenario for 

all vehicles, although we can and do recognize that the footprint-based standards will 

significantly limit the likelihood of its occurrence within the context of this rulemaking. 

In summary, the agencies recognize the balancing inherent in achieving higher 

levels of fuel economy and lower levels of CO2 emissions through reduction of vehicle 

mass. Based on the 2010 Kahane analysis that attempts to separate the effects of mass 

reductions and footprint reductions, and to account better for the possibility that mass 

reduction will be accomplished entirely through methods that preserves structural 

strength and vehicle safety, the agencies now believe that the likely deleterious safety 

effects of the MYs 2012-2016 standards may be much lower than originally estimated. 

They may be close to zero, or possibly beneficial if mass reduction is carefully 

undertaken in the future and if the mass reduction in the heavier LTVs is greater (in 

absolute terms) than in passenger cars. In light of these findings, we believe that the 

balancing is reasonable. 

5. How do the Agencies Plan to Address this Issue Going Forward?

NHTSA and EPA believe that it is important for the agencies to conduct further 

study and research into the interaction of mass, size and safety to assist future 

rulemakings. The agencies intend to begin working collaboratively and to explore with 

DOE, CARB, and perhaps other stakeholders an interagency/ intergovernmental working 

group to evaluate all aspects of mass, size and safety. It would also be the goal of this 

Deleted: is able
143 

team to coordinate government supported studies and independent research, to the extent 

possible, to help ensure the work is complementary to previous and ongoing research and 

to guide further research in this area. DOE’s EERE office has long funded extensive 

research into component advanced vehicle materials and vehicle mass reduction. Other 

agencies may have additional expertise that will be helpful in establishing a coordinated 

work plan. The agencies are interested in looking at the weight-safety relationship in a 

more holistic (complete vehicle) way, and thanks to this CAFE rulemaking NHTSA has 

begun to bring together parts of itself— crashworthiness, and crash avoidance rulemaking 

offices and the agency’s Research & Development office—in an interdisciplinary way to 

better leverage the expertise of the agency. Extending this effort to other agencies will 

help to ensure that all aspects of the weight-safety relationship are considered completely 

and carefully with our future research. The agencies also intend to carefully consider 

comments received in response to the NPRM in developing plans for future studies and 

research and to solicit input from stakeholders. 

The agencies also plan to watch for safety effects as the U.S. light-duty vehicle 

fleet evolves in response both to the CAFE/GHG standards and to consumer preferences 

over the next several years. Additionally, as new and advanced materials and component 

smart designs are developed and commercialized, and as manufacturers implement them 

in more vehicles, it will be useful for the agencies to learn more about them and to try to 

track these vehicles in the fleet to understand the relationship between vehicle design and 

injury/fatality data. Specifically, the agencies intend to follow up with study and research 

of the following: 

First, NHTSA is in the process of contracting with an independent institution to 

review the statistical methods that NHTSA and DRI have used to analyze historical data 

related to mass, size and safety, and to provide recommendation on whether the existing 

methods or other methods should be used for future statistical analysis of historical data. 

This study will include a consideration of potential near multicollinearity in the historical 

data and how best to address it in a regression analysis. This study is being initiated 

because, in response to the NPRM, NHTSA received a number of comments related to 

the methodology NHTSA used for the NPRM to determine the relationship between mass 

and safety, as discussed in detail above. 

Second, NHTSA and EPA, in consultation with DOE, intend to begin updating 

the MYs 1991-1999 database on which the safety analyses in the NPRM and final rule 

are based with newer vehicle data in the next several months. This task will take at least 

a year to complete. This study is being initiated in response to the NPRM comments 

related to the use of data from MYs 1991-1999 in the NHTSA analysis, as discussed in 

detail above. 

Third, in order to assess if the design of recent model year vehicles that 

incorporate various mass reduction methods affect the relationships among vehicle mass, 

size and safety, NHTSA and EPA intend to conduct collaborative statistical analysis, 

beginning in the next several months. The agencies intend to work with DOE to identify 

vehicles that are using material substitution and smart design. After these vehicles are 

Deleted: has 
144 

identified, the agencies intend to assess if there are sufficient data for statistical analysis. 

If there are sufficient data, statistical analysis would be conducted to compare the 

relationship among mass, size and safety of these smart design vehicles to vehicles of 

similar size and mass with more traditional designs. This study is being initiated because, 

in response to the NPRM, NHTSA received comments related to the use of data from 

MYs 1991-1999 in the NHTSA analysis that did not include new designs that might 

change the relationship among mass, size and safety, as discussed in detail above. 

NHTSA may initiate a two-year study of the safety of the fleet through an 

analysis of the trends in structural stiffness and whether any trends identified impact 

occupant injury response in crashes. Vehicle manufacturers may employ stiffer light 

weight materials to limit occupant compartment intrusion while controlling for mass that 

may expose the occupants to higher accelerations resulting in a greater chance of injury 

in real-world crashes. This study would provide information that would increase the 

understanding of the effects on safety of newer vehicle designs. 

In addition, NHTSA and EPA, possibly in collaboration with DOE, may conduct 

a longer-term computer modeling-based design and analysis study to help determine the 

maximum potential for mass reduction in the MYs 2017-2021 timeframe, through direct 

material substitution and smart design while meeting safety regulations and guidelines, 

and maintaining vehicle size and functionality. This study may build upon prior research 

completed on vehicle mass reduction. This study would further explore comprehensive 

vehicle effects, including dissimilar material joining technologies, manufacturer 

feasibility of both supplier and OEM, tooling costs, and crash simulation and perhaps 

eventual crash testing. 

III. EPA Greenhouse Gas Vehicle Standards 

A. Executive Overview of EPA Rule

 1. Introduction

 The Environmental Protection Agency (EPA) is establishing GHG emissions 

standards for the largest sources of transportation GHGs--light-duty vehicles, light-duty 

trucks, and medium-duty passenger vehicles (hereafter light vehicles). These vehicle 

categories, which include cars, sport utility vehicles, minivans, and pickup trucks used for 

Deleted: greenhouse gas

Deleted: greenhouse gases
145 

personal transportation, are responsible for almost 60% of all U.S. transportation related 

emissions of the six gases discussed above (Section I.A). This action represents the firstever EPA rule to regulate vehicle GHG emissions under the Clean Air Act (CAA) and 

will establish standards for model years 2012-2016 and later light vehicles sold in the 

United States. 

 EPA is adopting three separate standards. The first and most important is a set of 

fleet-wide average carbon dioxide (CO2) emission standards for cars and trucks. These 

standards are CO2 emissions-footprint curves, where each vehicle has a different CO2

emissions compliance target depending on its footprint value. Vehicle CO2 emissions 

will be measured over the EPA city and highway tests. The rule allows for credits based 

on demonstrated improvements in vehicle air conditioner systems, including both 

efficiency and refrigerant leakage improvement, which are not captured by the EPA tests. 

The EPA projects that the average light vehicle tailpipe CO2 level in model year 2011 

will be 325 grams per mile while the average vehicle fleetwide average CO2 emissions 

compliance level for the model year 2016 standard will be 250 grams per mile, an 

average reduction of 23 percent from today’s CO2 levels. 

 EPA is also finalizing standards that will cap tailpipe nitrous oxide (N2O) and 

methane (CH4) emissions at 0.010 and 0.030 grams per mile, respectively. Even after 

adjusting for the higher relative global warming potencies of these two compounds, 

nitrous oxide and methane emissions represent less than one percent of overall vehicle 

greenhouse gas emissions from new vehicles. Accordingly, the goal of these two 

standards is to limit any potential increases of tailpipe emissions of these compounds in 

the future but not to force reductions relative to today’s low levels. 

 

 This final rule responds to the Supreme Court’s 2007 decision in Massachusetts v. 

EPA145 which found that greenhouse gases fit within the definition of air pollutant in the 

Clean Air Act. The Court held that the Administrator must determine 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 case was remanded back to the Agency for reconsideration in light of the 

court's decision. 

 The Administrator has responded to the remand by issuing two findings under 

section 202(a) of the Clean Air Act.146 First, the Administrator found that the science 

supports a positive endangerment finding that the mix of six greenhouse gases (carbon 

 

145 549 U.S.C. 497 (2007). For further information on Massachusetts v. EPA see the Endangerment and 

Cause or Contribute Findings for Greenhouse Gases under Section 202(a) the Clean Air Act, published in 

the Federal Register on December 15, 2009 (74 FR 66496). There is a comprehensive discussion of the 

litigation’s history, the Supreme Court’s findings, and subsequent actions undertaken by the Bush 

Administration and the EPA from 2007-2008 in response to the Supreme Court remand. This information is 

also available at: http://www.epa.gov/climatechange/endangerment.html.

146 See 74 FR 66496 (Dec. 15, 2009), "Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act” 

Deleted: greenhouse gas 

Deleted: greenhouse gas

Deleted: pollutants 

Deleted: were 

Deleted: s for purposes of 

Deleted: Court

Deleted: the case 

Deleted: its finding

Deleted: Court’s 

Deleted: For further information on 

Massachusetts v. EPA see the July 30, 

2008 Advance Notice of Proposed 

Rulemaking, “Regulating Greenhouse 

Gas Emissions under the Clean Air Act”, 

73 FR 44354 at 44397. There is a 

comprehensive discussion of the 

litigation’s history, the Supreme Court’s 

findings, and subsequent actions 

undertaken by the Bush Administration 

and the EPA from 2007-2008 in response 

to the Supreme Court remand. 

Deleted: for 
146 

dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)) in the atmosphere endangers the 

public health and welfare of current and future generations. This is referred to as the 

endangerment finding. Second, the Administrator found that the combined emissions of 

the same six gases from new motor vehicles and new motor vehicle engines contribute to 

the atmospheric concentrations of these key greenhouse gases and hence to the threat of 

climate change. This is referred to as the cause and contribute finding. Motor vehicles 

and new motor vehicle engines emit carbon dioxide, methane, nitrous oxide, and 

hydrofluorocarbons. EPA provides more details below on the legal and scientific bases 

for this final rule. 

 As discussed in Section I, this GHG rule is part of a joint National Program such 

that a large majority of the projected benefits are achieved jointly with NHTSA’s CAFE 

rule which is described in detail in Section IV of this preamble. EPA projects total CO2

equivalent emissions savings of approximately 960 million metric tons as a result of the 

rule, and oil savings of 1.8 billion barrels over the lifetimes of the MY 2012-2016 

vehicles subject to the rule. EPA projects that over the lifetimes of the MY 2012-2016 

vehicles, the rule will cost $52 billion but will result in benefits of $240 billion at a 3 

percent discount rate, or $192 billion at a 7 percent discount rate (both values assume the 

average SCC value at 3%, i.e., the $21/ton SCC value in 2010). Accordingly, these light 

vehicle greenhouse gas emissions standards represent an important contribution under the 

Clean Air Act toward meeting long-term greenhouse gas emissions and import oil 

reduction goals, while providing important economic benefits as well. The results of our 

analysis of 2012-2016 MY vehicles, which we refer to as our “model year analysis,” are 

summarized in Tables III.H.10-4 to III.H.10-7.

 We have also looked beyond the lifetimes of 2012-2016 MY vehicles at annual 

costs and benefits of the program for the 2012 through 2050 timeframe. We refer to this 

as our “calendar year” analysis (as opposed to the costs and benefits mentioned above 

which we refer to as our “model year analysis”). In our calendar year analysis, the new 

2016 MY standards are assumed to apply to all vehicles sold in model years 2017 and 

later. The net present values of annual costs for the 2012 through 2050 timeframe are 

$346 billion for new vehicle technology which will provide $1.5 billion in fuel savings, 

both values at a 3 percent discount rate. At a 7 percent discount rate over the same 

period, the technology costs are estimated at $192 billion which will provide $673 billion 

in fuel savings. The social benefits during the 2012 through 2050 timeframe are 

estimated at $454 billion and $305 billion at a 3 and 7 percent discount rate, respectively. 

Both of these benefit estimates assume the average SCC value at 3% (i.e., the $21/ton 

SCC value in 2010). The net benefits during this time period are then $1.7 billion and 

$785 million at a 3 and 7 percent discount rate, respectively. The results of our “calendar 

year” analysis are summarized in Tables III.H 10-1 to III.H.10-3.

 2. Why is EPA Establishing this Rule? 

 This rule addresses only light vehicles. EPA is addressing light vehicles as a first 

step in control of greenhouse gas emissions under the Clean Air Act for four reasons. 

Deleted: contribute to four of these 

gases including--

Deleted: carbon dioxide

Deleted: net societal 

Deleted: 192

Deleted: 143

Deleted: a 
147 

First, light vehicles are responsible for almost 60% of all mobile source GHG emissions, 

a share three times larger than any other mobile source subsector, and represent about 

one-sixth of all U.S. greenhouse gas emissions. Second, technology exists that can be 

readily and cost-effectively applied to these vehicles to reduce their greenhouse gas 

emissions in the near term. Third, EPA already has an existing testing and compliance 

program for these vehicles, refined since the mid-1970s for emissions compliance and 

fuel economy determinations, which would require only minor modifications to 

accommodate greenhouse gas emissions regulations. Finally, this rule is an important 

step in responding to the Supreme Court’s ruling in Massachusetts vs. EPA, which 

applies to other emissions sources in addition to light-duty vehicles. In fact, EPA is 

currently evaluating controls for motor vehicles other than those covered by this rule, and 

is also reviewing seven motor vehicle related petitions submitted by various states and 

organizations requesting that EPA use its Clean Air Act authorities to take action to 

reduce greenhouse gas emissions from aircraft (under §231(a)(2)), ocean-going vessels 

(under §213(a)(4)), and other nonroad engines and vehicle sources (also under 

§213(a)(4)). 

a. Light Vehicle Emissions Contribute to Greenhouse Gases and the Threat 

of Climate Change 

 Greenhouse gases are gases in the atmosphere that effectively trap some of the 

Earth’s heat that would otherwise escape to space. Greenhouse gases are both naturally 

occurring and anthropogenic. The primary greenhouse gases of concern that are directly 

emitted by human activities include carbon dioxide, methane, nitrous oxide, 

hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. 

 These gases, once emitted, remain in the atmosphere for decades to centuries. 

Thus, they become well mixed globally in the atmosphere and their concentrations 

accumulate when emissions exceed the rate at which natural processes remove 

greenhouse gases from the atmosphere. The heating effect caused by the human-induced 

buildup of greenhouse gases in the atmosphere is very likely the cause of most of the 

observed global warming over the last 50 years. 148 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. A detailed explanation of observed and 

projected changes in greenhouse gases and climate change and its impact on health, 

society, and the environment is included in EPA’s technical support document for the 

 

148“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.

Deleted: greenhouse gas

Deleted: first 

Deleted: and 

Deleted: 147
148 

recently promulgated Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act.149 

 Mobile sources represent a large and growing share of United States greenhouse 

gases and include light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, 

heavy duty trucks, airplanes, railroads, marine vessels and a variety of other sources. In 

2007, all mobile sources emitted 31% of all U.S. GHGs, and were the fastest-growing 

source of U.S. GHGs in the U.S. since 1990. Transportation sources, which do not 

include certain off-highway sources such as farm and construction equipment, account 

for 28% of U.S. GHG emissions, and Section 202(a) sources, which include light-duty 

vehicles, light-duty trucks, medium-duty passenger vehicles, heavy-duty trucks, buses, 

and motorcycles account for 23% of total U.S. GHGs.150 

 Light vehicles emit carbon dioxide, methane, nitrous oxide and 

hydrofluorocarbons. Carbon dioxide (CO2) is the end product of fossil fuel combustion. 

During combustion, the carbon stored in the fuels is oxidized and emitted as CO2 and 

smaller amounts of other carbon compounds.151 Methane (CH4) emissions are a function 

of the methane content of the motor fuel, the amount of hydrocarbons passing 

uncombusted through the engine, and any post-combustion control of hydrocarbon 

emissions (such as catalytic converters).152 Nitrous oxide (N2O) (and nitrogen oxide 

(NOX)) emissions from vehicles and their engines are closely related to air-fuel ratios, 

combustion temperatures, and the use of pollution control equipment. For example, some 

types of catalytic converters installed to reduce motor vehicle NOX, carbon monoxide 

(CO) and hydrocarbon emissions can promote the formation of N2O.153 

Hydrofluorocarbons (HFC) emissions are progressively replacing chlorofluorocarbons

(CFC) and hydrochlorofluorocarbons (HCFC) in these vehicles’ cooling and refrigeration 

systems as CFCs and HCFCs are being phased out under the Montreal Protocol and Title 

VI of the CAA. There are multiple emissions pathways for HFCs with emissions 

occurring during charging of cooling and refrigeration systems, during operations, and 

during decommissioning and disposal.154 

b. Basis for Action under the Clean Air Act 

 

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 

 

149 74 FR 66496 (Dec. 15, 2009). Both the Federal Register Notice and the Technical Support Document 

for Endangerment and Cause or Contribute Findings are found in the public docket No. EPA-OAR-2009-

0171, in the public docket established for this rulemaking, and at 

http://epa.gov/climatechange/endangerment.html. 150 Inventory of U.S. Greenhouse Gases and Sinks: 1990-2007. 151 Mobile source carbon dioxide emissions in 2006 equaled 26 percent of total U.S. CO2 emissions. 152 In 2006, methane emissions equaled 0.32 percent of total U.S. methane emissions Nitrous oxide is a 

produce of the reaction that occurs between nitrogen and oxygen during fuel combustion. 

153 In 2006, nitrous oxide emissions for these sources accounted for 8 percent of total U.S. nitrous oxide 

emissions. 

154 In 2006, HFC from these source categories equaled 56 percent of total U.S. HFC emissions, making it 

the single largest source category of U.S. HFC emissions. 

Deleted: greenhouse gase

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Deleted: greenhouse gase

Deleted: four greenhouse gases: 

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149 

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.” As noted above, the Administrator has found that 

the elevated concentrations of greenhouse gases in the atmosphere may reasonably be 

anticipated to endanger public health and welfare.155 The Administrator defined the “air 

pollution” referred to in CAA section 202(a) to be the combined mix of six long-lived 

and directly emitted GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), 

hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). 

The Administrator has further found under CAA section 202(a) that emissions of the 

single air pollutant defined as the aggregate group of these same six greenhouse gases 

from new motor vehicles and new motor vehicle engines contribute to air pollution. As a 

result of these findings, section 202(a) requires EPA to issue standards applicable to 

emissions of that air pollutant. New motor vehicles and engines emit CO2, methane, N2O 

and HFC. This preamble describes the provisions that control emissions of CO2, HFCs, 

nitrous oxide, and methane. For further discussion of EPA’s authority under section 

202(a), see Section I.C.2 of the preamble to the proposed rule (74 FR at 49464-66). 

There are a variety of other CAA Title II provisions that are relevant to standards 

established under section 202(a). The standards are applicable to motor vehicles for their 

useful life. EPA has the discretion in determining what standard applies over the 

vehicles’ useful life and has exercised that discretion in this rule. See Section III.E.4 

below. 

 

The standards established under CAA section 202(a) are implemented and 

enforced through various mechanisms. Manufacturers are required to obtain an EPA 

certificate of conformity before they may sell or introduce their new motor vehicle into 

commerce, according to CAA section 206(a). The introduction into commerce of 

vehicles without a certificate of conformity is a prohibited act under CAA section 203 

that may subject a manufacturer to civil penalties and injunctive actions (see CAA 

sections 204 and 205). Under CAA section 206(b), EPA may conduct testing of new 

production vehicles to determine compliance with the standards. For in-use vehicles, if 

EPA determines that a substantial number of vehicles do not conform to the applicable 

regulations then the manufacturer must submit and implement a remedial plan to address 

the problem (see CAA section 207(c)). There are also emissions-based warranties that the 

manufacturer must implement under CAA section 207(a). Section III.E describes the 

rule’s certification, compliance, and enforcement mechanisms. 

c. EPA’s Endangerment and Cause or Contribute Findings for Greenhouse 

Gases under Section 202(a) of the Clean Air Act 

On December 7, 2009 EPA’s Administrator signed an action with two distinct 

findings regarding greenhouse gases under section 202(a) of the Clean Air Act. On 

December 15, 2009, the final findings were published in the Federal Register. This 

action is called the Endangerment and Cause or Contribute Findings for Greenhouse 

 

155 74 FR 66496 (Dec. 15, 2009). 

Deleted: air pollution of 

Deleted: levels 

Deleted: concentrations

Deleted: elevated concentrations of the 

Deleted: those six gases 

Deleted: the 

Deleted: four of the six GHGs:

Deleted: emissions

Deleted: As a result of these findings, 

section 202(a) requires EPA to issue 

standards applicable to emissions of those 

pollutants. 

Deleted: promulgated 
150 

Gases under Section 202(a) of the Clean Air Act (Endangerment Finding).156 Below are 

the two distinct findings: 

• Endangerment Finding: The Administrator finds that the current and projected 

concentrations of the six key well-mixed greenhouse gases--carbon dioxide 

(CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--in the atmosphere 

threaten the public health and welfare of current and future generations. 

• Cause or Contribute Finding: The Administrator finds that the combined 

emissions of these well-mixed greenhouse gases from new motor vehicles and 

new motor vehicle engines contribute to the greenhouse gas pollution which 

threatens public health and welfare. 

 

 Specifically, the Administrator found, after a thorough examination of the 

scientific evidence on the causes and impact of current and future climate change, and 

careful review of public comments, that the science compellingly supports a positive 

finding that atmospheric concentrations of these greenhouse gases result in air pollution 

which may reasonably be anticipated to endanger both public health and welfare. In her 

finding, the Administrator relied heavily upon the major findings and conclusions from 

the recent assessments of the U.S. Climate Change Science Program and the U.N. 

Intergovernmental Panel on Climate Change.157 The Administrator made a positive 

endangerment finding after considering both observed and projected future effects of 

climate change, key uncertainties, and the full range of risks and impacts to public health 

and welfare occurring within the United States. In addition, the finding focused on 

impacts within the U.S. but noted that the evidence concerning risks and impacts 

occurring outside the U.S. provided further support for the finding. 

 The key scientific findings supporting the endangerment finding are that: 

– Concentrations of greenhouse gases are at unprecedented levels compared to 

recent and distant past. These high concentrations are the unambiguous result 

of anthropogenic emissions and are very likely the cause of the observed 

increase in average temperatures and other climatic changes. 

– The effects of climate change observed to date and projected to occur in the 

future include more frequent and intense heat waves, more severe wildfires, 

degraded air quality, heavier downpours and flooding, increasing drought, 

greater sea level rise, more intense storms, harm to water resources, harm to 

agriculture, and harm to wildlife and ecosystems. These impacts are effects 

on public health and welfare within the meaning of the Clean Air Act. 

 

156 74 FR 66496 (Dec. 15, 2009) 157 The U.S. Climate Change Science Program (CCSP) is now called the U.S. Global Change Research 

Program (GCRP). 
151 

The Administrator found that emissions of the single air pollutant defined as the 

aggregate group of these same six greenhouse gases from new motor vehicles and new 

motor vehicle engines contribute to the air pollution and hence to the threat of climate 

change. Key facts supporting this cause and contribute finding for on-highway vehicles 

regulated under section 202(a) of the Clean Air Act are that these sources are responsible 

for 24% of total U.S. greenhouse gas emissions, and more than 4% of total global 

greenhouse gas emissions.158 As noted above, these findings require EPA to issue 

standards under section 202 (a) “applicable to emission” of the air pollutant that EPA 

found causes or contributes to the air pollution that endangers public health and welfare. 

The final emissions standards satisfy this requirement for greenhouse gases from lightduty vehicles. Under section 202(a) 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. EPA has the discretion under section 202(a) 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 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. EPA is 

not setting any standards for perfluorocarbons (PFCs) or sulfur hexafluoride (SF6) as they 

are not emitted by motor vehicles.

 3. What is EPA Adopting? 

a. Light-Duty Vehicle, Light-Duty Truck, and Medium-Duty Passenger 

Vehicle Greenhouse Gas Emission Standards and Projected Compliance 

Levels 

The following section provides an overview of EPA’s final rule. The key public 

comments are not discussed here, but are discussed in the sections that follow which 

provide the details of the program. Comments are also discussed in the Response to 

Comments document. 

The CO2 emissions standards are by far the most important of the three standards 

and are the primary focus of this summary. As proposed, EPA is adopting an attributebased approach for the CO2 fleet-wide standard (one for cars and one for trucks), using 

vehicle footprint as the attribute. These curves establish different CO2 emissions targets 

for each unique car and truck footprint. Generally, the larger the vehicle footprint, the 

higher the corresponding vehicle CO2 emissions target. Table III.A.3-1 shows the 

greenhouse gas standards for light vehicles that EPA is finalizing for model years (MY) 

2012 and later: 

 

158 This figure includes the greenhouse gas contributions of light vehicles, heavy duty vehicles, and 

remaining on-highway mobile sources. Light-duty vehicles are responsible for over 70 percent of Section 

202(a) mobile source GHGs, or about 17% of total U.S. greenhouse gas emissions. U.S. EPA.2009 

Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases 

under Section 202(a) of the Clean Air Act. Washington, DC. pp. 180-194. Available at

http://epa.gov/climatechange/endangerment/downloads/Endangerment%20TSD.pdf .

Deleted: the combined emissions of the 

six well-mixed gases contribute to the 

atmospheric concentrations of these key 

greenhouse gases 

Deleted: and that transportation 

sources including motor vehicles and new 

motor vehicle engines contribute to four 

of these gases including --carbon dioxide, 

methane, nitrous oxide, and 

hydrofluorocarbons

Deleted: The Administrator also 

considered whether emissions of each 

greenhouse gas individually, as a separate 

air pollutant, would contribute to this air 

pollution. ¶

¶

Deleted: or pollutants

Deleted: finds 
152 

Table III.A.3-1 Industry-Wide Greenhouse Gas Emissions Standards 

Standard/ 

Covered 

Compounds

Form of 

Standard 

Level of 

Standard 

Credits Test Cycles 

CO2 Standard159: 

Tailpipe CO2

Fleetwide 

average footprint 

CO2-curves for 

cars and trucks 

Projected 

Fleetwide CO2

level of 250 g/mi 

(See footprint 

curves in Sec. 

III.B.2) 

CO2-e credits160 EPA 2-cycle 

(FTP and HFET 

test cycles)161

N2O Standard: 

Tailpipe N2O 

Cap per vehicle 0.010 g/mi None* EPA FTP test 

CH4 Standard: 

Tailpipe CH4

Cap per vehicle 0.030 g/mi None* EPA FTP test 

* For N2O and CH4, manufacturers may optionally demonstrate compliance with a CO2-

equivalent standard equal to its footprint-based CO2 target level, using the FTP and HFET tests. 

One important flexibility associated with the CO2 standard is the option for 

manufacturers to obtain credits associated with improvements in their air conditioning 

systems. EPA is adopting the air conditioning provisions with minor modifications. As 

will be discussed in greater detail in later sections, EPA is establishing test procedures 

and design criteria by which manufacturers can demonstrate improvements in both air 

conditioner efficiency (which reduces vehicle tailpipe CO2 by reducing the load on the 

engine) and air conditioner refrigerants (using lower global warming potency refrigerants 

and/or improving system design to reduce GHG emissions associated with leaks). 

Neither of these strategies to reduce GHG emissions from air conditioners will be 

reflected in the EPA FTP or HFET tests. These improvements will be translated to a 

g/mi CO2-equivalent credit that can be subtracted from the manufacturer’s tailpipe CO2

compliance value. EPA expects a high percentage of manufacturers to use this flexibility 

to earn air conditioning-related credits for MY2012-2016 vehicles such that the average 

credit earned is about 11 grams per mile CO2–equivalent in 2016. 

A second flexibility, being finalized essentially as proposed, is CO2 credits for 

flexible and dual fuel vehicles, similar to the CAFE credits for such vehicles which allow 

 

159 While over 99 percent of the carbon in automotive fuels is converted to CO2 in a properly functioning 

engine, compliance with the CO2 standard will also account for the very small levels of carbon associated 

with vehicle tailpipe hydrocarbon (HC) and carbon monoxide (CO) emissions, converted to CO2 on a mass 

basis, as discussed further in Section III.B 

160 CO2-e refers to CO2-equivalent, and is a metric that allows non-CO2 greenhouse gases (such as 

hydrofluorocarbons used as automotive air conditioning refrigerants) to be expressed as an equivalent mass 

(i.e., corrected for relative global warming potency) of CO2 emissions. 161 FTP is the Federal Test Procedure which uses what is commonly referred to as the “city” driving 

schedule, and HFET is the Highway Fuel Economy Test which uses the “highway” driving schedule. 

Compliance with the CO2 standard will be based on the same 2-cycle values that are currently used for 

CAFE standards compliance; EPA projects that fleet-wide in-use or real world CO2 emissions are 

approximately 25 percent higher, on average, than 2-cycle CO2 values. Separate mechanisms apply for 

A/C credits. 

Deleted: Pollutants
153 

manufacturers to gain up to 1.2 mpg in their overall CAFE ratings. The Energy 

Independence and Security Act of 2007 (EISA) mandated a phase-out of these flexible 

fuel vehicle CAFE credits beginning in 2015, and ending after 2019. EPA is allowing 

comparable CO2 credits for flexible fuel vehicles through MY 2015, but for MY 2016 

and beyond, the GHG rule treats flexible and dual fuel vehicles on a CO2-performance 

basis, calculating the overall CO2 emissions for flexible and dual fuel vehicles based on a 

fuel use-weighted average of the CO2 levels on gasoline and on the alternative fuel, and 

on a manufacturer’s demonstration of actual usage of the alternative fuel in its vehicle 

fleet. 

Table III.A.3-2 summarizes EPA projections of industry-wide 2-cycle CO2

emissions and fuel economy levels that will be achieved by manufacturer compliance 

with the GHG standards for MY2012-2016. 

For MY2011, Table III.A.3-2 uses the NHTSA projections of the average fuel 

economy level that will be achieved by the MY 2011 fleet of 30.8 mpg for cars and 23.3 

mpg for trucks, converted to an equivalent combined car and truck CO2 level of 326 

grams per mile.162 EPA believes this is a reasonable estimate with which to compare the 

MY2012-2016 CO2 emission standards. Identifying the proper MY2011 estimate is 

complicated for many reasons, among them being the turmoil in the current automotive 

market for consumers and manufacturers, uncertain and volatile oil and gasoline prices, 

the ability of manufacturers to use flexible fuel vehicle credits to meet MY2011 CAFE 

standards, and the fact that most manufacturers have been surpassing CAFE standards 

(particularly the car standard) in recent years. Taking all of these considerations into 

account, EPA believes that the MY2011 projected CAFE achieved values, converted to 

CO2 emissions levels, represent a reasonable estimate. 

Table III.A.3-2 shows projected industry-wide average CO2 emissions values. 

The Projected CO2 Emissions for the Footprint-Based Standard column shows the CO2

g/mi level corresponding with the footprint standard that must be met. It is based on the 

promulgated CO2-footprint curves and projected footprint values, and will decrease each 

year to 250 grams per mile (g/mi) in MY2016. For MY2012-2016, the emissions impact 

of the projected utilization of flexible fuel vehicle (FFV) credits and the temporary leadtime allowance alternative standard (TLAAS, discussed below) are shown in the next two 

columns. The Projected CO2 Emissions column gives the CO2 emissions levels projected 

to be achieved given use of the flexible fuel credits and temporary lead-time allowance 

program. This column shows that, relative to the MY 2011 estimate, EPA projects that 

MY2016 CO2 emissions will be reduced by 23 percent over five years. The Projected 

A/C Credit column represents the industry wide average air conditioner credit 

manufacturers are expected to earn on an equivalent CO2 gram per mile basis in a given 

model year. In MY2016, the projected A/C credit of 10.6 g/mi represents 14 percent of 

the 76 g/mi CO2 emissions reductions associated with the final standards. The Projected 

2-cycle CO2 Emissions column shows the projected CO2 emissions as measured over the 

EPA 2-cycle tests, which will allow compliance with the standard assuming projected 

utilization of the FFV, TLAAS, and A/C credits. 

 

162 As discussed in Section IV of this preamble. 
154 

Table III.A.3-2 Projected Fleetwide CO2 Emissions Values (grams per mile) 

Model 

Year 

Projected 

CO2

Emissions 

for the 

FootprintBased 

Standard 

 

Projected 

FFV 

Credit 

Projected 

TLAAS 

Credit 

Projected 

CO2

Emissions

Projected 

A/C Credit

Projected 

2-cycle 

CO2

Emissions 

2011 - - - (326) - (326) 

2012 295 6.5 1.2 303 3.5 307 

2013 286 5.8 0.9 293 5.0 298 

2014 276 5.0 0.6 282 7.5 290 

2015 263 3.7 0.3 267 10.0 277 

2016 250 0.0 0.1 250 10.6 261 

EPA is also finalizing a series of flexibilities for compliance with the CO2

standard which are not expected to significantly affect the projected compliance and 

achieved values shown above, but which should reduce the costs of achieving those 

reductions. These flexibilities include the ability to earn: annual credits for a 

manufacturer’s over-compliance with its unique fleet-wide average standard, early credits 

from MY2009-2011, credit for “off-cycle” CO2 reductions from new and innovative 

technologies that are not reflected in CO2/fuel economy tests, as well as the carry-forward 

and carry-backward of credits, and the ability to transfer credits between a 

manufacturer’s car and truck fleets. These flexibilities are being adopted with only very 

minor changes from the proposal, as discussed in Section III.C. 

EPA is finalizing an incentive to encourage the commercialization of advanced 

GHG/fuel economy control technologies, including electric vehicles (EVs), plug-in 

hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs), for model years 2012-

2016. EPA’s proposal included an emissions compliance value of zero grams/mile for 

EVs and FCVs, and the electric portion of PHEVs, and a multiplier in the range of 1.2 to 

2.0, so that each advanced technology vehicle would count as greater than one vehicle in 

a manufacturer’s fleet-wide compliance calculation. Several commenters were very 

concerned about these credits and upon considering the public comments on this issue, 

EPA is finalizing an advanced technology vehicle incentive program to assign a zero 

gram/mile emissions compliance value for EVs and FCVs, and the electric portion of 

PHEVs, for up to the first 200,000 EV/PHEV/FCV vehicles produced by a given 

manufacturer during MY2012-2016. For any production greater than this amount, the 

compliance value for the vehicle will be greater than zero gram/mile, set at a level that 

reflects the vehicle’s average net increase in upstream greenhouse gas emissions in 

comparison to the gasoline or diesel vehicle it replaces. EPA is not finalizing a multiplier 

based on the concerns potentially excessive credits using that incentive. EPA agrees that 

the multiplier, in combination with the zero grams/mile compliance value, would be 

excessive. EPA will also allow this early advanced technology incentive program 
155 

beginning in MYs 2009 through 2011. Further discussion on the advanced technology 

vehicle incentives, including more detail on the public comments and EPA’s response, is 

found in Section III.C. 

EPA is also finalizing a temporary lead-time allowance (TLAAS) for 

manufacturers that sell vehicles in the U.S. in MY 2009 and for which U.S. vehicle sales 

in that model year are below 400,000 vehicles. This allowance will be available only 

during the MY 2012-2015 phase-in years of the program. A manufacturer that satisfies 

the threshold criteria will be able to treat a limited number of vehicles as a separate 

averaging fleet, which will be subject to a less stringent GHG standard.163 Specifically, 

a standard of 125 percent of the vehicle’s otherwise applicable foot-print target level will 

apply to up to 100,000 vehicles total, spread over the four year period of MY 2012 

through 2015. Thus, the number of vehicles to which the flexibility could apply is 

limited. EPA also is setting appropriate restrictions on credit use for these vehicles, as 

discussed further in Section III. By MY 2016, these allowance vehicles must be averaged 

into the manufacturer’s full fleet (i.e., they will no longer be eligible for a different 

standard). EPA discusses this in more detail in Section III.B of the preamble. 

 EPA received comments from several smaller manufacturers that the TLAAS 

program was insufficient to allow manufacturers with very limited product lines to 

comply. These manufacturers commented that they need additional leadtime to meet the 

standards, because their CO2 baselines are significantly higher and their vehicle product 

lines are even more limited, reducing their ability to average across their fleets compared 

even to other TLAAS manufacturers. EPA fully summarizes the public comments on the 

TLAAS program, including comments not supporting the program, in Section III.B. In 

summary, in response to the lead time issues raised by manufacturers, EPA is modifying 

the TLAAS program that applies to manufacturers with between 5,000 and 50,000 U.S. 

vehicle sales in MY 2009. These manufactures would have an increased allotment of 

vehicles, a total of 250,000, compared to 100,000 vehicles (for other TLAAS-eligible 

manufacturers. In addition, the TLAAS program for these manufacturers would be 

extended by one year, through MY2016 for these vehicles, for a total of five years of 

eligibility. The other provisions of the TLAAS program would continue to apply, such as 

the restrictions on credit trading and the level of the standard. Additional restrictions 

would also apply to these vehicles, as discussed in Section III.B.5. In addition, for the 

smallest volume manufacturers, those with U.S. sales of below 5,000 vehicles, EPA is not 

setting standards at this time but is instead deferring standards until a future rulemaking. 

This is the same approach we are using for small businesses. The unique issues involved 

with these manufacturers will be addressed in that future rulemaking. Further discussion 

of the public comment on these issues and details on these changes from the proposed 

program are included in Section III.B.6. The agency received comments on its 

compliance with the Regulatory Flexibility Act. As stated in Section III.I.3, small 

entities are not significantly impacted by this rulemaking. 

 

163 EPCA does not permit such an allowance. Consequently, manufacturers who may be able to take 

advantage of a lead-time allowance under the GHG standards would be required to comply with the 

applicable CAFE standard or be subject to penalties for non-compliance. 

Deleted: sales
156 

EPA is also adopting caps on the tailpipe emissions of nitrous oxide (N2O) and 

methane (CH4)--0.010 g/mi for N2O and 0.030 g/mi for CH4—over the EPA FTP test. 

While N2O and CH4 can be potent greenhouse gases on a relative mass basis, their 

emission levels from modern vehicle designs are extremely low and represent only about 

1% of total late model light vehicle GHG emissions. These cap standards are designed to 

ensure that N2O and CH4 emissions levels do not rise in the future, rather than to force 

reductions in the already low emissions levels. Accordingly, these standards are not 

designed to require automakers to make any changes in current vehicle designs, and thus 

EPA is not projecting any environmental or economic costs or benefits associated with 

these standards. 

EPA has attempted to build on existing practice wherever possible in designing a 

compliance program for the GHG standards. In particular, the program structure will 

streamline the compliance process for both manufacturers and EPA by enabling 

manufacturers to use a single data set to satisfy both the new GHG and CAFE testing and 

reporting requirements. Timing of certification, model-level testing, and other 

compliance activities also follow current practices established under the Tier 2 emissions 

and CAFE programs. 

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 proposed GHG standards for new motor vehicles. Some comments 

suggested that EPA had underestimated the number of stationary sources that may be 

subject to GHG permitting requirements; other comments suggested that EPA did not 

adequately consider the permitting impact on small business sources. Other comments 

related to EPA’s interpretation of the CAA’s provisions for subjecting stationary sources 

to permit regulation after GHG standards are set. EPA’s response to these comments is

contained in the Response to Comments document; however, many of these comments 

pertain to issues that EPA is addressing in its consideration of the final Greenhouse Gas 

Permit Tailoring Rule, Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule; Proposed Rule, 74 FR 55292 (October 27, 2009) and will thus be 

fully addressed in that rulemaking. 

Some of the comments relating to the stationary source permitting issues 

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) 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 

Deleted: under 

Deleted: 
157 

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 

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 

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.164 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. 

 

164 As discussed elsewhere, for a variety of reasons EPA’s GHG standards achieve greater overall 

reductions in GHGs than NHTSA’s CAFE standards. 

Deleted: of 

Deleted: for this air pollutant
158 

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.

For discussion of comments on impacts on small entities and EPA’s compliance 

with the Regulatory Flexibility Act, see the discussion in Section III.I.3. 

b. Environmental and Economic Benefits and Costs of EPA’s Standards 

In Table III.A.3-3 EPA presents estimated annual net benefits for the indicated 

calendar years. The table also shows the net present values of those benefits for the 

calendar years 2012-2050 using both a 3 percent and a 7 percent discount rate. As 

discussed previously, EPA recognizes that much of these same costs and benefits are also 

attributable to the CAFE standard contained in this joint final rule. 

Table III.A.3-3 Projected Quantifiable Benefits and Costs for CO2 Standard 

(in million 2007$) 

2020 2030 2040 2050 NPV, 3%a NPV, 7%a

Quantified Annual 

Costsb -$20,100 -$64,000 -$101,900 -$152,200 -$1,199,700 -$480,700

Benefits from Reduced CO2 Emissions at each assumed SCC valuec,d,e

Avg SCC at 5% $900 $2,700 $4,600 $7,200 $34,500 $34,500 

Avg SCC at 3% $3,700 $8,900 $14,000 $21,000 $176,700 $176,700 

Avg SCC at 2.5% $5,800 $14,000 $21,000 $30,000 $299,600 $299,600 

95th percentile SCC 

at 3% $11,000 $27,000 $43,000 $62,000 $538,500 $538,500 

Other Impacts 

Criteria Pollutant 

Benefitsf,g,h,i B $1,200-

$1,300

$1,200-

$1,300

$1,200-

$1,300 $21,000 $14,000 

Energy Security 

Impacts (price shock) $2,200 $4,500 $6,000 $7,600 $81,900 $36,900 

Reduced Refueling $2,400 $4,800 $6,300 $8,000 $87,900 $40,100 

Value of Increased 

Drivingj $4,200 $8,800 $13,000 $18,400 $171,500 $75,500 
159 

Accidents, Noise, 

Congestion -$2,300 -$4,600 -$6,100 -$7,800 -$84,800 -$38,600 

Quantified Net Benefits at each assumed SCC valuec,d,e

Avg SCC at 5% $27,500 $81,500 $127,000 $186,900 $1,511,700 $643,100 

Avg SCC at 3% $30,300 $87,700 $136,400 $200,700 $1,653,900 $785,300 

Avg SCC at 2.5% $32,400 $92,800 $143,400 $209,700 $1,776,800 $908,200 

95th percentile SCC 

at 3% $37,600 $105,800 $165,400 $241,700 $2,015,700 $1,147,100 

a

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to Section III.F for more 

detail.

b

 Quantified annual costs are negative because fuel savings are included as negative costs (i.e., positive 

savings). Since the fuel savings outweigh the vehicle technology costs, the costs of as presented here are 

actually negative (i.e., they represent savings). 

c

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

Technical Support Document (TSD) notes the difference between the social cost of non-CO2 emissions and 

CO2 emissions, and specifies a goal to develop methods to value non-CO2 emissions in future analyses. d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $35-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates. 

e

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to SCC TSD for more detail. 

f

 Note that “B” indicates unquantified criteria pollutant benefits in the year 2020. For the final rule, we 

only modeled the rule’s PM2.5- and ozone-related impacts in the calendar year 2030. For the purposes of 

estimating a stream of future-year criteria pollutant benefits, we assume that the benefits out to 2050 are 

equal to, and no less than, those modeled in 2030 as reflected by the stream of estimated future emission 

reductions. The NPV of criteria pollutant-related benefits should therefore be considered a conservative 

estimate of the potential benefits associated with the final rule. 

g

 The benefits presented in this table include an estimate of PM-related premature mortality derived from 

Laden et al., 2006, and the ozone-related premature mortality estimate derived from Bell et al., 2004. If the 

benefit estimates were based on the ACS study of PM-related premature mortality (Pope et al., 2002) and 

the Levy et al., 2005 study of ozone-related premature mortality, the values would be as much as 70% 

smaller. 

h

 The calendar year benefits presented in this table assume either a 3% discount rate in the valuation of PMrelated premature mortality ($1,300 million) or a 7% discount rate ($1,200 million) to account for a twentyyear segmented cessation lag. Note that the benefits estimated using a 3% discount rate were used to 

calculate the NPV using a 3% discount rate and the benefits estimated using a 7% discount rate were used 

to calculate the NPV using a 7% discount rate. For benefits totals presented at each calendar year, we used 

the mid-point of the criteria pollutant benefits range ($1,250). 

i

 Note that the co-pollutant impacts presented here do not include the full complement of endpoints that, if 

quantified and monetized, would change the total monetized estimate of impacts. The full complement of 

human health and welfare effects associated with PM and ozone remain unquantified because of current 

limitations in methods or available data. We have 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). Additionally, we are 

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. 
160 

j

Calculated using pre-tax fuel prices. 

4. Basis for the GHG Standards under Section 202(a)

 EPA statutory authority under section 202(a) (1) of the Clean Air Act (CAA) is 

discussed in more detail in Section I.C.2 of the proposed rule (74 FR at 49464-65). The 

following is a summary of the basis for the final GHG standards under section 202(a), 

which is discussed in more detail in the following portions of Section III. 

 With respect to CO2 and HFCs, EPA is adopting attribute-based light-duty car and 

truck standards that achieve large and important emissions reductions of GHGs. EPA has 

evaluated the technological feasibility of the standards, and the information and analysis 

performed by EPA indicates that these standards are feasible in the lead time provided. 

EPA and NHTSA have carefully evaluated the effectiveness of individual technologies as 

well as the interactions when technologies are combined. EPA’s projection of the 

technology that would be used to comply with the standards indicates that manufacturers 

will be able to meet the standards by employing a wide variety of technologies that are 

already commercially available and can be incorporated into their vehicles at the time of 

redesign. In addition to the consideration of the manufacturers’ redesign cycle, EPA’s 

analysis also takes into account certain flexibilities that will facilitate compliance 

especially in the early years of the program when potential lead time constraints are most 

challenging. These flexibilities include averaging, banking, and trading of various types 

of credits. For the industry as a whole, EPA’s projections indicate that the standards can 

be met using technology that will be available in the lead-time provided. At the same 

time, it must be noted that because technology is commercially available today does not 

mean it can automatically be incorporated fleet-wide during the model years in question. 

As discussed below, and in detail in Section III.D.7, EPA and NHTSA carefully analyzed 

issues of adequacy of lead time in determining the level of the standards, and the agencies 

are convinced both that lead time is sufficient to meet the standards but that major further 

additions of technology across the fleet is not possible during these model years. 

To account for additional lead-time concerns for various manufacturers of 

typically higher performance vehicles, EPA is adopting a Temporary Lead-time 

Allowance similar to that proposed that will further facilitate compliance for limited 

volumes of such vehicles in the program’s initial years. For a few very small volume 

manufacturers, EPA is deferring standards pending later rulemaking. 

EPA has also carefully considered the cost to manufacturers of meeting the 

standards, estimating piece costs for all candidate technologies, direct manufacturing 

costs, cost markups to account for manufacturers’ indirect costs, and manufacturer cost 

reductions attributable to learning. In estimating manufacturer costs, EPA took into 

account manufacturers’ own practices such as making major changes to model 

technology packages during a planned redesign cycle. EPA then projected the average 

cost across the industry to employ this technology, as well as manufacturer –bymanufacturer costs. EPA considers the per vehicle costs estimated from this analysis to 

be within a reasonable range in light of the emissions reductions and benefits received. 
161 

EPA projects, for example, that the fuel savings over the life of the vehicles will more 

than offset the increase in cost associated with the technology used to meet the standards. 

EPA has also evaluated the impacts of these standards with respect to reductions 

in GHGs and reductions in oil usage. For the lifetime of the model year 2012-2016 

vehicles we estimate GHG reductions of approximately 960 million metric tons CO2 eq. 

and fuel reductions of 1.8 billion barrels of oil. These are important and significant 

reductions. EPA has also analyzed a variety of other impacts of the standards, ranging 

from the standards’ effects on emissions of non-GHG pollutants, impacts on noise, 

energy, safety and congestion. EPA has also quantified the cost and benefits of the 

standards, to the extent practicable. Our analysis to date indicates that the overall 

quantified benefits of the standards far outweigh the projected costs. Utilizing a 3% 

discount rate, we estimate the total net social benefits over the life of the model year 

2012-2016 vehicles is $192 billion, and the net present value of the net social benefits of 

the standards through the year 2050 is $1.9 trillion dollars.165 These values are estimated 

at $136 billion and $787 billion, respectively, using a 7% discount rate and the SCC 

discounted at 3 percent.166 

Under section 202(a) EPA is called upon to set standards that provide adequate 

lead-time for the development and application of technology to meet the standards. 

EPA’s standards satisfy this requirement, as discussed above. In setting the standards, 

EPA is called upon to weigh and balance various factors, and to exercise judgment in 

setting standards that are a reasonable balance of the relevant factors. In this case, EPA 

has considered many factors, such as cost, impacts on emissions (both GHG and nonGHG), impacts on oil conservation, impacts on noise, energy, safety, and other factors, 

and has where practicable quantified the costs and benefits of the rule. In summary, 

given the technical feasibility of the standard, the moderate cost per vehicle in light of the 

savings in fuel costs over the life time of the vehicle, the very significant reductions in 

emissions and in oil usage, and the significantly greater quantified benefits compared to 

quantified costs, EPA is confident that the standards are an appropriate and reasonable 

balance of the factors to consider under section 202(a). See Husqvarna AB v. EPA, 254 

F. 3d 195, 200 (D.C. Cir. 2001) (great discretion to balance statutory factors in 

considering level of technology-based standard, and statutory requirement “to [give 

appropriate] consideration to the cost of applying ... technology” does not mandate a 

specific method of cost analysis); 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). 

 

165 Based on the mean SCC at 3 percent discount rate, which is $21 per metric ton CO2 in 2010 rising to 

$45 per metric ton CO2 in 2050. 166 SCC was discounted at 3 percent to maintain internal consistency in the SCC calculations while all other 

benefits were discounted at 7 percent. Specifically, the same discount rate used to discount the value of 

damages from future CO2 emissions is used to calculate net present value of SCC. 
162 

EPA recognizes that the vast majority of technologies which we are considering 

for purposes of setting standards under section 202(a) are commercially available and 

already being utilized to a limited extent across the fleet. The vast majority of the 

emission reductions which would result from this rule would result from the increased 

use of these technologies. EPA also recognizes that this rule would enhance the 

development and limited use of more advanced technologies, such as PHEVs and EVs. 

In this technological context, there is no clear cut line that indicates that only one 

projection of technology penetration could potentially be considered feasible for purposes 

of section 202(a), or only one standard that could potentially be considered a reasonable 

balancing of the factors relevant under section 202(a). EPA therefore evaluated two sets 

of alternative standards, one more stringent than the promulgated standards and one less 

stringent. 

The alternatives are 4% per year increase in standards which would be less 

stringent and a 6% per year increase in the standards which would be more stringent. 

EPA is not adopting either of these. As discussed in Section III.D.7, the 4% per year 

forgoes CO2 reductions which can be achieved at reasonable cost and are achievable by 

the industry within the rule’s timeframe. The 6% per year alternative requires a 

significant increase in the projected required technology penetration which appears 

inappropriate in this timeframe due to the limited available lead time and the current 

difficult financial condition of the automotive industry. (See Section III.D.7 for a 

detailed discussion of why EPA is not adopting either of the alternatives.). EPA also 

believes that the no backsliding standards it is adopting for N2O and CH4 are appropriate 

under section 202(a). 

B. GHG Standards for Light-duty Vehicles, Light-duty Trucks, and 

Medium-duty Passenger Vehicles 

 EPA is finalizing new emission standards to control greenhouse gases (GHGs) 

from light-duty vehicles. First, EPA is finalizing an emission standard for carbon dioxide 

(CO2) on a gram per mile (g/mile) basis that will apply to a manufacturer’s fleet of cars, 

and a separate standard that will apply to a manufacturer’s fleet of trucks. CO2 is the 

primary pollutant resulting from the combustion of vehicular fuels, and the amount of 

CO2 emitted is directly correlated to the amount of fuel consumed. Second, EPA is 

providing auto manufacturers with the opportunity to earn credits toward the fleet-wide 

average CO2 standards for improvements to air conditioning systems, including both 

hydrofluorocarbon (HFC) refrigerant losses (i.e., system leakage) and indirect CO2

emissions related to the increased load on the engine. Third, EPA is finalizing separate 

emissions standards for two other GHGs: methane (CH4) and nitrous oxide (N20). CH4

and N2O emissions relate closely to the design and efficient use of emission control 

hardware (i.e., catalytic converters). The standards for CH4 and N2O will be set as a cap 

that will limit emissions increases and prevent backsliding from current emission levels. 

The final standards described below will apply to passenger cars, light-duty trucks, and 

medium-duty passenger vehicles (MDPVs). As an overall group, they are referred to in 

this preamble as light vehicles or simply as vehicles. In this preamble section passenger 

Deleted: pollutant
163 

cars may be referred to simply as “cars”, and light-duty trucks and MDPVs as “light 

trucks” or “trucks.”167

EPA’s program includes a number of credit opportunities and other flexibilities to 

help manufacturers comply, especially in the early years of the program. EPA is 

establishing a system of averaging, banking, and trading of credits integral to the fleet 

averaging approach, based on manufacturer fleet average CO2 performance, as discussed 

in Section III.B.4. This approach is similar to averaging, banking, and trading (ABT) 

programs EPA has established in other programs and is also similar to provisions in the 

CAFE program. In addition to traditional ABT credits based on the fleet emissions 

average, EPA is also including A/C credits as an aspect of the standards, as mentioned 

above. EPA is also including several additional credit provisions that apply only in the 

initial model years of the program. These include flex fuel vehicle credits, incentives for 

the early commercialization of certain advanced technology vehicles, credits for new and 

innovative “off-cycle” technologies that are not captured by the current test procedures, 

and generation of credits prior to model year 2012. The A/C credits and additional credit 

opportunities are described in Section III.C. These credit programs will provide 

flexibility to manufacturers, which may be especially important during the early 

transition years of the program. EPA will also allow a manufacturer to carry a credit 

deficit into the future for a limited number of model years. A parallel provision, referred 

to as credit carry-back, will be part of the CAFE program. Finally, EPA is finalizing an

optional compliance flexibility, the Temporary Leadtime Allowance Alternative Standard 

program, for intermediate volume manufacturers, and is deferring standards for the 

smallest manufacturers, as discussed in Sections III.B.5 and 6 below. 

 1. What Fleet-wide Emissions Levels Correspond to the CO2 Standards?

The attribute-based CO2 standards, are projected to achieve a national fleet-wide 

average, covering both light cars and trucks, of 250 grams/mile of CO2 in model year 

(MY) 2016. This includes CO2-equivalent emission reductions from A/C improvements, 

reflected as credits in the standard. The standards will begin with MY 2012, with a 

generally linear increase in stringency from MY 2012 through MY 2016. EPA will have 

separate standards for cars and light trucks. The tables in this section below provide 

overall fleet average levels that are projected for both cars and light trucks over the 

phase-in period which is estimated to correspond with the standards. The actual fleetwide average g/mi level that will be achieved in any year for cars and trucks will depend 

on the actual production for that year, as well as the use of the various credit and 

averaging, banking, and trading provisions. For example, in any year, manufacturers 

may generate credits from cars and use them for compliance with the truck standard. 

Such transfer of credits between cars and trucks is not reflected in the table below. In 

Section III.F, EPA discusses the year-by-year estimate of emissions reductions that are 

projected to be achieved by the standards. 

 

167 As described in Section III.B.2., GHG emissions standards will use the same vehicle category 

definitions as are used in the CAFE program. 

Deleted: 
164 

In general, the schedule of standards acts as a phase-in to the MY 2016 standards, 

and reflects consideration of the appropriate lead-time for each manufacturer to 

implement the requisite emission reductions technology across its product line.168 Note 

that 2016 is the final model year in which standards become more stringent. The 2016 

CO2 standards will remain in place for 2017 and later model years, until revised by EPA 

in a future rulemaking. 

EPA estimates that, on a combined fleet-wide national basis, the 2016 MY 

standards will achieve a level of 250 g/mile CO2, including CO2-equivalent credits from 

A/C related reductions. The derivation of the 250 g/mile estimate is described in Section 

III.B.2. 

EPA has estimated the overall fleet-wide CO2-equivalent emission levels that 

correspond with the attribute-based standards, based on the projections of the 

composition of each manufacturer’s fleet in each year of the program. Tables III.B.1-1 

and III.B.1-2 provides these estimates for each manufacturer.169 

As a result of public comments and updated economic and future fleet 

projections, the attribute based curves have been updated for this final rule, as discussed 

in detail in Section II.B of this preamble and Chapter 2 of the Joint TSD. This update in 

turn affects costs, benefits, and other impacts of the final standards - thus EPA's overall 

projection of the impacts of the final rule standards have been updated and the results are 

different than for the NPRM, though in general not by a large degree. 

Table III.B.1-1 Estimated Fleet CO2-equivalent Levels Corresponding to the Standards 

for Cars (g/mile)

Manufacturer Model Year 

 2012 2013 2014 2015 2016

BMW 266 259 250 239 228 

Chrysler 269 262 254 243 232 

Daimler 274 267 259 249 238 

Ford 267 259 251 240 229 

General 

Motors 268 261 252 241 230 

Honda 260 252 244 233 222 

Hyundai 260 254 246 233 222 

Kia 263 255 247 235 224 

Mazda 260 252 243 232 221 

Mitsubishi 257 249 241 230 219 

Nissan 263 256 248 237 226 

Porsche 244 237 228 217 206 

Subaru 253 246 237 226 215 

 

168 See CAA section 202(a)(2). 169 These levels do not include the effect of flexible fuel credits, transfer of credits between cars and trucks, 

temporary lead time allowance, or any other credits. 
165 

Suzuki 245 238 230 218 208 

Tata 288 280 272 261 250 

Toyota 259 251 243 232 221 

Volkswagen 256 249 240 229 219 

Table III.B.1-2 Estimated Fleet CO2-equivalent Levels Corresponding to the Standards 

for Light Trucks (g/mile)

Manufacturer Model Year 

2012 2013 2014 2015 2016 

BMW 330 320 310 297 283 

Chrysler 342 333 323 309 295 

Daimler 343 332 323 308 294 

Ford 354 344 334 319 305 

General 

Motors 364 354 344 330 316 

Honda 327 318 309 295 281 

Hyundai 325 316 307 292 278 

Kia 335 327 318 303 289 

Mazda 319 308 299 285 271 

Mitsubishi 316 306 297 283 269 

Nissan 343 334 323 308 294 

Porsche 334 325 315 301 287 

Subaru 315 305 296 281 267 

Suzuki 320 310 300 286 272 

Tata 321 310 301 287 272 

Toyota 342 333 323 308 294 

Volkswagen 341 331 322 307 293 

 These estimates were aggregated based on projected production volumes into the 

fleet-wide averages for cars and trucks (Table III.B.1-3).170

Table III.B.1-3 Estimated Fleet-wide CO2-equivalent Levels Corresponding to the 

Standards 

 

170 Due to rounding during calculations, the estimated fleet-wide CO2-equivalent levels may vary by plus or 

minus 1 gram. 
166 

 Cars Trucks 

Model Year CO2 (g/mi) CO2 (g/mi) 

2012 263 346 

2013 256 337 

2014 247 326 

2015 236 312 

2016 and later 225 298 

As shown in Table III.B.1-3, fleet-wide CO2-equivalent emission levels for cars 

under the approach are projected to decrease from 263 to 225 grams per mile between 

MY 2012 and MY 2016. Similarly, fleet-wide CO2-equivalent emission levels for trucks 

are projected to decrease from 346 to 398 grams per mile. These numbers do not include 

the effects of other flexibilities and credits in the program. The estimated achieved 

values can be found in Chapter 5 of the Regulatory Impact Analysis (RIA). 

EPA has also estimated the average fleet-wide levels for the combined car and 

truck fleets. These levels are provided in Table III.B.1-4. As shown, the overall fleet 

average CO2 level is expected to be 250 g/mile in 2016. 

Table III.B.1-4 Estimated Fleet-wide Combined CO2-equivalent Levels Corresponding to 

the Standards 

Combined Car and Truck 

Model Year CO2 (g/mi) 

2012 295 

2013 286 

2014 276 

2015 263 

2016 250 

As noted above, EPA is finalizing standards that will result in increasingly 

stringent levels of CO2 control from MY 2012 though MY 2016 – applying the CO2

footprint curves applicable in each model year to the vehicles expected to be sold in each 

model year produces fleet-wide annual reductions in CO2 emissions. Comments from the 

Center for Biological Diversity (CBD) challenged EPA to increase the stringency of the 

standards for all of the years of the program, and even argued that 2016 standards should 

be feasible in 2012. Other commenters noted the non-linear increase in the standards 

from 2011 (CAFE) to the 2012 GHG standards. As explained in greater detail in Section 

III.D below and the relevant support documents, EPA believes that the level of 

improvement achieves important CO2 emissions reductions through the application of 

feasible control technology at reasonable cost, considering the needed lead time for this 

program. EPA further believes that the averaging, banking and trading provisions, as well 

as other credit-generating mechanisms, allow manufacturers further flexibilities which 

reduce the cost of the CO2 standards and help to provide adequate lead time. EPA 

believes this approach is justified under section 202(a) of the Clean Air Act. 
167 

EPA has analyzed the feasibility under the CAA of achieving the CO2 standards, 

based on projections of what actions manufacturers are expected to take to reduce 

emissions. The results of the analysis are discussed in detail in Section III.D below and 

in the RIA. EPA also presents the estimated costs and benefits of the car and truck CO2

standards in Section III.H. In developing the final rule, EPA has evaluated the kinds of 

technologies that could be utilized by the automobile industry, as well as the associated 

costs for the industry and fuel savings for the consumer, the magnitude of the GHG 

reductions that may be achieved, and other factors relevant under the CAA. 

 

With respect to the lead time and cost of incorporating technology improvements 

that reduce GHG emissions, EPA and NHTSA place important weight on the fact that 

during MYs 2012-2016 manufacturers are expected to redesign and upgrade their lightduty vehicle products (and in some cases introduce entirely new vehicles not on the 

market today). Over these five model years there will be an opportunity for 

manufacturers to evaluate almost every one of their vehicle model platforms and add 

technology in a cost-effective way to control GHG emissions and improve fuel economy. 

This includes redesign of the air conditioner systems in ways that will further reduce 

GHG emissions. The time-frame and levels for the standards, as well as the ability to 

average, bank and trade credits and carry a deficit forward for a limited time, are 

expected to provide manufacturers the time needed to incorporate technology that will 

achieve GHG reductions, and to do this as part of the normal vehicle redesign process. 

This is an important aspect of the final rule, as it will avoid the much higher costs that 

will occur if manufacturers needed to add or change technology at times other than these 

scheduled redesigns. This time period will also provide manufacturers the opportunity to 

plan for compliance using a multi-year time frame, again in accord with their normal 

business practice. Further details on lead time, redesigns and feasibility can be found in 

Section III-D. 

Consistent with the requirement of CAA section 202(a)(1) that standards be 

applicable to vehicles “for their useful life,” EPA is finalizing CO2 vehicle standards that 

will apply for the useful life of the vehicle. Under section 202(i) of the Act, which 

authorized the Tier 2 standards, EPA established a useful life period of 10 years or 

120,000 miles, whichever first occurs, for all Tier 2 light-duty vehicles and light-duty 

trucks.171 Tier 2 refers to EPA’s standards for criteria pollutants such as NOX, HC, and 

CO. EPA is finalizing new CO2 standards for the same group of vehicles, and therefore 

the Tier 2 useful life will apply for CO2 standards as well. The in-use emission standard 

will be 10% higher than the model-level certification emission test results, to address 

issues of production variability and test-to-test variability. The in-use standard is 

discussed in Section III.E. 

EPA is requiring manufacturers to measure CO2 for certification and compliance 

purposes using the same test procedures currently used by EPA for measuring fuel 

economy. These procedures are the Federal Test Procedure (FTP or ‘‘city’’ test) and the 

 

171 See 65 FR 6698 (February 10, 2000). 
168 

Highway Fuel Economy Test (HFET or ‘‘highway’’ test).172 This corresponds with the 

data used to develop the footprint-based CO2 standards, since the data on control 

technology efficiency was also developed in reference to these test procedures. Although 

EPA recently updated the test procedures used for fuel economy labeling, to better reflect 

the actual in-use fuel economy achieved by vehicles, EPA is not using these test 

procedures for the CO2 standards in this final rule, given the lack of data on control 

technology effectiveness under these procedures. 173 There were a number of 

commenters that advocated for a change in either the test procedures or the fuel economy 

calculation weighting factors. The U.S. Coalition for Advanced Diesel Cars urged a 

changing of the city/highway weighting factors from their current values of 45/55 to 

43/57 to be more consistent with the EPA (5-cycle) fuel economy labeling rule. EPA has 

decided that such a change would not be appropriate, nor consistent with the technical 

analyses supporting the 5-cycle fuel economy label rulemaking. The city/highway 

weighting of 43/57 was found to be appropriate when the city fuel economy is based on a 

combination of Bags 2 and 3 of the FTP and the city portion of the US06 test cycle, and 

when the highway fuel economy is based on a combination of the HFET and the highway 

portion of the US06 cycle. When city and highway fuel economy are based on the FTP 

and HFET cycles, respectively, the appropriate city/highway weighting is not 43/57, but 

very close to 55/45. Therefore, the weighting of the city and highway fuel economy 

values contained in this rule is appropriate for and consistent with the use of the FTP and 

HFET cycles to measure city and highway fuel economy. 

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 proposed 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. 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 emissions 

over the FTP and HFET cycles and the five cycle formulae. However, while we believe 

 

172 EPA established the FTP for emissions measurement in the early 1970s. In 1976, in response to the 

Energy Policy and Conservation Act (EPCA) statute, EPA extended the use of the FTP to fuel economy 

measurement and added the HFET. The provisions in the 1976 regulation, effective with the 1977 model 

year, established procedures to calculate fuel economy values both for labeling and for CAFE purposes. 173 See 71 FR 77872, December 27, 2006. 
169 

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, not toward compliance with the CAFE standards). For future analysis, 

EPA will consider examining new drive cycles and test procedures for fuel economy.174 

EPA is finalizing standards that include hydrocarbons (HC) and carbon monoxide 

(CO) in its CO2 emissions calculations on a CO2-equivalent basis. It is well accepted that 

HC and CO are typically oxidized to CO2 in the atmosphere in a relatively short period of 

time and so are effectively part of the CO2 emitted by a vehicle. In terms of standard 

stringency, accounting for the carbon content of tailpipe HC and CO emissions and 

expressing it as CO2-equivalent emissions will add less than one percent to the overall 

CO2-equivalent emissions level. This will also ensure consistency with CAFE 

calculations since HC and CO are included in the “carbon balance” methodology that 

EPA uses to determine fuel usage as part of calculating vehicle fuel economy levels. 

2. What Are the CO2 Attribute-based Standards?

EPA is finalizing the same vehicle category definitions that are used in the CAFE 

program for the 2011 model year standards.175 This approach allows EPA’s CO2

standards and the CAFE standards to be harmonized across all vehicles. In other words, 

vehicles will be subject to either car standards or truck standards under both programs, 

and not car standards under one program and trucks standards under the other. The 

CAFE vehicle category definitions differ slightly from the EPA definitions for cars and 

light trucks used for the Tier 2 program and other EPA vehicle programs. However, EPA 

is not changing the vehicle category definitions for any other light-duty mobile source 

programs, except the GHG standards. 

EPA is finalizing separate car and truck standards, that is, vehicles defined as cars 

have one set of footprint-based curves for MY 2012-2016 and vehicles defined as trucks 

have a different set for MY 2012-2016. In general, for a given footprint the CO2 g/mi 

target for trucks is less stringent then for a car with the same footprint. 

Some commenters requested a single or converging curve for both cars and 

trucks.176 EPA is not finalizing a single fleet standard where all cars and trucks are 

measured against the same footprint curve for several reasons. First, some vehicles 

 

174 There were also a number of comments on air conditioner test procedures; these will be discussed in 

Section III.C and the RIA. 

175 See 49 CFR 523. 176 CBD, ICCT and NESCAUM supported a single curve and the students at UC Santa Barbara commented 

on converging curves. 
170 

classified as trucks (such as pick-up trucks) have certain attributes not common on cars 

which attributes contribute to higher CO2 emissions – notably high load carrying 

capability and/or high towing capability.177 Due to these differences, it is reasonable to 

separate the light-duty vehicle fleet into two groups. Second, EPA wishes to harmonize 

key program design elements of the GHG standards with NHTSA’s CAFE program 

where it is reasonable to do so. NHTSA is required by statute to set separate standards 

for passenger cars and for non-passenger cars. As discussed in Section IV, EPCA does 

not preclude NHTSA from issuing converging standards if its analysis indicates that these 

are the appropriate standards under the statute applicable separately to each fleet. 

Finally, most of the advantages of a single standard for all light duty vehicles are 

also present in the two-fleet standards finalized here. Because EPA is allowing 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 will if there was a single fleet standard. 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 to try and design vehicles which are 

more similar to passenger cars but which may meet the regulatory definition of trucks. 

Although this is of concern to EPA, we do not believe at this time that concern is 

sufficient to outweigh the other reasons for finalizing separate car and truck fleet 

standards. However, it is possible that in the future, recent trends may continue such that 

cars may become more truck-like and trucks may become more car-like. Therefore, EPA 

will reconsider whether it is appropriate to use converging curves if justified by future 

analysis. 

For model years 2012 and later, EPA is finalizing a series of CO2 standards that 

are described mathematically by a family of piecewise linear functions (with respect to 

vehicle footprint).178 The form of the function is as follows: 

CO2 = a, if x ≤ l 

CO2 = cx + d, if l < x ≤ h 

CO2 = b, if x > h 

 

Where, 

CO2 = the CO2 target value for a given footprint (in g/mi) 

a = the minimum CO2 target value (in g/mi) 

b = the maximum CO2 target value (in g/mi) 

c = the slope of the linear function (in g/mi per sq ft) 

d = is the zero-offset for the line (in g/mi CO2) 

 

177 There is a distinction between body-on-frame trucks and unibody cars and trucks that make them 

technically different in a number of ways. Also, 2WD vehicles tend to have lower CO2 emissions than 

their 4WD counterparts (all other things being equal). More discussion of this can be found in the TSD and 

RIA. 

178 See final regulations at 40 CFR 86.1818-12. 
171 

x = footprint of the vehicle model (in square feet, rounded to the nearest tenth) 

l & h are the lower and higher footprint limits, constraints, or the boundary 

(“kinks”) between the flat regions and the intermediate sloped line 

EPA’s parameter values that define the family of functions for the CO2 fleetwide 

average car and truck standards are as follows: 

Table III.B.2-1 Parameter Values for Cars (for CO2 gram per mile targets) 

Model Year a b c d Lower 

constraint

Upper 

constraint 

2012 244 315 4.72 50.5 41 56 

2013 237 307 4.72 43.3 41 56 

2014 228 299 4.72 34.8 41 56 

2015 217 288 4.72 23.4 41 56 

2016 and 

later 206 277 4.72 12.7 41 56 

Table III.B.2-2 Parameter Values for Trucks (for CO2 gram per mile targets) 

Model Year a b c d Lower 

constraint

Upper 

constraint 

2012 294 395 4.04 128.6 41 66 

2013 284 385 4.04 118.7 41 66 

2014 275 376 4.04 109.4 41 66 

2015 261 362 4.04 95.1 41 66 

2016 and 

later 247 348 4.04 81.1 41 66 

The equations can be shown graphically for each vehicle category, as shown in 

Figures III.B.2-1 and III.B.2-2. These standards (or functions) decrease from 2012-2016 

with a vertical shift. 

The EPA received a number of comments on both the attribute and the shape of 

the curve. For reasons described in Section IIC and Chapter 2 of the TSD, the EPA feels 

that footprint is the most appropriate choice of attribute for this rule. More background 

discussion on other alternative attributes and curves EPA explored can be found in the 

EPA RIA. EPA recognizes that the CAA does not mandate that EPA use an attribute 

based standard, as compared to NHTSA’s obligations under EPCA. The EPA believes 

that a footprint-based program will harmonize EPA’s program and the CAFE program as 

a single national program, resulting in reduced compliance complexity for manufacturers. 

EPA’s reasons for using an attribute based standard are discussed in more detail in the 

Joint TSD. Also described in these other sections are the reasons why EPA is finalizing 

the slopes and the constraints as shown above. For future analysis, EPA will consider 

other options and suggestions made by commenters. 

EPA also received public comments from two manufacturers, General Motors and 

Ford Motor Company, suggesting that the GHG program should harmonize with an 
172 

EPCA provision that allows a manufacturer to exclude emergency vehicles from its 

CAFE fleet by providing written notice to NHTSA.179 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. 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 reduce 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 program fleet. While EPA is not finalizing such an exclusion for emergency 

vehicles today, we do believe it is important to assess this issue in the future. EPA plans 

to assess the unique characteristics of these emergency vehicles and whether special 

provisions for addressing them are warranted. 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 Section III.B.6. below). 

 

179 49 U.S.C, 32902(e)
173 

Figure III.B.2-1. CO2 (g/mi) Car standard curves. 
174 

 

Figure III.B.2-2. CO2 (g/mi) Truck standard curves. 
175 

3. Overview of How EPA’s CO2 Standards Will Be Implemented for 

Individual Manufacturers 

 

 This section provides a brief overview of how EPA will implement the CO2

standards. Section III.E explains EPA’s approach to certification and compliance in 

detail. As proposed, EPA is finalizing two kinds of standards – fleet average standards 

determined by a manufacturer’s fleet makeup, and in-use standards that will apply to the 

individual vehicles that make up the manufacturer’s fleet. Although this is similar in 

concept to the current light-duty vehicle Tier 2 program, there are important differences. 

In explaining EPA’s CO2 standards, it is useful to summarize how the Tier 2 program 

works. 

 Under Tier 2, manufacturers select a test vehicle prior to certification and test the 

vehicle and/or its emissions hardware to determine both its emissions performance when 

new and the emissions performance expected at the end of its useful life. Based on this 

testing, the vehicle is assigned to one of several specified bins of emissions levels, 

identified in the Tier 2 rule, and this bin level becomes the emissions standard for the test 

group the test vehicle represents. All of the vehicles in the group must meet the 

emissions level for that bin throughout their useful life. The emissions level assigned to 

the bin is also used in calculating the manufacturer’s fleet average emissions 

performance. 

 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 at the time the 

manufacturer applies for and receives a certificate of conformity for a test group. Instead, 

at certification, the manufacturer demonstrates that the vehicles in the test group are 

expected to comply throughout their useful life with the emissions bin assigned to that 

test group, and makes a good faith demonstration that its fleet is expected to comply with 

the Tier 2 average when the model year is over. EPA issues a certificate for the vehicles 

covered by 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. 

 EPA is retaining the Tier 2 approach of requiring manufacturers to demonstrate in 

good faith at the time of certification that vehicles in a test group will meet applicable 

standards throughout useful life. EPA is also retaining the practice of conditioning 

certificates upon attainment of the fleet average standard. However, there are several 

important differences between a Tier 2 type of program and the CO2 standards program. 

These differences and resulting modifications to EPA’s certification protocols are 

summarized below and are described in detail in Section III.E. 

 EPA will continue to certify test groups as it does for Tier 2, and the CO2

emission results for the test vehicle will serve as the initial or default standard for all of 

the vehicles in the test group. However, manufacturers will later collect and submit data 
176 

for individual vehicle model types180 within each test group, based on the extensive fuel 

economy testing that occurs through the course of the model year. This model type data 

will be used to assign a distinct certification level for each model type, thus replacing the 

initial test group data as the compliance value for each model. It is these model type 

values that will be used to calculate the fleet average after the end of the model year.181 

The option to substitute model type data for the test group data is at the manufacturer's 

discretion, except they are required, as they are under the CAFE test protocols, to submit 

sufficient vehicle test data to represent no less than 90 percent of their actual model year 

production. The test group emissions data will continue to apply for any model type that 

is not covered by vehicle test data specific to that model type. 

EPA’s CO2 standards also differ from Tier 2 in that the fleet average calculation 

for Tier 2 is based on test group bin levels and test group sales whereas under the CO2

program the CO2 fleet average could be based on a combination of test group and model 

type emissions and model type production. For the new CO2 standards, the final 

regulations use production rather than sales in calculating the fleet average in order to 

closely conform with the CAFE program, which is a production-based program.182 

Production as defined in the regulations is relatively easy for manufacturers to track, but 

once the vehicle is delivered to dealerships the manufacturer becomes once step removed 

from the sale to the ultimate customer, and it becomes more difficult to track that final 

transaction. There is no environmental impact of using production instead of actual sales, 

and many commenters supported maintaining alignment between EPA’s program and the 

CAFE program where possible. 

4. Averaging, Banking, and Trading Provisions for CO2 Standards

 As explained above, EPA is finalizing a fleet average CO2 program for passenger 

cars and light trucks. EPA has previously implemented similar averaging programs for a 

range of motor vehicle types and pollutants, from the Tier 2 fleet average for NOX to 

motorcycle hydrocarbon (HC) plus oxides of nitrogen (NOX) emissions to NOX and 

particulate matter (PM) emissions from heavy-duty engines.183 The program will operate 

much like EPA’s existing averaging programs in that manufacturers will calculate 

production-weighted fleet average emissions at the end of the model year and compare 

their fleet average with a fleet average emission standard to determine compliance. As in 

other EPA averaging programs, the Agency is also finalizing a comprehensive program 

 

180 “Model type” is defined in 40 CFR 600.002-08 as “... a unique combination of car line, basic engine, 

and transmission class.” A “car line” is essentially a model name, such as “Camry,” “Malibu,” or “F150.” 

The fleet average is calculated on the basis of model type emissions 

181 The final in-use vehicle standards for each vehicle will also be based on the testing used to determine 

the model type values. As discussed in Section III.E.4, an in-use adjustment factor will be applied to the 

vehicle test results to determine the in-use standard that will apply during the useful life of the vehicle. 

182 “Production” is defined as “vehicles produced and delivered for sale” and is not a measure of the 

number of vehicles actually sold. 

183 For example, see the Tier 2 light-duty vehicle emission standards program (65 FR 6698, February 10, 

2000), the 2010 and later model year motorcycle emissions program (69 FR 2398, January 15, 2004), and 

the 2007 and later model year heavy-duty engine and vehicle standards program (66 FR 5001, January 18, 

2001). 
177 

for averaging, banking, and trading of credits which together will help manufacturers in 

planning and implementing the orderly phase-in of emissions control technology in their 

production, consistent with their typical redesign schedules.184 

 Averaging, Banking, and Trading (ABT) of emissions credits has 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. ABT is important because it can 

help to address many issues of technological feasibility and lead-time, as well as 

considerations of cost. ABT is an integral part of the standard setting itself, and is not 

just an add-on to help reduce costs. 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. A wide range of commenters expressed 

general support for the ABT provisions. Some commenters noted issues regarding 

specific provisions of the ABT program, which will be discussed in the appropriate 

context below. Several commenters requested that EPA publicly release manufacturerspecific ABT data to improve the transparency of credit transactions. These comments 

are addressed in Section III.E. 

This section discusses generation of credits by achieving a fleet average CO2 level 

that is lower than the manufacturer’s CO2 fleet average standard. The final rule includes 

a variety of additional ways credits may be generated by manufacturers. Section III.C 

describes these additional opportunities to generate credits in detail. Manufacturers may 

earn credits through A/C system improvements beyond a specified baseline. Credits can 

also be generated by producing alternative fuel vehicles, by producing advanced 

technology vehicles including electric vehicles, plug-in hybrids, and fuel cell vehicles, 

and by using technologies that improve off-cycle emissions. In addition, early credits can 

be generated prior to the program’s MY 2012 start date. The credits will be used to 

determine a manufacturer’s compliance at the end of the model year. These credit 

generating opportunities are described below in Section III.C. 

 As explained earlier, manufacturers will determine the fleet average standard that 

applies to their car fleet and the standard for their truck fleet from the applicable 

attribute-based curve. A manufacturer’s credit or debit balance will be determined by 

comparing their fleet average with the manufacturer’s CO2 standard for that model year. 

The standard will be calculated from footprint values on the attribute curve and actual 

production levels of vehicles at each footprint. A manufacturer will generate credits if its 

car or truck fleet achieves a fleet average CO2 level lower than its standard and will 

generate debits if its fleet average CO2 level is above that standard. At the end of the 

model year, each manufacturer will calculate a production-weighted fleet average for 

each averaging set (cars and trucks). A manufacturer’s car or truck fleet that achieves a 

fleet average CO2 level lower than its standard will generate credits, and if its fleet 

average CO2 level is above that standard its fleet will generate debits. 

 

184 See final regulations at 40 CFR 86.1865-12. 
178 

 The regulations will 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. The CAFE adjustment 

factor accounts for two different influences that can cause the transfer of car and truck 

credits (expressed in tenths of a mpg), if left unadjusted, to potentially negate fuel 

reductions. First, mpg is not linear with fuel consumption, i.e., a 1 mpg improvement 

above a standard will imply a different amount of actual fuel consumed depending on the 

level of the standard. Second, NHTSA’s conversion corrects for the fact that the typical 

lifetime miles for cars is less than that for trucks, meaning that credits earned for cars and 

trucks are not necessarily equal. NHTSA’s adjustment factor essentially converts credits 

into vehicle lifetime gallons to ensure preservation of fuel savings and the transfer credits 

on an equal basis, and then converts back to the statutorily-required credit units of tenths 

of a mile per gallon. To convert to gallons NHTSA’s conversion must take into account 

the expected lifetime mileage for cars and trucks. Because EPA’s standards are 

expressed on a CO2 gram per mile basis, which is linear with fuel consumption, EPA’s 

credit calculations do not need to account for the first issue noted above. However, EPA 

is accounting for the second issue by expressing credits when they are generated in total 

lifetime Megagrams (metric tons), rather than through the use of conversion factors that 

would apply at certain times. In this way credits may be freely exchanged between car 

and truck compliance categories without the need for adjustment. Additional detail 

regarding this approach, including a discussion of the vehicle lifetime mileage estimates 

for cars and trucks can be found in Section III.E.5. A discussion of the derivation of the 

estimated vehicle lifetime miles traveled can be found in Chapter 4 of the Joint Technical 

Support Document. 

 A manufacturer that generates credits in a given year and vehicle category may 

use those credits in essentially four ways, although with some limitations. These 

provisions are very similar to those of other EPA averaging, banking, and trading 

programs. These provisions have the potential to reduce costs and compliance burden, 

and support the feasibility of the standards in terms of lead time and orderly redesign by a 

manufacturer, thus promoting and not reducing the environmental benefits of the 

program. 

 

 First, 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. NRDC 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. 

Using current model year credits to offset a prior model year deficit is referred to in the 

CAFE program as credit carry-back. EPA’s deficit carry-forward, or credit carry-back 

provisions are described further, below. 
179 

 Second, after satisfying any needs to offset pre-existing deficits, remaining credits 

may be banked, or saved for use in future years. Credits generated in this program will 

be available to the manufacturer for use in any of the five model years after the model 

year in which they were generated, consistent with the CAFE program under EISA. This 

is also referred to as a credit carry-forward provision. 

 EPA received a number of comments regarding the credit carry-back and carryforward 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. At least two automobile 

manufacturers suggested modeling the program after California, which allows credits to 

be carried forward for three additional years following a discounting schedule. 

For other new 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 is therefore acting consistently with our past practice in finalizing 

reasonable restrictions on credit life in this new program. 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. As discussed below in Section III.C, early credits 

generated by a manufacturer are also be 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. 

 Third, the new program enables manufacturers to transfer credits between the two 

averaging sets, passenger cars and trucks, within a manufacturer. For example, credits 

accrued by over-compliance with a manufacturer’s car fleet average standard may be 

used to offset debits accrued due to that manufacturer’s not meeting the truck fleet 

average standard in a given year. EPA believes that such cross-category use of credits by 

a manufacturer provides important additional flexibility in the transition to emissions 

control technology without affecting overall emission reductions. Comments regarding 

the credit transfer provisions expressed general support, noting that it does not matter to 

the environment whether a gram of pollutant is generated from a car or a truck. 
180 

Additional comments regarding EPA’s streamlined megagram approach and method of 

accounting for expected vehicle lifetime miles traveled are summarized in Section III.E. 

 Finally, accumulated credits may be traded to another vehicle manufacturer. As 

with intra-company credit use, such inter-company credit trading provides flexibility in 

the transition to emissions control technology without affecting overall emission 

reductions. Trading credits to another vehicle manufacturer could be a straightforward 

process between the two manufacturers, but could also involve third parties that could 

serve as credit brokers. Brokers may not own the credits at any time. These sorts of 

exchanges are typically allowed under EPA’s current emission credit programs, e.g., the 

Tier 2 light-duty vehicle NOX fleet average standard and the heavy-duty engine NOX fleet 

average standards, although manufacturers have seldom made such exchanges. 

Comments generally reflected support for the credit trading flexibility, although some 

questioned the extent to which trading might actually occur. As noted above, comments 

regarding program transparency are addressed in Section III.E. 

If a manufacturer has accrued a deficit at the end of a model year – that is, its fleet 

average level failed to meet the required fleet average standard – the manufacturer may 

carry that deficit forward (also referred to credit carry-back) for a total of three model 

years after the model year in which that deficit was generated. EPA continues to believe 

that three years is an appropriate amount of time that gives the manufacturers adequate 

time to respond to a deficit situation but does not create a lengthy period of prolonged 

non-compliance with the fleet average standards.185 As noted above, such a deficit carryforward may only occur after the manufacturer has applied any banked credits or credits 

from another averaging set. If a deficit still remains after the manufacturer has applied all 

available credits, and the manufacturer did not obtain credits elsewhere, the deficit may 

be carried forward for up to three model years. No deficit may be carried into the fourth 

model year after the model year in which the deficit occurred. Any deficit from the first 

model year that remains after the third model year will constitute a violation of the 

condition on the certificate, which will constitute a violation of the Clean Air Act and 

will be subject to enforcement action. 

 The averaging, banking, and trading provisions are generally consistent with those 

included in the CAFE program, with a few notable exceptions. As with EPA’s approach, 

CAFE allows five year carry-forward of credits and three year carry-back. Under CAFE, 

transfers of 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 allows credit 

trading, but again, traded credits cannot be used to meet the minimum domestic 

passenger car standard. EPA did not propose, and is not finalizing, these constraints on 

the use of transferred credits. 

 

185 EPA emission control programs that incorporate ABT provisions (e.g., the Tier 2 program and the 

Mobile Source Air Toxics program) have provided this three-year deficit carry-forward provision for this 

reason. See 65 FR 6745 (February 10, 2000), and 71 FR 8427 (February 26, 2007). 
181 

 Additional details regarding the averaging, banking, and trading provisions and 

how EPA will implement these provisions can be found in Section III.E. 

5. CO2 Temporary Lead-Time Allowance Alternative Standards

EPA proposed adopting a limited and narrowly prescribed option, called the 

Temporary Lead-time Allowance Alternative Standards (TLAAS), to provide additional 

lead time for a certain subset of manufacturers. As noted in the proposal, this option was 

designed to address two different situations where we project that more lead time is 

needed, based on the level of emissions control technology and emissions control 

performance currently exhibited by certain vehicles. One situation involves 

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. More 

lead time is needed in the program’s initial years to upgrade these vehicles to meet the 

aggressive CO2 emissions performance levels required by the final rule. The other 

situation involves manufacturers who have a limited line of vehicles and are therefore 

unable to average emissions performance across a full line of production. For example, 

some smaller volume manufacturers produce only vehicles with emissions above the 

corresponding CO2 footprint target, and do not have other types of vehicles (that exceed 

their compliance targets) in their production mix with which to average. Often, these 

manufacturers also pay fines under the CAFE program rather than meeting the applicable 

CAFE standard. Because voluntary non-compliance through payment of civil penalties is 

impermissible for the GHG standards under the CAA, both of these types of 

manufacturers need additional lead time to upgrade vehicles and meet the standards. 

EPA proposed that this subset of manufacturers be allowed to produce up to 100,000 

vehicles over model years 2012-2015 that would be subject to a somewhat less stringent 

CO2 standard of 1.25 times the standard that would otherwise apply to those vehicles. 

Only manufacturers with total U.S. sales of less than 400,000 vehicles per year in MY 

2009 would be eligible for this allowance. Those manufacturers would have to exhaust 

designated program flexibilities in order to be eligible, and credit generating and trading 

opportunities for the eligible vehicles would be restricted. See 74 FR 49522-224. 

EPA is finalizing the optional TLAAS provisions, with certain limited 

modifications, so that these manufacturers can have sufficient lead time to meet the 

tougher MY 2016 GHG standards, while preserving consumer choice of vehicles during 

this time.186 EPA is finalizing modified provisions to address the unique lead-time 

issues of smaller volume manufacturers. One provision involves additional flexibility 

under the TLAAS program for manufacturers below 50,000 U.S. vehicle sales, as 

discussed further in Section III.B.5.b below. Another provision defers the CO2 standards 

for the smallest volume manufacturers, those below 5,000 U.S. vehicle sales, as discussed 

in Section III.B.6. 

Comments from several manufacturers strongly supported the TLAAS program as 

critical to provide the lead time needed for manufacturers to meet the standards. 

 

186 See final regulations at 40 CFR 86.1818-12(e).
182 

Volkswagen commented that TLAAS is an important aspect of EPA’s proposal and that 

it responds to the needs of some smaller manufacturers for additional lead time and 

flexibility under the CAA. Daimler Automotive Group commented that TLAAS is a 

critical element of the program and falls squarely within EPA’s discretion to provide 

appropriate lead time to limited-line low-volume manufacturers. BMW also commented 

that TLAAS 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 because they 

sell “feature-dense” vehicles (as opposed to light-weight large wheel-base vehicles) and 

no pick-up trucks. BMW commented that their MY 2016 footprint-based standard is 

projected to be 4 percent more stringent than the fleet average standard of 250 g/mile. 

The Alliance of Automobile Manufacturers supported the flexibilities proposed by EPA, 

including TLAAS. As discussed in detail below, EPA received extensive comments from 

many smaller volume manufacturers that the proposed TLAAS program was insufficient 

to address lead time and feasibility issues they will face under the program. 

In contrast, EPA also received comments from the Center for Biological Diversity 

opposing the TLAAS program, commenting that an exception for high performance 

vehicles is not allowed under EPCA or the CAA and that it rewards manufacturers that 

pay penalties under CAFE and penalizes those that have complied with CAFE. This 

commenter suggests that manufacturers could decrease vehicle mass or power output of 

engines, purchase credits from another manufacturer, or earn off-cycle credits. EPA 

responds to these comments below. 

 

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. We show below that 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 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, even with the full 

application of technologies assumed by the OMEGA Model, including hybrid use of up 

to 15 percent. These include BMW, Jaguar Land Rover, Daimler, Porsche, and 

Volkswagen In addition, the smaller volume manufacturers of this group (i.e., Jaguar 

Land Rover and Porsche) face the greatest shortfall (see 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 
183 

time to adapt to a longer term strategy of meeting the final standards within their vehicle 

redesign cycles. 

Second, EPA has carefully evaluated other means of eligible manufacturers 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. While 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 likely be used before a manufacturer 

would turn to the more restricted and limiting TLAAS provisions. 

As discussed in 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 real-world 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 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 technologyforcing provisions of Title II, EPA may base standards on an industry-wide capability 

“taking into account the broad spectrum of technological capabilities as well as cost and 

other factors” across the industry). EPA is not legally required to set standards that drive 
184 

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 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 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. 

As described below, EPA also carefully considered the comments of smaller 

volume manufacturers and believes additional lead time is needed. Therefore, EPA is 

finalizing the TLAAS program, similar to that proposed, and is also finalizing an 

additional TLAAS option for manufacturers with annual U.S. sales under 50,000 

vehicles. EPA is also deferring standards for manufacturers with annual sales of less than 

5,000 vehicles. These new TLAAS provisions and the small volume manufacturer 

deferment are discussed in detail below and in Section III.B.6, respectively. 

a. Base TLAAS Program 

 As proposed, EPA is establishing the TLAAS program for a specified subset of 

manufacturers. This alternative standard is an option only for manufacturers with total 

U.S. sales of less than 400,000 vehicles per year, using 2009 model year final sales 

numbers to determine eligibility for these alternative standards. For manufacturers with 

annual U.S. sales of 50,000 or more but less than 400,000 vehicles, EPA is finalizing the 

TLAAS program largely as proposed. EPA proposed that under the TLAAS, qualifying 

manufacturers would be allowed to produce up to 100,000 vehicles that would be subject 

to a somewhat less stringent CO2 standard of 1.25 times the standard that would 

otherwise apply to those vehicles. This 100,000 volume is not an annual limit, but is an 

absolute limit for the total number of vehicles which can use the TLAAS program over 

the model years 2012-2015. Any additional production would be subject to the same 

standards as any other manufacturer. EPA is retaining this limit for manufacturers with 

baseline MY 2009 sales of 50,000 but less than 400,000. In addition, as discussed further 

below, EPA is finalizing a variety of restrictions on the use of the TLAAS program, to 

ensure that only manufacturers who need more lead time for the kinds of reasons noted 

above are likely to use the program. 

 

Volvo and Saab commented 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 

Deleted: EPA received only supportive 

comments on the appropriateness of an 

upper bound of 400,000 vehicles to 

determine eligibility for TLAAS (except 

of course from commenters challenging 

the entire TLAAS). However, 
185 

past few years. These commenters offered a variety of suggestions including using 

MY2010 as the eligibility cut-off instead of MY2009, reassessing eligibility on a yearby-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. 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. 

Manufacturers with no U.S. sales in MY2009 are not eligible to utilize the 

TLAAS program. EPA does not support the commenter’s suggestion of a year-by-year 

eligibility determination because it opens up the TLAAS program to an unknown 

universe of potential eligible manufacturers, with the potential for gaming. EPA does not 

believe the TLAAS program should be available to new entrants to the U.S. market 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. 

As proposed, manufacturers qualifying for TLAAS will be allowed to meet 

slightly less stringent standards for a limited number of vehicles. An eligible 

manufacturer could have a total of up to 100,000 units of cars or trucks combined over 

model years 2012 – 2015 which would be subject to a standard 1.25 times the standard 

that would otherwise apply to those vehicles under the primary program. In other words, 

the footprint curves upon which the individual manufacturer standards for the TLAAS 

fleets are based would be less stringent by a factor of 1.25 for up to 100,000 of an eligible 

manufacturer’s vehicles for model years 2012-2015. 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 necessary lead time 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. 
186 

Finally, for manufacturers of 50,000 but less than 400,000 U.S. vehicles sales 

during 2009, the program expires at the end of MY 2015 as proposed. EPA continues to 

believe the program reasonably addresses a real world lead time constraint for these 

manufacturers, and does so in a way that balances the need for more lead time with the 

need to minimize any resulting loss in potential emissions reductions. In MY 2016, the 

TLAAS option thus ends for all but the smallest manufacturers opting for TLAAS, and 

manufacturers must comply with the same CO2 standards as non-TLAAS manufacturers; 

under the CAFE program companies would continue to be allowed to pay civil penalties 

in lieu of complying with the CAFE standards. However, because companies must meet 

both the CAFE standards and the EPA CO2 standards, the National Program will have the 

practical impact of providing a level playing field for almost all except the smallest 

companies beginning in MY2016. This option, even with the modifications being 

adopted, thereby results in more fuel savings and CO2 reductions than would be the case 

under the CAFE program by itself. 

EPA proposed that manufacturers meeting the cut-point of below 400,000 sales 

for MY 2009 but whose U.S. sales grew above 400,000 in any subsequent model years 

would remain eligible for the TLAAS program. The total sales number applies at the 

corporate level, so if a corporation owns several vehicle brands the aggregate sales for the 

corporation must be used. These provisions would help prevent gaming of the provisions 

through corporate restructuring. Corporate ownership or control relationships would be 

based on determinations made under CAFE for model year 2009 (except in the case of a 

manufacturer being sold by a larger manufacturer by the end of calendar year 2010, as 

discussed above). In other words, corporations grouped together for purposes of meeting 

CAFE standards in MY2009, must be grouped together for determining whether or not 

they are eligible under the 400,000 vehicle cut point. EPA is finalizing these provisions 

with the following modifications. 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. 

 
187 

 As proposed, the TLAAS vehicles will be separate car and truck fleets for that 

model year and subject to the less stringent footprint-based standards of 1.25 times the 

primary fleet average that would otherwise apply. The manufacturer will determine what 

vehicles are assigned to these separate averaging sets for each model year. As proposed, 

credits from the primary fleet average program can be transferred and used in the TLAAS 

program. Credits generated within the TLAAS program may also be transferred between 

the TLAAS car and truck averaging sets (but not to the primary fleet as explained below) 

for use through MY2015 when the TLAAS ends. 

EPA is 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. Therefore, 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. 

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. 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 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 received several comments in support of these credit restrictions for the 

TLAAS program. On the negative side, one manufacturer 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 above, 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. 
188 

One manufacturer 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). 

Manufacturers must determine the 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.

b. Additional TLAAS Flexibility for Manufacturers with MY 2009 Sales of 

Less Than 50,000 Vehicles 

 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. 

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 manufacturers included Aston 

Martin, McLaren, Lotus, and Ferrari. Their comments consistently focused on the need 

Deleted: need

Deleted: but clarifies that the m

Deleted: may
189 

for separate, less stringent standards for small volume manufacturers. The manufacturers 

commented that they are willing to make progress in reducing emissions, but that 

separate, less-stringent small volume manufacturer standards are needed for them to 

remain in the U.S. market. The commenters note that their product line consists entirely 

of high end sports cars. Most of these manufacturers have only a few vehicle models, 

have annual sales on the order of a few hundred to a few thousand vehicles, and several 

have average baseline CO2 emissions in excess of 500 g/mile – nearly twice the industry 

average. McLaren commented that its vehicle model to be introduced in MY2011 will 

have class leading CO2 performance but that it would not be able to offer the vehicle in 

the U.S. market because it does not have other vehicle models with which to average. 

Similarly, Aston Martin commented that it is of utmost importance that it is not required 

to reduce emissions significantly more than equivalent vehicles from larger 

manufacturers, which would render them uncompetitive due purely to the size of its 

business. Manufacturers also noted that they launch new products less frequently than 

larger manufacturers (e.g., Ferrari noted that their production period for models is 7-8 

years), and that suppliers serve large manufacturers first because they can buy in larger 

volumes. Some manufacturers also noted that they would be willing to purchase credits 

at a reasonable price, but they believed that credit availability from other manufacturers 

was highly unlikely due to the competitive nature of the auto industry. Several of these 

manufacturers provided confidential business information indicating their preliminary 

plans for reducing GHG emissions across their product lines through MY2016 and 

beyond. 

 The Association of International Automobile Manufacturers (AIAM) also 

commented that, because of their essential features, vehicles produced by small volume 

manufacturers would not be able to meet the proposed greenhouse gas standards. AIAM 

commented that “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.” AIAM 

commented further that “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.” AIAM recommended deferring standards for SVMs to a 

future rulemaking, providing EPA with adequate time to assess relevant product plans 

and technology feasibility information from SVMs, conduct the necessary reviews and 

modeling that may be needed, and consult with the stakeholders. 
190 

These commenters noted that standards for the smallest manufacturers were 

deferred in the California program until MY2016 and that California’s program would 

have established standards for small volume manufacturers in MY 2016 at a level that 

would be technologically feasible. The commenters also suggested that California’s 

approach is similar to the approach being taken by EPA for small business entities. 

Further, these commenters noted that in Tier 2 and other light-duty vehicle programs, 

EPA has allowed small volume manufacturers (SVMs) until the end of the phase-in 

period to comply with standards. The commenters recommended that EPA should defer 

standards for SVMs, and conduct a future rulemaking to establish appropriate standards 

for SVMs starting in model year 2016. Alternatively, some manufacturers recommended 

establishing much less stringent standards for SVMs as part of the current rulemaking. 

In summary, the manufacturers commented that their range of products was 

insufficient to allow them to meet the standards in the time provided, even with the 

proposed TLAAS program. Many of these manufacturers have baseline emissions 

significantly higher than their larger-volume competitors, and thus the CO2 reductions 

required from baseline under the program are larger for many of these companies than for 

other companies. Although they are investing substantial resources to reduce CO2

emissions, they believe that they will not be able to achieve the standards under the 

proposed approach. 

EPA also received comments urging us not to expand the TLAAS program. The 

commenters are concerned about the loss of benefits that would occur with any 

expansion. 

EPA has considered the comments carefully and concludes that additional 

flexibility is needed for these companies. 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. Standards for these small volume manufacturers are being 

deferred until a future rulemaking in the 2012 timeframe, as discussed in Section III.B.6, 

below. This will allow EPA to determine the appropriate level of standards for these 

manufacturers, as well as the small business entities, at a later time. 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 these provisions 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. These 

estimates are provided in RIA Chapter 5 Appendix A. 

 

For some of the companies, the reduction from baseline CO2 emissions required 

to meet the standards is clearly greater than for other TLAAS-eligible manufacturers. 

Compared with other TLAAS-eligible manufacturers, these companies also have more 
191 

limited fleets across which to average the standards. Some 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. EPA’s feasibility analysis provided in Section III.D., shows that these 

companies face a compliance shortfall significantly greater than other TLAAS companies 

(see Table III.D.6-4). This shortfall is primarily due to their narrow product lines and 

more limited ability to average across their vehicle fleets. 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. 

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 annually demonstrate that they have diligently made 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 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 timeframe 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. 

 

6. Deferment of CO2 Standards for Small Volume Manufacturers with 

Annual Sales Less than 5,000 Vehicles 

Deleted: attempted

Deleted: are 

Deleted: at a reasonable price 
192 

 In the proposal, in the context of the TLAAS program, EPA recognized that there 

would be a wide range of companies within the eligible manufacturers with sales less 

than 400,000 vehicles in model year 2009. As noted in the proposal, some of these 

companies, while having relatively small U.S. sales volumes, are large global automotive 

firms, including companies such as Mercedes and Volkswagen. Other companies are 

significantly smaller niche firms, with sales volumes closer to 10,000 vehicles per year 

worldwide, such as Aston Martin. EPA anticipated that there are a small number of such 

smaller volume manufacturers, which may face greater challenges in meeting the 

standards due to their limited product lines across which to average. EPA requested 

comment on whether the proposed TLAAS program would provide sufficient lead-time 

for these smaller firms to incorporate the technology needed to comply with the proposed 

GHG standards. See 74 FR at 49524. 

EPA received comments from several very small volume manufacturers that the 

TLAAS program would not provide sufficient lead time, as described above. EPA agrees 

with comments that the standards would be extremely challenging and potentially 

infeasible for these small volume manufacturers, absent credits from other manufacturers, 

and that 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 so unique, these manufacturers were not included in 

EPA’s OMEGA modeling assessment of the technology feasibility and costs to meet the 

proposed standards. As noted above, 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. 

Given the unique feasibility issues raised for these manufacturers, EPA is 

deferring establishing CO2 standards for manufacturers with U.S. sales of less than 5,000 

vehicles.187 This will provide EPA more time to consider the unique challenges faced by 

these manufacturers. EPA expects to conduct this rulemaking in the 2012 timeframe. 

The deferment only applies to CO2 standards and 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. This approach is consistent 

with that envisioned by California for these manufacturers. EPA estimates that eligible 

small volume manufacturers currently comprise less than 0.1 percent of the total light-

 

187 See final regulations at 40 CFR 86.1801-12(k).
193 

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 make a good faith effort to secure 

credits to the extent they are reasonably available from other manufacturers to offset the 

difference between their baseline emissions and what their obligations would be under 

the TLAAS program starting in MY2012. 

 Eligibility will be determined somewhat differently compared to the TLAAS 

program. Manufacturers with either MY2008 or MY2009 U.S. sales of less than 5,000 

vehicles will be initially eligible. This includes “branded sales” for companies that sold 

vehicles under a larger manufacturer but has become independent by the end of calendar 

year 2010. EPA is including MY2008 as well as MY2009 because some manufacturers 

in this market segment have such limited sales that they often drop in and out of the 

market from year to year. 

In determining eligibility, 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. EPA received public comment from a manufacturer requesting 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 this comment, 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. 

To remain eligible for the deferral from standards, the rolling average of three 

consecutive model years of sales must remain below 5,000 vehicles. EPA is establishing 

the 5,000 vehicle threshold to allow for some sales growth by SVMs, as SVMs typically 

have annual sales of below 2,000 vehicles. However, EPA wants to ensure that standards 

for as few vehicles as possible are deferred and therefore believes it is appropriate that 

manufacturers with U.S. sales growing to above 5,000 vehicles per year be required to 

comply with standards (including TLAAS, as applicable). Manufacturers with unusually 

strong sales in a given year would still likely remain eligible, based on the three year 

rolling average. However, if a manufacturer takes steps to expand in the U.S. market on 

a permanent basis such that they consistently sell more than 5,000 vehicles per year, they 

must meet the TLAAS standards. EPA believes a manufacturer will be able to consider 

these provisions, along with other factors, in its planning to significantly expand in the 

U.S. market. 

Deleted: , as discussed in RIA Chapter 

5, Appendix A

Deleted: at a reasonable price 
194 

For manufacturers exceeding the 5,000 vehicle rolling average through mergers or 

acquisitions of other manufacturers, those manufacturers will lose eligibility in the MY 

immediately following the last year of the rolling average. For manufacturers exceeding 

this level through sales growth, but remaining below a 50,000 vehicle threshold, the 

manufacturer will lose eligibility for the deferred standards in the second model year 

following the last year of the rolling average. For example, if the rolling average of MYs 

2009-2011 exceeded 5,000 vehicles but was below 50,000 vehicles, the manufacturer 

would not be eligible for the deferred standards in MY2013. For manufacturers with a 3-

year rolling average exceeding 50,000 vehicles, the manufacturer would lose eligibility in 

the MY immediately following the last model year in the rolling average. For example, if 

the rolling average of MYs 2009-2011 exceeded 50,000 vehicles, the manufacturer would 

not be eligible for the deferred standards in MY2012. Such manufacturers may continue 

to be eligible for TLAAS, or the expanded TLAAS program, per the provisions described 

above. EPA believes these provisions are needed to ensure that the SVM deferment 

remains targeted to true small volume manufacturers and does not become available to 

larger manufacturers through mergers or acquisitions. EPA is including the 50,000 

vehicle criteria to differentiate between manufacturers that may slowly gain more sales 

and manufacturers that have taken major steps to significantly increase their presence in 

the U.S. market, such as by introducing new vehicle models. EPA believes 

manufacturers selling more than 50,000 vehicles should not be able to take advantage of 

the deferment, as they should be able to meet the applicable TLAAS standards through 

averaging across their larger product line. 

EPA is requiring that potential SVMs submit a declaration to EPA containing a 

detailed written description of how the manufacturer qualifies as a small volume 

manufacturer. The declaration must contain eligibility information including MY2008 

and 2009 U.S. sales, the last three completed MYs sales information, detailed information 

regarding ownership relationships with other manufacturers, and documentation of efforts 

to purchase credits from other manufacturers. Because such manufacturers are not 

automatically exempted from other EPA regulations for light-duty vehicles and light-duty 

trucks, entities are subject to the greenhouse gas control requirements in this program 

until such a declaration has been submitted and approved by EPA. The declaration must 

be submitted annually at the time of vehicle emissions certification under the EPA Tier 2 

program, beginning in MY2012. 

7. Nitrous Oxide and Methane Standards

In addition to fleet-average CO2 standards, as proposed, EPA is establishing 

separate per-vehicle standards for nitrous oxide (N2O) and methane (CH4) emissions.188 

The agency's intention is to set emissions standards that act to cap emissions to ensure 

that future vehicles do not increase their N2O and CH4 emissions above levels typical of 

today's vehicles. EPA proposed to cap N2O at a level of 0.010 g/mi and to cap CH4 at a 

level of 0.03 g/mi. Both of these compounds are more potent contributors to global 

 

188 See final regulations at 40 CFR 86.1818-12(f). 

Deleted: pollutants 
195 

warming than CO2; N2O has a global warming potential, or GWP, of 298 and CH4 has a 

GWP of 25.189 

EPA received many comments on the proposed N2O and CH4 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, and the Manufacturers of Emissions Control Association. These commenters 

stated that EPA needs to address all mobile GHGs under the Clean Air Act, and N2O and 

CH4 are both more potent contributors to global warming than CO2. The Center for 

Biological Diversity commented that in light of the potency of these GHGs, EPA should 

develop standards which reduce emissions over current levels and that EPA had not 

analyzed either the technologies or the costs of doing so. EPA discusses these comments 

and our responses below and in the Response to Comments Document. 

Auto manufacturers generally did not support standards for these GHGs, stating 

that the levels of these GHGs from current vehicles are too small to warrant standards at 

this time. These commenters also stated that if EPA were to proceed with "cap" 

standards, the stringency of the proposed levels could restrict the introduction of some 

new technologies. Commenters specifically raised this concern with the examples of 

diesel and lean-burn gasoline for N2O, or natural gas and ethanol fueled vehicles for CH4. 

Only one manufacturer, Volkswagen, submitted actual test data to support these claims; 

very limited emission data on two concept vehicles -- a CNG vehicle and a flexible-fuel 

vehicle -- indicated measured emission levels near or above the proposed standards, but 

included no indication of whether any technological steps had been taken to reduce 

emissions below the cap levels. Many commenters support an approach of establishing a 

CO2 -equivalent standard, where N2O and CH4 could be averaged with CO2 emissions to 

result in an overall CO2-equivalent compliance value, similar to the approach California 

has used for its GHG standards190 Under such an approach, the auto industry 

commenters supported using a default value for N2O emissions in lieu of a measured test 

value. Several auto manufacturers also had concerns that a new requirement to measure 

N2O would require significant equipment and facility upgrades and would create testing 

challenges with new measurement equipment with which they have little experience. 

 EPA has considered these comments and is finalizing the cap standards for N2O 

and CH4 as proposed. EPA agrees with the NGO, state, and other commenters that lightduty vehicle emissions are small but important contributors to the U.S. N2O and CH4

inventories, and that in the absence of a limitation, the potential for significant emission 

increases exists with the evolution of new vehicle and engine technologies. (Indeed, the 

industry commenters concede as much in stating that they are contemplating introducing 

vehicle technologies that could result in emissions exceeding the cap standard levels). 

EPA also believes that in most cases N2O and CH4 emissions from light-duty vehicles 

 

189 The global warming potentials (GWP) used in this rule are consistent with the Intergovernmental Panel 

on Climate Change (IPCC) Fourth Assessment Report (AR4). 190 California Environmental Protection Agency Air Resources Board, Staff Report: Initial Statement of 

Reasons for Proposed Rulemaking Public Hearing To Consider Adoption Of Regulations To Control 

Greenhouse Gas Emissions From Motor Vehicles, August 6, 2004. 

Deleted: greenhouse gase

Deleted: pollutants

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196 

will remain well below the cap standards. Therefore, we are setting cap standards for 

these GHGs at the proposed levels. However, as described below, the agency is 

incorporating several provisions intended to address industry concerns about 

technological feasibility and leadtime, including an optional CO2-equivalent approach 

and, for N2O, more leadtime before testing will be required to demonstrate compliance 

with the emissions standard (in interim, manufacturers may certify based on a compliance 

statement based on good engineering judgment). 

a. Nitrous Oxide (N2O) Exhaust Emission Standard 

As stated above, N2O is a global warming gas with a high global warming 

potential.191 It accounts for about 2.3% of the current greenhouse gas emissions from 

cars and light trucks.192 EPA is setting a per-vehicle N2O emission standard of 0.010 

g/mi, measured over the traditional FTP vehicle laboratory test cycles. The standard will 

become effective in model year 2012 for all light-duty cars and trucks. The standard is 

designed to prevent increases in N2O emissions from current levels; i.e., it is a nobacksliding standard. 

N2O is emitted from gasoline and diesel vehicles mainly during specific catalyst 

temperature conditions conducive to N2O formation. Specifically, N2O can be generated 

during periods of emission hardware warm-up when rising catalyst temperatures pass 

through the temperature window when N2O formation potential is possible. For current 

Tier 2 compatible gasoline engines with conventional three-way catalyst technology, N2O 

is not generally produced in significant amounts because the time the catalyst spends at 

the critical temperatures during warm-up is short. This is largely due to the need to 

quickly reach the higher temperatures necessary for high catalyst efficiency to achieve 

emission compliance for criteria pollutants. As several auto manufacturer comments 

noted, N2O is a more significant concern with diesel vehicles, and potentially future 

gasoline lean-burn engines, equipped with advanced catalytic NOX emissions control 

systems. In the absence of N2O emission standards, these systems could be designed in a 

way that emphasizes efficient NOX control while at the same time allowing the formation 

of significant quantities of N2O. Excess oxygen present in the exhaust during lean-burn 

conditions in diesel or lean-burn gasoline engines equipped with these advanced systems 

can favor N2O formation if catalyst temperatures are not carefully controlled. Without 

specific attention to controlling N2O emissions in the development of such new NOX

control systems, vehicles could have N2O emissions many times greater than are emitted 

by current gasoline vehicles. 

EPA is setting an N2O emission standard that the agency believes will be met by 

current-technology gasoline vehicles at essentially no cost. As just noted, N2O formation 

in current catalyst systems occurs, but the emission levels are relatively low, because the 

time the catalyst spends at the critical temperatures during warm-up when N2O can form 

is short. At the same time, EPA believes that the standard will ensure that the design of 

advanced NOX control systems, especially for future diesel and lean-burn gasoline 

 

191 N2O has a GWP of 298 according to the IPCC Fourth Assessment Report (AR4). 192 See RIA Chapter 2. 

Deleted: pollutants 
197 

vehicles, will control N2O emission levels. While current NOX control approaches used 

on current Tier 2 diesel vehicles do not tend to favor the formation of N2O emissions, 

EPA believes that this N2O standard will discourage new emission control designs that 

achieve criteria emissions compliance at the cost of increased N2O emissions. Thus, the 

standard will cap N2O emission levels, with the expectation that current gasoline and 

diesel vehicle control approaches that comply with the Tier 2 vehicle emission standards 

for NOX will not increase their emission levels, and that the cap will ensure that future 

vehicle designs will be appropriately controlled for N2O emissions. 

 

The level of the N2O standard is approximately two times the average N2O level 

of current gasoline passenger cars and light-duty trucks that meet the Tier 2 NOX

standards. EPA has not previously regulated N2O emissions, and available data on 

current vehicles is limited. However, EPA derived the standard from a combination of 

emission factor values used in modeling light duty vehicle emissions and limited recent 

EPA test data. 193,194 Because the standard represents a level 100 percent higher than the 

average current N2O level, we continue to believe that most if not all Tier 2 compliant 

gasoline and diesel vehicles will easily be able to meet the standards. Manufacturers 

typically use design targets for NOX emission levels of about 50% of the standard, to 

account for in-use emissions deterioration and normal testing and production variability, 

and EPA expects that manufacturers will use a similar approach for N2O emission 

compliance. EPA did not propose and is not finalizing a more stringent standard for 

current vehicles because we believe that the stringent Tier 2 program and the associated 

NOX fleet average requirement already result in significant N2O control, 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. 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. 

Diesel cars and light trucks with advanced emission control technology are in the 

early stages of development and commercialization. As this segment of the vehicle 

market develops, the N2O standard will likely require these manufacturers to incorporate 

control strategies that minimize N2O formation. Available approaches include using 

electronic controls to limit catalyst conditions that might favor N2O formation and 

consider different catalyst formulations. While 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. 

 

 

193 Memo to docket “Derivation of Proposed N2O and CH4 Cap Standards," Tad Wysor, EPA, November 

19, 2009. Docket EPA-HQ-OAR-2009-0472-6801 

194 Memo to docket “EPA NVFEL N2O Test Data,” Tony Fernandez, EPA. 
198 

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.195 EPA was 

primarily concerned that such an approach could undermine the stringency of the CO2

standards, as the proposed standards were designed to “cap” N2O and CH4 emissions, 

rather than reflecting a level either that is the industry fleet-wide average or that would 

effect reductions in these GHGs. 

As noted above, several auto manufacturers expressed interest in such a CO2-

equivalent approach, due to concerns that the caps could be limiting for some advanced 

technology vehicles. While we continue to believe that the vast majority of light-duty 

vehicles will be able to easily meet the standards, we acknowledge that advanced diesel 

or lean-burn gasoline vehicles of the future may face slightly greater challenges. 

Therefore, after considering these comments, EPA is finalizing an optional compliance 

approach to provide flexibility for any advanced technologies that may have challenges in 

meeting the N2O or CH4 cap standards. 

In lieu of complying with the separate N2O and CH4 cap standards, a 

manufacturer may choose to comply with a CO2-equivalent standard. A manufacturer 

choosing this option will convert its N2O and CH4 test results (or, as described below, a 

default N2O value for MY 2012-2014) into CO2-equivalent values and add this sum to 

their CO2 emissions. This CO2-equivalent value will still need to comply with the 

manufacturer’s footprint-based CO2 target level. In other words, a manufacturer could 

offset any N2O emissions (or any CH4 emissions) by taking steps to further reduce CO2. 

A manufacturer choosing this option 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 (or CH4) levels, but will not be allowed to increase CO2 above its 

footprint target level by reducing N2O (or CH4). 

 The compliance level in g/mi for the optional CO2-equivalent approach for 

gasoline vehicles is calculated as CO2 + (CWF/0.273 × NMHC) + (1.571 × CO) + (298 ×

N2O) + (25 × CH4).196 The N2O and CH4 values are the measured emission values for 

these GHGs, except N2O in model years 2012 through 2014. For these model years, 

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 below. Consistent with the other elements of 

 

195 California Environmental Protection Agency Air Resources Board, Staff Report: Initial Statement of 

Reasons for Proposed Rulemaking Public Hearing To Consider Adoption Of Regulations To Control 

Greenhouse Gas Emissions From Motor Vehicles, August 6, 2004. 

196 This equation will differ depending upon the fuel; see the final regulations for equations for other fuels.

Deleted: pollutant

Deleted: 310 

Deleted: x

Deleted: 21 

Deleted: x

Deleted: pollutants
199 

the equation, N2O and CH4 must be included at full useful life deteriorated values. This 

requires testing using the highway test cycle in addition to the FTP during the 

manufacturer’s deterioration factor (DF) development program. However, 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. Finally, for manufacturers using this option, the CO2-equivalent emission 

level would also be the basis for any credits that the manufacturer might generate. 

Manufacturers expressed concerns about their ability to acquire and install N2O 

analytical equipment. However, the agency continues to believe that such burdens, while 

not trivial, will also not be excessive. While many manufacturers do not appear to have 

invested yet in adding N2O measurement equipment to their test facilities, EPA is not 

aware of any information to indicate that that suppliers will have difficulty providing 

sufficient hardware, or that such equipment is unusually expensive or complex compared 

to existing measurement hardware. EPA allows N2O measurement using any of four 

methods, all of which are commercially available today. The costs of certification and 

other indirect costs of this rule are accounted for in the Indirect Cost Multipliers, 

discussed in Section III.H below. 

Still, given the short lead-time for this rule 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. 

b. Methane (CH4) Exhaust Emission Standard 

Methane (CH4) is a greenhouse gas with a high global warming potential.197 It 

accounts for about 0.2% of the greenhouse gases from cars and light trucks.198

EPA is setting a CH4 emission standard of 0.030 g/mi as measured on the FTP, to 

apply beginning with model year 2012 for both cars and trucks. EPA believes that this 

 

197 CH4 has a GWP of 25 according to the IPCC Fourth Assessment Report (AR4). 198 See RIA Chapter 2. 
200 

level for the standard will be met by current gasoline and diesel vehicles, and will prevent 

large increases in future CH4 emissions. This is particularly a concern in the event that 

alternative fueled vehicles with high methane emissions, like some past dedicated 

compressed natural gas (CNG) vehicles and some flexible-fueled vehicle when operated 

on E85 fuel, become a significant part of the vehicle fleet. Currently EPA does not have 

separate CH4 standards because unlike other hydrocarbons it does not contribute 

significantly to ozone formation.199 However, CH4 emissions levels in the gasoline and 

diesel car and light truck fleet have nevertheless generally been controlled by the Tier 2 

standards for non-methane organic gases (NMOG). However, without an emission 

standard for CH4, there is no guarantee that future emission levels of CH4 will remain at 

current levels as vehicle technologies and fuels evolve. 

The standard will cap CH4 emission levels, with the expectation that emissions 

levels of current gasoline and diesel vehicles meeting the Tier 2 emission standards will 

not increase. The level of the standard will generally be achievable for typical vehicles 

through normal emission control methods already required to meet the Tier 2 emission 

standards for NMOG. Also, since CH4 is already measured under the current Tier 2 

regulations (so that it may be subtracted to calculate non-methane hydrocarbons), we 

believe that the standard will not result in any additional testing costs Therefore, EPA is 

not attributing any costs to this part of this program. Since CH4 is produced during fuel 

combustion in gasoline and diesel engines similarly to other hydrocarbon components, 

controls targeted at reducing overall NMOG levels are generally also effective in 

reducing CH4 emissions. Therefore, for typical gasoline and diesel vehicles, 

manufacturer strategies to comply with the Tier 2 NMOG standards have to date tended 

to prevent increases in CH4 emissions levels. The CH4 standard will ensure that 

emissions will be addressed if in the future there are increases in the use of natural gas or 

other alternative fuels or technologies that may result in higher CH4 emissions. 

As with the N2O standard, EPA is setting the level of the CH4 standard to be 

approximately two times the level of average CH4 emissions from Tier 2 gasoline 

passenger cars and light-duty trucks. EPA believes the standard will easily be met by 

current gasoline vehicles, and that flexible fuel vehicles operating on ethanol can be 

designed to resolve any potential CH4 emissions concerns. Similarly, since current diesel 

vehicles generally have even lower CH4 emissions than gasoline vehicles, EPA believes 

that diesels will also meet the CH4 standard. However, EPA also believes that to set a 

CH4 emission standard more stringent than the proposed standard could effectively make 

the Tier 2 NMOG standard more stringent and is inappropriate for that reason (and 

untimely as well, given the challenge of meeting the CO2 standards, as noted above). 

Some CNG-fueled vehicles have historically produced significantly higher CH4

emissions than gasoline or diesel vehicles. This is because CNG fuel is essentially 

methane and any unburned fuel that escapes combustion and is not oxidized by the 

catalyst is emitted as methane. However, in recent model years, the few dedicated CNG 

vehicles sold in the U.S. meeting the Tier 2 standards have had CH4 control as effective 

 

199 But see Ford Motor Co. v. EPA, 604 F. 2d 685 (D.C. Cir. 1979) (permissible for EPA to regulate CH4

under CAA section 202 (b)). 
201 

as that of gasoline or diesel vehicles. Still, even if these vehicles meet the Tier 2 NMOG 

standard and appear to have effective CH4 control by nature of the NMOG controls, Tier 

2 standards do not require CH4 control. Although EPA believes that in most cases that 

the CH4 cap standard should not require any different emission control designs beyond 

what is already required to meet Tier 2 NMOG standards on a dedicated CNG vehicle, 

the cap will ensure that systems maintain the current level of CH4 control. 

Some manufacturers have also expressed some concerns about CH4 emissions 

from flexible fueled vehicles operating on E85 (85% ethanol, 15% gasoline). However, 

we are not aware of any information would indicate that if engine-out CH4 proves to be 

higher than for a typical gasoline vehicle, that such emissions could not be managed by 

reasonably available control strategies (perhaps similar to those of used in dedicated 

CNG vehicles). 

 

As described above, in response to the comments, EPA will also allow 

manufacturers to choose to comply with a CO2-equivalent standard in lieu of complying 

with a separate CH4 cap standards. A manufacturer choosing this option would convert 

its N2O and CH4 test results into CO2-equivalent values (using the respective GWP 

values), and would then compare this value to the manufacturer's footprint-based CO2

target level to determine compliance. However, as with N2O, this approach will not 

permit a manufacturer to increase its CO2 by reducing CH4; the company's footprintbased CO2 target level would remain the same. 

8. Small Entity Deferment 

 As proposed, EPA is deferring setting GHG emissions standards for small entities 

meeting the Small Business Administration (SBA) size criteria of a small business as 

described in 13 CFR 121.201.200 EPA would instead consider appropriate GHG 

standards for these entities as part of a future regulatory action. This includes both U.S.-

based and foreign small entities in three distinct categories of businesses for light-duty 

vehicles: small volume manufacturers, independent commercial importers (ICIs), and 

alternative fuel vehicle converters. 

EPA has identified about 13 entities that fit the Small Business Administration 

(SBA) size criterion of a small business. EPA estimates there currently are 

approximately two small volume manufacturers, eight ICIs, and three alternative fuel 

vehicle converters in the light-duty vehicle market. Further detail is provided in Section 

III.I.3, below. EPA estimates that these small entities comprise less than 0.1 percent of 

the total light-duty vehicle sales in the U.S., and therefore the deferment will have a 

negligible impact on the GHG emissions reductions from the standards. 

To ensure that EPA is aware of which companies would be deferred, EPA 

proposed to require that such entities submit a declaration to EPA containing a detailed 

written description of how that manufacturer qualifies as a small entity under the 

provisions of 13 CFR 121.201. EPA has reconsidered the need for this additional 

 

200 See final regulations at 40 CFR 86.1801-12(j).

Deleted: is 

Deleted: ing
202 

submission under the regulations and is deleting it as not necessary. We already have 

information on the limited number of small entities that we expect would receive the 

benefits of the exemption, and do not need the proposed regulatory requirement to be 

able to effectively implement this exemption for those parties who in fact meet its terms. 

Small entities are currently covered by a number of EPA motor vehicle emission 

regulations, and they routinely submit information and data on an annual basis as part of 

their compliance responsibilities. 

 EPA did not receive adverse comments regarding the proposed small entity 

deferment. EPA received comments concerning whether or not the small entity 

deferment applies to foreign manufacturers. EPA clarifies that foreign manufacturers 

meeting the SBA size criteria are eligible for the deferment, as was EPA’s intent during 

the proposal. 

C. Additional Credit Opportunities for CO2 Fleet Average Program 

 The final standards represent a significant multi-year challenge for manufacturers, 

especially in the early years of the program. Section III.B.4 above describes EPA's 

provisions for manufacturers to be able to generate credits by achieving fleet average 

CO2 emissions below their fleet average standard, and also how manufacturers can use 

credits to comply with the standards. As described in Section III.B.4, credits can be 

carried forward five years, carried back three years, transferred between vehicle 

categories, and traded between manufacturers. The credits provisions described below 

provide manufacturers with additional ways to earn credits starting in MY 2012. EPA is 

also including early credits provisions for the 2009–2011 model years, as described 

below in Section III.C.5. 

The provisions described below provide additional flexibility, especially in the 

early years of the program. This helps to address issues of lead-time or technical 

feasibility for various manufacturers and in several cases provides an incentive for 

promotion of technology pathways that warrant further development. EPA is finalizing a 

variety of credit opportunities because manufacturers are not likely to be in a position to 

use every credit provision. EPA expects that manufacturers are likely to select the credit 

opportunities that best fit their future plans. 

EPA believes it is critical that manufacturers have options to ease the transition to 

the final MY 2016 standards. At the same time, EPA believes these credit programs must 

be and are designed in a way to ensure that they achieve emission reductions that achieve 

real-world reductions over the full useful life of the vehicle (or, in the case of FFV credits 

and Advanced Technology incentives, to incentivize the introduction of those vehicle 

technologies) and are verifiable. In addition, EPA believes that these credit programs do 

not provide an opportunity for manufacturers to earn “windfall” credits. Comments on 

the proposed EPA credit programs are summarized below along with EPA’s response, 

and are detailed in the Response to Comments document. 

 1. Air Conditioning Related Credits

Deleted: Because such entities are not 

automatically exempted from other EPA 

regulations for light-duty vehicles and 

light-duty trucks, the entity is subject to 

the greenhouse gas control requirements 

in this GHG program until such a 

declaration has been submitted and 

approved by EPA. The declaration must 

be submitted annually at time of vehicle 

emissions certification under the EPA 

Tier 2 program, beginning in model year 

2012. 

Deleted: EPA expects that the 

additional paperwork burden associated 

with completing and submitting a small 

entity declaration to gain deferral from 

the GHG standards would be negligible 

and easily done in the context of other 

routine submittals to EPA. However, 

EPA has accounted for this cost with a 

nominal estimate included in the 

Information Collection Request 

completed under the Paperwork 

Reduction Act. Additional information 

can be found in the Paperwork Reduction 

Act discussion in Section III.I.2.
203 

Manufacturers will be able to generate and use credits for improved air 

conditioner (A/C) systems in complying with the CO2 fleetwide average standards 

described above (or otherwise to be able to bank or trade the credits). EPA expects that 

most manufacturers will choose to utilize the A/C provisions as part of its compliance 

demonstration (and for this reason cost of compliance with A/C related emission 

reductions are assumed in the cost analysis). The A/C provisions are structured as 

credits, unlike the CO2 standards for which manufacturers will demonstrate compliance 

using 2-cycle (city/highway) tests (see Sections III.B and III.E.). Those tests do not 

measure either A/C leakage or tailpipe CO2 emissions attributable to A/C load. Thus, it 

is a manufacturer’s option to include A/C GHG emission reductions as an aspect of its 

compliance demonstration. Since this is an elective alternative, EPA is referring to the 

A/C part of the rule as a credit. 

EPA estimates that direct A/C GHG emissions - emissions due to the leakage of 

the hydrofluorocarbon refrigerant in common use today - account for 5.1% of CO2-

equivalent GHGs from light-duty cars and trucks. This includes the direct leakage of 

refrigerant as well as the subsequent leakage associated with maintenance and servicing, 

and with disposal at the end of the vehicle’s life. The emissions that are associated with 

leakage reductions are the direct leakage and the leakage associated with maintenance 

and servicing. Together these are equivalent to CO2 emissions of approximately 13.6 

g/mi per car and light-truck. EPA also estimates that indirect GHG emissions (additional 

CO2 emitted due to the load of the A/C system on the engine) account for another 3.9% 

of light-duty GHG emissions.201 This is equivalent to CO2 emissions of approximately 

14.2 g/mi per vehicle. The derivation of these figures can be found in Chapter 2.2 of the 

EPA RIA. 

 EPA believes that it is important to address A/C direct and indirect emissions 

because the technologies that manufacturers will employ to reduce vehicle exhaust CO2

will have little or no impact on A/C related emissions. Without addressing A/C related 

emissions, as vehicles become more efficient, the A/C related contribution will become a 

much larger portion of the overall vehicle GHG emissions. 

 

Over 95% of the new cars and light trucks in the United States are equipped with 

A/C systems and, as noted, there are two mechanisms by which A/C systems contribute 

to the emissions of greenhouse gases: through leakage of refrigerant into the atmosphere 

and through the consumption of fuel to provide mechanical power to the A/C system. 

With leakage, it is the high global warming potential (GWP) of the current automotive 

refrigerant (HFC-134a, with a GWP of 1430) that results in the CO2-equivalent impact of 

13.6 g/mi.202 Due to the high GWP of this HFC, a small leakage of the refrigerant has a 

much greater global warming impact than a similar amount of emissions of CO2 or other 

 

201 See Chapter 2, Section 2.2.1.2 of the RIA. 202 The global warming potentials (GWP) used in this rule are consistent with Intergovernmental Panel on 

Climate Change (IPCC) Fourth Assessment Report (AR4). (At this time, the IPCC Second Assessment 

Report (SAR) GWP values are used in the official U.S. greenhouse gas inventory submission to the climate 

change framework.) 
204 

mobile source GHGs. Manufacturers can reduce A/C leakage emissions by using leaktight components. Also, manufacturers can largely eliminate the global warming impact 

of leakage emissions by adopting systems that use an alternative, low-GWP refrigerant, 

as discussed below.203 The A/C system also contributes to increased CO2 emissions 

through the additional work required to operate the compressor, fans, and blowers. This 

additional work typically is provided through the engine’s crankshaft, and delivered via 

belt drive to the alternator (which provides electric energy for powering the fans and 

blowers) and the A/C compressor (which pressurizes the refrigerant during A/C 

operation). The additional fuel used to supply the power through the crankshaft 

necessary to operate the A/C system is converted into CO2 by the engine during 

combustion. This incremental CO2 produced from A/C operation can thus be reduced by 

increasing the overall efficiency of the vehicle’s A/C system, which in turn will reduce 

the additional load on the engine from A/C operation.204

Manufacturers can make very feasible improvements to their A/C systems to 

address A/C system leakage and efficiency. EPA is finalizing two separate credit 

approaches to address leakage reductions and efficiency improvements independently. A 

leakage reduction credit will take into account the various technologies that could be used 

to reduce the GHG impact of refrigerant leakage, including the use of an alternative 

refrigerant with a lower GWP. An efficiency improvement credit will account for the 

various types of hardware and control of that hardware available to increase the A/C 

system efficiency. For purposes of use of A/C credits at certification, manufacturers will 

be required to attest to the durability of the leakage reduction and the efficiency 

improvement technologies over the full useful life of the vehicle. 

 

EPA believes that both reducing A/C system leakage and increasing efficiency are 

highly cost-effective and technologically feasible. EPA expects most manufacturers will 

choose to use these A/C credit provisions, although some may not find it necessary to do 

so. 

 

a. A/C Leakage Credits 

The refrigerant used in vehicle A/C systems can get into the atmosphere by many 

different means. These refrigerant emissions occur from the slow leakage over time that 

all closed high pressure systems will experience. Refrigerant loss occurs from 

permeation through hoses and leakage at connectors and other parts where the 

containment of the system is compromised. The rate of leakage can increase due to 

deterioration of parts and connections as well. In addition, there are emissions that occur 

during accidents and maintenance and servicing events. Finally, there are end-of-life 

emissions if, at the time of vehicle scrappage, refrigerant is not fully recovered. 

 

203 Refrigerant emissions during maintenance and at the end of the vehicle’s life (as well as emissions 

during the initial charging of the system with refrigerant) are also addressed by the CAA Title VI 

stratospheric ozone program, as described below. 

204 We chose not to address changes to the weight of the A/C system, since the issue of CO2 emissions from 

the fuel consumption of normal (non-A/C) operation, including basic vehicle weight, is inherently 

addressed by the primary CO2 standards (Section III.B above). 
205 

Because the process of refrigerant leakage has similar root causes as those that 

cause fuel evaporative emissions from the fuel system, some of the emission control 

technologies are similar (including hose materials and connections). There are, however, 

some fundamental differences between the systems that require a different approach, both 

to controlling and to documenting that control. The most notable difference is that A/C 

systems are completely closed systems and always under significant pressure, whereas 

the fuel system is not. Fuel systems are meant to be refilled as liquid fuel is consumed by 

the engine, while the A/C system ideally should never require “recharging” of the 

contained refrigerant. Thus it is critical that the A/C system leakages be kept to an 

absolute minimum. As a result, these emissions are typically too low to accurately 

measure in most current SHED chambers designed for fuel evaporative emissions 

measurement, especially for A/C systems that are new or early in life. 

A few commenters suggested that we allow manufacturers, as an option, to use an 

industry-developed “mini-shed” test procedure (SAE J2763 – Test Procedure for 

Determining Refrigerant Emissions from Mobile Air Conditioning Systems) to measure 

and report annual refrigerant leakage.205 However, 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).206 

Establishing such a correlation would require testing of a fairly broad range of currenttechnology 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, as discussed below, there are indications that much of the industry will 

eventually be moving toward alternative refrigerants with very low GWPs. EPA believes 

such a transition would diminish the value of any correlation studies that might be done 

to confirm the appropriateness of the SAE J2763 procedure as an option in this rule. For 

these reasons, EPA is therefore not adopting such an optional direct measurement 

approach to addressing refrigerant leakage at this time. 

Instead, as proposed, EPA is adopting a design-based method for manufacturers 

to demonstrate improvements in their A/C systems and components.207 Manufacturers 

implementing system designs expected to result in reduced refrigerant leakage will be 

eligible for credits that could then be used to meet their CO2 emission compliance 

requirements (or otherwise banked or traded). The A/C Leakage Credit provisions will 

generally assign larger credits to system designs that would result in greater leakage 

reductions. In addition, proportionately larger A/C Leakage Credits will be available to 

manufacturers that substitute a refrigerant with lower GWP than the current HFC-134a 

refrigerant. 

 

205 Honeywell and Volvo supported this view; most other commenters did not. 206 However, there is a correlation in the fleet between J2763 measurements and J2727 scores. 207 See final regulations at 40 CFR 86.1866-12(b). 
206 

Our method for calculating A/C Leakage Credits is based closely on an industryconsensus leakage scoring method, described below. This leakage scoring method is 

correlated to experimentally-measured leakage rates from a number of vehicles using the 

different available A/C components. Under the approach, manufacturers will choose from 

a menu of A/C equipment and components used in their vehicles in order to establish 

leakage scores which will characterize their A/C system leakage performance. Credits 

will be generated from leakage reduction improvements that exceed average fleetwide 

leakage rates. 

EPA believes that the design-based approach will result in estimates of leakage 

emissions reductions that will be comparable to those that will eventually result from 

performance-based testing. We believe that this method appropriately approximates the 

real-world leakage rates for the expected MY 2012-2016 A/C systems. 

The cooperative industry and government Improved Mobile Air Conditioning 

(IMAC) program208 has demonstrated that new-vehicle leakage emissions can be reduced 

by 50%. This program has shown that this level of improvement can be accomplished by 

reducing the number and improving the quality of the components, fittings, seals, and 

hoses of the A/C system. All of these technologies are already in commercial use and 

exist on some of today’s systems. 

As proposed, a manufacturer wishing to generate A/C Leakage Credits will 

compare the components of its A/C system with a set of leakage-reduction technologies 

and actions based closely on that developed through IMAC and the Society of 

Automotive Engineers (as SAE Surface Vehicle Standard J2727, August 2008 version). 

The J2727 approach was developed from laboratory testing of a variety of A/C related 

components, and EPA believes that the J2727 leakage scoring system generally 

represents a reasonable correlation with average real-world leakage in new vehicles. The 

EPA credit approach addresses the same A/C components as does SAE J2727 and 

associates each component with the same gram-per-year leakage rate as the SAE method, 

although, as described below, EPA limits the credits allowed and also modifies it for 

other factors such as alternative refrigerants. 

A manufacturer choosing to generate A/C Leakage Credits will sum the leakage 

values for an A/C system for a total A/C leakage score according to the following 

formula. Because the primary GHG program standards are expressed in terms of vehicle 

exhaust CO2 emissions as measured in grams per mile, the credits programs adopted in 

this rule, including A/C related credits, must ultimately be converted to a common metric 

for proper calculation of credits toward compliance with the primary vehicle standards. 

This formula describes the conversion of the grams-per-year leakage score to a gramsper-mile CO2eq value, taking vehicle miles traveled (VMT) and the GWP of the 

refrigerant into account: 

A/C Leakage Credit = (MaxCredit) * [ 1 - (LeakScore/AvgImpact) * 

(GWPRefrigerant/1430)] 

 

208 Team 1-Refrigerant Leakage Reduction: Final Report to Sponsors, SAE, 2007. 
207 

Where: 

MaxCredit is 12.6 and 15.6 g/mi CO2eq for cars and trucks, respectively. These values 

become 13.8 and 17.2 for cars and trucks, respectively, if low-GWP refrigerants are used, 

since this would generate additional credits from reducing emissions during maintenance 

events, accidents, and at end-of-life. 

LeakScore is the leakage score of the A/C system as measured according to the EPA 

leakage method (based on the J2727 procedure, as discussed above) in units of g/yr. The 

minimum score that EPA considers feasible is fixed at 8.3 and 10.4 g/yr for cars and 

trucks respectively (4.1 and 5.2 g/yr for systems using electric A/C compressors) as 

discussed below. 

 

Avg Impact is the average current A/C leakage emission rate, which is 16.6 and 20.7 

g/yr for cars and trucks, respectively 

GWPRefrigerant is the global warming potential (GWP) for direct radiative forcing of 

the refrigerant. For purposes of this rule, the GWP of HFC-134a is 1430, the GWP of 

HFC-152a is 124, the GWP of HFO-1234yf is 4, and the GWP of CO2 as a refrigerant is 

1. 

The EPA Final RIA elaborates further on the development of each of the values 

incorporated in the A/C Leakage Credit formula above, as summarized here. First, as 

proposed, EPA estimates that leakage emission rates for systems using the current 

refrigerant (HFC-134a) could be feasibly reduced to rates no less than 50% of current 

rates -- or 8.3 and 10.4 g/yr for cars and trucks, respectively -- based on the conclusions 

of the IMAC study as well as consideration of refrigerant emissions over the full life of 

the vehicle. 

Also, some commenters noted 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 yet allow for leakage emission rate reductions beyond EPA's estimates for 

systems with conventional belt-driven compressors. EPA agrees with these comments, 

and we have incorporated lower minimum emission rates into the formula above – 4.1 

and 5.2 g/yr for cars and trucks, respectively – in order to allow additional leakage 

reduction credits for vehicles that use sealed electric A/C compressors. The maximum 

available credits for these two approaches are summarized in Table III.C.1-1 below. 

AIAM commented that EPA should not set a lower limit on the 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 proposed (and 

now final) 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 difference are small compared to our 

Deleted: d 
208 

minimum score.209 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 in-use factors, even a leakless (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. The EPA has therefore decided 

for the purposes of this final rule to not change the minimum score for belt driven 

compressors due to the reason cited above and to the otherwise overwhelming support for 

the program as proposed from commenters. 

In addition, as discussed above, EPA recognizes that substituting a refrigerant 

with a significantly lower GWP will be a very effective way to reduce the impact of all 

forms of refrigerant emissions, including maintenance, accidents, and vehicle scrappage. 

To address future GHG regulations in Europe and California, systems using alternative 

refrigerants -- including HFO1234yf, with a GWP of 4 and CO2 with a GWP of 1 -- are 

under serious development and have been demonstrated in prototypes by A/C component 

suppliers. The European Union has enacted regulations phasing in alternative refrigerants 

with GWP less than 150 starting this year, and the State of California proposed providing 

credits for alternative refrigerant use in its GHG rule. Within the timeframe of MYs 

2012-2016, EPA is not expecting widespread use of low-GWP refrigerants. However, 

EPA believes that these developments are promising, and, as proposed, has included in 

the A/C Leakage Credit formula above a factor to account for the effective GHG 

reductions that could be expected from refrigerant substitution. The A/C Leakage Credits 

that will be available will be a function of the GWP of the alternative refrigerant, with the 

largest credits being available for refrigerants with GWPs at or approaching a value of 1. 

For a hypothetical alternative refrigerant with a GWP of 1 (e.g., CO2 as a refrigerant), 

effectively eliminating leakage as a GHG concern, our credit calculation method could 

result in maximum credits equal to total average emissions, or credits of 13.8 and 17.2 

g/mi CO2eq for cars and trucks, respectively, as incorporated into the A/C Leakage Credit 

formula above as the "MaxCredit" term. 

 Table III.C.1-1 summarizes the maximum A/C leakage credits available to a 

manufacturer, according to the formula above. 

Table III.C.1-1 Maximum Leakage Credit Available to Manufacturers 

Car (g/mi) Truck (g/mi) 

R-134a refrigerant with belt-driven 

compressor 

6.3 7.8 

R-134a refrigerant with electric 

motor-driven compressor 

9.5 11.7 

 

209 The Minnesota refrigerant leakage data can be found at 

http://www.pca.state.mn.us/climatechange/mobileair.html#leakdata 
209 

Lowest-GWP refrigerant (GWP=1) 13.8 17.2 

 

It is possible that alternative refrigerants could, without compensating action by 

the manufacturer, reduce the efficiency of the A/C system (see related discussion of the 

A/C Efficiency Credit below.) However, as noted at proposal and discussed further in the 

following section, 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 due to the use of alternative 

refrigerants. 

Beyond the comments mentioned above, commenters generally supported or were 

silent about EPA's refrigerant leakage methodology (as based on SAE J2727), including 

the maximum leakage credits available, the technologies eligible for credit and their 

associated leakage reduction values, and the potential for alternative refrigerants. All 

comments related to A/C credits are addressed in the Response to Comments Document. 

b. A/C Efficiency Credits 

Manufacturers that make improvements in their A/C systems to increase 

efficiency and thus reduce CO2 emissions due to A/C system operation may be eligible 

for A/C Efficiency Credits. As with A/C Leakage Credits, manufacturers could apply 

A/C Efficiency Credits toward compliance with their overall CO2 standards (or otherwise 

bank and trade the credits). 

As mentioned above, EPA estimates that the CO2 emissions due to A/C related 

loads on the engine account for approximately 3.9% of total greenhouse gas emissions 

from passenger vehicles in the United States. Usage of A/C systems is inherently higher 

in hotter and more humid months and climates; however, vehicle owners may use their 

A/C systems all year round in all parts of the nation. For example, people commonly use 

A/C systems to cool and dehumidify the cabin air for passenger comfort on hot humid 

days, but they also use the systems to de-humidify cabin air to assist in defogging/deicing the front windshield and side glass in cooler weather conditions for improved 

visibility. A more detailed discussion of seasonal and geographical A/C usage rates can 

be found in the RIA. 

Most of the additional load on the engine from A/C system operation comes from 

the compressor, which pumps the refrigerant around the system loop. Significant 

additional load on the engine may also come from electric or hydraulic fans, which are 

used to move air across the condenser, and from the electric blower, which is used to 

move air across the evaporator and into the cabin. Manufacturers have several currentlyexisting technology options for improving efficiency, including more efficient 

compressors, fans, and motors, and system controls that avoid over-chilling the air (and 

subsequently re-heating it to provide the desired air temperature with an associated loss 

of efficiency). For vehicles equipped with automatic climate-control systems, real-time 

adjustment of several aspects of the overall system (such as engaging the full capacity of 

the cooling system only when it is needed, and maximizing the use of recirculated air) 
210 

can result in improved efficiency. Table III.C.1-2 below lists some of these technologies 

and their respective efficiency improvements. 

As discussed in the proposal, EPA is adopting a design-based “menu” approach 

for estimating efficiency improvements and, thus, quantifying A/C Efficiency Credits.210 

However, EPA’s ultimate preference is performance-based standards and credit 

mechanisms (i.e., using actual measurements) as typically providing a more accurate 

measure of performance. However, EPA has concluded that a practical, performancebased procedure for the purpose of accurately quantifying A/C-related CO2 emission 

reductions, and thus efficiency improvements for assigning credits, is not yet available. 

Still, EPA is introducing a new specialized performance-based test for the more limited 

purpose of demonstrating that actual efficiency improvements are being achieved by the 

design improvements for which a manufacturer is seeking A/C credits. As discussed 

below, beginning in MY 2014, manufacturers wishing to generate A/C Efficiency Credits 

will need to show improvement on the new A/C Idle Test in order to then use the "menu" 

approach to quantify the number of credits attributable to those improvements. 

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.211 First, we have separated the credit available for 

‘recirculated air’212 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. 

Second, many commenters indicated that the electronic expansion valve, or EXV, 

should not be included in the menu of technologies, as its effectiveness may not be as 

high as we projected. Commenters noted that the SAE IMAC report stated efficiency 

improvements for an EXV used in conjunction with a more efficient compressor, and not 

as a stand alone technology and that no manufacturers are considering this technology for 

their products within the timeframe of this rulemaking. We believe other technologies 

(improved compressor controls for example) can achieve the same benefit as an EXV, 

without the need for this unique component, and therefore are not adopting it as an option 

in the design menu of efficiency-improving A/C technologies. 

Third, 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 

 

210 See final regulations at 40 CFR 86.1866-12(c). 211 Commenters included the Alliance of Automobile Manufacturers, Jaguar Land Rover, Denso, and the 

Motor and Equipment Manufacturers Association, among others. 

212 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. 
211 

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 that an IHX 

in a conventional HFC-134a system can improve system efficiency by 20%, resulting in a 

credit of 1.1 g/mi.213 Further discussion of IHX technology can be found in the RIA. 

Fourth, 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 

regulation text to clarify what is considered to be the ‘baseline’ components for this 

analysis. We consider the baseline component to be the version which a manufacturer 

most recently had in production on the same vehicle or a vehicle in a similar EPA vehicle 

classification. 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. 

For model years 2012 and 2013, a manufacturers wishing to generate A/C 

Efficiency Credits for a group of its vehicles with similar A/C systems will compare 

several of its vehicle A/C-related components and systems with a list of efficiency-related 

technology improvements (see Table III.C.1-2 below). Based on the technologies the 

manufacturer chooses, an A/C Efficiency Credit value will be established. This designbased approach will recognize the relationships and synergies among efficiency-related 

technologies. Manufacturers could receive credits based on the technologies they chose 

to incorporate in their A/C systems and the associated credit value for each technology. 

The total A/C Efficiency Credit will be the total of these values, up to a maximum 

allowable credit of 5.7 g/mi CO2eq. This will be the maximum improvement from 

current average efficiencies for A/C systems (see the RIA for a full discussion of our 

derivation of the reductions and credit values for individual technologies and for the 

maximum total credit available). Although the total of the individual technology credit 

values may exceed 5.7 g/mi CO2eq, synergies among the technologies mean that the 

values are not additive. A/C Efficiency Credits as adopted may not exceed 5.7 g/mi 

CO2eq. 

Table III.C.1-2 Efficiency-Improving A/C Technologies and Credits 

Technology Description Estimated 

Reduction in 

A/C CO2

Emissions 

A/C 

Efficiency 

Credit (g/mi 

CO2) 

Reduced reheat, with externally-controlled, 

variable-displacement compressor 

30% 1.7 

 

213 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. 
212 

Reduced reheat, with externally-controlled, 

fixed-displacement or pneumatic variabledisplacement compressor 

20% 1.1 

Default to recirculated air with closed-loop 

control of the air supply (sensor feedback to 

control interior air quality) whenever the 

ambient temperature is 75 °F or higher 

(although deviations from this temperature 

are allowed if accompanied by an 

engineering analysis) 

30% 1.7 

Default to recirculated air with open-loop 

control air supply (no sensor feedback) 

whenever the ambient temperature 75 °F or 

higher lower temperatures are allowed) 

20% 1.1 

Blower motor controls which limit wasted 

electrical energy (e.g., pulse width 

modulated power controller) 

15% 0.9 

Internal heat exchanger 20% 1.1 

Improved condensers and/or evaporators 

(with system analysis on the component(s) 

indicating a COP improvement greater than 

10%, when compared to previous industry 

standard designs) 

20% 1.1 

Oil Separator (with engineering analysis 

demonstrating effectiveness relative to the 

baseline design) 

10% 0.6 

The proposal requested comment on adjusting the efficiency credit for alternative 

refrigerants. Although a few commenters noted that the efficiency of an HFO1234yf 

system may differ from a current HFC-134a system,214 we believe that this difference 

does not take into account any efficiency improvements that may be recovered or gained 

when the overall system is specifically designed with consideration of the new refrigerant 

properties (as compared to only substituting the new refrigerant). EPA is therefore not 

adjusting the credits based on efficiency differences for this rule. 

 As noted above, for model years 2014 and later, manufacturers seeking to 

generate design-based A/C Efficiency Credits will also need to use a specific new EPA 

performance test to confirm that the design changes are resulting in improvements in A/C 

system efficiency as integrated into the vehicle. As proposed, beginning in MY 2014 

manufacturers will need to perform an A/C CO2 Idle Test for each A/C system (family) 

for which it desires to generate Efficiency Credits. Manufacturers will need to 

demonstrate an improvement over current average A/C CO2 levels (21.3 g/minute on the 

Idle Test) to qualify for the menu approach credits. Upon qualifying on the Idle Test, the 

 

214 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.” 
213 

manufacturer will be eligible to use the menu approach above to quantify the potential 

credits it could generate. To earn the full amount of credits available in the menu 

approach (limited to the maximum), the test must demonstrate a 30% or greater 

improvement in CO2 levels over the current average. 

 For A/C systems that achieve an improvement between 0-and-30% (or a result 

between 21.3 and 14.9 g/minute result on the A/C CO2 Idle Test), a credit can still be 

earned, but a multiplicative credit adjustment factor will be applied to the eligible credits. 

As shown in Figure III.C.1-1 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)). We adopted this 

adjustment factor in response to commenters who were concerned that a vehicle which 

incorporated many efficiency-improving technologies may not achieve the full 30% 

improvement, and as a result would receive no credit (thus discouraging them from using 

any of the technologies). 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. 
214 

Figure III.C.1-1 A/C Credit Adjustment Factor 
215 

EPA is adopting the A/C CO2 Idle Test procedure as proposed in most respects. 

This laboratory idle test is performed while the vehicle is at idle, similar to the idle 

carbon monoxide (CO) test that was once a part of EPA vehicle certification. The test 

determines the additional CO2 generated at idle when the A/C system is operated. The 

A/C CO2 Idle Test will be run with and without the A/C system cooling the interior cabin 

while the vehicle’s engine is operating at idle and with the system under complete control 

of the engine and climate control system. The test includes tighter restrictions on test cell 

temperatures and humidity levels than apply for the basic FTP test procedure in order to 

more closely control the loads from operation of the A/C system. EPA is also adopting 

additional refinements to the required in-vehicle blower fan settings for manually 

controlled systems to more closely represent “real world” usage patterns. 

Many commenters questioned the ability of this test to measure the improved 

efficiency of certain A/C technologies, and stated 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, we 

determined that it is sufficiently robust for the 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 range of operating conditions. 

Further details of the A/C Idle Test can be found in the RIA and the regulations, as well 

as in the Response to Comments Document. 

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. 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/Crelated CO2 emissions. The Idle Test will not be required in order to generate A/C 

Efficiency Credits until MY 2014 to allow sufficient time for manufacturers to make the 

necessary facilities improvements and to gain experience with the test. 

EPA also considered and invited comment on a more comprehensive testing 

approach to quantifying A/C CO2 emissions that could be somewhat more technically 

robust, but would require more test time and test facility improvements for many 

manufacturers. EPA invited comment on using an adapted version of the SCO3, an 

existing test procedure that is part of the Supplemental Federal Test Procedure. EPA 

discussed and invited comment on the various benefits and concerns associated with 

using an adapted SCO3 test. 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 many stakeholders, and would require a significant 
216 

amount of time, exceeding the scope of this rule. 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. 

c. Interaction with Title VI Refrigerant Regulations 

Title VI of the Clean Air Act deals with the protection of stratospheric ozone. 

Section 608 establishes a comprehensive program to limit emissions of certain ozonedepleting substances (ODS). The rules promulgated under section 608 regulate the use 

and disposal of such substances during the service, repair or disposal of appliances and 

industrial process refrigeration. In addition, section 608 and the regulations promulgated 

under it, prohibit knowingly venting or releasing ODS during the course of maintaining, 

servicing, repairing or disposing of an appliance or industrial process refrigeration 

equipment. Section 609 governs the servicing of motor vehicle A/C systems. The 

regulations promulgated under section 609 (40 CFR part 82, subpart B) establish 

standards and requirements regarding the servicing of A/C systems. These regulations 

include establishing standards for equipment that recovers and recycles (or, for 

refrigerant blends, only recovers) refrigerant from A/C systems; requiring technician 

training and certification by an EPA-approved organization; establishing recordkeeping 

requirements; imposing sales restrictions; and prohibiting the venting of refrigerants. 

Section 612 requires EPA to review substitutes for class I and class II ozone depleting 

substances and to consider whether such substitutes will cause an adverse effect to human 

health or the environment as compared with other substitutes that are currently or 

potentially available. EPA promulgated regulations for this program in 1992 and those 

regulations are located at 40 CFR part 82, subpart G. When reviewing substitutes, in 

addition to finding them acceptable or unacceptable, EPA may also find them acceptable 

so long as the user meets certain use conditions. For example, all motor vehicle air 

conditioning system must have unique fittings and a uniquely colored label for the 

refrigerant being used in the system. 

 On September 14, 2006, EPA proposed to approve R-744 (CO2) for use in motor 

vehicle A/C systems (71 FR 55140) and on October 19, 2009, EPA proposed to approve 

the low-GWP refrigerant HFO-1234yf for these systems (74 FR 53445), both subject to 

certain requirements. Final action on both of these proposals is expected later this year. 

EPA previously issued a final rule allowing the use of HFC-152a as a refrigerant in motor 

vehicle A/C systems subject to certain requirements (June 12, 2008; 73 FR 33304). As 

discussed above, manufacturers transitioning to any of the approved refrigerants would 

be eligible for A/C Leakage Credits, the value of which would depend on the GWP of 

their refrigerant and the degree of leakage reduction of their systems. 

EPA views this rule as complementing these Title VI programs, and not 

conflicting with them. To the extent that manufacturers choose to reduce refrigerant 

leakage in order to earn A/C Leakage Credits, this will dovetail with the Title VI section 

609 standards which apply to maintenance events, and to end-of-vehicle life disposal. In 
217 

fact, as noted, a benefit of the A/C credit provisions is that there should be fewer and less 

impactive maintenance events for MVACs, since there will be less leakage. In addition, 

the credit provisions will not conflict (or overlap) with the Title VI section 609 standards. 

EPA also believes the menu of leak control technologies described in this rule will 

complement the section 612 requirements, because these control technologies will help 

ensure that HFC-134a (or other refrigerants) will be used in a manner that further 

minimizes potential adverse effects on human health and the environment. 

2. Flexible Fuel and Alternative Fuel Vehicle Credits

EPA is finalizing its proposal to allow flexible-fuel vehicles (FFVs) and 

alternative fuel vehicles to generate credits for purposes of the GHG rule starting in the 

2012 model year. FFVs are vehicles that can run on both an alternative fuel and a 

conventional fuel. Most FFVs are E85 vehicles, which can run on a mixture of up to 85 

percent ethanol and gasoline. Dedicated alternative fuel vehicles are vehicles that run 

exclusively on an alternative fuel (e.g., compressed natural gas). These credits are 

designed to complement the treatment of FFVs under CAFE, consistent with the emission 

reduction objectives of the CAA. As explained at proposal, EPCA includes an incentive 

under the CAFE program for production of dual-fueled vehicles or FFVs, and dedicated 

alternative fuel vehicles.215 For FFVs and dual-fueled vehicles, the EPCA/EISA credits 

have three elements: 1) the assumption that the vehicle is operated 50% of the time on 

the conventional fuel and 50% of the time on the alternative fuel, 2) that 1 gallon of 

alternative fuel is treated as 0.15 gallon of fuel, essentially increasing the fuel economy of 

a vehicle on alternative fuel by a factor of 6.67, and 3) a “cap” provision that limits the 

maximum fuel economy increase that can be applied to a manufacturer’s overall CAFE 

compliance value for all CAFE compliance categories (i.e., domestic passenger cars, 

import passenger cars, and light trucks) to 1.2 mpg through 2014 and 1.0 mpg in 2015. 

EPCA’s provisions were amended by the EISA to extend the period of availability of the 

FFV credits, but to begin phasing them out by annually reducing the amount of FFV 

credits that can be used in demonstrating compliance with the CAFE standards.216 EPCA 

does not premise the availability of the FFV credits on actual use of alternative fuel. 

Under EPCA, after MY 2019 no FFV credits will be available for CAFE compliance.217 

Under EPCA, for dedicated alternative fuel vehicles, there are no limits or phase-out. As 

proposed, FFV and Alternative Fuel Vehicle Credits will be calculated as a part of the 

calculation of a manufacturer’s overall fleet average fuel economy and fleet average 

carbon-related exhaust emissions (§600.510-12). 

 Manufacturers supported the inclusion of FFV credits in the program. Chrysler 

noted that the credits encourage manufacturers to continue production of vehicles capable 

of running on alternative fuels as the production and distribution systems of such fuels 

 

215 49 U.S.C 32905 216 See 49 U.S.C 32906. The mechanism by which EPCA provides an incentive for production of FFVs is 

by specifying that their fuel economy is determined using a special calculation procedure that results in 

those vehicles being assigned a higher fuel economy level than would otherwise occur. 49 U.S.C 32905 (b). 

This is typically referred to as an FFV credit. 

217 49 U.S.C 32906 
218 

are developed. Chrysler believes the lower carbon intensity of such fuels is an 

opportunity for further greenhouse gas reductions and increased energy independence, 

and the continuance of such incentives recognizes the important potential of this 

technology to reduce GHGs. Toyota noted that 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. Toyota believes that 

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. 

 As proposed, electric vehicles (EVs) or plug-in hybrid electric vehicles (PHEVs) 

are not eligible to generate this type of credit. These vehicles are covered by the 

advanced technology vehicle incentives provisions described in Section III.C.3, so 

including them here would lead to a double counting of credits. 

 a. Model Year 2012 – 2015 Credits 

i. FFVs 

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. (As discussed below in Section III.E., EPA is not allowing CAFE-based FFV 

credits to be generated as part of the early credits program.) As noted at proposal, several 

manufacturers have already taken the availability of FFV credits into account in their 

near-term future planning for CAFE and this reliance indicates that these credits need to 

be considered in assessing necessary lead time for the CO2 standards. Manufacturers 

commented that the credits are necessary in allowing them to transition to the new 

standards. EPA thus believes that allowing these credits, in the near term, would help 

provide adequate lead time for manufacturers to implement the new multi-year standards, 

but that for the longer term there is adequate lead time without the use of such credits. 

This will also tend to harmonize the GHG and the CAFE program during these interim 

years. As discussed below, EPA is requiring for MY 2016 and later that manufacturers 

will need to 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 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. 

 

As with the CAFE program, EPA will base MY 2012-2015 credits on the 

assumption that the vehicles would operate 50% of the time on the alternative fuel and 

50% of the time on conventional fuel, resulting in CO2 emissions that are based on an 

arithmetic average of alternative fuel and conventional fuel CO2 emissions. 218 In 

addition, the measured CO2 emissions on the alternative fuel will be multiplied by a 0.15 

 

218 49 U.S.C 32905 (b) 
219 

volumetric conversion factor which is included in the CAFE calculation as provided by 

EPCA. Through this mechanism a gallon of alternative fuel is deemed to contain 0.15 

gallons of fuel. For example, for a flexible-fuel vehicle that emitted 330 g/mi CO2

operating on E85 and 350 g/mi CO2 operating on gasoline, the resulting CO2 level to be 

used in the manufacturer’s fleet average calculation would be: 

[ ] ( ) CO /8.199 mig 2

35015.0330 2 = × + =

 EPA understands that by using the CAFE approach -- including the 0.15 factor -- 

the CO2 emissions value for the vehicle is calculated to be significantly lower than it 

actually would be otherwise, even if the vehicle were assumed to operate on the 

alternative fuel at all times. This represents a “credit” being provided to FFVs. 

 EPA notes also that the above equation and example are based on an FFV that is 

an E85 vehicle. EPCA, as amended by EISA, also establishes the use of this approach, 

including the 0.15 factor, for all alternative fuels, not just E85.219 The 0.15 factor is used 

for B-20 (20 percent biofuel and 80 percent diesel) FFVs. EPCA also establishes this 

approach, including the 0.15 factor, for gaseous-fueled dual-fueled vehicles, such as a 

vehicle able to operate on gasoline and CNG.220 (For natural gas dual-fueled vehicles, 

EPCA establishes a factor of 0.823 gallons of fuel for every 100 cubic feet a natural gas 

used to calculate a gallons equivalent.221) The EISA’s use of the 0.15 factor in this way 

provides a similar regulatory treatment across the various types of alternative fuel 

vehicles. EPA also will use the 0.15 factor for all FFVs in order not to disrupt 

manufacturers’ near-term compliance planning and assure sufficient lead time. EPA, in 

any case, expects the vast majority of FFVs to be E85 vehicles, as is the case today. 

 The FFV credit limits for CAFE are 1.2 mpg for model years 2012-2014 and 1.0 

mpg for model year 2015.222 In CO2 terms, these CAFE limits translate to declining CO2

credit limits over the four model years, as the CAFE standards increase in stringency. As 

the CAFE standard increases numerically, the limit becomes a smaller fraction of the 

standard. EPA proposed, but is not adopting, credit limits based on the overall 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. EPA received comment from one manufacturer 

supporting this approach. EPA also received comments from another manufacturer 

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 this approach 

since it best harmonizes how credit limits are determined in CAFE. EPA intended and 

 

219 49 U.S.C 32905 (c) 220 49 U.S.C 32905 (d). 221 49 U.S.C 32905 (c). 222 49 U.S.C 32906 (a). 
220 

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 were 270 g/mile the limit would be 10.2 g/mile. 

ii. Dedicated Alternative Fuel Vehicles 

 As proposed, EPA will calculate CO2 emissions from dedicated alternative fuel 

vehicles for MY 2012 – 2015 by measuring the CO2 emissions over the test procedure 

and multiplying the results by the 0.15 conversion factor described above. For example, 

for a dedicated alternative fuel vehicle that would achieve 330 g/mi CO2 while operating 

on alcohol (ethanol or methanol), the effective CO2 emissions of the vehicle for use in 

determining the vehicle’s CO2 emissions would be calculated as follows: 

CO /5.4915.0330 mig 2 = × =

b. Model Years 2016 and Later 

i. FFVs 

EPA is treating FFV credits the same as under EPCA for model years 2012-2015, 

but is applying a different approach starting with model year 2016. EPA recognizes that 

under EPCA automatic FFV credits are entirely phased out of the CAFE program by MY 

2020, and apply in the prior model years with certain limitations, but without a 

requirement that the manufacturers demonstrate actual use of the alternative fuel. Unlike 

EPCA, CAA section 202(a) 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 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. 

Starting with model year 2016, as proposed, EPA will no longer allow 

manufacturers to base FFV emissions on the use of the 0.15 factor credit described above, 

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 in support of EPA’s proposal to use this approach 

instead of the EPCA approach for MY2016 and later. 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. In other words, the default 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 
221 

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. An example calculation 

is described below. 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 fleetwide performance. Based on existing certification 

data, E85 FFV CO2 emissions are typically 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 would provide such an incentive to manufacturers and that E85 vehicles could 

be optimized through engine redesign and calibration to provide additional CO2

reductions. 

Under the EPCA credit provisions, there is an incentive to produce FFVs but no 

actual incentive to ensure that the alternative fuels are used, or that actual vehicle fuel 

economy improves. GHG and energy security benefits are only achieved if the 

alternative fuel is actually used and (for GHGs) that performance improves, and EPA’s 

approach for MY2016 and beyond will now provide such an incentive. This approach 

will promote greater use of alternative fuels, as compared to a situation where there is a 

credit but no usage requirement. This is also consistent with the agency’s overall 

commitment to the expanded use of renewable fuels. Therefore, 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. 

For 2016 and later model years, EPA will therefore treat FFVs similarly to 

conventional fueled vehicles in that FFV emissions would be based on actual CO2 results 

from emission testing on the fuels on which it operates. In calculating the emissions 

performance of an FFV, manufacturers may base FFV emissions on vehicle testing based 

on the alternative fuel emissions, if they can demonstrate that the alternative fuel is 

actually being used in the vehicles. Performance will otherwise be calculated assuming 

use only of conventional fuel. The manufacturer must establish the ratio of operation that 

is on the alternative fuel compared to the conventional fuel. The ratio will be used to 

weight the CO2 emissions performance over the 2-cycle test on the two fuels. The 0.15 

conversion factor will no longer be included in the CO2 emissions calculation. For 

example, for a flexible-fuel vehicle that emitted 300 g/mi CO2 operating on E85 ten 

percent of the time and 350 g/mi CO2 operating on gasoline ninety percent of the time, 

the CO2 emissions for the vehicles to be used in the manufacturer’s fleet average would 

be calculated as follows: 

g/mi 345)90.0350()10.0300( CO2 ×= + × =
222 

 The most complex part of this approach is to establish what data are needed for a 

manufacturer to accurately demonstrate use of the alternative fuel, where the 

manufacturer intends for its performance to be calculated based on some use of 

alternative fuels. One option EPA is finalizing is establishing a rebuttable presumption 

using a national average approach based on national E85 fuel use. Manufacturers could 

use this value along with their vehicle emissions results demonstrating lower emissions 

on E85 to determine the emissions compliance values for FFVs sold by manufacturers 

under this program. For example, national E85 volumes and national FFV sales may be 

used to prorate E85 use by manufacturer sales volumes and FFVs already in-use. Upon a 

manufacturer’s written request, EPA will 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 E85 sales, E85 usage will be assigned to each vehicle. This 

method accounts for the VMT of new FFVs and FFVs already in the existing fleet using 

VMT data in the model. The model will then be used to determine the ratio of E85 and 

gasoline for new vehicles being sold. Fluctuations in E85 sales and FFV sales will be 

taken into account to adjust the manufacturers’ E85 actual use estimates annually. EPA 

plans to make this assigned fuel usage factor available through guidance prior to the start 

of MY 2016 and adjust it annually as necessary. EPA believes this is a reasonable way to 

apportion E85 use across the fleet. 

If manufacturers decide not to use EPA’s assigned fuel usage based on the 

national average analysis, they have a second option of presenting their own data for 

consideration as the basis for evaluating fuel usage. Manufacturers have suggested 

demonstrations using vehicle on-board data gathering through the use of on-board 

sensors and computers. California’s program allows FFV credits based on FFV use and 

envisioned manufacturers collecting fuel use data from vehicles in fleets with on-site 

refueling. Manufacturers must present a statistical analysis of alternative fuel usage data 

collected on actual vehicle operation. EPA is not attempting to specify how the data is 

collected or the amount of data needed. However, the analysis must be based on sound 

statistical methodology. Uncertainty in the analysis must be accounted for in a way that 

provides reasonable certainty that the program does not result in loss of emissions 

reductions. 

 

EPA received comments that the 2016 and later FFV emissions performance 

methodology should be based on the life cycle emissions (i.e., including the upstream 

GHG emissions associated with fuel feedstocks, production, and transportation) 

associated with the use of the alternative fuel. Commenters are concerned that the use of 

ethanol will not result in lower GHGs on a lifecycle basis. After considering these 

comments, EPA is not including lifecycle emissions in the calculation of vehicle credits. 

EPA continues to believe that it is appropriate to base credits for MY2012-2015 on the 

EPCA/CAFE credits and to base compliance values for MY2016 on the demonstrated 

tailpipe emissions performance on gasoline and E85, and is finalizing this approach as 

proposed. EPA recently finalized its RFS2 rulemaking which addresses lifecycle 

emissions from ethanol and the upstream GHG benefits of E85 use are already captured 

by this program.223 

 

223 75 FR 14670 (March 26, 2010) Deleted: XX Cite RFS2 FR notice
223 

 

ii. Dedicated Alternative Fuel Vehicles 

 As proposed, for model years 2016 and later dedicated alternative fuel vehicles, 

CO2 will be measured over the 2-cycle test in order to be included in a manufacturer’s 

fleet average CO2 calculations. As noted above, this is different than CAFE methodology 

which provides a methodology for calculating a petroleum-based mpg equivalent for 

alternative fuel vehicles so they can be included in CAFE. However, because CO2 can be 

measured directly from alternative fuel vehicles over the test procedure, EPA believes 

this is the simplest and best approach since it is consistent with all other vehicle testing 

under the CO2 program. EPA did not receive comments on this approach. 

3. Advanced Technology Vehicle Incentives for Electric Vehicles, Plug-in 

Hybrids, and Fuel Cell Vehicles

EPA is finalizing provisions that provide a temporary regulatory incentive for the 

commercialization of certain advanced vehicle power trains—electric vehicles (EVs), 

plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCVs)—for model year 

2012-2016 light-duty and medium-duty passenger vehicles.224 The purpose of these 

provisions is to provide a temporary incentive to promote technologies which have the 

potential to produce very large GHG reductions in the future, but which face major 

challenges such as vehicle cost, consumer acceptance, and the development of low-GHG 

fuel production infrastructure. The tailpipe GHG emissions from EVs, PHEVs operated 

on grid electricity, and hydrogen-fueled FCVs are zero, and traditionally the emissions of 

the vehicle itself are all that EPA takes into account for purposes of compliance with 

standards set under section 202(a). Focusing on vehicle tailpipe emissions has not raised 

any issues for criteria pollutants, as upstream emissions associated with production and 

distribution of the fuel are addressed by comprehensive regulatory programs focused on 

the upstream sources of those emissions.225 At this time, however, there is no such 

comprehensive program addressing upstream emissions of GHGs, and the upstream GHG 

emissions associated with production and distribution of electricity are higher than the 

corresponding upstream GHG emissions of gasoline or other petroleum based fuels. In 

the future, if there were a program to comprehensively control upstream GHG emissions, 

then the zero tailpipe levels from these vehicles have the potential to produce very large 

GHG reductions, and to transform the transportation sector’s contribution to nationwide 

GHG emissions. 

This temporary incentive program applies only for the model years 2012-2016 

covered by this final rule. EPA will reassess the issue of how to address EVs, PHEVs, 

and FCVs in rulemakings for model years 2017 and beyond, based on the status of 

advanced technology vehicle commercialization, the status of upstream GHG emissions 

control programs, and other relevant factors. 

 

224 See final regulations at 40 CFR 86.1866-12(a). 225 In this section, “upstream” means all fuel-related GHG emissions prior to the fuel being introduced to 

the vehicle. 
224 

 In the Joint Notice of Intent, EPA stated that “EPA is currently considering 

proposing additional credit opportunities to encourage the commercialization of advanced 

GHG/fuel economy control technology such as electric vehicles and plug-in hybrid 

electric vehicles. These ‘super credits’ could take the form of a multiplier that would be 

applied to the number of vehicles sold such that they would count as more than one 

vehicle in the manufacturer’s fleet average.”226 Following through, EPA proposed two 

mechanisms by which these vehicles would earn credits: 1) a zero grams/mile compliance 

value for EVs, FCVs, and for PHEVs when operated on grid electricity, and 2) a vehicle 

multiplier in the range of 1.2 to 2.0.227 

 The zero grams/mile compliance value for EVs (and for PHEVs when operated on 

grid electricity, as well as for FCVs which involve similar upstream GHG issues with 

respect to hydrogen production) is an incentive that operates like a credit because, while 

it accurately accounts for tailpipe GHG emissions, it does not reflect the increase in 

upstream GHG emissions associated with the electricity used by EVs compared to the 

upstream GHG emissions associated with the gasoline or diesel fuel used by conventional 

vehicles.228 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.229 The net upstream GHG impact could change 

over time, of course, based on changes in electricity generation or gasoline production. 

 The proposed vehicle multiplier incentive would also have operated like a credit 

as it would have allowed an EV, PHEV, or FCV to count as more than one vehicle in the 

manufacturer’s fleet average. For example, combining a multiplier of 2.0 with a zero 

grams/mile compliance value for an EV would allow that EV to be counted as two 

vehicles, each with a zero grams/mile compliance value, in the manufacturer’s fleet 

average calculations. In effect, a multiplier of 2.0 would double the overall credit 

associated with an EV, PHEV, or FCV. 

 

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

FR 24007, 24011 (May 22, 2009) 

227 74 FR 49533-34. 228 See 74 FR 49533 (“EPA recognizes that for each EV that is sold, 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”). 229 This 120 grams/mile value for a midsize EV is approximately similar to the compliance value for 

today’s most efficient conventional hybrid vehicle, so the EV would not be significantly more “GHGpositive” than the most efficient conventional hybrid counterpart under a full accounting approach. It 

should be noted that these emission levels would still be well below the footprint targets for the vehicles in 

question. 
225 

 EPA explained in the proposal that the potential for large future emissions 

benefits from these technologies provides a strong reason for providing incentives at this 

time to promote their commercialization in the 2012-2016 model years. At the same 

time, EPA acknowledged that the zero grams/mile compliance value did not account for 

increased upstream GHG emissions. EPA requested comment on providing some type of 

incentive, 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 many comments on these issues, which will 

be briefly summarized below. 

 Although some environmental organizations and State agencies supported the 

principle of including some type of regulatory incentive mechanism, almost all of their 

comments were opposed to the combination of both the zero grams/mile compliance 

value and multipliers in the higher end of the proposed range of 1.2 to 2.0. The California 

Air Resources Board stated that the proposed credits “are excessive” and the Union of 

Concerned Scientists stated that it “strongly objects” to the approach that lacks “technical 

justification” by not “accounting for upstream emissions.” The Natural Resources 

Defense Council (NRDC) stated that the credits could “undermine the emissions benefits 

of the program and will have the unintended consequence of slowing the development of 

conventional cleaner vehicle emission reduction technologies into the fleet.” NRDC, 

along with several other commenters who made the same point, cited an example based 

on Nissan’s public statements that it plans on producing up to 150,000 Nissan Leaf EVs 

in the near future at its plant in Smyrna, Tennessee.230 NRDC’s analysis showed that if 

EVs were to account for 10% of Nissan’s car fleet in 2016, the combination of the zero 

grams/mile and 2.0 multiplier would allow Nissan to make only relatively small 

improvements to its gasoline car fleet and still be in compliance. NRDC described a 

detailed methodology for calculating “true full fuel cycle emissions impacts” for EVs. 

The Sierra Club suggested that the zero grams/mile credit would “taint” EVs as the public 

comes to understand that these vehicles are not zero-GHG vehicles, and that the zero 

grams/mile incentive would allow higher gasoline vehicle GHG emissions. 

Most vehicle manufacturers were supportive of both the zero grams/mile 

compliance value and a higher vehicle multiplier. The Alliance of Automobile 

Manufacturers supported zero grams/mile “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.” Nissan claimed that zero grams/mile is 

“legally required,” stating that EPA’s 2-cycle test procedures do not account for upstream 

GHG emissions, that accounting for upstream emissions from electric vehicles but not 

from other vehicles would be arbitrary, and that including upstream GHG would “disrupt 

the careful balancing embedded into the National Program.” Several other manufacturers, 

including Ford, Chrysler, Toyota, and Mitsubishi, also supported the proposed zero 

grams/mile compliance value. BMW suggested a compliance value approach similar to 

 

230 ”Secretary Chu Announces Closing of $1.4 Billion Loan to Nissan,” Department of Energy, January 28, 

2010, http://www.energy.gov/news/8581.htm 
226 

that used for CAFE compliance (described below), which would yield a very low, nonzero grams/mile compliance value. Honda opposed the zero grams/mile incentive. Honda 

suggested that EPA should fully account for upstream GHG and “should separate 

incentives and credits from the measurement of emissions.” Automakers universally 

supported higher multipliers, many higher than the maximum 2.0 level proposed by EPA. 

Honda suggested a multiplier of 16.0 for FCVs. Mitsubishi supported the concept of 

larger, temporary incentives until advanced technology vehicle sales achieved a 10% 

market share. Finally, some commenters suggested that other technologies should also 

receive incentives, such as diesel vehicles, hydrogen-fueled internal combustion engines, 

and natural gas vehicles. 

 Based on a careful consideration of these comments, EPA is modifying its 

proposed advanced technology vehicle incentive program for EVs, PHEVs, and FCVs 

produced in 2012-2016. EPA is not extending the program to include additional 

technologies at this time. The final incentive program, and our rationale for it, are 

described below. 

 One, the incentive program retains the zero grams/mile value for EVs and FCVs, 

and for PHEVs when operated on grid electricity, subject to vehicle production caps 

discussed below. EPA acknowledges that, based on current electricity and hydrogen 

production processes, that EVs, PHEVs, and FCVs yield higher upstream GHG emissions 

than comparable gasoline vehicles. But EPA reiterates its support for temporarily 

rewarding advanced emissions control technologies by foregoing modest emissions 

reductions in the short term in order to lay the foundation for the potential for much 

larger emission reductions in the longer term.231 EPA notes 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). 

 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.

EPA agrees with the comments by the environmental organizations, States, and 

Honda that the zero grams/mile compliance value will reduce the overall GHG benefits 

of the program. However, EPA believes these reductions in GHG benefits will be 

relatively small based on the projected production of EVs, PHEVs, and FCVs during the 

 

231 EPA has adopted this strategy in several of its most recent and important mobile source rulemakings, 

such as its Tier 2 Light-Duty Vehicle, 2007 Heavy-Duty Highway, and Tier 4 Nonroad Diesel rulemakings. 

Deleted: 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.
227 

2012-2016 timeframe, along with the other changes that we are making in the incentive 

program. EPA believes this modest potential for reduction in near-term emissions 

control is more than offset by the potential for very large future emissions reductions that 

commercialization of these technologies could promote. 

 Two, the incentive program will not include any vehicle multipliers, i.e., an EV’s 

zero grams/mile compliance value will count as one vehicle in a manufacturer’s fleet 

average, not as more than one vehicle as proposed. EPA has concluded that the 

combination of the zero grams/mile and multiplier credits would be excessive. Compared 

to the maximum multiplier of 2.0 that EPA had proposed, dropping this multiplier 

reduces the aggregate impact of the overall credit program by a factor of two (less so for 

lower multipliers, of course). 

 Three, EPA is placing 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 model years 2012-2016. The cumulative production 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 a second 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 and could significantly undermine the program’s GHG benefits. If, for 

example, 500,000 EVs were produced in 2012-2016 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.232 The rationale for these caps is that the incentive for EVs, PHEVs, and 

FCVs 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 higher 

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 2012-2016 timeframe.233 

Production beyond the cumulative vehicle production cap for a given 

manufacturer in MY2012-2016 would have its compliance values calculated according to 

a methodology that accounts in full for the net increase in upstream GHG emissions. For 

 

232 See Regulatory Impact Analysis, Appendix 5.B. While it is, of course, impossible to predict the number 

of EVs, PHEVs, and FCVs that will be produced between 2012 and 2016 with absolute certainty, EPA 

believes that 500,000 “un-capped” EVs is an optimistic scenario. Fewer EVs, or a combination of 500,000 

EVs and PHEVs, would lessen the short-term reduction in GHG benefits. Production of more than 500,000 

“un-capped” EVs would increase the short-term reduction in GHG benefits. 

233 Fundamental power train changes in the automotive market typically evolve slowly over time. For 

example, over ten years after the U.S. introduction of the first conventional hybrid electric vehicle, total 

hybrid sales are approximately 300,000 units per year. 
228 

an EV, for example, this would involve: 1) measuring the vehicle electricity consumption 

in watt-hours/mile over the 2-cycle test (in the example introduced earlier, a midsize EV 

might have a 2-cycle test electricity consumption of 230 watt-hours/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 powerplant234 (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).235,236 The full 

accounting methodology for the portion of PHEV operation on grid electricity would use 

this same approach. 

EPA projects that the aggregate impact of the incentive program on advanced 

technology vehicle GHG compliance values will be similar to the way advanced 

technologies are treated under DOT’s CAFE program. In the CAFE program, the mpg 

value for an EV is determined using a “petroleum equivalency factor” that has a 1/0.15 

factor built into it similar to the flexible fuel vehicle credit.237 For example, under current 

regulations, an EV with a 2-cycle electricity consumption of 230 watt-hours/mile would 

have a CAFE rating of about 360 miles per gallon, which would be equivalent to a 

gasoline vehicle GHG emissions value of 25 grams/mile, which is close to EPA’s zero 

grams/mile for EV production that is below an individual automaker’s cumulative vehicle 

 

234 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. 

235 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 from 19,200 grams upstream GHG/mmBtu (Department of Energy: 

National Energy Technology Laboratory. 2009. NETL: Petroleum-Based Fuels Life Cycle Greenhouse Gas 

Analysis - 2005 Baseline Model. Available at http://www.netl.doe.gov/energy-analyses) and multiplying by 

0.115 mmBtu/gallon of gasoline. 

236 Manufacturers can utilize alternate calculation methodologies if shown to yield equivalent or superior 

results and if approved in advance by the Administrator. 

237 65 FR 36987 (June 12, 2000). 
229 

production cap. The exception would be if a manufacturer exceeded its cumulative 

vehicle production cap during MY2012-2016. Then, the same EV would have a GHG 

compliance value of about 120 grams/mile, which would be significantly higher than the 

25 gram/mile implied by the 360 mile/gallon CAFE value. 

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. 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. While the 

logical place to start is the emissions level measured under the test procedure, section 

202(a)(1) does not require that EPA limit itself to only that level. For vehicles above the 

production volume cap described above, 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 we are addressing. For vehicles above the cap, EPA is reasonably 

and fairly accounting for the incremental increase in upstream GHG emissions from both 

the electric vehicles and the conventional vehicles. EPA is not, as Nissan suggested, 

arbitrarily counting upstream emissions for electric vehicles but not for conventional fuel 

vehicles.

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) 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, as 

shown above in the example for a midsize car, electricity upstream GHG emissions are 

about three times higher than gasoline upstream GHG emissions. For example, 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. Nor 

is EPA arbitrarily ignoring upstream GHG emissions of flexible fuel vehicles (FFVs) that 

can operate on E85. 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.238 EPA’s recently 

 

238 Renewable Fuel Standard Program (RFS2), Regulatory Impact Analysis, Section 1.7.4, February 2010. 
230 

promulgated Renewable Fuel Standard Program shows that, with respect to aggregate 

lifecycle emissions including non-tailpipe GHG emissions (such as feedstock growth, 

transportation, fuel production, and land use), lifecycle emissions for ethanol from corn 

using advanced production technologies are about 20 percent less GHG than gasoline 

from oil.239 Given this difference, and that E85 is used in FFVs less than 1 percent of the 

time, EPA has concluded that it is not necessary to adopt a more complicated upstream 

accounting for FFVs. Accordingly, EPA’s incentive approach here is both reasonable and 

authorized under section 202(a)(1). 

 In summary, EPA believes that this program for MY2012-2016 strikes a reasoned 

balance by providing a temporary regulatory incentive to help promote 

commercialization of advanced vehicle technologies which are potential game-changers, 

but which also face major barriers, while effectively minimizing potential GHG losses by 

dropping the proposed multiplier and adding individual automaker production volume 

caps. In the future, if there were a program to control utility GHG emissions, then these 

advanced technology vehicles have the potential to produce very large reductions in GHG 

emissions, and to transform the transportation sector’s contribution to nationwide GHG 

emissions. EPA will reassess the issue of how to address EVs, PHEVs, and FCVs in 

rulemakings for model years 2017 and beyond based on the status of advanced vehicle 

technology commercialization, the status of upstream GHG control programs, and other 

relevant factors. 

Finally, the criteria and definitions for what vehicles qualify for the advanced 

technology vehicle incentives are provided in Section III.E. These definitions for EVs, 

PHEVs, and FCVs ensure that only credible advanced technology vehicles are provided 

the incentives. 

4. Off-cycle Technology Credits

As proposed, EPA is adopting an optional credit opportunity intended to apply to 

new and innovative technologies that reduce vehicle CO2 emissions, but for which the 

CO2 reduction benefits are not significantly captured over the 2-cycle test procedure used 

to determine compliance with the fleet average standards (i.e., “off-cycle”).240 Eligible 

innovative technologies are 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. 

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. 

 

239 75 FR 14670 (March 26, 2010) 240 See final regulations at 40 CFR 86.1866-12(d). 

Deleted: emits

Deleted: comprehensive

Deleted: upstream emissions of 

Deleted: s from utilities and other fuel 

production facilities

Deleted: XX (fill in after RFS 

publication)
231 

Similar to the technologies used to reduce A/C system indirect CO2 emissions by 

increasing A/C efficiency, eligible technologies would not be primarily active during the 

2-cycle test and therefore the associated improvements in CO2 emissions would not be 

significantly captured. Because these technologies are not nearly so well developed and 

understood, EPA is not prepared to consider them in assessing the stringency of the CO2

standards. However, EPA is aware of some emerging and innovative technologies and 

concepts in various stages of development with CO2 reduction potential that might not be 

adequately captured on the FTP or HFET. EPA believes that manufacturers should be 

able to generate credit for the emission reductions these technologies actually achieve, 

assuming these reductions can be adequately demonstrated and verified. Examples 

include solar panels on hybrids or electric vehicles, adaptive cruise control, and active 

aerodynamics. EPA believes it would be appropriate to provide an incentive to 

encourage the introduction of these types of technologies, that bona fide reductions from 

these technologies should be considered in determining a manufacturer’s fleet average, 

and that a credit mechanism is an effective way to do this. This optional credit 

opportunity would be available through the 2016 model year. 

 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 

their use should be incentivized. One manufacturer suggested that off-cycle credits 

should be given for start-stop technologies. EPA does not agree that this technology, 

which EPA’s modeling projects will be widely used by manufacturers in meeting the CO2 

standards, should qualify for off-cycle credits. 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 in 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 that manufacturers 

will rely on 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 rely on in widespread use throughout the fleet in meeting the CO2 standards. Such 

credits could lead to double counting, as there is already significant CO2 benefit over the 

2-cycle tests. EPA expects that most if not all technologies that 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. We expect that the 

catalytic converter and other emission control technology will 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 normally would not be chosen as a GHG control strategy, 

as their GHG benefits are not 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. 

Thus, EPA is 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 

Deleted: some
232 

innovative, are introduced in only a limited number of vehicle models (i.e., not in 

widespread use), and are not captured on the current 2-cycle tests. This approach will 

encourage future innovation, which may lead to the opportunity for future emissions 

reductions. 

 

 As proposed, manufacturers would 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. Credits must be 

based on real additional reductions of CO2 emissions and must be quantifiable and 

verifiable with a repeatable methodology. 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. 

 As discussed below, EPA is finalizing a two-tiered process for demonstrating the 

CO2 reductions of an innovative and novel technology with benefits not 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 to better 

represent real-world factors impacting fuel economy, including higher speeds and more 

aggressive driving, colder temperature operation, and the use of air conditioning. If this 

determination is affirmative, the manufacture 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. 

 

a. Technology Demonstration Using EPA 5-Cycle Methodology 

As noted above, the CO2 reduction benefit of some innovative technologies could 

be demonstrated using the 5-cycle approach currently used for EPA’s fuel economy 

labeling program. The 5-cycle methodology was finalized in EPA’s 2006 fuel economy 

labeling rule,241 which provides a more accurate fuel economy label estimate to 

consumers starting with 2008 model year vehicles. In addition to the FTP and HFET test 

procedures, the 5-cycle approach folds in the test results from three additional test 

procedures to determine fuel economy. The additional test cycles include cold 

temperature operation, high temperature, high humidity and solar loading, and aggressive 

and high-speed driving; thus these tests could be used to demonstrate the benefit of a 

technology that reduces CO2 over these types of driving and environmental conditions. 

Using the test results from these additional test cycles collectively with the 2-cycle data 

 

241 Fuel Economy Labeling of Motor Vehicles: Revisions to Improve Calculation of Fuel Economy 

Estimates; Final Rule (71 FR 77872, December 27, 2006). 
233 

provides a more precise estimate of the average fuel economy and CO2 emissions of a 

vehicle for both the city and highway independently. A significant benefit of using the 5-

cycle methodology to measure and quantify the CO2 reductions is that the test cycles are 

properly weighted for the expected average U.S. operation, meaning that the test results 

could be used without further adjustments. 

EPA continues to believe that the use of these supplemental cycles may provide a 

method by which technologies not demonstrated on the baseline 2-cycles can be 

quantified and is finalizing this approach as proposed. The cold temperature FTP can 

capture new technologies that improve the CO2 performance of vehicles during colder 

weather operation. These improvements may be related to warm-up of the engine or 

other operation during the colder temperature. An example of such a new, innovative 

technology is a waste heat capture device that provides heat to the cabin interior, enabling 

additional engine-off operation during colder weather not previously enabled due to 

heating and defrosting requirements. The additional engine-off time would result in 

additional CO2 reductions that otherwise would not have been realized without the heat 

capture technology. 

Although A/C credits for efficiency improvements will largely be captured in the 

A/C credits provisions through the credit menu of known efficiency improving 

components and controls, certain new technologies may be able to use the high 

temperatures, humidity, and solar load of the SC03 test cycle to accurately measure their 

impact. An example of a new technology may be a refrigerant storage device that 

accumulates pressurized refrigerant during driving operation or uses recovered vehicle 

kinetic energy during deceleration to pressurize the refrigerant. Much like the waste heat 

capture device used in cold weather, this device would also allow additional engine-off 

operation while maintaining appropriate vehicle interior occupant comfort levels. SC03 

test data measuring the relative impact of innovative A/C-related technologies could be 

applied to the 5-cycle equation to quantify the CO2 reductions of the technology. 

The US06 cycle may be used to capture innovative technologies designed to 

reduce CO2 emissions during higher speed and more aggressive acceleration conditions, 

but not reflected on the 2-cycle tests. An example of this is an active aerodynamic 

technology. This technology recognizes the benefits of reduced aerodynamic drag at 

higher speeds and makes changes to the vehicle at those speeds. The changes may 

include active front or grill air deflection devices designed to redirect frontal airflow. 

Certain active suspension devices designed primarily to reduce aerodynamic drag by 

lowering the vehicle at higher speeds may also be measured on the US06 cycle. To 

properly measure these technologies on the US06, the vehicle would require unique load 

coefficients with and without the technologies. The different load coefficient (properly 

weighted for the US06 cycle) could effectively result in reduced vehicle loads at the 

higher speeds when the technologies are active. Similar to the previously discussed 

cycles, the results from the US06 test with and without the technology could then use the 

5-cycle methodology to quantify CO2 reductions. 
234 

If the 5-cycle procedures can be used to demonstrate the innovative technology, 

then the regulatory evaluation/approval process will be relatively simple. The 

manufacturer will simply test vehicles with and without the technology installed or 

operating and compare results. All 5-cycles must be tested with the technology enabled 

and disabled, and the test results will used to calculate a combined city/highway CO2

value with the technology and without the technology. These values will then be 

compared to determine the amount of the credit; the combined city/highway CO2 value 

with the technology operating will be subtracted from the combined city/highway CO2

value without the technology operating to determine the gram per mile CO2 credit. It is 

likely that multiple tests of each of the five test procedures will need to be performed in 

order to achieve the necessary strong degree of statistical significance of the credit 

determination results. This will have to be done for each model type for which a credit is 

sought, unless the manufacturer could demonstrate that the impact of the technology was 

independent of the vehicle configuration on which it was installed. In this case, EPA 

may consider allowing the test to be performed on an engine family basis or other 

grouping. At the end of the model year, the manufacturer will determine the number of 

vehicles produced subject to each credit amount and report that to EPA in the final model 

year report. The gram per mile credit value determined with the 5-cycle comparison 

testing will be multiplied by the total production of vehicles subject to that value to 

determine the total number of credits. 

 EPA received a few comments regarding the 5-cycle approach. While not 

commenting directly on the 5-cycle testing methodology, the Alliance 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 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 offcycle 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, as discussed 

below, which we believe addresses commenter concerns regarding maintaining a level 

playing field. 

b. Alternative Off-Cycle Credit Methodologies 

As proposed, in cases where the benefit of a technological approach to reducing 

CO2 emissions can not be adequately represented using existing test cycles, 

manufacturers will need to develop test procedures and analytical approaches to estimate 
235 

the effectiveness of the technology for the purpose of generating credits. As discussed 

above, the first step must be a thorough assessment of whether the 5-cycle approach can 

be used to demonstrate a reduction in emissions. If EPA determines that the 5-cycle 

process is inadequate for the specific technology being considered by the manufacturer 

(i.e., the 5-cycle test does not demonstrate any emissions reductions), then an alternative 

approach may be developed and submitted to EPA for approval. The demonstration 

program must be robust, verifiable, and capable of demonstrating the real-world 

emissions benefit of the technology with strong statistical significance. 

The CO2 benefit of some technologies may be able to be demonstrated with a 

modeling approach, using engineering principles. An example would be where a roof 

solar panel is used to charge the on-board vehicle battery. The amount of potential 

electrical power that the panel could supply could be modeled for average U.S. 

conditions and the units of electrical power could be translated to equivalent fuel energy 

or annualized CO2 emission rate reduction from the captured solar energy. The CO2

reductions from other technologies may be more challenging to quantify, especially if 

they are interactive with the driver, geographic location, environmental condition, or 

other aspect related to operation on actual roads. In these cases, manufacturers might 

have to design extensive on-road test programs. Any such on-road testing programs 

would need to be statistically robust and based on average U.S. driving conditions, 

factoring in differences in geography, climate, and driving behavior across the U.S. 

Whether the approach involves on-road testing, modeling, or some other 

analytical approach, the manufacturer will be required to present a proposed methodology 

to EPA. EPA will approve the methodology and credits only if certain criteria are met. 

Baseline emissions and control emissions must be clearly demonstrated over a wide range 

of real world driving conditions and over a sufficient number of vehicles to address issues 

of uncertainty with the data. The analytical approach must be robust, verifiable, and 

capable of demonstrating the real-world emissions benefit with strong statistical 

significance. Data must be on a vehicle model-specific basis unless a manufacturer 

demonstrated model specific data was not necessary. Approval of the approach to 

determining a CO2 benefit will not imply approval of the results of the program or 

methodology; when the testing, modeling, or analyses are complete the results will 

likewise be subject to EPA review and approval. EPA believes that manufacturers could 

work together to develop testing, modeling, or analytical methods for certain 

technologies, similar to the SAE approach used for A/C refrigerant leakage credits. 

 In addition, 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. EPA agrees with these comments and is including an opportunity for 
236 

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. EPA will take comments into consideration, and where 

appropriate, work with the manufacturer to modify their approach prior to approving any 

off-cycle credits methodology. EPA will give final notice of its determination to the 

general public as well as 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. 

 EPA also received comments that the off-cycle credits highlights the inadequacy 

of current test procedures, and that there is a clear need for updated certification test 

procedures. As discussed in Section III. B., EPA believes the current test procedures are 

adequate 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 other test procedures that capture off-cycle emissions. 

 

5. Early Credit Options

 EPA is finalizing a program to allow manufacturers to generate early credits in 

model years 2009-2011.242 As described below, credits may be generated through early 

additional fleet average CO2 reductions, early A/C system improvements, early advanced 

technology vehicle credits, and early off-cycle credits. As with other credits, early credits 

are subject to a five year carry-forward limit based on the model year in which they are 

generated. Manufacturers may transfer early credits between vehicle categories (e.g., 

between the car and truck fleet). With the exception of MY2009 early program credits, 

as discussed below, a manufacturer may trade other early credits to other manufacturers 

without limits. The agencies note that CAFE credits earned in MYs prior to MY 2011 

will still be available to manufacturers for use in the CAFE program in accordance with 

applicable regulations. 

 EPA is not adopting certification, compliance, or in-use requirements for vehicles 

generating early credits. Since manufacturers are already certifying MY 2010 and in 

some cases even MY 2011 vehicles, doing so would make certification, compliance, and 

in-use requirements unworkable. As discussed below, manufacturers are required to 

submit an early credits report to EPA for approval no later than 90 days after the end of 

MY 2011. This report must include details on all early credits the manufacturer 

generates, why the credits are bona fide, how they are quantified, and how they can be 

verified. 

 

242 See final regulations at 40 CFR 86.1867-12. 
237 

 a. Credits Based on Early Fleet Average CO2 Reductions 

 As proposed, EPA is finalizing opportunities for early credit generation in MYs 

2009-2011 through over-compliance with a fleet average CO2 baseline established by 

EPA. EPA is finalizing four pathways for doing so. In order to generate early CO2

credits, manufacturers must select one of the four paths for credit generation for the entire 

three year period and may not switch between pathways for different model years. For 

two pathways, EPA is establishing the baseline equivalent to the California standards for 

the relevant model year. Generally, manufacturers that over-comply with those CARB 

standards would earn credits. Two additional pathways, described below, include credits 

based on over-compliance with CAFE standards in states that have not adopted the 

California standards. 

 EPA received comments from manufacturers in support of the 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. 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 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 CAFE, so overcompliance 

with the California standards could be a windfall in MY 2009, and possibly even 

MY2010. 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. EPA is retaining the early credits program because EPA judges that they are 

not windfall credits, and 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 for the initial 

years of the program. However, as discussed below, EPA is restricting credit trading for 

MY2009 credits earned under the California-based pathways. 

Manufacturers selecting Pathway 1 will generate credits by over-complying with 

the California equivalent baseline established by EPA over the manufacturer’s fleet of 

vehicles sold nationwide. Manufacturers selecting Pathway 2 will generate credits 

against the California equivalent baseline only for the fleet of vehicles sold in California 

and the CAA section 177 states.243 This approach includes all CAA 177 states as of the 

 

243 CAA 177 states refers to states that have adopted the California GHG standards. At present, there are 

thirteen CAA 177 states: New York, Massachusetts, Maryland, Vermont, Maine, Connecticut, Arizona, 

New Jersey, New Mexico, Oregon, Pennsylvania, Rhode Island, Washington, as well as Washington, DC. 
238 

date of promulgation of the Final Rule in this proceeding. Manufacturers are required to 

include both cars and trucks in the program. Under 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 the early 

credits generated under this program are consistent with the credits available under the 

California program during these model years. In its comments, California supported such 

an approach. 

 Table III.C.5-1 provides the California equivalent baselines EPA is finalizing to 

be used as the basis for CO2 credit generation under the California-based pathways. 

These are the California GHG standards for the model years shown. 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 credits 

program. EPA received comments from one manufacturer that this adjustment is in error 

and should not be made. The commenter noted that EPA already includes total 

hydrocarbons in the carbon balance determination of carbon related exhaust emissions 

and therefore already accounts for CH4. EPA also includes CO in the carbon related 

exhaust emissions determination which acts to offset the need for an N20 adjustment. 

The commenter noted that THC and CO add about 0.8 to 3.0 g/mile to the determination 

of carbon related emissions and therefore EPA should not make the 2.0g/mile adjustment. 

The commenter is correct, and therefore the final levels shown in the table below are 2.0 

g/mile higher than proposed. These comments are further discussed in the Response to 

Comments document. Manufacturers will generate CO2 credits by achieving fleet 

average CO2 levels below these baselines. As shown in the table, the California-based 

early credit pathways are based on the California vehicle categories. Also, the 

California-based baseline levels are not footprint-based, but universal levels that all 

manufacturers would use. Manufacturers will need to achieve fleet levels below those 

shown in the table in order to earn credits, using the California vehicle category 

definitions. 

Table III.C.5-1 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 

2011 267 390 

 
239 

Manufacturers using Pathways 1 or 2 above will use year end car and truck sales 

in each category. Although production data is used for the program starting in 2012, 

EPA is using sales data for the early credits program in order to apportion vehicles by 

state. This is described further below. Manufacturers must calculate actual fleet average 

emissions over the appropriate vehicle fleet, either for vehicles sold nationwide for 

Pathway 1, or California plus 177 states sales for Pathway 2. Early CO2 credits are based 

on the difference between the baseline shown in the table above and the actual fleet 

average emissions level achieved. Any early A/C credits generated by the manufacturer, 

described below in Section III.C.5.b, will be included in the fleet average level 

determination. In model year 2009, the California CO2 standard for cars (323 g/mi CO2) 

is equivalent to 323 g/mi CO2, and the California light-truck standard (437 g/mi CO2) is 

less stringent than the equivalent CAFE standard, recognizing that there are some 

differences between the way the California program and the CAFE program categorize 

vehicles. Manufacturers are required to show that they over comply over the entire three 

model year time period, not just the 2009 model year, to generate early credits under 

either Pathways 1, 2 or 3. A manufacturer cannot use credits generated in model year 

2009 unless they offset any debits from model years 2010 and 2011. 

EPA received comments that this approach will provide windfall credits to 

manufacturers because the MY2009 California light truck standards is less stringent than 

the corresponding CAFE standards. While this could be accurate if credits were based on 

performance in just MY 2009, that is not how credits are determined. Credits are based 

on the performance over a three model year period, MY 2009-2011. As noted in the 

proposal, EPA expects that the requirement to over comply over the entire time period 

covering these 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 credit trading between firms of MY2009 credits based on the 

California program. EPA requested comments on this approach and is finalizing this 

credit trading restriction based on continued concerns regarding the issue of windfall 

credits. 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. 

Commenters also recommended basing credits on the more stringent of the 

standards between CAFE and CARB, which for MY2009, would be the CAFE standards. 

However, EPA believes that this would not be necessary in light of the credit provisions 

requiring manufacturers choosing the California based pathways to use the California 
240 

pathway for all three MYs 2009-2011, and the credit trading restrictions for MY2009 

discussed above. 

In addition, for Pathways 1 and 2, EPA is allowing manufacturers to include 

alternative compliance credits earned per the California alternative compliance 

program.

244 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. This does not apply to EVs and PHEVs. The emissions of EVs and 

PHEVs are to be determined as described in Section III.C.3. Manufacturers may choose 

to either include their EVs and PHEVs in one of the four pathways described in this 

section or under the early advanced technology emissions credits described below, but 

not both due to issues of credit double counting. 

 EPA is also finalizing two additional early credit pathways manufacturers could 

select. Pathways 3 and 4 incorporate credits based on over-compliance with CAFE 

standards for vehicles sold outside of California and CAA 177 states in MY 2009-2011. 

Pathway 3 allows manufacturers to earn credits as under Pathway 2, plus earn CAFEbased credits in other states. Credits may not be generated for cars sold in California and 

CAA 177 states unless vehicle fleets in those states are performing better than the 

standards which otherwise would apply in those states, i.e., the baselines shown in Table 

III.C.5-1 above. 

Pathway 4 is for manufacturers choosing to forego California-based early credits 

entirely and earn only CAFE-based credits outside of California and CAA 177 states. 

Manufacturers may not include FFV credits under the CAFE-based early credit pathways 

since those credits do not automatically reflect actual reductions in CO2 emissions. 

The baselines for CAFE-based early pathways are provided in Table III.C.5-2 

below. They are based on the CAFE standards for the 2009-2011 model years. For 

CAFE standards in 2009-2011 model years that are footprint-based, the baseline would 

vary by manufacturer. Footprint-based standards are in effect for the 2011 model year 

CAFE standards.245 Additionally, for Reform CAFE truck standards, footprint standards 

are optional for the 2009-2010 model years. Where CAFE footprint-based standards are 

in effect, manufacturers will calculate a baseline using the footprints and sales of vehicles 

outside of California and CAA 177 states. The actual fleet CO2 performance calculation 

will also only include the vehicles sold outside of California and CAA 177 states, and as 

mentioned above, may not include FFV credits. 

 

244 See Section 6.6.E, California Environmental Protection Agency Air Resources Board, Staff Report: 

Initial Statement of Reasons For Proposed Rulemaking, Public Hearing to Consider Adoption of 

Regulations to Control Greenhouse Gas Emissions From Motor Vehicles, August 6, 2004. 

245 74 FR 14196, March 30, 2009. 
241 

Table III.C.5-2 CAFE Equivalent Baselines CO2 Emissions Levels for Early Credit 

Generation 

Model Year Cars Trucks 

2009 323 381* 

2010 323 376* 

2011 Footprint-based standard Footprint-based standard 

* Must be footprint-based standard for manufacturers selecting footprint option under 

CAFE 

 For the CAFE-based pathways, EPA is using the NHTSA car and truck 

definitions that are in place for the model year in which credits are being generated. EPA 

understands that the NHTSA definitions change starting in the 2011 model year, and 

therefore changes part way through the early credits program. EPA further recognizes 

that medium-duty passenger vehicles (MDPVs) are not part of the CAFE program until 

the 2011 model year, and therefore are not be part of the early credits calculations for 

2009 – 2010 under the CAFE-based pathways. 

 Pathways 2 through 4 involve splitting the vehicle fleet into two groups, vehicles 

sold in California and CAA 177 states and vehicles sold outside of these states. This 

approach requires a clear accounting of location of vehicle sales by the manufacturer. 

EPA believes it will be reasonable for manufacturers to accurately track sales by state, 

based on its experience with the National Low Emissions Vehicle (NLEV) Program. 

NLEV required manufacturers to meet separate fleet average standards for vehicles sold 

in two different regions of the country.246 As with NLEV, the determination is to be 

based on where the completed vehicles are delivered as a point of first sale, which in 

most cases would be the dealer.247

 As noted above, manufacturers choosing to generate early CO2 credits must select 

one of the four pathways for the entire early credits program and would not be able to 

switch among them. Manufacturers must submit their early credits report to EPA when 

they submit their final CAFE report for MY 2011 (which is required to be submitted no 

later than 90 days after the end of the model year). Manufacturers will have until then to 

decide which pathway to select. This gives manufacturers enough time to determine 

which pathway works best for them. This timing may be necessary in cases where 

manufacturers earn credits in MY 2011 and need time to assess data and prepare an early 

credits submittal for final EPA approval. 

 The table below provides a summary of the four fleet average-based CO2 early 

credit pathways EPA is finalizing: 

Table III.C.5-3 Summary of Early Fleet Average CO2 Credit Pathways 

Common Elements - Manufacturers select a pathway. Once selected, may 

not switch among pathways 

- All credits subject to 5 year carry-forward restrictions 

- For Pathways 2-4, vehicles apportioned by state based 

 

246 62 FR 31211, June 6, 1997. 247 62 FR 31212, June 6, 1997 
242 

on point of first sale 

Pathway 1: California-based Credits 

for National Fleet 

- Manufacturers earn credits based on fleet average 

emissions compared with California equivalent baseline 

set by EPA 

- Based on nationwide CO2 sales-weighted fleet average 

- Based on use of California vehicle categories 

- FFV alternative compliance credits per California 

program may be included 

- Once in the program, manufacturers must make up any 

deficits that are incurred prior to 2012 in order to carry 

credits forward to 2012 and later 

Pathway 2: California-based Credits 

for vehicles sold in California plus 

CAA 177 States 

- Same as Pathway 1, but manufacturers only includes 

vehicles sold in California and CAA 177 states in the 

fleet average calculation 

Pathway 3: Pathway 2 plus CAFEbased Credits outside of California 

plus CAA 177 States 

- Manufacturer earns credits as provided by Pathway 2: 

California-based credits for vehicles sold in California 

plus CAA 177 States, plus: 

- CAFE-based credits allowed for vehicles sold outside of 

California and CAA 177 states 

- For CAFE-based credits, manufacturers earn credits 

based on fleet average emissions compared with baseline 

set by EPA 

- CAFE-based credits based on NHTSA car and truck 

definitions 

- FFV credits not allowed to be included for CAFE-based 

credits 

Pathway 4: Only CAFE-based 

Credits outside of California plus 

CAA 177 States 

- Manufacturer elects to only earn CAFE-based credits 

for vehicles sold outside of California and CAA 177 

states. Earns no California and 177 state credits. 

- For CAFE-based credits, manufacturers earn credits 

based on fleet average emissions compared with baseline 

set by EPA 

- CAFE-based credits based on NHTSA car and truck 

definitions 

- FFV credits not allowed to be included for CAFE-based 

credits 

 b. Early A/C Credits 

 As proposed, EPA is finalizing provisions allowing manufacturers to earn early 

A/C credits in MYs 2009-2011 using the same A/C system design-based EPA provisions 

being finalized for MYs commencing in 2012, as described in Section III.C.1, above. 

Manufacturers will be able to earn early A/C CO2-equivalent credits by demonstrating 

improved A/C system performance, for both direct and indirect emissions. To earn 

credits for vehicles sold in California and CAA 177 states, the vehicles must be included 

in one of the California-based early credit pathways described above in III.C.5.a. EPA is 

finalizing this constraint in order to avoid credit double counting with the California 

program in place in those states, which also allows A/C system credits in this time frame. 
243 

Manufacturers must fold the A/C credits into the fleet average CO2 calculations under the 

California-based pathway. For example, the MY 2009 California-based program car 

baseline would be 323 g/mile (see Table III.C.5-1). If a manufacturer under Pathway 1 

had a MY 2009 car fleet average CO2 level of 320 g/mile and then earned an additional 

12 g/mile CO2-equivalent A/C credit, the manufacturers would earn a total of 10 g/mile 

of credit. Vehicles sold outside of California and 177 states would be eligible for the 

early A/C credits whether or not the manufacturers participate in other aspects of the 

early credits program. The early A/C credits for vehicles sold outside of California and 

177 states are based on the NHTSA vehicle categories established for the model year in 

which early A/C credits are being earned. 

 c. Early Advanced Technology Vehicle Incentive 

 As discussed in Section III.C.3, above, EPA is finalizing an incentive for sales of 

advanced technology vehicles including EVs, PHEVs, and fuel cell vehicles. EPA is not 

including a multiplier for these vehicles. However, EPA is allowing the use of the 0 

g/mile value for electricity operation for up to 200,000 vehicles per manufacturer (or 

300,000 vehicles for any manufacturer that sells 25,000 or more advanced technology 

vehicles in MY 2012). EPA believes that providing an incentive for the sales of such 

vehicles prior to MY 2012 is consistent with the goal encouraging the introduction of 

such vehicles as early as possible. Therefore, 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. 

Manufacturers selling such vehicles in MY 2009-2011 have the option of either folding 

them into the early credits calculation under Pathways 1 through 4 described in III.C.5.a 

above, or tracking the sales of these vehicles separately for use in their fleetwide average 

compliance calculation in MY 2012 or later years, but may not do both as this would lead 

to double counting. Manufacturers tracking the sales of vehicles not folded into 

Pathways 1-4, may choose to use the vehicle counts along with the 0 g/mi emissions 

value (up to the applicable vehicle sales cap) to comply with 2012 or later standards. For 

example, if a manufacturer sells 1,000 EVs in MY 2011, the manufacturer would then be 

able to include 1,000 vehicles at 0 g/mile in their MY 2012 fleet to decrease the fleet 

average for that model year. Again, these 1,000 vehicles would be counted against the 

cumulative cap of 200,000 or 300,000, as applicable, vehicles. Also, these 1,000 EVs 

would not be included in the early credit pathways discussed above in Section III.C.5.a, 

otherwise the vehicles would be double counted. As with early credits, these early 

advanced technology vehicles will be tracked by model year (2009, 2010, or 2011) and 

subject to the 5 year carry-forward restrictions. 

 d. Early Off-Cycle Credits 

 EPA’s is finalizing off-cycle innovative technology credit provisions, as described 

in Section III.C.4. EPA requested comment on beginning these credits in the 2009-2011 

time frame, provided manufacturers are able to make the necessary demonstrations 

outlined in Section III.C.4, above. EPA is finalizing this approach for early off-cycle 

Deleted: 9
244 

credits as a way to encourage innovation to lower emissions as early as possible, 

including the requirements for public review described in Section III.C.4. Upon EPA 

approval of a manufacturer’s application for credits, the credits may be earned 

retroactively. EPA did not receive comments specifically on early off-cycle credits. 

D. Feasibility of the Final CO2 Standards 

This final rule is based on the need to obtain significant GHG emissions 

reductions from the transportation sector, and the recognition that there are cost-effective 

technologies to achieve such reductions for MY 2012-2016 vehicles. As in many prior 

mobile source rulemakings, the decision on what standard to set is largely based on the 

effectiveness of the emissions control technology, the cost and other impacts of 

implementing the technology, and the lead time needed for manufacturers to employ the 

control technology. The standards derived from assessing these factors are also evaluated 

in terms of the need for reductions of greenhouse gases, the degree of reductions 

achieved by the standards, and the impacts of the standards in terms of costs, quantified 

benefits, and other impacts of the standards. The availability of technology to achieve 

reductions and the cost and other aspects of this technology are therefore a central focus 

of this rulemaking. 

EPA is taking the same basic approach in this rulemaking, although the 

technological problems and solutions involved in this rulemaking differ in some ways 

from prior mobile source rulemakings. Here, the focus of the emissions control 

technology is on reducing CO2 and other greenhouse gases. Vehicles combust fuel to 

perform two basic functions: 1) to transport the vehicle, its passengers and its contents 

(and any towed loads), and 2) to operate various accessories during the operation of the 

vehicle such as the air conditioner. Technology can reduce CO2 emissions by either 

making more efficient use of the energy that is produced through combustion of the fuel 

or reducing the energy needed to perform either of these functions. 

This focus on efficiency calls for looking at the vehicle as an entire system, and 

the proposed and now final standards reflect this basic paradigm. In addition to fuel 

delivery, combustion, and aftertreatment technology, any aspect of the vehicle that affects 

the need to produce energy must also be considered. For example, the efficiency of the 

transmission system, which takes the energy produced by the engine and transmits it to 

the wheels, and the resistance of the tires to rolling both have major impacts on the 

amount of fuel that is combusted while operating the vehicle. The braking system, the 

aerodynamics of the vehicle, and the efficiency of accessories, such as the air conditioner, 

all affect how much fuel is combusted as well. 

 In evaluating vehicle efficiency, we have excluded fundamental changes in 

vehicles’ size and utility. For example, we did not evaluate converting minivans and 

SUVs to station wagons, converting vehicles with four wheel drive to two wheel drive, or 

reducing headroom in order to lower the roofline and reduce aerodynamic drag. We have 

limited our assessment of technical feasibility and resultant vehicle cost to technologies 

which maintain vehicle utility as much as possible. Manufacturers may decide to alter 
245 

the utility of the vehicles which they sell in response to this rule, but this is not a 

necessary consequence of the rule but rather a matter of automaker choice. 

This need to focus on the efficient use of energy by the vehicle as a system leads 

to a broad focus on a wide variety of technologies that affect almost all the systems in the 

design of a vehicle. As discussed below, there are many technologies that are currently 

available which can reduce vehicle energy consumption. These technologies are already 

being commercially utilized to a limited degree in the current light-duty fleet. These 

technologies include hybrid technologies that use higher efficiency electric motors as the 

power source in combination with or instead of internal combustion engines. While 

already commercialized, hybrid technology continues to be developed and offers the 

potential for even greater efficiency improvements. Finally, there are other advanced 

technologies under development, such as lean burn gasoline engines, which offer the 

potential of improved energy generation through improvements in the basic combustion 

process. In addition, the available technologies are not limited to powertrain 

improvements but also include mass reduction, electrical system efficiencies, and 

aerodynamic improvements. 

 The large number of possible technologies to consider and the breadth of vehicle 

systems that are affected mean that consideration of the manufacturer’s design and 

production process plays a major role in developing the final standards. Vehicle 

manufacturers typically develop many different models by basing them on a limited 

number of vehicle platforms. The platform typically consists of a common set of vehicle 

architecture and structural components. This allows for efficient use of design and 

manufacturing resources. Given the very large investment put into designing and 

producing each vehicle model, manufacturers typically plan on a major redesign for the 

models approximately every 5 years. At the redesign stage, the manufacturer will 

upgrade or add all of the technology and make most other changes supporting the 

manufacturer’s plans for the next several years, including plans related to emissions, fuel 

economy, and safety regulations. 

This redesign often involves a package of changes designed to work together to 

meet the various requirements and plans for the model for several model years after the 

redesign. This often involves significant engineering, development, manufacturing, and 

marketing resources to create a new product with multiple new features. In order to 

leverage this significant upfront investment, manufacturers plan vehicle redesigns with 

several model years’ of production in mind. Vehicle models are not completely static 

between redesigns as limited changes are often incorporated for each model year. This 

interim process is called a refresh of the vehicle and generally does not allow for major 

technology changes although more minor ones can be done (e.g., small aerodynamic 

improvements, valve timing improvements, etc). More major technology upgrades that 

affect multiple systems of the vehicle thus occur at the vehicle redesign stage and not in 

the time period between redesigns. The Center for Biological Diversity commented on 

EPA’s assumptions on redesign cycles, and these comments are addressed in Section 

III.D.7 below. 
246 

 As discussed below, there are a wide variety of CO2 reducing technologies 

involving several different systems in the vehicle that are available for consideration. 

Many can involve major changes to the vehicle, such as changes to the engine block and 

cylinder heads, redesign of the transmission and its packaging in the vehicle, changes in 

vehicle shape to improve aerodynamic efficiency and the application of aluminum (and 

other lightweight materials) in body panels to reduce mass. Logically, the incorporation 

of emissions control technologies would be during the periodic redesign process. This 

approach would allow manufacturers to develop appropriate packages of technology 

upgrades that combine technologies in ways that work together and fit with the overall 

goals of the redesign. It also allows the manufacturer to fit the process of upgrading 

emissions control technology into its multi-year planning process, and it avoids the large 

increase in resources and costs that would occur if technology had to be added outside of 

the redesign process. 

 This final rule affects five years of vehicle production, model years 2012-2016. 

Given the now-typical five year redesign cycle, nearly all of a manufacturer’s vehicles 

will be redesigned over this period. However, this assumes that a manufacturer has 

sufficient lead time to redesign the first model year affected by this final rule with the 

requirements of this final rule in mind. In fact, the lead time available for the start of 

model year 2012 (January 2011) is relatively short, less than a year. The time between 

this final rule and the start of 2013 model year (January 2012) production is under two 

years. At the same time, manufacturer product plans indicate that they are planning on 

introducing many of the technologies EPA projects could be used to show compliance 

with the final CO2 standards in both 2012 and 2013. In order to account for the relatively 

short lead time available prior to the 2012 and 2013 model years, albeit mitigated by their 

existing plans, EPA has factored this reality into how the availability is modeled for 

much of the technology being considered for model years 2012-2016 as a whole. If the 

technology to control greenhouse gas emissions is efficiently folded into this redesign 

process, then EPA projects that 85 percent of each manufacturer’s sales will be able to be 

redesigned with many of the CO2 emission reducing technologies by the 2016 model 

year, and as discussed below, to reduce emissions of HFCs from the air conditioner. 

 In determining the level of this first ever GHG emissions standard under the CAA 

for light-duty vehicles, EPA uses an approach that accounts for and builds on this 

redesign process. This provides the opportunity for several control technologies to be 

incorporated into the vehicle during redesign, achieving significant emissions reductions 

from the model at one time. This is in contrast to what would be a much more costly 

approach of trying to achieve small increments of reductions over multiple years by 

adding technology to the vehicle piece by piece outside of the redesign process. 

As described below, the vast majority of technology required by this final rule is 

commercially available and already being employed to a limited extent across the fleet 

(although the final rule will necessitate far wider penetration of these technologies 

throughout the fleet). The vast majority of the emission reductions which will result from 

this final rule will be produced from the increased use of these technologies. EPA also 

believes that this final rule will encourage the development and limited use of more 
247 

advanced technologies, such as PHEVs and EVs, and the final rule is structured to 

facilitate this result 

In developing the final standard, EPA built on the technical work performed by 

the State of California during its development of its statewide GHG program. EPA began 

by evaluating a nationwide CAA standard for MY 2016 that would require the levels of 

technology upgrade, across the country, which California standards would require for the 

subset of vehicles sold in California under Pavley 1. In essence, EPA developed an 

assessment of an equivalent national new vehicle fleet-wide CO2 performance standards 

for model year 2016 which would result in the new vehicle fleet in the State of California 

having CO2 performance equal to the performance from the California Pavley 1 

standards. This assessment is documented in Chapter 3.1 of the RIA. The results of this 

assessment predicts that a national light-duty vehicle fleet which adopts technology that 

achieves performance of 250 g/mile CO2 for model year 2016 will result in vehicles sold 

in California that would achieve the CO2 performance equivalent to the Pavley 1 

standards. 

 EPA then analyzed a level of 250 g/mi CO2 in 2016 using the OMEGA model 

(described in more detail below), and the car and truck footprint curves’ relative 

stringency discussed in Section II to determine what technology will be needed to 

achieve a fleet wide average of 250 g/mi CO2. As discussed later in this section we 

believe this level of technology application to the light-duty vehicle fleet can be achieved 

in this time frame, that such standards will produce significant reductions in GHG 

emissions, and that the costs for both the industry and the costs to the consumer are 

reasonable. EPA also developed standards for the model years 2012 through 2015 that 

lead up to the 2016 level. 

 

 EPA’s independent technical assessment of the technical feasibility of the final 

MY2012-2016 standards is described below. EPA has also evaluated a set of alternative 

standards for these model years, one that is more stringent than the final standards and 

one that is less stringent. The technical feasibility of these alternative standards is 

discussed at the end of this section. 

Evaluating the feasibility of these standards primarily includes identifying 

available technologies and assessing their effectiveness, cost, and impact on relevant 

aspects of vehicle performance and utility. The wide number of technologies which are 

available and likely to be used in combination requires a more sophisticated assessment 

of their combined cost and effectiveness. An important factor is also the degree that 

these technologies are already being used in the current vehicle fleet and thus, 

unavailable for use to improve energy efficiency beyond current levels. Finally, the 

challenge for manufacturers to design the technology into their products, and the 

appropriate lead time needed to employ the technology over the product line of the 

industry must be considered. 

Applying these technologies efficiently to the wide range of vehicles produced by 

various manufacturers is a challenging task. In order to assist in this task, EPA has 
248 

developed a computerized model called the Optimization Model for reducing Emissions 

of Greenhouse gases from Automobiles (OMEGA) model. Broadly, the model starts 

with a description of the future vehicle fleet, including manufacturer, sales, base CO2

emissions, footprint and the extent to which emission control technologies are already 

employed. For the purpose of this analysis, over 200 vehicle platforms were used to 

capture the important differences in vehicle and engine design and utility of future 

vehicle sales of roughly 16 million units in the 2016 timeframe. The model is then 

provided with a list of technologies which are applicable to various types of vehicles, 

along with their cost and effectiveness and the percentage of vehicle sales which can 

receive each technology during the redesign cycle of interest. The model combines this 

information with economic parameters, such as fuel prices and a discount rate, to project 

how various manufacturers would apply the available technology in order to meet various 

levels of emission control. The result is a description of which technologies are added to 

each vehicle platform, along with the resulting cost. While OMEGA can apply 

technologies which reduce CO2 emissions and HFC refrigerant emissions associated with 

air conditioner use, this task is currently handled outside of the OMEGA model. The 

model can be set to account for various types of compliance flexibilities, such as FFV 

credits. 

The remainder of this section describes the technical feasibility analysis in greater 

detail. Section III.D.1 describes the development of our projection of the MY 2012-

2016 fleet in the absence of this final rule. Section III.D.2 describes our estimates of the 

effectiveness and cost of the control technologies available for application in the 2012-

2016 timeframe. Section III.D.3 combines these technologies into packages likely to be 

applied at the same time by a manufacturer. In this section, the overall effectiveness of 

the technology packages vis-à-vis their effectiveness when combined individually is 

described. Section III.D.4 describes the process which manufacturers typically use to 

apply new technology to their vehicles. Section III.D.5 describes EPA’s OMEGA model 

and its approach to estimating how manufacturers will add technology to their vehicles in 

order to comply with CO2 emission standards. Section III.D.6 presents the results of the 

OMEGA modeling, namely the level of technology added to manufacturers’ vehicles and 

its cost. Section III.D.7 discusses the feasibility of the alternative 4-percent-per-year and 

6-percent-per-year standards. Further detail on all of these issues can be found in EPA 

and NHTSA’s Joint Technical Support Document as well as EPA’s Regulatory Impact 

Analysis. 

 

1. How Did EPA Develop a Reference Vehicle Fleet for Evaluating Further 

CO2 Reductions?

In order to calculate the impacts of this final rule, it is necessary to project the 

GHG emissions characteristics of the future vehicle fleet absent this regulation. This is 

called the “reference” fleet. EPA and NHTSA develop this reference fleet using a three 

step process. Step one develops a set of detailed vehicle characteristics and sales for a 

specific model year (in this case, 2008). This is called the baseline fleet. Step two 
249 

adjusts the sales of these vehicles using projections made by AEO and CSM to account 

for expected changes in market conditions. Step three applies fuel saving and emission 

control technology to these vehicles to the extent necessary for manufacturers to comply 

with the MY2011 CAFE standards. Thus, the reference fleet differs from the MY 2008 

baseline fleet in both the level of technology utilized and in terms of the sales of any 

particular vehicle. 

EPA and NHTSA perform steps one and two in an identical manner. The 

development of the characteristics of the baseline 2008 fleet and the adjustment of sales 

to match AEO and CSM forecasts is described in detail in Section II.B above. The two 

agencies perform step three in a conceptually identical manner, but each agency utilizes 

its own vehicle technology and emission model to project the technology needed to 

comply with the 2011 CAFE standards. The agencies use the same two models to project 

the technology and cost of the 2012-2016 standards. Use of the same model for both precontrol and post-control costs ensures consistency. 

The agencies received one comment from the Center for Biological Diversity that 

the use of 2008 vehicles in our baseline and reference fleets inherently includes vehicle 

models which already have or will be discontinued by the time this rule takes effect and 

will be replaced by more advanced vehicle models. This is true. However, we believe 

that the use of 2008 vehicle designs is still the most appropriate approach available. 

First, as discussed in Section II.B above, the designs of these new vehicles at the level of 

detail required for emission and cost modeling are not publically available. Even the 

confidential descriptions of these vehicle designs are usually not of sufficient detail to 

facilitate the level of technology and emission modeling performed by both agencies. 

Second, steps two and three of the process used to create the reference fleet adjust both 

the sales and technology of the 2008 vehicles. Thus, our reference fleet reflects the 

extent that completely new vehicles are expected to shift the light vehicle market in terms 

of both segment and manufacturer. Also, by adding technology to facilitate compliance 

with the 2011 CAFE standards, we account for the vast majority of ways in which these 

new vehicles will differ from their older counterparts. 

 

The agencies also received a comment that some manufacturers have already 

announced plans to introduce technology well beyond that required by the 2011 MY 

CAFE standards. This commenter indicated that the agencies’ approach over-estimated 

the technology and cost required by the proposed standards and resulted in less stringent 

standards being proposed than a more realistic reference fleet would have supported. 

First, the agencies agree that limiting the application of additional technology beyond that 

already on 2008 vehicles to only that required by the 2011 CAFE standards could underestimate the use of such technology absent this rule. However, it is difficult, if not 

impossible, to separate future fuel economy improvements made for marketing purposes 

from those designed to facilitate compliance with anticipated CAFE or CO2 emission 

standards. For example, EISA was signed over two years ago, which contained specific 

minimum limits on light vehicle fuel economy in 2020, while also requiring ratable 

improvements in the interim. NHTSA proposed fuel economy standards for the 2012-

2015 model years under the EISA provisions in April of 2008, although NHTSA 
250 

finalized only 2011 standards for passenger vehicles. It is also true that manufacturers 

can change their plans based on market conditions and other factors. Thus, 

announcements of future plans are not certain. As mentioned above, these plans do not 

include specific vehicle characteristics. Thus, in order to avoid under-estimating the cost 

associated with this rule, the agencies have limited the fuel economy improvements in the 

reference fleet to those projected to result from the existing CAFE standards. We 

disagree with the commenter that this has caused the standards being promulgated today 

to be less stringent than would have been the case had we been able to confidently predict 

additional fuel economy and CO2 emission improvements which will occur absent this 

rule. The inclusion of such technology in the reference fleet would certainly have 

reduced the cost of this final rule, as well as the benefits, but would not have changed the 

final level of technology required to meet the final standards. Also, we believe that the 

same impacts would apply to our evaluations of the two alternative sets of standards, the 

4% per year and 6% per year standards. We are confident that the vast majority of 

manufacturers would not comply with the least stringent of these standards (the 4% per 

year standards) in the absence of this rule. Thus, changes to the reference fleet would not 

have affected the differences in technology, cost or benefits between the final standards 

and the two alternatives. As described below, our rejection of the two alternatives in 

favor of the final standards is based primarily on the relative technology, cost and 

benefits associated with the three sets of standards than the absolute cost or benefit 

relative to the reference fleet. Thus, we do not agree with the commenter that our choice 

of reference fleet adversely impacted the development of the final standards being 

promulgated today. 

The addition of technology to the baseline fleet so that it complies with the MY 

2011 CAFE standards is described later in Section III.D.4, as this uses the same 

methodology used to project compliance with the final CO2 emission standards. In 

summary, the reference fleet represents vehicle characteristics and sales in the 2012 and 

later model years absent this final rule. Technology is then added to these vehicles in 

order to reduce CO2 emissions to achieve compliance with the final CO2 standards. As 

noted above, EPA did not factor in any changes to vehicle utility or characteristics, or 

sales in projecting manufacturers’ compliance with this final rule. 

After the reference fleet is created, the next step aggregates vehicle sales by a 

combination of manufacturer, vehicle platform, and engine design. As discussed in 

Section III.D.4 below, manufacturers implement major design changes at vehicle 

redesign and tend to implement these changes across a vehicle platform. Because the 

cost of modifying the engine depends on the valve train design (such as SOHC, DOHC, 

etc.), the number of cylinders and in some cases head design, the vehicle sales are broken 

down beyond the platform level to reflect relevant engine differences. The vehicle 

groupings are shown in Table III.D.1-1. These groupings are the same as those used in 

the NPRM. 

Table III.D.1-1 Vehicle Groupingsa

Vehicle Description Vehicle 

Type Vehicle Description Vehicle Type 
251 

Large SUV (Car) V8+ OHV 13 Subcompact Auto I4 1 

Large SUV (Car) V6 4v 16 Large Pickup V8+ DOHC 19 

Large SUV (Car) V6 OHV 12 Large Pickup V8+ SOHC 3v 14 

Large SUV (Car) V6 2v SOHC 9 Large Pickup V8+ OHV 13 

Large SUV (Car) I4 and I5 7 Large Pickup V8+ SOHC 10 

Midsize SUV (Car) V6 2v SOHC 8 Large Pickup V6 DOHC 18 

Midsize SUV (Car) V6 S/DOHC 4v 5 Large Pickup V6 OHV 12 

Midsize SUV (Car) I4 7 Large Pickup V6 SOHC 2v 11 

Small SUV (Car) V6 OHV 12 Large Pickup I4 S/DOHC 7 

Small SUV (Car) V6 S/DOHC 4 Small Pickup V6 OHV 12 

Small SUV (Car) I4 3 Small Pickup V6 2v SOHC 8 

Large Auto V8+ OHV 13 Small Pickup I4 7 

Large Auto V8+ SOHC 10 Large SUV V8+ DOHC 17 

Large Auto V8+ DOHC, 4v SOHC 6 Large SUV V8+ SOHC 3v 14 

Large Auto V6 OHV 12 Large SUV V8+ OHV 13 

Large Auto V6 SOHC 2/3v 5 Large SUV V8+ SOHC 10 

Midsize Auto V8+ OHV 13 Large SUV V6 S/DOHC 4v 16 

Midsize Auto V8+ SOHC 10 Large SUV V6 OHV 12 

Midsize Auto V7+ DOHC, 4v SOHC 6 Large SUV V6 SOHC 2v 9 

Midsize Auto V6 OHV 12 Large SUV I4/ 7 

Midsize Auto V6 2v SOHC 8 Midsize SUV V6 OHV 12 

Midsize Auto V6 S/DOHC 4v 5 Midsize SUV V6 2v SOHC 8 

Midsize Auto I4 3 Midsize SUV V6 S/DOHC 4v 5 

Compact Auto V7+ S/DOHC 6 Midsize SUV I4 S/DOHC 7 

Compact Auto V6 OHV 12 Small SUV V6 OHV 12 

Compact Auto V6 S/DOHC 4v 4 Minivan V6 S/DOHC 16 

Compact Auto I5 7 Minivan V6 OHV 12 

Compact Auto I4 2 Minivan I4 7 

Subcompact Auto V8+ OHV 13 Cargo Van V8+ OHV 13 

Subcompact Auto V8+ S/DOHC 6 Cargo Van V8+ SOHC 10 

Subcompact Auto V6 2v SOHC 8 Cargo Van V6 OHV 12 

Subcompact Auto I5/V6 S/DOHC 4v 4 a

I4 = 4 cylinder engine, I5 = 5 cylinder engine, V6, V7, and V8 = 6, 7, and 8 cylinder engines, respectively, 

DOHC = Double overhead cam, SOHC = Single overhead cam, OHV = Overhead valve, v = number of 

valves per cylinder, “/” = and, “+” = or larger.

As mentioned above, the second factor which needs to be considered in 

developing a reference fleet against which to evaluate the impacts of this final rule is the 

impact of the 2011 MY CAFE standards. Since the vehicles which comprise the above 

reference fleet are those sold in the 2008 MY, when coupled with our sales projections, 

they do not necessarily meet the 2011 MY CAFE standards. 

The levels of the 2011 MY CAFE standards are straightforward to apply to future 

sales fleets, as is the potential fine-paying flexibility afforded by the CAFE program (i.e., 

$55 per mpg of shortfall). However, projecting some of the compliance flexibilities 

afforded by EISA and the CAFE program are less clear. Two of these compliance 
252 

flexibilities are relevant to EPA’s analysis: 1) the credit for FFVs, and 2) the limit on the 

transferring of credits between car and truck fleets. The FFV credit is limited to 1.2 mpg 

in 2011 and EISA gradually reduces this credit, to 1.0 mpg in 2015 and eventually to zero 

in 2020. In contrast, the limit on car truck transfer is limited to 1.0 mpg in 2011, and 

EISA increases this to 1.5 mpg beginning in 2015 and then to 2.0 mpg beginning in 2020. 

The question here is whether to hold the 2011 MY CAFE provisions constant in the 

future or incorporate the changes in the FFV credit and car-truck credit trading limits 

contained in EISA. 

As was done for the NPRM, EPA has decided to hold the 2011 MY limits on FFV 

credit and car-truck credit trading constant in projecting the fuel economy and CO2

emission levels of vehicles in our reference case. This approach treats the changes in the 

FFV credit and car-truck credit trading provisions consistently with the other EISAmandated changes in the CAFE standards themselves. All EISA provisions relevant to 

2011 MY vehicles are reflected in our reference case fleet, while all post-2011 MY 

provisions are not. Practically, relative to the alternative, this increases both the cost and 

benefit of the final standards. In our analysis of this final rule, any quantified benefits 

from the presence of FFVs in the fleet are not considered. Thus, the only impact of the 

FFV credit is to reduce onroad fuel economy. By assuming that the FFV credit stays at 

1.2 mpg in the future absent this rule, the assumed level of onroad fuel economy that 

would occur absent this final rule is reduced. As this final rule eliminates the FFV credit 

(for purposes of CO2 emission compliance) starting in 2016, the net result is to increase 

the projected level of fuel savings from our final standards. Similarly, the higher level of 

FFV credit reduces projected compliance cost for manufacturers to meet the 2011 MY 

standards in our reference case. This increases the projected cost of meeting the final 

2012 and later standards. 

As just implied, EPA needs to project the technology (and resultant costs) 

required for the 2008 MY vehicles to comply with the 2011 MY CAFE standards in those 

cases where they do not automatically do so. The technology and costs are projected 

using the same methodology that projects compliance with the final 2012 and later CO2

standards. The description of this process is described in the following four sections and 

is essentially the same process used for the NPRM. 

A more detailed description of the methodology used to develop these sales 

projections can be found in the Joint TSD. Detailed sales projections by model year and 

manufacturer can also be found in the TSD. 

2. What Are the Effectiveness and Costs of CO2-reducing Technologies?

EPA and NHTSA worked together to jointly develop information on the 

effectiveness and cost of the CO2-reducing technologies, and fuel economy-improving 

technologies, other than A/C related control technologies. This joint work is reflected in 

Chapter 3 of the Joint TSD and in Section II of this preamble. A summary of the 

effectiveness and cost of A/C related technology is contained here. For more detailed 
253 

information on the effectiveness and cost of A/C related technology, please refer to 

Section III.C of this preamble and Chapter 2 of EPA’s RIA. 

A/C improvements are an integral part of EPA’s technology analysis and have 

been included in this section along with the other technology options. While discussed in 

Section III.C as a credit opportunity, air conditioning-related improvements are included 

in Table III.D.2-1.because A/C improvements are a very cost-effective technology at 

reducing CO2 (or CO2-equivalent) emissions. EPA expects most manufacturers will 

choose to use AC improvement credit opportunities as a strategy for meeting compliance 

with the CO2 standards. Note that the costs shown in Table III.D.2-1 do not include 

maintenance savings that would be expected from the new AC systems. Further, EPA 

does not include AC-related maintenance savings in our cost and benefit analysis 

presented in Section III.H. EPA discusses the likely maintenance savings in Chapter 2 of 

the RIA, though these savings are not included in our final cost estimates for the final 

rule. The EPA approximates that the level of the credits earned will increase from 2012 

to 2016 as more vehicles in the fleet are redesigned. The penetrations and average levels 

of credit are summarized in Table III.D.2-2, though the derivation of these numbers (and 

the breakdown of car vs. truck credits) is described in the RIA. As demonstrated in the 

IMAC study (and described in Section III.C as well as the RIA), these levels are feasible 

and achievable with technologies that are available and cost-effective today. 

These improvements are categorized as either leakage reduction, including use of 

alternative refrigerants, or system efficiency improvements. Unlike the majority of the 

technologies described in this section, A/C improvements will not be demonstrated in the 

test cycles used to quantify CO2 reductions in this final rule. As described earlier, for this 

analysis A/C-related CO2 reductions are handled outside of OMEGA model and therefore 

their CO2 reduction potential is expressed in grams per mile rather than a percentage used 

by the OMEGA model. See Section III.C.1 for the method by which potential reductions 

are calculated or measured. Further discussion of the technological basis for these 

improvements is included in Chapter 2 of the RIA. 

Table III.D.2-1 Total CO2 Reduction Potential and 2016 Cost for A/C Related 

Technologies for all Vehicle Classes (Costs in 2007 dollars) 

CO2 Reduction 

Potential 

Incremental Compliance 

Costs 

A/C refrigerant leakage 7.5 g/mi248 $17 

 

248 This represents 50% improvement in leakage and thus 50% of the A/C leakage impact potential 

compared to a maximum of 15 g/mi credit that can be achieved through the incorporation of a low very 

GWP refrigerant. 
254 

reduction 

A/C efficiency improvements 5.7 g/mi $53 

Table III.D.2-2 A/C Related Technology Penetration and Credit Levels Expected 

to be Earned 

Technology Average credit over entire fleet 

Penetration Car Truck Fleet Average 

2012 28%249 3.4 3.8 3.5 

2013 40% 4.8 5.4 5.0 

2014 60% 7.2 8.1 7.5 

2015 80% 9.6 10.8 10.0 

2016 85% 10.2 11.5 10.6 

3. How can Technologies be Combined into “Packages” and What is the 

Cost and Effectiveness of Packages?

Individual technologies can be used by manufacturers to achieve incremental CO2

reductions. However, as mentioned in Section III.D.1, EPA believes that manufacturers 

are more likely to bundle technologies into “packages” to capture synergistic aspects and 

reflect progressively larger CO2 reductions with additions or changes to any given 

package. In addition, manufacturers typically apply new technologies in packages during 

model redesigns that occur approximately once every five years, rather than adding new 

technologies one at a time on an annual or biennial basis. This way, manufacturers can 

more efficiently make use of their redesign resources and more effectively plan for 

changes necessary to meet future standards. 

Therefore, as explained at proposal, the approach taken here is to group 

technologies into packages of increasing cost and effectiveness. EPA determined that 19 

different vehicle types provided adequate representation to accurately model the entire 

fleet. This was the result of analyzing the existing light duty fleet with respect to vehicle 

size and powertrain configurations. All vehicles, including cars and trucks, were first 

distributed based on their relative size, starting from compact cars and working upward to 

large trucks. Next, each vehicle was evaluated for powertrain, specifically the engine 

size, I4, V6, and V8, and finally by the number of valves per cylinder. Note that each of 

these 19 vehicle types was mapped into one of the five classes of vehicles mentioned in 

Section III.D.2. While the five classes provide adequate representation for the cost basis 

associated with most technology application, they do not adequately account for all 

existing vehicle attributes such as base vehicle powertrain configuration and mass 

reduction. As an example, costs and effectiveness estimates for engine friction reduction 

for the small car class were used to represent cost and effectiveness for three vehicle 

types: subcompact cars, compact cars, and small multi-purpose vehicles (MPV) 

 

249 We assume slightly higher A/C penetration in 2012 than was assumed in the proposal to correct for 

rounding that occurred in the curve setting process. 
255 

equipped with a 4-cylinder engine, however the mass reduction associated for each of 

these vehicle types was based on the vehicle type sales-weighted average. In another 

example, a vehicle type for V8 single overhead cam 3-valve engines was created to 

properly account for the incremental cost in moving to a dual overhead cam 4-valve 

configuration. Note also that these 19 vehicle types span the range of vehicle footprint 

(smaller footprints for smaller vehicles and larger footprints for larger vehicles) which 

serve as the basis for the standards being promulgated today. A complete list of vehicles 

and their associated vehicle types is shown above in Table III.D.1-1. 

Within each of the 19 vehicle types, multiple technology packages were created in 

increasing technology content resulting in increasing effectiveness. Important to note 

that the effort in creating the packages attempted to maintain a constant utility for each 

package as compared to the baseline package. As such, each package is meant to provide 

equivalent driver-perceived performance to the baseline package. The initial packages 

represent what a manufacturer will most likely implement on all vehicles, including low 

rolling resistance tires, low friction lubricants, engine friction reduction, aggressive shift 

logic, early torque converter lock-up, improved electrical accessories, and low drag 

brakes.250 Subsequent packages include advanced gasoline engine and transmission 

technologies such as turbo/downsizing, GDI, and dual-clutch transmission. The most 

technologically advanced packages within a segment included HEV, PHEV and EV 

designs. The end result is a list of several packages for each of 19 different vehicle types 

from which a manufacturer could choose in order to modify its fleet such that compliance 

could be achieved. 

Before using these technology packages as inputs to the OMEGA model, EPA 

calculated the cost and effectiveness for the package. The first step was to apply the 

scaling class for each technology package and vehicle type combination. The scaling 

class establishes the cost and effectiveness for each technology with respect to the vehicle 

size or type. The Large Car class was provided as an example in Section III.D.2. 

Additional classes include Small Car, Minivan, Small Truck, and Large Truck and each 

of the 19 vehicle types was mapped into one of those five classes. In the next step, the 

cost for a particular technology package was determined as the sum of the costs of the 

applied technologies. The final step, determination of effectiveness, requires greater care 

due to the synergistic effects mentioned in Section III.D.2. This step is described 

immediately below. 

Usually, the benefits of the engine and transmission technologies can be 

combined multiplicatively. For example, if an engine technology reduces CO2 emissions 

by five percent and a transmission technology reduces CO2 emissions by four percent, the 

benefit of applying both technologies is 8.8 percent (100% - (100% – 4%) * (100% - 

5%)). In some cases, however, the benefit of the transmission-related technologies 

overlaps with many of the engine technologies. This occurs because the primary goal of 

most of the transmission technologies is to shift operation of the engine to more efficient 

 

250 When making reference to low friction lubricants, the technology being referred to is the engine changes 

and possible durability testing that would be done to accommodate the low friction lubricants, not the 

lubricants themselves. 
256 

locations on the engine map. This is accomplished by incorporating more ratio selections 

and a wider ratio span into the transmissions. Some of the engine technologies have the 

same goal, such as cylinder deactivation, advanced valvetrains, and turbocharging. In 

order to account for this overlap and avoid over-estimating emissions reduction 

effectiveness, EPA has developed a set of adjustment factors associated with specific 

pairs of engine and transmission technologies. 

The various transmission technologies are generally mutually exclusive. As such, 

the effectiveness of each transmission technology generally supersedes each other. For 

example, the 9.5-14.5 percent reduction in CO2 emissions associated with the automated 

manual transmission includes the 4.5-6.5 percent benefit of a 6-speed automatic 

transmission. Exceptions are aggressive shift logic and early torque converter lock-up 

that can be applied to vehicles with several types of automatic transmissions. 

EPA has chosen to use an engineering approach known as the lumped-parameter 

technique to determine these adjustment factors. The results from this approach were 

then applied directly to the vehicle packages. The lumped-parameter technique is well 

documented in the literature, and the specific approach developed by EPA is detailed in 

Chapter 1 of the RIA. 

Table III.D.3-1 presents several examples of the reduction in the effectiveness of 

technology pairs. A complete list and detailed discussion of these synergies is presented 

in Chapter 3 of the Joint TSD. 

Table III.D.3-1 Reduction in Effectiveness for Selected Technology Pairs 

Engine Technology Transmission Technology Reduction in Combined 

Effectiveness 

Intake cam phasing 5 speed automatic 0.5% 

Coupled cam phasing 5 speed automatic 0.5% 

Coupled cam phasing Aggressive shift logic 0.5% 

Cylinder deactivation 5 speed automatic 1.0% 

Cylinder deactivation Aggressive shift logic 0.5% 

 Table III.D.3-2 presents several examples of the CO2-reducing technology 

vehicle packages used in the OMEGA model for the large car class. Similar packages 

were generated for each of the 19 vehicle types and the costs and effectiveness estimates 

for each of those packages are discussed in detail in Chapter 3 of the Joint TSD. 

Table III.D.3-2 CO2 Reducing Technology Vehicle Packages for a Large Car 

Effectiveness and Costs in 2016 (Costs in 2007 dollars) 

Engine 

Technology 

Transmission 

Technology 

Additional 

Technology 

CO2

Reduction 

Package 

Cost 

3.3L V6 4 speed automatic None Baseline 

3.0L V6 + GDI 

+ CCP 6 speed automatic 3% Mass Reduction 17.9% $985 

3.0L V6 + GDI 6 speed automatic 5% Mass Reduction 20.6% $1,238 
257 

+ CCP + Deac 

2.2L I4 + GDI + 

Turbo + DCP 6 speed DCT 10% Mass Reduction Start-Stop 34.3% $1,903 

 

4. Manufacturer’s Application of Technology

Vehicle manufacturers often introduce major product changes together, as a 

package. In this manner the manufacturers can optimize their available resources, 

including engineering, development, manufacturing and marketing activities to create a 

product with multiple new features. In addition, manufacturers recognize that a vehicle 

will need to remain competitive over its intended life, meet future regulatory 

requirements, and contribute to a manufacturer’s CAFE requirements. Furthermore, 

automotive manufacturers are largely focused on creating vehicle platforms to limit the 

development of entirely new vehicles and to realize economies of scale with regard to 

variable cost. In very limited cases, manufacturers may implement an individual 

technology outside of a vehicle’s redesign cycle.251 In following with these industry 

practices, EPA has created set of vehicle technology packages that represent the entire 

light duty fleet. 

In evaluating needed lead time, EPA has historically authorized manufacturers of 

new vehicles or nonroad equipment to phase in available emission control technology 

over a number of years. Examples of this are EPA’s Tier 2 program for cars and light 

trucks and its 2007 and later PM and NOX emission standards for heavy-duty vehicles. In 

both of these rules, the major modifications expected from the rules were the addition of 

exhaust aftertreatment control technologies. Some changes to the engine were expected 

as well, but these were not expected to affect engine size, packaging or performance. The 

CO2 reduction technologies described above potentially involve much more significant 

changes to car and light truck designs. Many of the engine technologies involve changes 

to the engine block and heads. The transmission technologies could change the size and 

shape of the transmission and thus, packaging. Improvements to aerodynamic drag could 

involve body design and therefore, the dies used to produce body panels. Changes of this 

sort potentially involve new capital investment and the obsolescence of existing 

investment. 

At the same time, vehicle designs are not static, but change in major ways 

periodically. The manufacturers’ product plans indicate that vehicles are usually 

redesigned every 5 years on average.252 Vehicles also tend to receive a more modest 

“refresh” between major redesigns, as discussed above. Because manufacturers are 

already changing their tooling, equipment and designs at these times, further changes to 

vehicle design at these times involve a minimum of stranded capital equipment. Thus, 

the timing of any major technological changes is projected to coincide with changes that 

manufacturers are already making to their vehicles. This approach effectively avoids the 

 

251 The Center for Biological Diversity submitted comments disputing this distinction as well as the need 

for lead time. These comments are addressed in Section III.D.7. 

252 See discussion in Section III.D.7 with references 
258 

need to quantify any costs associated with discarding equipment, tooling, emission and 

safety certification, etc. when CO2-reducing equipment is incorporated into a vehicle. 

This final rule affects five years of vehicle production, model years 2012-2016. 

Given the now-typical five year redesign cycle, nearly all of a manufacturer’s vehicles 

will be redesigned over this period. However, this assumes that a manufacturer has 

sufficient lead time to redesign the first model year affected by this final rule with the 

requirements of this final rule in mind. In fact, the lead time available for model year 

2012 is relatively short. The time between a likely final rule and the start of 2013 model 

year production is likely to be just over two years. At the same time, the manufacturer 

product plans indicate that they are planning on introducing many of the technologies 

projected to be required by this final rule in both 2012 and 2013. In order to account for 

the relatively short lead time available prior to the 2012 and 2013 model years, albeit 

mitigated by their existing plans, EPA projects that only 85 percent of each 

manufacturer’s sales will be able to be redesigned with major CO2 emission-reducing 

technologies by the 2016 model year. Less intrusive technologies can be introduced into 

essentially all of a manufacturer’s sales. This resulted in three levels of technology 

penetration caps, by manufacturer. Common technologies (e.g., low friction lubes, 

aerodynamic improvements) had a penetration cap of 100%. More advanced powertrain 

technologies (e.g., stoichiometric GDI, turbocharging) had a penetration cap of 85%. 

The most advanced technologies considered in this analysis (e.g., diesel engines,253 as 

well as IMA, powersplit and 2-mode hybrids) had a 15% penetration cap. 

This is the same approach as was taken in the NPRM. EPA received several 

comments commending it on its approach to establishing technical feasibility via its use 

of the OMEGA model. The only adverse comment received regarding the application of 

technology was from the Center for Biological Diversity (CBD), which criticized EPA’s 

use of the 5-year redesign cycle. CBD argued that manufacturers occasionally redesign 

vehicles sooner than 5 years and that EPA did not quantify the cost of shortening the 

redesign cycle to less than 5 years and compare this cost to the increased benefit of 

reduced CO2 emissions. CBD also noted that manufacturers have been recently dropping 

vehicle lines and entire divisions with very little leadtime, indicating their ability to 

change product plans much quicker than projected above. 

EPA did not explicitly evaluate the cost of reducing the average redesign cycle to 

less than 5 years for two reasons. One, in the past, manufacturers have usually shortened 

the redesign cycle to address serious problems with the current design, usually lower than 

anticipated sales. However, the amortized cost of the capital necessary to produce a new 

vehicle design will increase by 23%, from one-fifth of the capital cost to one-fourth (and 

assuming a 3% discount rate). This would be on top of the cost of the emission control 

equipment itself. The only benefit of this increase in societal cost will be earlier CO2

emission reductions (and the other benefits associated with CO2 emission control). The 

capital costs associated with vehicle redesign go beyond CO2 emission control and 

potentially involve every aspect of the vehicle and can represent thousands of dollars. 

 

253 While diesel engines are a mature technology and not “advanced”, the aftertreatment systems necessary 

for them in the U.S. market are advanced. 
259 

We believe that it would be an inefficient use of societal resources to incur such costs 

when they can be obtained much more cost effectively just one year later. 

Two, the examples of manufacturers dropping vehicle lines and divisions with 

very short lead time is not relevant to the redesign of vehicles. There is no relationship 

between a manufacturer’s ability to stop selling a vehicle model or to close a vehicle 

division and a manufacturer's ability to redesign a vehicle. A company could decide to 

stop selling all of its products within a few weeks – but it would still take a firm 

approximately 5 years to introduce a major new vehicle line. It is relatively easy to stop 

the manufacture of a particular product (though this too can incur some cost -- such as 

plant wind-down costs, employee layoff or relocation costs, and dealership related costs). 

It is much more difficult to perform the required engineering design and development, 

design, purchase, and install the necessary capital equipment and tooling for components 

and vehicle manufacturing and develop all the processes associated with the application 

of a new technology. Further discussion of the CBD comments can be found in III.D.7 

below. 

5. How is EPA Projecting that a Manufacturer Decides Between Options to 

Improve CO2 Performance to Meet a Fleet Average Standard?

 EPA is generally taking the same approach to projecting the application of 

technology to vehicles as it did for the NPRM. With the exception of two comments, all 

commenters agreed with the modeling approach taken in the NPRM. One of these two 

comments is addressed is Section III.D.1 above, while the other is addressed in Section 

III.D.3. above. 

There are many ways for a manufacturer to reduce CO2-emissions from its 

vehicles. A manufacturer can choose from a myriad of CO2 reducing technologies and 

can apply one or more of these technologies to some or all of its vehicles. Thus, for a 

variety of levels of CO2 emission control, there are an almost infinite number of 

technology combinations which produce the desired CO2 reduction. As noted earlier, 

EPA developed a new vehicle model, the OMEGA model in order to make a reasonable 

estimate of how manufacturers will add technologies to vehicles in order to meet a fleetwide CO2 emissions level. EPA has described OMEGA’s specific methodologies and 

algorithms in a memo to the docket for this rulemaking (Docket EPA-HQ-OAR-2009-

0472). 

The OMEGA model utilizes four basic sets of input data. The first is a 

description of the vehicle fleet. The key pieces of data required for each vehicle are its 

manufacturer, CO2 emission level, fuel type, projected sales and footprint. The model 

also requires that each vehicle be assigned to one of the 19 vehicle types, which tells the 

model which set of technologies can be applied to that vehicle. (For a description of how 

the 19 vehicle types were created, reference Section III.D.3.) In addition, the degree to 

which each vehicle already reflects the effectiveness and cost of each available 

technology must also be input. This avoids the situation, for example, where the model 

might try to add a basic engine improvement to a current hybrid vehicle. Except for this 
260 

type of information, the development of the required data regarding the reference fleet 

was described in Section III.D.1 above and in Chapter 1 of the Joint TSD. 

The second type of input data used by the model is a description of the 

technologies available to manufacturers, primarily their cost and effectiveness. Note that 

the five vehicle classes are not explicitly used by the model, rather the costs and 

effectiveness associated with each vehicle package is based on the associated class. This 

information was described in Sections III.D.2 and III.D.3 above as well as Chapter 3 of 

the Joint TSD. In all cases, the order of the technologies or technology packages for a 

particular vehicle type is determined by the model user prior to running the model. 

Several criteria can be used to develop a reasonable ordering of technologies or packages. 

These are described in the Joint TSD. 

The third type of input data describes vehicle operational data, such as annual 

scrap rates and mileage accumulation rates, and economic data, such as fuel prices and 

discount rates. These estimates are described in Section II.F above, Section III.H below 

and Chapter 4 of the Joint TSD. 

The fourth type of data describes the CO2 emission standards being modeled. 

These include the CO2 emission equivalents of the 2011 MY CAFE standards and the 

final CO2 standards for 2016. As described in more detail below, the application of A/C 

technology is evaluated in a separate analysis from those technologies which impact CO2

emissions over the 2-cycle test procedure. Thus, for the percent of vehicles that are 

projected to achieve A/C related reductions, the CO2 credit associated with the projected 

use of improved A/C systems is used to adjust the final CO2 standard which will be 

applicable to each manufacturer to develop a target for CO2 emissions over the 2-cycle 

test which is assessed in our OMEGA modeling. 

As mentioned above for the market data input file utilized by OMEGA, which 

characterizes the vehicle fleet, our modeling must and does account for the fact that many 

2008 MY vehicles are already equipped with one or more of the technologies discussed 

in Section III.D.2 above. Because of the choice to apply technologies in packages, and 

2008 vehicles are equipped with individual technologies in a wide variety of 

combinations, accounting for the presence of specific technologies in terms of their 

proportion of package cost and CO2 effectiveness requires careful, detailed analysis. The 

first step in this analysis is to develop a list of individual technologies which are either 

contained in each technology package, or would supplant the addition of the relevant 

portion of each technology package. An example would be a 2008 MY vehicle equipped 

with variable valve timing and a 6-speed automatic transmission. The cost and 

effectiveness of variable valve timing would be considered to be already present for any 

technology packages which included the addition of variable valve timing or technologies 

which went beyond this technology in terms of engine related CO2 control efficiency. An 

example of a technology which supplants several technologies would be a 2008 MY 

vehicle which was equipped with a diesel engine. The effectiveness of this technology 

would be considered to be present for technology packages which included 

improvements to a gasoline engine, since the resultant gasoline engines have a lower CO2
261 

control efficiency than the diesel engine. However, if these packages which included 

improvements also included improvements unrelated to the engine, like transmission 

improvements, only the engine related portion of the package already present on the 

vehicle would be considered. The transmission related portion of the package’s cost and 

effectiveness would be allowed to be applied in order to comply with future CO2

emission standards. 

The second step in this process is to determine the total cost and CO2

effectiveness of the technologies already present and relevant to each available package. 

Determining the total cost usually simply involves adding up the costs of the individual 

technologies present. In order to determine the total effectiveness of the technologies 

already present on each vehicle, the lumped parameter model described above is used. 

Because the specific technologies present on each 2008 vehicle are known, the applicable 

synergies and dis-synergies can be fully accounted for. 

The third step in this process is to divide the total cost and CO2 effectiveness 

values determined in step 2 by the total cost and CO2 effectiveness of the relevant 

technology packages. These fractions are capped at a value of 1.0 or less, since a value 

of 1.0 causes the OMEGA model to not change either the cost or CO2 emissions of a 

vehicle when that technology package is added. 

As described in Section III.D.3 above, technology packages are applied to groups 

of vehicles which generally represent a single vehicle platform and which are equipped 

with a single engine size (e.g., compact cars with four cylinder engine produced by Ford). 

These grouping are described in Table III.D.1-1. Thus, the fourth step is to combine the 

fractions of the cost and effectiveness of each technology package already present on the 

individual 2008 vehicles models for each vehicle grouping. For cost, percentages of each 

package already present are combined using a simple sales-weighting procedure, since 

the cost of each package is the same for each vehicle in a grouping. For effectiveness, 

the individual percentages are combined by weighting them by both sales and base CO2

emission level. This appropriately weights vehicle models with either higher sales or 

CO2 emissions within a grouping. Once again, this process prevents the model from 

adding technology which is already present on vehicles, and thus ensures that the model 

does not double count technology effectiveness and cost associated with complying with 

the 2011 MY CAFE standards and the final CO2 standards. 

Conceptually, the OMEGA model begins by determining the specific CO2

emission standard applicable for each manufacturer and its vehicle class (i.e., car or 

truck). Since the final rule allows for averaging across a manufacturer’s cars and trucks, 

the model determines the CO2 emission standard applicable to each manufacturer’s car 

and truck sales from the two sets of coefficients describing the piecewise linear standard 

functions for cars and trucks in the inputs, and creates a combined car-truck standard. 

This combined standard considers the difference in lifetime VMT of cars and trucks, as 

indicated in the final regulations which govern credit trading between these two vehicle 

classes. For both the 2011 CAFE and 2016 CO2 standards, these standards are a function 

of each manufacturer’s sales of cars and trucks and their footprint values. When 
262 

evaluating the 2011 MY CAFE standards, the car-truck trading was limited to 1.2 mpg. 

When evaluating the final CO2 standards, the OMEGA model was run only for MY 2016. 

OMEGA is designed to evaluate technology addition over a complete redesign cycle and 

2016 represents the final year of a redesign cycle starting with the first year of the final 

CO2 standards, 2012. Estimates of the technology and cost for the interim model years 

are developed from the model projections made for 2016. This process is discussed in 

Chapter 6 of EPA’s RIA to this final rule. When evaluating the 2016 standards using the 

OMEGA model, the final CO2 standard which manufacturers will otherwise have to meet 

to account for the anticipated level of A/C credits generated was adjusted. On an industry 

wide basis, the projection shows that manufacturers will generate 11 g/mi of A/C credit 

in 2016. Thus, the 2016 CO2 target for the fleet evaluated using OMEGA was 261 g/mi 

instead of 250 g/mi. 

As noted above, EPA estimated separately the cost of the improved A/C systems 

required to generate the 11 g/mi credit. This is consistent with our final A/C credit 

procedures, which will grant manufacturers A/C credits based on their total use of 

improved A/C systems, and not on the increased use of such systems relative to some 

base model year fleet. Some manufacturers may already be using improved A/C 

technology. However, this represents a small fraction of current vehicle sales. To the 

degree that such systems are already being used, EPA is over-estimating both the cost 

and benefit of the addition of improved A/C technology relative to the true reference fleet 

to a small degree. 

The model then works with one manufacturer at a time to add technologies until 

that manufacturer meets its applicable standard. The OMEGA model can utilize several 

approaches to determining the order in which vehicles receive technologies. For this 

analysis, EPA used a “manufacturer-based net cost-effectiveness factor” to rank the 

technology packages in the order in which a manufacturer is likely to apply them. 

Conceptually, this approach estimates the cost of adding the technology from the 

manufacturer’s perspective and divides it by the mass of CO2 the technology will reduce. 

One component of the cost of adding a technology is its production cost, as discussed 

above. However, it is expected that new vehicle purchasers value improved fuel 

economy since it reduces the cost of operating the vehicle. Typical vehicle purchasers 

are assumed to value the fuel savings accrued over the period of time which they will 

own the vehicle, which is estimated to be roughly five years. It is also assumed that 

consumers discount these savings at the same rate as that used in the rest of the analysis 

(3 or 7 percent). Any residual value of the additional technology which might remain 

when the vehicle is sold is not considered. The CO2 emission reduction is the change in 

CO2 emissions multiplied by the percentage of vehicles surviving after each year of use 

multiplied by the annual miles travelled by age, again discounted to the year of vehicle 

purchase. 

Given this definition, the higher priority technologies are those with the lowest 

manufacturer-based net cost-effectiveness value (relatively low technology cost or high 

fuel savings leads to lower values). Because the order of technology application is set for 

each vehicle, the model uses the manufacturer-based net cost-effectiveness primarily to 
263 

decide which vehicle receives the next technology addition. Initially, technology 

package #1 is the only one available to any particular vehicle. However, as soon as a 

vehicle receives technology package #1, the model considers the manufacturer-based net 

cost-effectiveness of technology package #2 for that vehicle and so on. In general terms, 

the equation describing the calculation of manufacturer-based cost effectiveness is as 

follows: 

[ ]

[ ] [ ] ( ) ∑

∑

+

=

− ××

− ××−

= 35

1

1

1 2

)1(

1

i

i

i

PP

i

i i

Gap

dCO VMT

Gap

TechCost VMTdFS

ManufCostEff

Where 

ManufCostEff = Manufacturer-Based Cost Effectiveness (in dollars per kilogram CO2), 

TechCost = Marked up cost of the technology (dollars), 

PP = Payback period, or the number of years of vehicle use over which consumers value 

fuel savings when evaluating the value of a new vehicle at time of purchase, 

dFSi = Difference in fuel consumption due to the addition of technology times fuel price 

in year i, 

dCO2 = Difference in CO2 emissions due to the addition of technology, 

VMTi = product of annual VMT for a vehicle of age i and the percentage of vehicles of 

age i still on the road, and 

1- Gap = Ratio of onroad fuel economy to two-cycle (FTP/HFET) fuel economy 

The OMEGA model does not currently allow for the VMT used in determining 

the various technology ranking factors to be a function of the rebound factor. If the user 

believed that the consideration of rebound VMT was important, they could increase their 

estimate of the payback period to simulate the impact of the rebound VMT. 

EPA describes the technology ranking methodology and manufacturer-based cost 

effectiveness metric in greater detail in a technical memo to the Docket for this final rule 

(Docket EPA-HQ-OAR-2009-0472). 

When calculating the fuel savings, the full retail price of fuel, including taxes is 

used. While taxes are not generally included when calculating the cost or benefits of a 

regulation, the net cost component of the manufacturer-based net cost-effectiveness 

equation is not a measure of the social cost of this final rule, but a measure of the private 

cost, (i.e., a measure of the vehicle purchaser’s willingness to pay more for a vehicle with 

higher fuel efficiency). Since vehicle operators pay the full price of fuel, including 

taxes, they value fuel costs or savings at this level, and the manufacturers will consider 

this when choosing among the technology options. 

This definition of manufacturer-based net cost-effectiveness ignores any change 

in the residual value of the vehicle due to the additional technology when the vehicle is 

five years old. As discussed in Chapter 1 of the RIA, based on historic used car pricing, 
264 

applicable sales taxes, and insurance, vehicles are worth roughly 23% of their original 

cost after five years, discounted to year of vehicle purchase at 7% per annum. It is 

reasonable to estimate that the added technology to improve CO2 level and fuel economy 

will retain this same percentage of value when the vehicle is five years old. However, it 

is less clear whether first purchasers, and thus, manufacturers consider this residual value 

when ranking technologies and making vehicle purchases, respectively. For this final 

rule, this factor was not included in our determination of manufacturer-based net costeffectiveness in the analyses performed in support of this final rule. 

The values of manufacturer-based net cost-effectiveness for specific technologies 

will vary from vehicle to vehicle, often substantially. This occurs for three reasons. 

First, both the cost and fuel-saving component cost, ownership fuel-savings, and lifetime 

CO2 effectiveness of a specific technology all vary by the type of vehicle or engine to 

which it is being applied (e.g., small car versus large truck, or 4-cylinder versus 8-

cylinder engine). Second, the effectiveness of a specific technology often depends on the 

presence of other technologies already being used on the vehicle (i.e., the dis-synergies. 

Third, the absolute fuel savings and CO2 reduction of a percentage an incremental 

reduction in fuel consumption depends on the CO2 level of the vehicle prior to adding the 

technology. Chapter 1 of the RIA of this final rule contains further detail on the values of 

manufacturer-based net cost-effectiveness for the various technology packages. 

6. Why are the Final CO2 Standards Feasible?

 The finding that the final standards are technically feasible is based primarily on 

two factors. One is the level of technology needed to meet the final standards. The other 

is the cost of this technology. The focus is on the final standards for 2016, as this is the 

most stringent standard and requires the most extensive use of technology. 

 With respect to the level of technology required to meet the standards, EPA 

established technology penetration caps. As described in Section III.D.4, EPA used two 

constraints to limit the model’s application of technology by manufacturer. The first was 

the application of common fuel economy enablers such as low rolling resistance tires and 

transmission logic changes. These were allowed to be used on all vehicles and hence had 

no penetration cap. The second constraint was applied to most other technologies and 

limited their application to 85% with the exception of the most advanced technologies 

(e.g., power-split hybrid and 2-mode hybrid) and diesel254, whose application was limited 

to 15%. 

 EPA used the OMEGA model to project the technology (and resultant cost) 

required for manufacturers to meet the current 2011 MY CAFE standards and the final 

2016 MY CO2 emission standards. Both sets of standards were evaluated using the 

OMEGA model. The 2011 MY CAFE standards were applied to cars and trucks 

separately with the transfer of credits from one category to the other allowed up to an 

 

254 While diesel engines are not an “advanced technology” per se, diesel engines that can meet EPA’s light 

duty Tier 2 Bin 5 NOx standards have advanced (and somewhat costly) aftertreatment systems on them that 

make this technology penetration cap appropriate in addition to their relatively high incremental costs. 
265 

increase in fuel economy of 1.0 mpg as allowed under the applicable MY2011 CAFE 

regulations. Chrysler, Ford and General Motors are assumed to utilize FFV credits up to 

the maximum of 1.2 mpg for both their car and truck sales. Nissan is assumed to utilize 

FFV credits up to the maximum of 1.2 mpg for only their truck sales. The use of any 

banked credits from previous model years was not considered. The modification of the 

reference fleet to comply with the 2011 CAFE standards through the application of 

technology by the OMEGA model is the final step in creating the final reference fleet. 

This final reference fleet forms the basis for comparison for the model year 2016 

standards. 

 Table III.D.6-1 shows the usage level of selected technologies in the 2008 

vehicles coupled with 2016 sales prior to projecting their compliance with the 2011 MY 

CAFE standards. These technologies include converting port fuel-injected gasoline 

engines to direct injection (GDI), adding the ability to deactivate certain engine cylinders 

during low load operation to overhead cam engines (OHC-DEAC), adding a turbocharger 

and downsizing the engine (Turbo), diesel engine technology, increasing the number of 

transmission speeds to 6, or converting automatic transmissions to dual-clutch automated 

manual transmissions (Dual-Clutch Trans), adding 42 volt start-stop capability (StartStop), and converting a vehicle to an intermediate or strong hybrid design. This last 

category includes three current hybrid designs: integrated motor assist (IMA), power-split 

(PS), 2-mode hybrids and electric vehicles.255 

Table III.D.6-1 Penetration of Technology in 2008 Vehicles with 2016 Sales: Cars and 

Trucks 

GDI 

OHCDEAC Turbo Diesel 

6 Speed 

Auto 

Trans 

Dual 

Clutch 

Trans 

StartStop Hybrid 

BMW 7.5% 0.0% 6.1% 0.0% 86% 0.9% 0% 0.1% 

Chrysler 0.0% 0.0% 0.5% 0.1% 14% 0.0% 0% 0.0% 

Daimler 0.0% 0.0% 6.5% 5.6% 76% 7.5% 0% 0.0% 

Ford 0.4% 0.0% 2.2% 0.0% 29% 0.0% 0% 0.0% 

General Motors 3.1% 0.0% 1.4% 0.0% 15% 0.0% 0% 0.3% 

Honda 1.4% 7.1% 1.4% 0.0% 0% 0.0% 0% 2.1% 

Hyundai 0.0% 0.0% 0.0% 0.0% 3% 0.0% 0% 0.0% 

Kia 0.0% 0.0% 0.0% 0.0% 0% 0.0% 0% 0.0% 

Mazda 13.6% 0.0% 13.6% 0.0% 26% 0.0% 0% 0.0% 

Mitsubishi 0.0% 0.0% 0.0% 0.0% 10% 0.0% 0% 0.0% 

Nissan 0.0% 0.0% 0.0% 0.0% 0% 0.0% 0% 0.8% 

Porsche 58.6% 0.0% 14.9% 0.0% 49% 0.0% 0% 0.0% 

Subaru 0.0% 0.0% 9.8% 0.0% 0% 0.0% 0% 0.0% 

 

255 EPA did not project reliance on the use of any plug-in hybrid or battery electric vehicles when 

projecting manufacturers’ compliance with the 2016 standards. However, BMW did sell a battery electric 

vehicle in the 2008 model year, so these sales are included in the technology penetration estimates for the 

reference case and the final and alternative standards evaluated for 2016. 
266 

Suzuki 0.0% 0.0% 0.0% 0.0% 0% 0.0% 0% 0.0% 

Tata 0.0% 0.0% 17.3% 0.0% 99% 0.0% 0% 0.0% 

Toyota 6.8% 0.0% 0.0% 0.0% 21% 0.0% 0% 11.6% 

Volkswagen 50.6% 0.0% 39.5% 0.0% 69% 13.1% 0% 0.0% 

Overall 3.8% 0.8% 2.6% 0.1% 19.1% 0.5% 0.0% 2.2% 

As can be seen, all of these technologies were already being used on some 2008 

MY vehicles, with the exception of direct injection gasoline engines with either cylinder 

deactivation or turbocharging and downsizing. Transmissions with more gearsets were 

the most prevalent, with some manufacturers (e.g., BMW, Suzuki) using them on 

essentially all of their vehicles. Both Daimler and VW equip many of their vehicles with 

automated manual transmissions, while VW makes extensive use of direct injection 

gasoline engine technology. Toyota has converted a significant percentage of its 2008 

vehicles to strong hybrid design. 

 Table III.D.6-2 shows the usage level of the same technologies in the reference 

case fleet after projecting their compliance with the 2011 MY CAFE standards. Except 

for mass reduction, the figures shown represent the percentages of each manufacturer’s 

sales which are projected to be equipped with the indicated technology. For mass 

reduction, the overall mass reduction projected for that manufacturer’s sales is also 

shown. The last row in Table III.D.6-2 shows the increase in projected technology 

penetration due to compliance with the 2011 MY CAFE standards. The results of DOT’s 

Volpe modeling were used to project that all manufacturers would comply with the 2011 

MY standards in 2016 without the need to pay fines, with one exception. This exception 

was Porsche in the case of their car fleet. When projecting Porsche’s compliance with 

the 2011 MY CAFE standard for cars, NHTSA projected that Porsche would achieve a 

CO2 emission level of 304.3 g/mi instead of the required 284.8 g/mi level (29.2 mpg 

instead of 31.2 mpg), and pay fines in lieu of further control. 

Table III.D.6-2 Penetration of Technology Under 2011 MY CAFE Standards in 2016 

Sales: Cars and Trucks (Percent of Sales) 

 GDI 

OHCDEAC Turbo 

6 Speed 

Auto 

Trans 

Dual 

Clutch 

Trans 

StartStop 

Mass 

Reduction 

(%) 

BMW 44% 12% 30% 53% 37% 13% 2% 

Chrysler 0% 0% 0% 18% 0% 0% 0% 

Daimler 23% 22% 8% 52% 34% 26% 2% 

Ford 0% 0% 3% 27% 0% 0% 0% 

General 

Motors 3% 0% 1% 15% 0% 0% 0% 
267 

Honda 2% 6% 2% 0% 0% 0% 0% 

Hyundai 0% 0% 0% 3% 0% 0% 0% 

Kia 0% 0% 0% 0% 0% 0% 0% 

Mazda 13% 0% 13% 20% 0% 0% 0% 

Mitsubishi 32% 0% 2% 25% 35% 0% 1% 

Nissan 0% 0% 0% 0% 0% 0% 0% 

Porsche 92% 0% 75% 5% 55% 38% 4% 

Subaru 0% 0% 9% 0% 0% 0% 0% 

Suzuki 70% 0% 0% 3% 67% 67% 3% 

Tata 85% 54% 20% 27% 73% 73% 6% 

Toyota 7% 0% 0% 19% 0% 0% 0% 

Volkswagen 89% 5% 81% 14% 78% 18% 3% 

Overall 10% 2% 7% 16% 7% 3% 0% 

Increase over 

2008 MY 6% 1% 4% -3% 6% 3% 0% 

As can be seen, the 2011 MY CAFE standards, when evaluated on an industry 

wide basis, require only a modest increase in the use of these technologies. The projected 

MY2016 fraction of automatic transmission with more gearsets actually decreases 

slightly due to conversion of these units to more efficient designs such as automated 

manual transmissions and hybrids. However, the impact of the 2011 MY CAFE 

standards is much greater on selected manufacturers, particularly BMW, Daimler, 

Porsche, Tata (Jaguar/Land Rover) and VW. All of these manufacturers are projected to 

increase their use of direct injection gasoline engine technology, advanced transmission 

technology, and start-stop technology. It should be noted that these manufacturers have 

traditionally paid fines under the CAFE program. However, with higher fuel prices and 

the lower cost mature technology projected to be available by 2016, these manufacturers 

would likely find it in their best interest to improve their fuel economy levels instead of 

continuing to pay fines (again with the exception of Porsche cars). While not shown, no 

gasoline engines were projected to be converted to diesel technology and no hybrid 

vehicles were projected. Most manufacturers do not require the level of CO2 emission 

control associated with either of these technologies. The few manufacturers that would 

were projected to choose to pay CAFE fines in 2011 in lieu of adding diesel or hybrid 

technologies. 

 This 2008 baseline fleet, modified to meet 2011 standards, becomes our 

“reference” case. See Section II.B above. This is the fleet against which the final 2016 

standards are compared. Thus, it is also the fleet that is assumed to exist in the absence of 

this rule. No air conditioning improvements are assumed for model year 2011 vehicles. 

The average CO2 emission levels of this reference fleet vary slightly from 2012-2016 due 

to small changes in the vehicle sales by market segments and manufacturer. CO2

emissions from cars range from 282-284 g/mi, while those from trucks range from 382-
268 

384 g/mi. CO2 emissions from the combined fleet range from 316-320. These estimates 

are described in greater detail in Section 5.3.2.2 of the EPA RIA. 

 Conceptually, both EPA and NHTSA perform the same projection in order to 

develop their respective reference fleets. However, because the two agencies use two 

different models to modify the baseline fleet to meet the 2011 CAFE standards, the 

projected technology that could be added will be slightly different. The differences, 

however, are relatively small since most manufacturers only require modest addition of 

technology to meet the 2011 CAFE standards. 

 EPA then used the OMEGA model once again to project the level of technology 

needed to meet the final 2016 CO2 emission standards. Using the results of the OMEGA 

model, every manufacturer was projected to be able to meet the final 2016 standards with 

the technology described above except for four: BMW, VW, Porsche and Tata (which is 

comprised of Jaguar and Land Rover vehicles in the U.S. fleet) . For these 

manufacturers, the results presented below are those with the fully allowable application 

of technology available in EPA’s OMEGA modeling analysis and not for the technology 

projected to enable compliance with the final standards. Described below are a number 

of potential feasible solutions for how these companies can achieve compliance. The 

overall level of technology needed to meet the final 2016 standards is shown in Table 

III.D.6-3. As discussed above, all manufacturers are projected to improve the air 

conditioning systems on 85% of their 2016 sales.256

Table III.D.6-3 Final Penetration of Technology for 2016 CO2 Standards: Cars and 

Trucks 

 GDI 

OHCDEAC Turbo Diesel

6 Speed 

Auto 

Trans 

Dual 

Clutch 

Trans 

StartStop Hybrid 

Mass 

Reduction 

(%) 

BMW 80% 21% 61% 6% 13% 63% 65% 14% 5%

Chrysler 79% 13% 17% 0% 31% 52% 54% 0% 6%

Daimler 76% 30% 53% 5% 12% 72% 67% 14% 5%

Ford 84% 21% 19% 0% 27% 60% 61% 0% 6%

General 

Motors 67% 25% 14% 0% 8% 61% 61% 0% 6%

Honda 43% 6% 2% 0% 0% 49% 18% 2% 3%

Hyundai 59% 0% 1% 0% 8% 52% 32% 0% 3%

Kia 33% 0% 1% 0% 0% 52% 4% 0% 2%

Mazda 60% 0% 14% 1% 17% 47% 41% 0% 4%

Mitsubishi 74% 0% 33% 0% 14% 74% 74% 0% 6%

Nissan 66% 7% 11% 0% 2% 62% 58% 1% 5%

Porsche 83% 15% 62% 8% 5% 45% 62% 15% 4%

 

256 Many of the technologies shown in this table are mutually exclusive. Thus, 85% penetration might not 

be possible. For example, any use of hybrids will reduce the DEAC, Turbo, 6SPD, DCT, and 42V S-S 

technologies. Additionally, not every technology is available to be used on every vehicle type. 
269 

Subaru 60% 0% 9% 0% 0% 58% 44% 0% 3%

Suzuki 77% 0% 0% 0% 10% 67% 67% 0% 4%

Tata 85% 55% 27% 0% 14% 70% 70% 15% 5%

Toyota 26% 7% 3% 0% 13% 40% 7% 12% 2%

Volkswagen 82% 18% 71% 11% 10% 68% 60% 15% 4%

Overall 60% 13% 15% 1% 12% 55% 42% 4% 4%

Increase 

over 2011 

CAFE 49% 11% 9% 1% -4% 48% 39% 2% 4%

 Table III.D.6-4 shows the 2016 standards, as well as the achieved CO2 emission 

levels for the five manufacturers which are not able to meet these standards under the 

premises of our modeling. It should be noted that the two sets of combined emission 

levels shown in Table III.D.6-4 are based on sales weighting car and truck emission 

levels. 

Table III.D.6-4 Emissions of Manufacturers Unable to Meet Final 2016 Standards (g/mi 

CO2) 

 Achieved Emissions 2016 Standards Shortfall 

Manufacturer Car Truck Combined Car Truck Combined Combined 

BMW 236.3 278.7 248.5 228.4 282.5 243.9 4.6 

Tata 258.6 323.6 284.2 249.9 272.5 258.8 25.4 

Daimler 246.3 297.8 262.6 238.3 294.3 256.1 6.5 

Porsche 244.1 332.0 273.4 206.1 286.9 233.0 40.4 

Volkswagen 223.5 326.6 241.6 218.6 292.7 231.6 10.0 

 

As can be seen, BMW and Daimler have the smallest shortfalls, 5-6 g/mi, while Porsche 

has the largest, 40 g/mi. 

On an industry average basis, the technology penetrations are very similar to 

those projected in the proposal. There is a slight shift from the use of cylinder 

deactivation to the two advanced transmission technologies. This is due to the fact that 

the estimated costs for these three technologies have been updated, and thus, their relative 

cost effectiveness when applied to specific vehicles have also shifted. The reader is 

referred to Section II.E of this preamble as well as Chapter 3 of the Joint TSD for a 

detailed description of the cost estimates supporting this final rule and to the RIA for a 

description of the selection of technology packages for specific vehicle types. The other 

technologies shown in Table III.D.6-4 changed by 2 percent or less between the proposal 

and this final rule. 

As can be seen, the overall average reduction in vehicle weight is projected to be 

4 percent. This reduction varies across the two vehicle classes and vehicle base weight. 

For cars below 2,950 pounds curb weight, the average reduction is 2.8 percent (75 

pounds), while the average was 4.3 percent (153 pounds) for cars above 2,950 curb 

weight. For trucks below 3,850 pounds curb weight, the average reduction is 4.7 percent 
270 

(163 pounds), while it was 5.1 percent (240 pounds) for trucks above 3,850 curb weight. 

Splitting trucks at a higher weight, for trucks below 5,000 pounds curb weight, the 

average reduction is 4.4 percent (186 pounds), while it was 7.0 percent (376 pounds) for 

trucks above 5,000 curb weight. 

 The levels of requisite technologies differ significantly across the various 

manufacturers. Therefore, several analyses were performed to ascertain the cause. 

Because the baseline case fleet consists of 2008 MY vehicle designs, these analyses were 

focused on these vehicles, their technology and their CO2 emission levels. 

 Comparing CO2 emissions across manufacturers is not a simple task. In addition 

to widely varying vehicle styles, designs, and sizes, manufacturers have implemented fuel 

efficient technologies to varying degrees, as indicated in Table III.D.6-1. The projected 

levels of requisite technology to enable compliance with the final 2016 standards shown 

in Table III.D.6-3 account for two of the major factors which can affect CO2 emissions:1) 

level of technology already being utilized and 2) vehicle size, as represented by footprint. 

 For example, the fuel economy of a manufacturer’s 2008 vehicles may be 

relatively high because of the use of advanced technologies. This is the case with 

Toyota’s high sales of their Prius hybrid. However, the presence of this technology in a 

2008 vehicle eliminates the ability to significantly reduce CO2 further through the use of 

this technology. In the extreme, if a manufacturer were to hybridize a high level of its 

sales in 2016, it does not matter whether this technology was present in 2008 or whether 

it would be added in order to comply with the standards. The final level of hybrid 

technology would be the same. Thus, the level at which technology is present in 2008 

vehicles does not explain the difference in requisite technology levels shown in Table 

III.D.6-3. 

 Similarly, the final CO2 emission standards adjust the required CO2 level 

according to a vehicle’s footprint, requiring lower absolute emission levels from smaller 

vehicles. Thus, just because a manufacturer produces larger vehicles than another 

manufacturer does not explain the differences seen in Table III.D.6-3. 

 In order to remove these two factors from our comparison, the EPA lumped 

parameter model described above was used to estimate the degree to which technology 

present on each 2008 MY vehicle in our reference fleet was improving fuel efficiency. 

The effect of this technology was removed and each vehicle’s CO2 emissions were 

estimated as if it utilized no additional fuel efficiency technology beyond the baseline. 

The differences in vehicle size were accounted for by determining the difference between 

the sales-weighted average of each manufacturer’s “no technology” CO2 levels to their 

required CO2 emission level under the final 2016 standards. The industry-wide 

difference was subtracted from each manufacturer’s value to highlight which 

manufacturers had lower and higher than average “no technology” emissions. The results 

are shown in Figure III.D.6-1. 
271 

-20-40-60

0

80604020

120100

BMW Chrysler DaimlerFord GeneralMotors Honda HyundaiKia Mazda Mitsubishi Nissan Porsche Suba ur SuzukiTata Toyota Volkswagen

) CO2 Emissions (g/mi Car Truck

Figure III.D.6-1 CO2 Emission Reduction Required in 2016 from 2008 Vehicles After Removing the 

Benefit of Technology Already Present, Relative to That for the Fleet as a Whole 
272 

As can be seen in Table III.D.6-3 the manufacturers projected to require the greatest 

levels of technology also show the highest offsets relative to the industry. The greatest 

offset shown in Figure III.D.6-1 is for Tata’s trucks (Land Rover). These vehicles are 

estimated to have 100 g/mi greater CO2 emissions than the average 2008 MY truck after 

accounting for differences in the use of fuel saving technology and footprint. The lowest 

adjustment is for Subaru’s trucks, which have 50 g/mi CO2 lower emissions than the 

average truck. 

 While this comparison confirms the differences in the technology penetrations 

shown in Table III.D.6-3, it does not yet explain why these differences exist. Two well 

known factors affecting vehicle fuel efficiency are vehicle weight and acceleration 

performance (henceforth referred to as “performance”). The footprint-based form of the 

final CO2 standard accounts for most of the difference in vehicle weight seen in the 2008 

MY fleet. However, even at the same footprint, vehicles can have varying weights. 

Higher performing vehicles also tend to have higher CO2 emissions over the two-cycle 

fuel economy test procedure. So manufacturers with higher average performance levels 

will tend to have higher average CO2 emissions for any given footprint. This variability at 

any given footprint contributes to much of the scatter in the data (shown for example on 

plots like Figures II.C.1-3 through II.C.1-6). 

 We developed a methodology to assess the impact of these two factors on each 

manufacturer’s projected compliance with the 2016 standards. First, we had to remove 

(or isolate) the effect of CO2 control technology already being employed on 2008 

vehicles. As described above, 2008 vehicles exhibit a wide range of control technology 

and leaving these impacts in place would confound the assessment of performance and 

weight on CO2 emissions. Thus, the first step was to estimate each vehicle’s “no 

technology” CO2 emissions. To do this, we used the EPA lumped parameter model 

(described in the TSD) to estimate the overall percentage reduction in CO2 emissions 

associated with technology already on the vehicle and then backed out this effect 

mathematically. Second, we performed a least-square linear regression of these no 

technology CO2 levels against curb weight and the ratio of rated engine horsepower to 

curb weight simultaneously. The ratio of rated engine horsepower to curb weight is a 

good surrogate for acceleration performance and the data is available for all vehicles, 

whereas the zero to sixty time is not. Both factors were found to be statistically 

significant at the 95% confidence level. Together, they explained over 80% of the 

variability in vehicles’ CO2 emissions for cars and over 70% for trucks. Third, we 

determined the sales-weighted average curb weight per footprint for cars and trucks, 

respectively, for the fleet as a whole. We also determined the sales-weighted average of 

the ratio of rated engine horsepower to curb weight for cars and trucks, respectively, for 

the fleet as a whole. Fourth, we adjusted each vehicle’s “no technology” CO2 emissions 

to eliminate the degree to which the vehicle had higher or lower acceleration performance 

or curb weight per footprint relative to the car or truck fleet as a whole. For example, if a 

car’s ratio of horsepower to weight was 0.007 and the average ratio for all cars was 

0.006, then the vehicle’s “no technology” CO2 emission level was reduced by the 

difference between these two values (0.001) times the impact of the ratio of horsepower 

to weight on car CO2 emissions from the above linear regression. Finally, we substituted 
273 

these performance and weight adjusted CO2 emission levels for the original, “no 

technology” CO2 emission levels shown in Figure III.D.6-1. The results are shown in 

Figure III.D.6-2. 
274 -10

-20-30-40

0

302010

BMWDaim er l

GeneralMo ors t HyundaiMazdaNissanSubaru Tata Volkswagen

) CO2 Emissions (g/mi Car Truck

Figure III.D.6-2 CO2 Emission Reduction Required in 2016 From 2008 Vehicles After 1) Removing 

the Benefit of Technology Already Present, and 2) Adjusting for Differences in Weight per 

Footprint, and Performance, Relative to That for the Fleet as a as a Whole
275 

First, note that the scale in Figure III.D.6-2 is much smaller by a factor of 3 than 

that in Figure III.D.6-1. In other words, accounting for differences in vehicle weight (at 

constant footprint) and performance dramatically reduces the variability among the 

manufacturers’ CO2 emissions. Most of the manufacturers with high positive offsets in 

Figure III.D.6-1 now show low or negative offsets. For example, BMW’s and VW’s 

trucks show very low CO2 emissions. Tata’s emissions are very close to the industry 

average. Daimler’s vehicles are no more than 10 g/mi above the average for the industry. 

This analysis indicates that the primary reasons for the differences in technology 

penetrations shown for the various manufacturers in Table III.D.6-3 are weight and 

acceleration performance. EPA has not determined why some manufacturers’ vehicle 

weight is relatively high for its footprint value, or whether this weight provides additional 

utility for the consumer. Performance is more straightforward. Some consumers desire 

high acceleration performance and some manufacturers orient their sales towards these 

consumers. However, the cost in terms of CO2 emissions is clear. Manufacturers 

producing relatively heavy or high performance vehicles presently (with concomitant 

increases CO2 emissions) will require greater levels of technology in order to meet the 

final CO2 standards in 2016. 

 As can be seen from Table III.D.6-3 above, widespread use of several 

technologies is projected due to the final standards. The vast majority of engines are 

projected to be converted to direct injection, with some of these engines including 

cylinder deactivation or turbocharging and downsizing. More than 60 percent of all 

transmissions are projected to be either 6+ speed automatic transmissions or dual-clutch 

automated manual transmissions. More than one third of the fleet is projected to be 

equipped with 42 volt start-stop capability. This technology was not utilized in 2008 

vehicles, but as discussed above, promises significant fuel efficiency improvement at a 

moderate cost. 

 In their comments, Porsche stated that their vehicles have twice the power-toweight ratio as the fleet average and that their vehicles presently have a high degree of 

technology penetration, which allows them to meet the 2009 CAFE standards. Porsche 

also commented that the 2016 standards are not feasible for their firm, in part due to the 

high level of technologies already present in their vehicles and due to their “very long 

production life cycles”. BMW in their comments stated that their vehicles are “featuredense” thus “requiring additional efforts to comply” with future standards.257 Ferrari, in 

their comments, states that the standards are not feasible for high-performance sports cars 

without compromising on their “distinctiveness”. They also state that because they 

already have many technologies on the vehicles, “there are limited possibilities for 

further improvements.” Finally Ferrari states that smaller volume manufacturers have 

higher costs “because they can be distributed over very limited production volumes”, and 

they have longer product lifecycles. The latter view was also shared by Lotus. These 

comments will be addressed below, but are cited here as supporting the conclusions from 

 

257 As a side note, one of the benefits for the off-cycle technology credits allowed in this final rule is the 

opportunity this flexibility provides for some of these ‘feature dense’ vehicles to generate such credits to 

assist, to some extent, in the companies’ ability to comply. 
276 

the above analysis that high performance and feature dense vehicles have a greater 

challenge meeting the 2016 standards. In general, other manufacturers covering the rest 

of the fleet and other commenters agreed with EPA’s analysis in the proposal of projected 

technology usage, and supported the view that the 2016 model year standards were 

feasible in the lead-time provided. 

 In response to the comments above, EPA foresees no significant technical or 

engineering issues with the projected deployment of these technologies across the fleet by 

MY 2016, with their incorporation being folded into the vehicle redesign process (with 

the exception of some of the small volume manufacturers). All of these technologies are 

commercially available now. The automotive industry has already begun to convert its 

port fuel-injected gasoline engines to direct injection. Cylinder deactivation and 

turbocharging technologies are already commercially available. As indicated in Table 

III.D.6-1, high speed transmissions are already widely used. However, while more 

common in Europe, automated manual transmissions are not currently used extensively in 

the U.S. Widespread use of this technology would require significant capital investment 

but does not present any significant technical or engineering issues. Start-stop systems 

based on a 42-volt architecture also represent a challenge because of the complications 

involved in a changeover to a higher voltage electrical architecture. However, with 

appropriate capital investments (which are captured in the EPA estimated costs), these 

technology penetration rates are achievable within the timeframe of this rule. While most 

manufacturers have some plans for these systems, our projections indicate that their use 

may exceed 35% of sales, with some manufacturers projected to use higher levels. 

 Most manufacturers are not projected to hybridize any vehicles to comply with 

the final standards. The hybrids shown for Toyota are projected to be sold even in the 

absence of the final standards. However the relatively high hybrid penetrations (14-15%) 

projected for BMW, Daimler, Porsche, Tata and Volkswagen deserve further discussion. 

These manufacturers are all projected by the OMEGA model to utilize the maximum 

application of full hybrids allowed by our model in this time frame, which is 15 percent. 

 As discussed in the EPA RIA, a maximum 2016 technology penetration rate of 

85% is projected for the vast majority of available technologies, however, for full hybrid 

systems the projection shows that given the available lead-time full hybrids can only be 

applied to approximately 15% of a manufacturer’s fleet. This number of course can vary 

by manufacturer. Hybrids are a relatively costly technology option which requires 

significant changes to a vehicle’s powertrain design, and EPA estimates that 

manufacturers will require a significant amount of lead time and capital investment to 

introduce this technology into the market in very large numbers. Thus the EPA captures 

this significant change in production facilities with a lower penetration cap. A more 

thorough discussion of lead time limitations can be found below and in Section III.B.5. 

While the hybridization levels of BMW, Daimler, Porsche, Tata and Volkswagen 

are relatively high, the sales levels of these five manufacturers are relatively low. Thus, 

industry-wide, hybridization reaches only 4 percent, compared with 3 percent in the 

reference case. This 4 percent level is believed to be well within the capability of the 
277 

hybrid component industry by 2016. Thus, the primary challenge for these five 

companies would be at the manufacturer level, redesigning a relatively large percentage 

of sales to include hybrid technology. The final TLAAS provisions will provide 

significant needed lead time to these manufacturers for pre-2016 compliance, since all 

qualified companies are able to take advantage of these provisions. 

By 2016, it is likely that these manufacturers would also be able to change vehicle 

characteristics which currently cause their vehicles to emit much more CO2 than similar 

sized vehicles produced by other manufacturers. These factors may include changes in 

model mix, further mass reduction, electric and/or plug-in hybrid vehicles as well as 

technologies that may not be included in our packages. Also, companies may have 

technology penetration rates of less costly technologies (listed in the above tables) greater 

than 85%, and they may also be able to apply hybrid technology to more than 15 percent 

of their fleet (while the 15% cap on the application of hybrid technology is reasonable for 

the industry as a whole, higher percentages are certainly possible for individual 

manufacturers, particularly those with small volumes). For example, a switch to a low 

GWP alternative refrigerant in a large fraction of a fleet can replace many other much 

more costly technologies, but this option is not captured in the modeling. In addition, 

these manufacturers can also take advantage of flexibilities, such as early credits for air 

conditioning and trading with other manufacturers. 

EPA believes it is likely that there will be certain high volume manufacturers that 

will earn a significant amount of early GHG credits starting in 2010 that would expire 5 

years later, by 2015, unused. It is possible that these manufacturers may be willing to sell 

these credits to manufacturers with whom there is little or no direct competition.258 

Furthermore, a large number of manufacturers have also stated publicly that they support 

the 2016 standards. The following companies have all submitted letters in support of the 

national program, including the 2016 MY levels discussed above: BMW, Chrysler, 

Daimler, Ford, GM, Nissan, Honda, Mazda, Toyota, and Volkswagen. This supports the 

view that the emissions reductions needed to achieve the standards are technically and 

economically feasible for all these companies, and that EPA’s projection of model year

2016 non-compliance for BMW, Daimler, and Volkswagen is based on an inability of our 

model at this time to fully account for the full flexibilities of the EPA program as well as 

the potentially unique technology approaches or new product offerings which these 

manufactures are likely to employ. 

 In addition, manufacturers do not need to apply technology exactly according to 

our projections. Our projections simply indicate one path which would achieve 

compliance. Those manufacturers whose vehicles are heavier (feature dense) and higher 

performing than average in particular have additional options to facilitate compliance and 

reduce their technological burden closer to the industry average. These options include 

decreasing the mass of the vehicles and/or decreasing the power output of the engines. 

Finally, EPA allows compliance to be shown through the use of emission credits obtained 

from other manufacturers. Especially for the lower volume sales of some manufacturers 

 

258 For example, a manufacturer that only sells electric vehicles may very well sell the credits they earn to 

another manufacturer that does not sell any electric vehicles. 
278 

that could be one component of an effective compliance strategy, reducing the 

technology that needs to be employed on their vehicles. 

 For light-duty cars and trucks, manufacturers have available to them a range of 

technologies that are currently commercially available and can feasibly be employed in 

their vehicles by MY 2016. Our modeling projects widespread use of these technologies 

as a technologically feasible approach to complying with the final standards. Comments 

from the manufactures provided broad support for this conclusion. A limited number of 

commenters presented specific concerns about their technology opportunities, and EPA 

has described above (and elsewhere in the rule) the paths available for them to comply. 

 In sum, EPA believes that the emissions reductions called for by the final 

standards are technologically feasible, based on projections of widespread use of 

commercially available technology, as well as use by some manufacturers of other 

technology approaches and compliance flexibilities not fully reflected in our modeling. 

 EPA also projected the cost associated with these projections of technology 

penetration. Table III.D.6-4 shows the cost of technology in order for manufacturers to 

comply with the 2011 MY CAFE standards, as well as those associated with the final 

2016 CO2 emission standards. The latter costs are incremental to those associated with 

the 2011 MY standards and also include $60 per vehicle, on average, for the cost of 

projected use of improved air-conditioning systems.259 

Table III.D.6-4 Cost of Technology per Vehicle in 2016 ($2007) 

2011 MY CAFE Standards, 

Relative to 2008 MY 

Final 2016 CO2 Standards, Relative to 

2011 MY CAFE Standards 

 Cars Trucks All Cars Trucks All 

BMW $346 $423 $368 $1,558 $1,195 $1,453 

Chrysler $33 $116 $77 $1,129 $1,501 $1,329 

Daimler $468 $683 $536 $1,536 $931 $1,343 

Ford $73 $161 $106 $1,108 $1,442 $1,231 

General Motors $31 $181 $102 $899 $1,581 $1,219 

Honda $0 $0 $0 $635 $473 $575 

Hyundai $0 $69 $10 $802 $425 $745 

Kia $0 $42 $7 $667 $247 $594 

Mazda $0 $0 $0 $855 $537 $808 

Mitsubishi $328 $246 $295 $817 $1,218 $978 

Nissan $0 $61 $18 $686 $1,119 $810 

Porsche $473 $706 $550 $1,506 $759 $1,257 

Subaru $68 $62 $66 $962 $790 $899 

 

259 Note that the actual cost of the A/C technology is estimated at $71 per vehicle as shown in Table 

III.D.2-3. However, we expect only 85 percent of the fleet to add that technology. Therefore, the cost of 

the technology when spread across the entire fleet is $60 per vehicle ($71 x 85% = $60). 
279 

Suzuki $49 $232 $79 $1,015 $537 $937 

Tata $611 $1,205 $845 $1,181 $680 $984 

Toyota $0 $0 $0 $381 $609 $455 

Volkswagen $228 $482 $272 $1,848 $972 $1,694 

Overall $63 $138 $89 $870 $1,099 $948 

As can be seen, the industry average cost of complying with the 2011 MY CAFE 

standards is quite low, $89 per vehicle. This cost is $11 per vehicle higher than that 

projected in the NPRM. This change is very small and is due to several factors, mainly 

changes in the projected sales of each manufacturer’s specific vehicles, and changes in 

estimated technology costs. Similar to the costs projected in the NPRM, the range of 

costs across manufacturers is quite large. Honda, Mazda and Toyota are projected to face 

no cost. In contrast, Mitsubishi, Porsche, Tata and Volkswagen face costs of at least 

$272 per vehicle. As described above, three of these last four manufacturers (all but 

Mitsubishi) face high costs to meet even the 2011 MY CAFE standards due to either their 

vehicles’ weight per unit footprint or performance. Porsche would have been projected to 

face lower costs in 2016 if they were not expected to pay CAFE fines in 2011. 

 As shown in the last row of Table III.D.6-4, the average cost of technology to 

meet the final 2016 standards for cars and trucks combined relative to the 2011 MY 

CAFE standards is $948 per vehicle. This is $103 lower than that projected in the 

NPRM, due primarily to lower technology cost projections for the final rule compared to 

the NPRM for certain technologies. (See Chapter 1 of the Joint TSD for a detailed 

description of how our technology costs for the final rule differ from those used in the 

NPRM). As was the case in the NPRM, Table III.D.6-4 shows that the average cost for 

cars would be slightly lower than that for trucks. Toyota and Honda show projected costs 

significantly below the average, while BMW, Porsche, Tata and Volkswagen show 

significantly higher costs. On average, the $948 per vehicle cost is significant, 

representing 3.4 percent of the total cost of a new vehicle. However, as discussed below, 

the fuel savings associated with the final standards exceed this cost significantly. In 

general, commenters supported EPA’s cost projections, as discussed in Section II. 

 

 While the CO2 emission compliance modeling using the OMEGA model focused 

on the final 2016 MY standards, the final standards for 2012-2015 are also feasible. As 

discussed above, manufacturers develop their future vehicle designs with several model 

years in view. Generally, the technology estimated above for 2016 MY vehicles 

represents the technology which would be added to those vehicles which are being 

redesigned in 2012-2015. The final CO2 standards for 2012-2016 reduce CO2 emissions 

at a fairly steady rate. Thus, manufacturers which redesign their vehicles at a fairly 

steady rate will automatically comply with the interim standard as they plan for 

compliance in 2016. 

 Manufacturers which redesign much fewer than 20% of their sales in the early 

years of the final program would face a more difficult challenge, as simply implementing 

the “2016 MY” technology as vehicles are redesigned may not enable compliance in the 
280 

early years. However, even in this case, manufacturers would have several options to 

enable compliance. One, they could utilize the debit carry-forward provisions described 

above. This may be sufficient alone to enable compliance through the 2012-2016 MY 

time period, if their redesign schedule exceeds 20% per year prior to 2016. If not, at 

some point, the manufacturer might need to increase their use of technology beyond that 

projected above in order to generate the credits necessary to balance the accrued debits. 

For most manufacturers representing the vast majority of U.S. sales, this would simply 

mean extending the same technology to a greater percentage of sales. The added cost of 

this in the later years of the program would be balanced by lower costs in the earlier 

years. Two, the manufacture could take advantage of the many optional credit generation 

provisions contained in this final rule, including early-credit generation for model years 

2009-2011, credits for advanced technology vehicles, and credits for the application of 

technology which result in off-cycle GHG reductions. Finally, the manufacturer could 

buy credits from another manufacturer. As indicated above, several manufacturers are 

projected to require less stringent technology than the average. These manufacturers 

would be in a position to provide credits at a reasonable technology cost. Thus, EPA 

believes the final standards for 2012-2016 would be feasible. Further discussion of the 

technical feasibility of the interim year standards, including for smaller volume 

manufacturers can be found in Section III.B, in the discussion on the Temporary 

Leadtime Allowance Alternative Standards. 

7. What Other Fleet-Wide CO2 Levels Were Considered?

Two alternative sets of CO2 standards were considered. One set would reduce 

CO2 emissions at a rate of 4 percent per year. The second set would reduce CO2

emissions at a rate of 6 percent per year. The analysis of these standards followed the 

exact same process as described above for the final standards. The only difference was 

the level of CO2 emission standards. The footprint-based standard coefficients of the car 

and truck curves for these two alternative control scenarios were discussed above. The 

resultant projected CO2 standards in 2016 for each manufacturer under these two 

alternative scenarios and under the final rule are shown in Table III.D.7-1. 

Table III.D.7-1 Overall Average CO2 Emission Standards by Manufacturer in 

2016 

4% per Year Final Rule 6% per Year 

BMW 248 244 224 

Chrysler 270 266 245 

Daimler 260 256 236 

Ford 261 257 237 

General Motors 275 271 250 

Honda 248 244 224 

Hyundai 234 231 212 

Kia 239 236 217 

Mazda 232 228 210 

Mitsubishi 244 239 219 

Nissan 250 245 226 
281 

Porsche 237 233 213 

Subaru 238 234 214 

Suzuki 222 218 199 

Tata 263 259 239 

Toyota 249 245 225 

Volkswagen 236 232 213 

Overall 254 250 230 

Tables III.D.7-2 and III.D.7-3 show the technology penetration levels for the 4 

percent per year and 6 percent per year standards in 2016. 

Table III.D.7-2 Technology Penetration - 4% per Year CO2 Standards in 2016: Cars and 

Trucks Combined 

 GDI 

OHCDEAC Turbo Diesel 

6 Speed 

Auto 

Trans 

Dual 

Clutch 

Trans 

StartStop Hybrid 

Mass 

Reduction 

(%) 

BMW 80% 21% 61% 6% 13% 63% 65% 14% 5% 

Chrysler 67% 13% 17% 0% 26% 52% 54% 0% 6% 

Daimler * 76% 30% 53% 5% 12% 72% 67% 14% 5% 

Ford 77% 18% 16% 0% 25% 58% 59% 0% 5% 

General 

Motors 62% 24% 11% 0% 7% 57% 57% 0% 5% 

Honda 44% 6% 2% 0% 0% 49% 15% 2% 2% 

Hyundai 52% 0% 1% 0% 3% 52% 28% 0% 3% 

Kia 37% 0% 1% 0% 0% 57% 0% 0% 2% 

Mazda 79% 0% 14% 1% 17% 66% 60% 0% 5% 

Mitsubishi 85% 0% 31% 0% 16% 72% 72% 0% 6% 

Nissan 69% 7% 11% 0% 2% 64% 61% 1% 6% 

Porsche * 83% 15% 62% 8% 5% 45% 62% 15% 4% 

Subaru 72% 0% 9% 0% 0% 70% 37% 0% 3% 

Suzuki 70% 0% 0% 0% 3% 67% 67% 0% 3% 

Tata * 85% 55% 27% 0% 14% 70% 70% 15% 5% 

Toyota 15% 7% 0% 0% 13% 30% 7% 12% 1% 

Volkswagen * 82% 18% 71% 11% 10% 68% 60% 15% 4% 

Overall 56% 13% 14% 1% 11% 53% 41% 4% 4% 

Increase over 

2011 CAFE 46% 11% 7% 1% -5% 46% 38% 2% 4% 

* These manufacturers were unable to meet the final 2016 standards with the imposed 

caps on technology. 
282 

Table III.D.7-3 Technology Penetration - 6% per Year Alternative Standards in 2016: 

Cars and Trucks Combined 

 GDI 

OHCDEAC Turbo Diesel 

6 Speed 

Auto 

Trans 

Dual 

Clutch 

Trans 

StartStop Hybrid 

Mass 

Reduction 

(%) 

BMW * 80% 21% 61% 6% 13% 63% 65% 14% 5% 

Chrysler 85% 13% 50% 0% 3% 82% 83% 2% 8% 

Daimler * 76% 30% 53% 5% 12% 72% 67% 14% 5% 

Ford* 85% 13% 57% 0% 4% 74% 75% 10% 7% 

General 

Motors 85% 25% 43% 0% 2% 83% 83% 2% 8% 

Honda 68% 6% 10% 0% 1% 65% 65% 2% 6% 

Hyundai 73% 1% 12% 0% 9% 64% 64% 0% 5% 

Kia 62% 0% 1% 0% 0% 62% 61% 0% 5% 

Mazda 85% 0% 19% 1% 4% 80% 82% 0% 7% 

Mitsubishi* 85% 4% 42% 0% 4% 75% 75% 10% 7% 

Nissan 85% 8% 38% 0% 0% 78% 81% 4% 8% 

Porsche * 83% 15% 62% 8% 5% 45% 62% 15% 4% 

Subaru 84% 0% 18% 1% 3% 79% 80% 0% 6% 

Suzuki 85% 0% 85% 0% 0% 85% 85% 0% 8% 

Tata * 85% 55% 27% 0% 14% 70% 70% 15% 5% 

Toyota 71% 7% 5% 0% 20% 49% 47% 12% 4% 

Volkswagen * 82% 18% 71% 11% 10% 68% 60% 15% 4% 

Overall 79% 12% 33% 1% 7% 69% 69% 6% 6% 

Increase over 

2011 CAFE 69% 10% 26% 1% -9% 62% 66% 4% 6% 

* These manufacturers were unable to meet the final 2016 standards with the imposed 

caps on technology. 

With respect to the 4 percent per year standards, the levels of requisite control 

technology are lower than those under the final standards, as would be expected. 

Industry-wide, the largest decreases were a 7 percent decrease in use of gasoline direct 

injection engines, a 4 percent decrease in the use of dual clutch transmissions, and a 2 

percent decrease in the application of start-stop technology. On a manufacturer specific 

basis, the most significant decreases were a 10 percent or larger decrease in the use of 

stop-start technology for Honda, Kia, Mitsubishi and Suzuki and a 12 percent drop in 

turbocharger use for Mitsubishi. These are relatively small changes and are due to the 

fact that the 4 percent per year standards only require 4 g/mi CO2 less control than the 

final standards in 2016. Porsche, Tata and Volkswagen continue to be unable to comply 

with the CO2 standards in 2016, even under the 4 percent per year standard scenario. 

BMW just complied under this scenario, so its costs and technology penetrations are the 

same as under the final standards. 
283 

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 again 

would be expected. Industry-wide, the largest increase was a 25 percent increase in the 

application of start-stop technology and 13-17 percent increases in the use of gasoline 

direct injection engines, turbocharging and dual clutch transmissions. On a manufacturer 

specific basis, the most significant increases were a 10 percent increase in hybrid 

penetration for Ford and Mitsubishi. These are more significant changes and are due to 

the fact that the 6 percent per year standards require 20 g/mi CO2 more control than the 

final standards in 2016. 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 as can be seen from Figure III.D.6-

2. The CO2 emissions from Ford's cars are very similar to those of the industry when 

adjusted for technology, weight and performance. However, their trucks emit more than 

25% more CO2 per mile than the industry average. It is possible that addressing this 

issue would resolve their difficulty in complying with the 6 percent per year scenario. 

Both Mitsubishi's cars and truck emit roughly 10% more than the industry average 

vehicles after adjusting for technology, weight and performance. Again, addressing this 

issue could resolve their difficulty in complying with the 6 percent per year scenario. 

Five manufacturers are projected to need to increase their use of start-stop technology by 

at least 30 percent. 

Table III.D.7-4 shows the projected cost of the two alternative sets of standards. 

Table III.D.7-4 Technology Cost per Vehicle in 2016 – Alternative Standards ($2007) 

4 Percent per Year Standards, 

relative to 2011 MY CAFE 

standards 

6 Percent per Year Standards, 

relative to 2011 MY CAFE 

standards 

Cars Trucks All Cars Trucks All 

BMW $1,558 $1,195 $1,453 $1,558 $1,195 $1,453 

Chrysler $1,111 $1,236 $1,178 $1,447 $2,156 $1,827 

Daimler $1,536 $931 $1,343 $1,536 $931 $1,343 

Ford $1,013 $1,358 $1,140 $1,839 $2,090 $1,932 

General Motors $834 $1,501 $1,148 $1,728 $2,030 $1,870 

Honda $598 $411 $529 $894 $891 $893 

Hyundai $769 $202 $684 $1,052 $1,251 $1,082 

Kia $588 $238 $527 $1,132 $247 $979 

Mazda $766 $537 $733 $1,093 $1,083 $1,092 

Mitsubishi $733 $1,164 $906 $1,224 $1,840 $1,471 

Nissan $572 $1,119 $729 $1,151 $1,693 $1,306 

Porsche $1,506 $759 $1,257 $1,506 $759 $1,257 

Subaru $962 $616 $836 $1,173 $1,316 $1,225 
284 

Suzuki $1,015 $179 $879 $1,426 $1,352 $1,414 

Tata $1,181 $680 $984 $1,181 $680 $984 

Toyota $323 $560 $400 $747 $906 $799 

Volkswagen $1,848 $972 $1,694 $1,848 $972 $1,694 

Overall $811 $1,020 $883 $1,296 $1,538 $1,379 

As can be seen, the average cost of the 4 percent per year standards is only $65 

per vehicle less than that for the final standards. This incremental cost is very similar to 

that projected in the NPRM. In contrast, the average cost of the 6 percent per year 

standards is over $430 per vehicle more than that for the final standards, which is $80 

less than that projected in the NPRM (again due to lower technology costs). Compliance 

costs are entering the region of non-linearity. The $65 cost savings of the 4 percent per 

year standards relative to the final rule represents $19 per g/mi CO2 increase. The $430 

cost increase of the 6 percent per year standards relative to the final rule represents a25 

per g/mi CO2 increase. More importantly, two additional manufacturers, Ford and 

Mitsubishi, are projected to be unable to comply with the 6% per year standards. In 

addition, under the 6% per year standards, four manufacturers (Chrysler, General Motors, 

Suzuki and Nissan) are within 2 g/mi CO2 of the minimum achievable levels projected by 

EPA’s OMEGA model analysis for 2016. 

 

 EPA does not believe the 4% per year alternative is an appropriate standard for 

the MY2012-2016 time frame. As discussed above, the 250 g/mi final rule is 

technologically feasible in this time frame at reasonable costs, and provides higher GHG 

emission reductions at a modest cost increase over the 4% per year alternative (less than 

$100 per vehicle). In addition, the 4% per year alternative does not result in a 

harmonized National Program for the country. Based on California’s letter of May 18, 

2009, the emission standards under this alternative would not result in the State of 

California revising its regulations such that compliance with EPA’s GHG standards 

would be deemed to be in compliance with California’s GHG standards for these model 

years. Thus, the consequence of promulgating a 4% per year standard would be to 

require manufacturers to produce two vehicle fleets: a fleet meeting the 4% per year 

federal standard, and a separate fleet meeting the more stringent California standard for 

sale in California and the section 177 states. This further increases the costs of the 4% 

per year standard and could lead to additional difficulties for the already stressed 

automotive industry. 

EPA also does not believe the 6% per year alternative is an appropriate standard 

for the MY 2012-2016 time frame. As shown in Tables III.D.7-3 and III.D.7-4, the 6% 

per year alternative represents a significant 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: for GM, a 15% increase in 

both DCTs and start-stop systems, for Nissan a 9% increase in full hybrid systems, for 
285 

Ford an 11% increase in full hybrid systems, for Chrysler a 34% increase in both DCT 

and start-stop systems and for Hyundai a 23% increase in the overall penetration of DCT 

and start-stop systems. For the industry as a whole, the per-vehicle cost increase for the 

6% per year alternative is nearly $500. 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. 

As noted above, EPA’s OMEGA model predicts that for model year 2016, Ford, 

Mitsubhisi, Mercedes, BMW, Volkswagen, Jaguar-LandRover, 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 leadtime 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 time frame, 

significant product development and capital investments will need to occur over the next 

2-3 year in order to be ready for launching these new products for those model years. 

Thus a major 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 2016) already requires significant investment and product 

development costs for the industry, focused on the next few years. 

It is important to note, and as discussed later in this 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 nearly $500 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 near-term 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 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 
286 

next few years, as well 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. 

Jaguar/Land Rover, in their comments, agreed that the more stringent standards 

would not be economically practicable, and several automotive firms indicated that the 

proposed standards, while feasible, would be overly challenging.260 On the other hand, 

the Center for Biological Diversity (henceforth referred to here as CBD), strongly urged 

EPA to adopt more stringent standards. CBD gives examples of higher standards in other 

nations to support their contention that the standards should be more stringent. CBD also 

claims that the agencies are “setting standards that deliberately delay implementation of 

technology that is available now” by setting lead time for the rule greater than 18 months. 

CBD also accuses the agencies of arbitrarily “adhering to strict five-year manufacturer 

‘redesign cycles.’” CBD notes that the agencies have stated that all of the “technologies 

are already available today,” and EPA 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.” Based on the agencies’ previous statements, CBD 

concludes that the fleet can meet the 250 g/mi target in 2010. EPA believes that in all 

cases, CBD’s analysis for feasibility and necessary lead time is flawed. 

 Other countries’ absolute fleetwide standards are not a reliable or directly 

relevant comparison. The fleet make-up in other nations is quite different than that of the 

United States. CBD primarily cites the European Union and Japan as examples. Both of 

these regions have a large fraction of small vehicles (with lower average weight, and 

footprint size) when compared to vehicles in the U.S. Also the U.S. has a much greater 

fraction of light-duty trucks. In particular in Europe, there is a much higher fraction of 

diesel vehicles in the existing fleet, which leads to lower CO2 emissions in the baseline 

fleet as compared to the U.S. This is in large part due to the significantly different fuel 

prices seen in Europe as compared to the U.S. The European fleet also has a much higher 

penetration of manual transmission than the U.S., which also results in lower CO2

emissions. Moreover, these countries use different test cycles, which bias CO2 emissions 

relative to the EPA 2 cycle test cycles. When looked at from a technology-basis, with the 

exception of the existing large penetration of diesels and manual transmissions in the 

European fleet – there is no “magic” in the European and Japanese markets which leads 

to lower fleet-wide CO2 emissions. In fact, from a technology perspective, the standards 

contained in this final rule are premised to a large degree on the same technologies which 

the European and Japanese governments have relied upon to establish their CO2 & fuel 

economy limits for this same time frame and for the fleet mixes in their countries. That is 

for example, large increases in the use of 6+ speed transmissions, automated manual 

transmissions, gasoline direct injection, engine downsizing and turbocharging, and startstop systems. CBD has not provided any detailed analysis of what technologies are 

 

260 See comments from Toyota, General Motors 
287 

available in Europe which EPA is not considering – and there are no such “magic” 

technologies. The vast majority of the differences between the current and future CO2

performance of the Japanese and European light-duty vehicle fleets are due to differences 

in the size and current composition of the vehicle fleets in those two regions – not 

because EPA has ignored technologies which are available for application to the U.S. 

market in the 2012-2016 time frame. 

If CBD is advocating a radical reshifting of domestic fleet composition, (such as 

requiring U.S. consumers to purchase much smaller vehicles and requiring U.S. 

consumers to purchase vehicles with manual transmissions), it is sufficient to say that 

standards forcing such a result are not compelled under section 202 (a), where reasonable 

preservation of consumer choice remains a pertinent factor for EPA to consider in 

balancing the relevant statutory factors. See also International Harvester (478 F. 2d at 

640 (Administrator required to consider issues of basic demand for new passenger 

vehicles in making technical feasibility and lead time determinations). Thus EPA 

believes that the standard is at the proper level of stringency for the projected domestic 

fleet in the 2012-2016 model years taking into account the wide variety of consumer 

choice that is reflected in this projection of the domestic fleet. 

As mentioned earlier (in III.D.4), CBD’s comments on available lead time also 

are inaccurate. Under section 202 (a), 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.” Having sufficient lead time includes among other 

things, the time required to certify vehicles. For example, model year 2012 vehicles will 

be tested and certified for the EPA within a short time after the rule is finalized, and this 

can start as early as calendar year 2010, for MY 2012 vehicles that can be produced in 

calendar year 2011. In addition, these 2012 MY vehicles have already been fully 

designed, with prototypes built several years earlier. 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. A full line manufacturer only has limited staffing and financial resources 

to redesign vehicles, therefore the redesigns are staggered throughout a multi-year period 

to optimize human capital.261 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. Even if this unlikely condition were possible, the large 

engineering staff would then have to be downsized or work on the next redesign of the 

 

261 See for example “How Automakers Plan Their Products”, Center for Automotive Research, July 2007. 
288 

entire line another few years later. This would have the effect of increasing the cost of 

the vehicles. 

There is much evidence to indicate that the average redesign cycle in the industry 

is about 5 years.262 There are some manufacturers who have longer cycles (such as 

smaller manufacturers described above), 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. A complete 

redesign of the entire U.S. light-duty fleet by model year 2012 is clearly infeasible, and 

EPA believes that several model years additional lead time is necessary in order for the 

manufacturers to meet the standards. The graduated increase in the stringency of the 

standards from MYs 2012 through 2016 accounts for this needed lead time. 

 There are other reasons that the fleet cannot meet the 250g/mi CO2 target in 2012 

(much less in 2010). The commenter reasons that if technology is in use now – even if 

limited use—it can be utilized across the fleet nearly immediately. This is not the case. 

An immediate demand from original equipment manufacturers (OEMs) to supply 100% 

of the fleet with these technologies in 2012 would cause their suppliers to encounter the 

same lead time issues discussed above. Suppliers have limited capacity to change their 

current production over to the newer technologies quickly. Part of this reason is due to 

engineering, cost and manpower constraints as described above, but additionally, the 

suppliers face an issue of “stranded capital”. This is when the basic tooling and machines 

that produce the technologies in question need to be replaced. If these tools and 

machines are replaced before they near the end of their useful life, the suppliers are left 

with “stranded capital” i.e., a significant financial loss because they are replacing 

perfectly good equipment with newer equipment. This situation can also occur for the 

OEMs. In an extreme example, a plant that switches over from building port fuel 

injected gasoline engines to building batteries and motors, will require a nearly complete 

retooling of the plant. In a less extreme example, a plant that builds that same engine and 

switches over to suddenly building smaller turbocharged direct injection engines with 

starter alternators might have significant retooling costs as well as stranded capital. 

Finally, it takes a significant amount of time to retool a factory and smoothly validate the 

tooling and processes to mass produce a replacement technology. This is why most 

manufacturers do this process over time, replacing equipment as they wear out. CBD has 

not accounted for any of these considerations. EPA believes that attempting to force the 

types of massive technology penetration needed in the early model years of the standard 

to achieve the 2016 standards would be physically and cost prohibitive. 

A number of automotive firms and associations (including the Alliance of 

Automobile Manufacturers, Mercedes, and Toyota) commented that the standards during 

the early model years, in particular MY2012, are too stringent, and that a more linear 

phase-in of the standards beginning with the MY2011 CAFE standards and ending with 

the 250 gram/mi proposed EPA projected fleet-wide level in MY2016 is more 

 

262 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. 

Deleted: “Car Wars 2009-2012, The 

U.S. automotive product pipeline”, John 

Murphy, Research Analyst, Merrill 

Lynch research paper , May 14, 2008 and 
289 

appropriate. In the May 19, 2009 Joint Notice of Intent, EPA and NHTSA stated that the 

standards would have “... a generally linear phase-in from MY 2012 through to model 

year 2016.” (74 FR 24008). The Alliance of Automobile Manufacturers stated that the 

phase-in of the standards is not linear, and they proposed a methodology for the CAFE 

standards to be a linear progression from MY2011 to MY2016. The California Air 

Resources Board commented that the proposed level of stringency, including the EPA 

proposed standards for MY2012-2015, were appropriate and urged EPA to finalize the 

standards as proposed and not reduce the stringency in the early model years as this 

would result in a large loss of the GHG reductions from the National Program. EPA 

agrees with the comments from CARB, and we have not reduced the stringency of the 

program for the early model years. While some automotive firms indicated a desire to 

see a linear transition from the Model Year 2011 CAFE standards, our technology and 

cost analysis indicates that our standards are appropriate for these interim years. As 

shown in Section III.H of this final rule, the final standards result in significant GHG 

reductions, including the reductions from MY2012-2015, and at reasonable costs, 

providing appropriate lead time. The automotive industry commenters did not point to a 

specific technical issue with the standards, but rather their desire for a linear phase-in 

from the existing 2011 CAFE standards. 

In summary, the EPA believes that the MY2012-2016 standards finalized are 

feasible and that there are compelling reasons not to adopt more stringent standards, 

based on a reasonable weighing of the statutory factors, including available technology, 

its cost, and the lead time necessary to permit its development and application.. For 

further discussion of these issues, see Chapter 4 of the RIA as well as the response to 

comments. 

E. Certification, Compliance, and Enforcement 

 1. Compliance Program Overview

This section describes EPA's comprehensive program to ensure compliance with 

emission standards for carbon dioxide (CO2), nitrous oxide (N2O), and methane (CH4), as 

described in Section III.B. An effective compliance program is essential to achieving the 

environmental and public health benefits promised by these mobile source GHG 

standards. EPA's GHG compliance program is designed around two overarching 

priorities: 1) to address Clean Air Act (CAA) requirements and policy objectives; and 2) 

to streamline the compliance process for both manufacturers and EPA by building on 

existing practice wherever possible, and by structuring the program such that 

manufacturers can use a single data set to satisfy both the new GHG and Corporate 

Average Fuel Economy (CAFE) testing and reporting requirements. The EPA and 

NHTSA programs recognize, and replicate as closely as possible, the compliance 

protocols associated with the existing CAA Tier 2 vehicle emission standards, and with 

CAFE standards. The certification, testing, reporting, and associated compliance 

activities closely track current practices and are thus familiar to manufacturers. EPA 

already oversees testing, collects and processes test data, and performs calculations to 

determine compliance with both CAFE and CAA standards. Under this coordinated 
290 

approach, the compliance mechanisms for both programs are consistent and nonduplicative. 

 Vehicle emission standards established under the CAA apply throughout a 

vehicle's full useful life. Today’s rule establishes fleet average greenhouse gas standards 

where compliance with the fleet average is determined based on the testing performed at 

time of production, as with the current CAFE fleet average. EPA is also establishing inuse standards that apply throughout a vehicle’s useful life, with the in-use standard 

determined by adding an adjustment factor to the emission results used to calculate the 

fleet average. EPA’s program will thus not only assess compliance with the fleet average 

standards described in Section III.B, but will also assess compliance with the in-use 

standards. As it does now, EPA will use a variety of compliance mechanisms to conduct 

these assessments, including pre-production certification and post-production, in-use 

monitoring once vehicles enter customer service. Specifically, EPA is establishing 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 an assessment of compliance with the in-use 

standards concurrent with existing EPA and manufacturer Tier 2 emission compliance 

testing programs. Under this compliance program manufacturers will also be afforded 

numerous flexibilities to help achieve compliance, both stemming from the program 

design itself in the form of a manufacturer-specific CO2 fleet average standard, as well as 

in various credit banking and trading opportunities, as described in Section III.C. EPA 

received broad comment from regulated industry and from the public interest community 

supporting this overall compliance program structure. The compliance program is 

outlined in further detail below. 

2. Compliance with Fleet-Average CO2 Standards 

 Fleet average emission levels can only be determined when a complete fleet 

profile becomes available at the close of the model year. Therefore, EPA will 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 will be based on actual production figures for 

each model and on model-level emissions data collected through testing over the course 

of the model year. Manufacturers will submit this information to EPA in an end-of-year 

report which is discussed in detail in Section III.E.5.h below. 

 Manufacturers currently conduct their CAFE testing over an entire model year to 

maximize efficient use of testing and engineering resources. Manufacturers submit their 

CAFE test results to EPA and EPA conducts confirmatory fuel economy testing at its 

laboratory on a subset of these vehicles under EPA's Part 600 regulations. EPA’s 

proposal to extend this approach to the GHG program received overwhelming support 

from vehicle manufacturers. EPA is finalizing GHG requirements under which 

manufacturers will continue to perform the model-level testing currently required for 

CAFE fuel economy performance and measure and report the CO2 values for all tests 
291 

conducted.263 Manufacturers will submit one data set in satisfaction of both CAFE and 

GHG requirements such that EPA’s program will not impose additional timing or testing 

requirements on manufacturers beyond that required by the CAFE program. For example, 

manufacturers currently submit fuel economy test results at the subconfiguration and 

configuration levels to satisfy CAFE requirements. Now manufacturers will also submit 

CO2 values for the same vehicles. Section III.E.3 discusses how this will be implemented 

in the certification process. 

 a. Compliance Determinations 

 As described in Section III.B above, the fleet average standards will be 

determined on a manufacturer by manufacturer basis, separately for cars and trucks, using 

the footprint attribute curves. EPA will calculate the fleet average emission level using 

actual production figures and, for each model type, CO2 emission test values generated at 

the time of a manufacturer's CAFE testing. EPA will then compare the actual fleet 

average to the manufacturer's footprint standard to determine compliance, taking into 

consideration use of averaging and credits. 

 Final determination of compliance with fleet average CO2 standards may not 

occur until several years after the close of the model year due to the flexibilities of carryforward and carry-back credits and the remediation of deficits (see Section III.C). A 

failure to meet the fleet average standard after credit opportunities have been exhausted 

could ultimately result in penalties and injunctive orders under the CAA as described in 

Section III.E.6 below. 

 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 Report264 and Fuel Economy Trends Report.265 As 

proposed, EPA plans to expand these reports to include GHG performance and 

 

263 As discussed in Section III.B.1, vehicle and fleet average compliance will be based on a combination of 

CO2, HC, and CO emissions. This is consistent with the carbon balance methodology used to determine 

fuel consumption for the labeling and CAFE programs. The final regulations account for these total carbon 

emissions appropriately and refer to the sum of these emissions as the “carbon-related exhaust emissions” 

(CREE). Although regulatory text uses the more accurate term “CREE” to represent the CO2 – equivalent 

sum of carbon emissions, the term CO2 is used as shorthand throughout Section III.E as a more familiar 

term for most readers. 

264 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 

265 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 
292 

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. 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. 

 Beyond transparency in reporting emissions data and compliance status, 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 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. 

b. Required Minimum Testing For Fleet Average CO2

 EPA received no public comment on provisions that would extend current CAFE 

testing requirements and flexibilities to the GHG program, and is finalizing as proposed 

minimum testing requirements for fleet average CO2 determination. EPA will require and 

use the same test data to determine a manufacturer’s compliance with both the CAFE 

standard and the fleet average CO2 emissions standard. CAFE requires manufacturers to 

submit test data representing at least 90% of the manufacturer's model year production, 

by configuration.266 The CAFE testing covers the vast majority of models in a 

manufacturer’s fleet. Manufacturers industry-wide currently test more than 1,000 

vehicles each year to meet this requirement. EPA believes this minimum testing 

requirement is necessary and applicable for calculating accurate CO2 fleet average 

emissions. Manufacturers may test additional vehicles, at their option. As described 

above, EPA will use the emissions results from the model-level testing to calculate a 

manufacturer's fleet average CO2 emissions and to determine compliance with the CO2

fleet average standard. 

 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 

 

266 See 40 CFR 600.010-08(d). 
293 

substituted data in the GHG program, but only when the substituted data are also used for 

CAFE purposes. 

 EPA regulations for CAFE testing permit the use of analytically derived fuel 

economy data in lieu of conducting actual fuel economy tests in certain situations.267 

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 data 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 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. 

 3. Vehicle Certification

CAA section 203(a)(1) prohibits manufacturers from introducing a new motor 

vehicle into commerce unless the vehicle is covered by an EPA-issued certificate of 

conformity. Section 206(a)(1) of the CAA describes the requirements for EPA issuance 

of a certificate of conformity, based on a demonstration of compliance with the emission 

standards established by EPA under section 202 of the Act. The certification 

demonstration requires emission testing, and must be done for each model year.268 

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.269 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 levels, identified in the Tier 2 

rule, and this bin level becomes the in-use emissions standard for that test group.270 

 

267 40 CFR 600.006-08(e) 268 CAA section 206(a)(1). 269 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. 

270 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. 
294 

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. 

 EPA will similarly condition each certificate of conformity for the GHG program 

upon a manufacturer's demonstration of compliance with the manufacturer’s fleet-wide 

average CO2 standard. The following discussion explains how EPA will integrate the 

new GHG vehicle certification program into the existing certification program. 

a. Compliance Plans 

 In an effort to expedite the Tier 2 program certification process and facilitate 

early resolution of any compliance related concerns, EPA conducts annual reviews of 

each manufacturer’s certification, in-use compliance and fuel economy plans for 

upcoming model year vehicles. EPA meets with each manufacturer individually, typically 

before the manufacturer begins to submit applications for certification for the new model 

year. Discussion topics include compliance plans for the upcoming model year, any new 

product offerings/new technologies, certification and/or testing issues, phase-in and/or 

ABT plans, and a projection of potential EPA confirmatory test vehicles. EPA has been 

conducting these compliance preview meetings for more than 10 years and has found 

them to be very useful for both EPA and manufacturers. Besides helping to expedite the 

certification process, certification preview meetings provide an opportunity to resolve 

potential issues before the process begins. The meetings give EPA an early opportunity 

to assess a manufacturer’s compliance strategy, which in turn enables EPA to address any 

potential concerns before plans are finalized. The early interaction reduces the likelihood 

of unforeseen issues occurring during the actual certification of a test group which can 

result in the delay or even termination of the certification process. 
295 

For the reasons discussed above, along with additional factors, EPA believes it is 

appropriate for manufacturers to include their GHG compliance plan information as part 

of the new model year compliance preview process. This requirement is both consistent 

with existing practice under Tier 2 and very similar to the pre-model year report required 

under existing and new CAFE regulation. Furthermore, in light of the production 

weighted fleet average program design in which the final compliance determination 

cannot be made until after the end of the model year, EPA believes it is especially 

important for manufacturers to demonstrate that they have a credible compliance plan 

prior to the beginning of certification. 

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. The comments stated

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 pre-model 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 the 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. It is not EPA’s intent to base 

compliance action solely on differences between projections in the compliance plan and 

end of year results. 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 compliance provisions of the GHG 

program. Therefore, EPA is finalizing revisions to 40 CFR 600.514-12 which will 

Deleted: y felt

Deleted: ir
296 

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 modellevel 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 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. Today’s 

action will also finalize simplified reporting requirements as discussed above. 

b. Certification Test Groups and Test Vehicle Selection 

Manufacturers currently divide their fleet into "test groups" for certification 

purposes. The test group is EPA's unit of certification; one certificate is issued per test 

group. These groupings cover vehicles with similar emission control system designs 

expected to have similar emissions performance.271 The factors considered for 

determining test groups include combustion cycle, engine type, engine displacement, 

number of cylinders and cylinder arrangement, fuel type, fuel metering system, catalyst 

construction and precious metal composition, among others. Vehicles having these 

features in common are generally placed in the same test group.272 Cars and trucks may 

be included in the same test group as long as they have similar emissions performance 

(manufacturers frequently produce cars and trucks that have identical engine designs and 

emission controls). 

 

 EPA recognizes that the Tier 2 test group criteria do not necessarily relate to CO2

emission levels. For instance, while some of the criteria, such as combustion cycle, 

engine type and displacement, and fuel metering, may have a relationship to CO2

emissions, others, such as those pertaining to the catalyst, may not. In fact, there are 

many vehicle design factors that affect CO2 generation and emissions but are not 

included in EPA's test group criteria.273 Most important among these may be vehicle 

weight, horsepower, aerodynamics, vehicle size, and performance features. 

 

271 40 CFR 86.1827-01. 272 EPA provides for other groupings in certain circumstances, and can establish its own test groups in cases 

where the criteria do not apply. 40 CFR 86.1827-01(b), (c) and (d). 

273 EPA noted this potential lack of connection between fuel economy testing and testing for emissions 

standard purposes when it first adopted fuel economy test procedures. See 41 FR at 38677 (Sept. 10, 

1976). 
297 

 As described in the proposal, EPA considered but did not propose a requirement 

for separate CO2 test groups established around criteria more directly related to CO2

emissions. Although CO2-specific test groups might more consistently predict CO2

emissions of all vehicles in the test group, the addition of a CO2 test group requirement 

would greatly increase the pre-production certification burden for both manufacturers and 

EPA. For example, a current Tier 2 test group would need to be split into two groups if 

automatic and manual transmissions models had been included in the same group. Twoand four-wheel drive vehicles in a current test group would similarly require separation, 

as would weight differences among vehicles. This would at least triple the number of test 

groups. EPA believes that the added burden of creating separate CO2 test groups is not 

warranted or necessary to maintain an appropriately rigorous certification program 

because the test group data are later replaced by model specific data which are used as the 

basis for determining compliance with a manufacturer’s fleet average standard. 

For these reasons, EPA will retain the current Tier 2 test group structure for cars 

and light trucks in the certification requirements for CO2. EPA believes that the current 

test group concept is also appropriate for N20 and CH4 because the technologies that are 

employed to control N2O and CH4 emissions will generally be the same as those used to 

control the criteria pollutants. Vehicle manufacturers agreed with this assessment and 

universally supported the use of current Tier 2 test groups in lieu of developing separate 

CO2 test groups. 

At the time of certification, manufacturers may use the CO2 emission level from 

the Tier 2 Emission Data Vehicle as a surrogate to represent all of the models in the test 

group. However, following certification further testing will generally be required for 

compliance with the fleet average CO2 standard as described below. EPA's issuance of a 

certificate will be conditioned upon the manufacturer's subsequent model level testing 

and attainment of the actual fleet average. Further discussion of these requirements is 

presented in Section III.E.6. 

As just discussed, the “worst case” Emissions Data Vehicle selected to represent a 

test group under Tier 2 (40 CFR 86.1828-01) may not have the highest levels of CO2 in 

that group. For instance, there may be a heavier, more powerful configuration that emits 

higher CO2, but may, due to the way the catalytic converter has been matched to the 

engine, actually have lower NOX, CO, PM or HC. 

 Therefore, in lieu of a separate CO2 -specific test group, EPA considered 

requiring manufacturers to select a CO2 test vehicle from within the Tier 2 test group that 

would be expected, based on good engineering judgment, to have the highest CO2

emissions within that test group. The CO2 emissions results from this vehicle would be 

used to establish an in-use CO2 emission standard for the test group. The requirement for 

a separate, worst case CO2 vehicle would provide EPA with some assurance that all 

vehicles within the test group would have CO2 emission levels at or below those of the 

selected vehicle, even if there is some variation in the CO2 control strategies within the 

test group (such as different transmission types). Under this approach, the test vehicle 
298 

might or might not be the same one that would be selected as worst case for criteria 

pollutants. Vehicle manufacturers expressed concern with this approach as well, and 

EPA ultimately rejected this approach because it could have required manufacturers to 

test two vehicles in each test group, rather than a single vehicle. This would represent an 

added timing burden to manufacturers because they might need to build additional test 

vehicles at the time of certification that previously weren't required to be tested. 

 Instead, EPA proposed and will adopt provisions that allow a single Emission 

Data Vehicle to represent the test group for both Tier 2 and CO2 certification. The 

manufacturer will 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. However, as a condition of the certificate, this 

surrogate CO2 emissions value will 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 will become the official certification test results (as per the conditioned 

certificate) and will be used to determine compliance with the fleet average. Only if the 

test vehicle is in fact the worst case CO2 vehicle for the test group could the manufacturer 

elect to apply the Emission Data Vehicle emission levels to all models in the test group 

for purposes of calculating fleet average emissions. Manufacturers would be unlikely to 

make this choice, because doing so would ignore the emissions performance of vehicle 

models in their fleet with lower CO2 emissions and would unnecessarily inflate their CO2

fleet average. Testing at the model level already occurs and data are already being 

submitted to EPA for CAFE and labeling purposes, so it would be an unusual situation 

that would cause a manufacturer to ignore these data and choose to accept a higher CO2

fleet average. 

 

 Manufacturers will be subject to two standards, the fleet average standard and the 

in-use standard for the useful life of the vehicle. Compliance with the fleet average 

standard is based on production-weighted averaging of the test data applied to each 

model. For each model, the in-use standard will generally be set at 10% higher than the 

level used for that model in calculating the fleet average (see Section III.E.4).274 The 

certificate will cover both of these standards, and the manufacturer will have to 

demonstrate compliance with both of these standards for purposes of receiving a 

certificate of conformity. The certification process for the in-use standard is discussed 

below in Section III.E.4. 

 

 c. Certification Testing Protocols and Procedures 

To be consistent with CAFE, EPA will combine the CO2 emissions results from 

the FTP and HFET tests using the same calculation method used to determine fuel 

economy for CAFE purposes. This approach is appropriate for CO2 because CO2 and 

fuel economy are so closely related. Other than the fact that fuel economy is calculated 

using a harmonic average and CO2 emissions can be calculated using a conventional 

average, the calculation methods are very similar. The FTP CO2 data will be weighted at 

 

274 In cases where configuration or sub-configuration level data exist, the in-use standard will be set at 10% 

higher than those emissions test results. See Section III.E.4 
299 

55%, and the highway CO2 data at 45%, and then averaged to determine the combined 

number. See Section III.B.1 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. 

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 is an 

integral part of current fuel economy testing. As explained in Section III.C, 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 carbon-related 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. 

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. The re-test results stand as official, even if they 

differ by more than 3% from the manufacturer’s value. 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 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 
300 

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).. 

 4. Useful Life Compliance

Section 202(a)(1) of the CAA requires emission standards to apply to vehicles 

throughout their statutory useful life, as further described in Section III.A. For emission 

programs that have fleet average standards, such as Tier 2 NOX fleet average standards 

and the new CO2 standards, the useful life requirement applies to individual vehicles 

rather than to the fleet average standard. For example, in Tier 2 the useful life 

requirements apply to the individual emission standard levels or “bins” that the vehicles 

are certified to, not the fleet average standard. For Tier 2, the useful life requirement is 

10 years275 or 120,000 miles with an optional 15 year or 150,000 mile provision. A 

similar approach is used for heavy-duty engines, however a specific Family Emissions 

Level is assigned to the engine family at certification, as compared to a pre-defined bin 

emissions level as in Tier 2. 

As noted above, the in-use CO2 standard under the greenhouse gas program, like 

Tier 2, will apply to individual vehicles and is separate from the fleet-average standard. 

However, unlike the Tier 2 program and other EPA fleet average standards, the modellevel CO2 test results are themselves used to calculate the fleet average standard for 

compliance purposes. This is consistent with the current CAFE practice, but it means the 

fleet average standard and the emission test results used to calculate compliance with the 

fleet average standard do not take into account test-to-test variability and production 

variability that can affect in-use levels. Since the CO2 fleet average uses the model level 

emissions test results themselves for purposes of calculating the fleet average, EPA 

proposed an adjustment factor for the in-use standard to provide some margin for 

production and test-to-test variability that could result in differences between the initial 

emission test results used to calculate the fleet average and emission results obtained 

during subsequent in-use testing. EPA proposed that each model’s in-use CO2 standard 

would be the model specific level used in calculating the fleet average, adjusted to be 

10% higher. 

 EPA received significant comment from industry expressing concern with the inuse 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. One manufacturer provided comments supporting the use of a 10% 

adjustment factor for the in-use standard. These comments also recommended that the 

10% adjustment factor be applied to configuration or subconfiguration data rather than to 

 

275 11 years for heavy-light-duty trucks, ref. 40 CFR 86.1805-12 
301 

model-level data unless the lower-level data were not available. Finally, the manufacturer 

expressed concern that a straight 10% adjustment would result in inequity between highand low-emitting vehicles. 

Section 202(a)(1) specifies that emissions standards are to be applicable for the 

useful life of the vehicle. The in-use emissions standard for CO2 implements this 

provision. While EPA agrees that the CAA does not require the Agency to perform inuse testing to monitor compliance with in-use standards, the Act clearly authorizes in-use 

testing. EPA has a long tradition of performing in-use testing and has found it to be an 

effective tool in the overall light-duty vehicle compliance program. EPA continues to 

believe that it is appropriate to perform in-use testing and that the evaluation of individual 

vehicle performance for all regulated emission constituents, including CO2, N2O and 

CH4, is necessary to ensure compliance with all light-duty requirements. EPA also 

believes that the CAA clearly mandates that all emission standards apply for a vehicle’s 

useful life and that an in-use standard is therefore necessary. 

EPA agrees with industry commenters that there is little evidence to indicate that 

CO2 emission levels from current-technology vehicles increase over time. However, as 

stated above, the CAA mandates that all emission standards apply for a vehicle’s useful 

life regardless of whether the emissions increase over time. In addition, there are factors 

other than emission deterioration over time that can cause in-use emissions to be greater 

than emission standards. The most obvious are component defects, production mistakes, 

and the stacking of component production and design tolerances. Any one of these can 

cause an exceedance of emission standards for individual vehicles or whole model lines. 

Finally EPA believes that it is essential to monitor in-use GHG emissions performance of 

new technologies, for which there is currently no in-use experience, as they enter the 

market. Thus EPA believes that the value in establishing an in-use standard extends 

beyond just addressing emission deterioration over time from current technology 

vehicles. 

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 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 causes a vehicle to burn excessive 

fuel could result in higher CO2 levels that would exceed the in-use standard. While it is 

likely that such a problem would affect other emissions as well, there would still be a 

demonstratable, repairable problem such that a recall might 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. 

Deleted: there was no subconfiguration
302 

EPA agrees with the industry comment that it is appropriate where possible to 

apply the 10% adjustment factor to the vehicle-level emission test results, rather than to a 

model-type value that includes production weighting factors. If no subconfiguration test 

data are available, then the adjustment factor will be applied to the model-type value. 

Therefore, EPA is finalizing an in-use standard based on a 10% multiplicative adjustment 

factor but the adjustment will be applied to emissions test results for the vehicle 

subconfiguration if such data exist, or to the model-type emissions level used to calculate 

the fleet average if subconfiguration test data are not available. 

 

 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. 

The CAA requires 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. 

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, manufacturers 

will not be allowed to use the assigned deterioration factor but rather will be required to 

establish an appropriate factor. If such an instance were to occur, EPA would allow 

manufacturers to use the whole-vehicle mileage accumulation method currently offered 

in EPA's regulations.276

 

 

276 40 CFR 86.1823-08 

Deleted: ¶

This in-use standard will apply for the 

same useful life period as in Tier 2. 

Section 202 (i) (3) (D) of the CAA allows 

EPA to adopt useful life periods for light 

duty vehicles and light-duty trucks which 

differ from those in section 202(d). 

Similar to Tier 2, the useful life 

requirements will be applicable to the 

model-level CO2 certification values 

(similar to the Tier 2 bins and also to the 

fleet average standard.¶
303 

 N2O and CH4 emissions are directly affected by vehicle emission control systems. 

Any of the durability options offered under EPA's current compliance program can be 

used to determine how emissions of N2O and CH4 change over time. EPA recognizes 

that manufacturers have not been required to account for durability effects of N2O and 

CH4 prior to now. EPA also realizes that industry will need sufficient time to explore 

durability options and become familiar with procedures for determining deterioration of 

N2O and CH4. Therefore, until the 2015 model year, rather than requiring manufacturers 

to establish a durability program for N2O and CH4, EPA will allow manufacturers to 

attest that vehicles meet the deteriorated, full useful life standard. If manufacturers 

choose to comply with the optional CO2 equivalent standard, EPA will allow the use of 

the manufacturer’s existing NOX deterioration factor for N2O and the existing NMOG 

deterioration factor for CH4. 

 

 a. Ensuring Useful Life Compliance 

 The CAA requires a vehicle to comply with emission standards over its regulatory 

useful life and affords EPA broad authority for the implementation of this requirement. 

As such, EPA has authority to require a manufacturer to remedy any noncompliance 

issues. The remedy 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 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.277 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 manufacturer 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 

 

277 64 FR 23906, May 4, 1999. 
304 

pollutants 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 improved an 

average of 1.42% when vehicles were tested over 5,000 miles. Manufacturers commented 

that the inclusion of a greenhouse gas emissions requirement and the highway test cycle 

as part of the IUVP would unnecessarily increase burden on manufacturers and provide 

no benefit, since CO2 emissions do not deteriorate over time. 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 manufacturer’s 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. 

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 

CAFE 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 
305 

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 emissions 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. 

EPA continues to believe that the IUCP is an important part of EPA’s in-use 

compliance program for traditional criteria pollutants. For GHG emissions, EPA believes 

the IUCP will also be a valuable future tool for achieving compliance. However, there are 

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. 
306 

 EPA has also administered its own in-use testing program for light-duty vehicles 

under authority of section 207(c) of the CAA for more than 30 years. In this program, 

EPA procures and tests representative privately owned vehicles to determine whether 

they are complying with emission standards. When testing indicates noncompliance, 

EPA works with the manufacturer to determine the cause of the problem and to conduct 

appropriate additional testing to determine its extent or the effectiveness of identified 

remedies. This program operates in conjunction with the IUVP program and other 

sources of information to provide a comprehensive picture of the compliance profile for 

the entire fleet and address compliance problems that are identified. EPA will add CO2, 

N2O, and CH4 to the emissions measurements it collects during surveillance testing. 

b. In-Use Compliance Standard 

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 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.278 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 

 

278 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. 
307 

vehicle result will always be the value used in determining the CO2 fleet average. 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 in-use 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. 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. 

 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 beyond a manufacturer’s control. EPA 

proposed a factor of 10% that would act as a surrogate for a certification margin. The 

factor would only be applicable to CO2 emissions, and would be applied to the modellevel test results that are 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%.279 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 

 

279 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 

Deleted: would be
308 

of 50 percent. In addition, little deterioration in 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 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 straight 10% adjustment would incur between high- and low-emitting vehicles. 

They suggested that rather than using an across-the-board 10% multiplicative adjustment 

factor applied to the model-level CO2 value for all vehicles, it would 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. (For flexible-fuel and dual-fuel vehicles the 

multiplicative factor will be applied to the test results on each fuel. In other words, these 

vehicles will have two applicable in-use emission standards; one for operation on the 
309 

conventional fuel and one for operation on the alternative fuel.) 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. 

5. Credit Program Implementation

As described in Section III.E.2 above, for each manufacturer’s model year 

production, the manufacturer will average the CO2 emissions within each of the two 

averaging sets (passenger cars and trucks) 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). 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). Section III.C discusses 

opportunities for manufacturers to improve their fleet average, beyond the credits that are 

simply calculated by over-achieving their applicable fleet average standard. 

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 is promulgating two broad types of credit programs under this rulemaking. 

One type of credit directly lowers a manufacturer’s actual fleet average by virtue of being 

applied within the methodology for calculating the fleet average emissions. Examples of 

this type of credit include the credits available for alternative fuel vehicles and the 

advanced technology vehicle provisions. The second type of credit is independent of the 

calculation of a manufacturer’s fleet average. Rather than giving credit by lowering a 

manufacturer’s fleet average via a credit mechanism, these credits (in megagrams) are 

calculated separately and are simply added to the manufacturer’s overall “bank” of 

credits (or debits). Using a fictional example, the remainder of this section reviews the 

different types of credits and shows where and how they are calculated and how they 

impact a manufacturer’s available credits. 

a. Basic Credits: Fleet Average Emissions are Below the Standard 

As just noted, basic credits are earned by a manufacturer’s fleet that performs 

better than the applicable fleet average standard. Manufacturers will calculate their fleet 

average standards (separate standards are calculated for cars and trucks) using the 

footprint-based equations described in Section III.B. A manufacturer’s actual end-ofyear fleet average is calculated similarly to the way in which CAFE values are currently 
310 

calculated; in fact, the regulations are essentially identical. The current CAFE calculation 

methods are in 40 CFR Part 600. As part of this rulemaking, EPA has amended key 

subparts and sections of Part 600 to require that fleet average CO2 emissions be 

calculated in a manner parallel to the way CAFE values are calculated. First, 

manufacturers will determine a CO2-equivalent value for each model type. The CO2-

equivalent value is a summation of the carbon-containing constituents of the exhaust 

emissions on a CO2-equivalent basis. For gasoline and diesel vehicles this simply 

involves measurement of total hydrocarbons and carbon monoxide in addition to CO2. 

The calculation becomes somewhat more complex for alternative fuel vehicles due to the 

different nature of their exhaust emissions. For example, for ethanol-fueled vehicles, the 

emission tests must measure ethanol, methanol, formaldehyde, and acetaldehyde in 

addition to CO2. However, all these measurements are currently necessary to determine 

fuel economy for the labeling and CAFE programs, and thus no new testing or data 

collection will be required. 280 Second, manufacturers will calculate a fleet average by 

weighting the CO2 value for each model type by the production of that model type, as 

they currently do for the CAFE program. Again, this will be done separately for cars and 

trucks. Finally, the manufacturer will compare the calculated standard with the fleet 

average that is actually achieved to determine the credits (or debits) that are generated. 

Both the determination of the applicable standard and the actual fleet average will be 

done after the model year is complete and using final model year vehicle production data. 

Consider a basic hypothetical example where Manufacturer “A” has calculated a 

car fleet average standard of 300 grams/mile and a car fleet average of 290 grams/mile 

(Table III.E.5-1). Further assume that the manufacturer produced 500,000 cars. The 

credit is calculated by taking the difference between the standard and the fleet average 

(300-290=10) and multiplying it by the manufacturer’s production of 500,000. This 

result is then multiplied by the assigned lifetime vehicle miles travelled (for cars this is 

195,264 miles, as discussed in Joint TSD Chapter 4), then finally divided by 1,000,000 to 

convert from grams to total megagrams. The result is the total number of megagrams of 

credit generated by the manufacturer’s car fleet. The same methodology is used to 

calculate the total number of megagrams of deficit, if the manufacturer was not able to 

comply with the fleet average standard. In this example, the result is 976,320 megagrams 

of credits, as shown in Table III.E.5-1. 

Table III.E.5-1 Summary for Manufacturer A: Earning Basic Credits 

 CO2 Totals 

Total production Conventional: 500,000 290 g/mi 500,000 

Fleet average 

standard 

 300 g/mi 

Fleet average 290 g/mi 

Credits [(300-290) × 500,000 × 195,264] ÷ 

1,000,000 

 = 954,855 Mg 

 

280 Note that the final rule also provides an option for manufacturers to incorporate N2O and CH4 in this 

calculation at their CO2-equivalent values. 
311 

b. Interim Advanced Technology Vehicle Provisions 

 The lower exhaust greenhouse gas emissions of some advanced technology 

vehicles can directly benefit a manufacturer’s fleet average, thus increasing the amount of 

fleet average-based credits they earn (or reducing the amount of debits that would 

otherwise accrue). Manufacturers that produce electric vehicles, plug-in hybrid electric 

vehicles, or fuel cell electric vehicles will include these vehicles in the fleet average 

calculation with their model type emission values. As described in detail in Section 

III.C.3, the emissions from electric vehicles and plug-in hybrid electric vehicles when 

operating on electricity will be accounted for by assuming zero emissions (0 g/mi CO2) 

for a limited number of vehicles through the 2016 model year. This interim limited use 

of 0 g/mi will be allowed for the technologies specifically noted above and as defined in 

the regulations, with the limitation that the vehicles must be certified to Tier 2 Bin 5 

emission standards or cleaner (i.e., advanced technology vehicles must contribute to 

criteria pollutant reductions as well as to greenhouse gas emission reductions). 

 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 all-electric 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 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: 
312 

• 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 noncombustion reaction of a consumable fuel, typically hydrogen. 

• Plug-in hybrid electric 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. 

With some simplifying assumptions, assume that 25,000 of Manufacturer A’s fleet 

are now plug-in hybrid electric vehicles with a calculated CO2 value of 80 g/mi, and the 

remaining 475,000 are conventional technology vehicles with an average CO2 value of 

290 grams/mile. By including the advanced technology PHEVs in their fleet, 

Manufacturer A now has more than 2.9 million credits (Table III.E.5-2). 

Table III.E.5-2 Summary for Manufacturer A: 

Earning Basic and Interim Advanced Technology Credits 

 CO2 Totals 

Total production Conventional: 475,000 290 

g/mi 

 500,000 

PHEV: 25,000 80 g/mi 

Fleet average 

standard 

 300 

g/mi 

 

Fleet average [(475,000 × 290) + (25,000 × 80)] 

÷ [500,000] 

280 

g/mi 

 

Credits [(300-280) × 500,000 × 195,264] 

÷ 1,000,000 

 = 1,952,640 

Mg 

c. Flexible-Fuel Vehicle Credits 

As noted in Section III.C, treatment of flexible-fuel vehicle (FFV) credits differs 

between model years 2012-2015 and 2016 and later. For the 2012 through 2015 model 

years the FFV credits will be calculated as they are in the CAFE program for the same 

model years, except that formulae in the final regulations have been modified as needed 
313 

to do the calculations in terms of grams per mile of CO2 values rather than miles per 

gallon. These credits are integral to the fleet average calculation and allow the vehicles 

to be represented by artificially reduced emissions. To use this credit program, the CO2

values of FFVs will be represented by the average of two things: the CO2 value while 

operating on gasoline and the CO2 value while operating on the alternative fuel 

multiplied by 0.15. 

For MY 2012 to 2015 for example, Manufacturer A makes 30,000 FFVs with 

CO2 values of 280 g/mi using gasoline and 260 g/mi using E85. The CO2 value that 

would represent the FFVs in the fleet average calculation would be calculated as follows: 

FFV emissions = [280 + (260×0.15)] ÷ 2 = 160 g/mi 

Including these FFVs with the applicable credit in Manufacturer A’s fleet 

average, as shown below in Table III.E.5-3, further reduces the fleet average to 256 

grams/mile and increases the manufacturer’s credits to about 4.2 million megagrams. 

Table III.E.5-3 Summary for Manufacturer A: 

Earning Basic, Interim Advanced Technology, and Flexible Fuel Vehicle Credits 

 CO2 Totals 

Total production Conventional: 445,000 290 g/mi 500,000 

PHEV: 25,000 80 g/mi 

 FFV: 30,000 160 g/mi 

Fleet average 

standard 

 300 g/mi 

Fleet average [(445,000 × 290) + (25,000 × 80) + 

30,000 x 160] 

÷ [500,000] 

272 g/mi 

Credits [(300-272) × 500,000 × 195,264] 

÷ 1,000,000 

 = 2,733,696 

Mg 

 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. 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 use of that fuel 

in FFVs relative to real-world use of the conventional fuel. Section III.C 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 
314 

use for their own vehicle(s), using a 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 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. In the example above, for 

instance, the default CO2 value for the fictional FFV described above would be the 

gasoline value of 280 g/mi, and the resulting fleet average and total credits would be 279 

g/mi and 2,050,272 megagrams, respectively. However, if the EPA determines that realworld ethanol use amounts to 40 percent of driving, then using the equation above the 

FFV would be included in the fleet average calculation with a CO2 value of 272 g/mi, 

resulting in an overall fleet average of 278 g/mi and total credit accumulation of 

2,147,904 megagrams. 

d. Dedicated Alternative Fuel Vehicle Credits 

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. For the 2012 through 2015 model years the CO2 test results are 

multiplied by the credit adjustment factor of 0.15, and the result is production-weighted 

in the fleet average calculation. For example, assume that Manufacturer A now produces 

20,000 dedicated CNG vehicles with CO2 emissions of 220 grams/mile, in addition to the 

FFVs and PHEVs already included in their fleet (Table III.E.5-4). Prior to the 2016 

model year the CO2 emissions representing these CNG vehicles will be 33 grams/mile 

(220 × 0.15). 

Table III.E.5-4 Summary for Manufacturer A: 

Earning Basic, Advanced Technology, Flexible Fuel Vehicle, and Dedicated Alternative 

Fuel Vehicle Credits 

 CO2 Totals 

Total production Conventional: 425,000 290 g/mi 500,000 

PHEV: 25,000 80 g/mi 

 FFV: 30,000 160 g/mi 

CNG: 20,000 33 g/mi 

Fleet average 

standard 

 300 g/mi 

Fleet average [(425,000 × 290) + (25,000 × 80) + 261 g/mi 
315 

(30,000 × 160) + (20,000 × 33)] 

÷ [500,000] 

Credits [(300-261) × 500,000 × 195,264] 

÷ 1,000,000 

 = 3,807,648 

Mg 

The calculation for 2016 and later will be the same except the 0.15 credit 

adjustment factor is removed from the equation, and the CNG vehicles in this example 

would simply be production-weighted in the equation using their actual emissions value 

of 220 grams/mile instead of the “credited” value of 33 grams/mile. 

e. Air Conditioning Leakage Credits 

Unlike the credit programs described above, air conditioning-related credits do 

not affect the overall calculation of the fleet average or fleet average standard. Whether a 

manufacturer generates zero air conditioning credits or many, the calculated fleet average 

remains the same. Air conditioning credits are calculated and added to any credits (or 

deficit) that results from the fleet average calculations shown above. Thus, these credits 

can increase a manufacturer’s credit balance or offset a deficit, but their calculation is 

external to the fleet average calculation. As noted in Section III.C, manufacturers can 

generate credits for reducing the leakage of refrigerant from their air conditioning 

systems. To do this the manufacturer will identify an air conditioning system 

improvement, indicate that they intend to use the improvement to generate credits, and 

then calculate an annual leakage rate (grams/year) for that system based on the method 

defined by the regulations. Air conditioning credits will be determined separately for 

cars and trucks using the car and truck-specific equations described in Section III.C. 

In order to put these credits on the same basis as the basic and other credits 

describe above, the air conditioning leakage credits will need to be calculated separately 

for cars and trucks. Thus, the resulting grams per mile credit determined from the 

appropriate car or truck equation will be multiplied by the lifetime VMT assigned by 

EPA (195,264 for cars; 225,865 for trucks), and then divided by 1,000,000 to get the total 

megagrams of CO2 credits generated by the improved air conditioning system. Although 

the calculations are done separately for cars and trucks, the total megagrams will be 

summed and then added to the overall credit balance maintained by the manufacturer. 

For example, assume that Manufacturer A has improved an air conditioning 

system that is installed in 250,000 cars and that the calculated leakage rate is 12 

grams/year. Assume that the manufacturer has also implemented a new refrigerant with a 

Global Warming Potential of 850. In this case the credit per air conditioning unit, 

rounded to the nearest gram per mile would be: 

[13.8 × [1 – (12/16.6 × 850/1430)] = 7.9 g/mi. 

Total megagrams of credits would then be: 

[ 7.9 × 250,000 × 195,264] ÷ 1,000,000 = 385,646 Mg. 
316 

These credits would be added directly to a manufacturer’s total balance; thus in 

this example Manufacturer A would now have, after consideration of all the above 

credits, a total of 4,193,294 megagrams of credits. 

f. Air Conditioning Efficiency Credits 

As noted in Section III.C.1.b, manufacturers may earn credits for improvements 

in air conditioning efficiency that reduce the impact of the air conditioning system on fuel 

consumption. These credits are similar to the air conditioning leakage credits described 

above, in that these credits are determined independently from the manufacturer’s fleet 

average calculation, and the resulting credits are added to the manufacturer’s overall 

balance for the respective model year. Like the air conditioning leakage credits, these 

credits can increase a manufacturer’s credit balance or offset a deficit, but their 

calculation is external to the fleet average calculation. 

In order to put these credits on the same basis as the basic and other credits 

describe above, the air conditioning efficiency credits are calculated separately for cars 

and trucks. Thus, the resulting grams per mile credit determined in the above equation is 

multiplied by the lifetime VMT, and then divided by 1,000,000 to get the total 

megagrams of efficiency credits generated by the improved air conditioning system. 

Although the calculations are done separately for cars and trucks, the total megagrams 

can be summed and then added to the overall credit balance maintained by the 

manufacturer. 

As described in Section III.C, manufacturers will determine their credit based on 

selections from a menu of technologies, each of which provides a gram per mile credit 

amount. The credits will be summed for all the technologies implemented by the 

manufacturer, but cannot exceed 5.7 grams per mile. Once this is done, the calculation is 

a straightforward translation of a gram per mile credit to total car or truck megagrams, 

using the same methodology described above. For example, if Manufacturer A 

implements enough technologies to get the maximum 5.7 grams per mile for an air 

conditioning system that sells 250,000 units in cars, the calculation of total credits would 

be as follows: 

[ 5.7 × 250,000 × 195,264] ÷ 1,000,000 = 278,251 Mg. 

These credits would be added directly to a manufacturer’s total balance; thus in 

this example Manufacturer A would now have, after consideration of all the above 

credits, a total of 4,471,545 megagrams of credits. 

g. Off-Cycle Technology Credits 

As described in Section III.C, these 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 
317 

average standards. Like the air conditioning credits, these credits are independent of the 

fleet average calculation. Section III.C.4 describes 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 above, 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 40 

CFR 600.114-08). 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 EPA for approval. 

As noted in Section III.C.4, a manufacturer-developed testing, data collection, and 

analysis program will require additional EPA approval and oversight. EPA received 

considerable comment from environmental and public interest organizations suggesting 

that EPA’s decisions about which technologies merit off-cycle credit should be open and 

public. EPA agrees that a public process will help ensure a fair review and alleviate 

concerns about potential misuse of the off-cycle credit flexibility. Therefore EPA intends 

to seek public comment on manufacturer proposals for off-cycle credit that do not use the 

5-cycle approach to quantify emission reductions. 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. 

Once the demonstration of the CO2 reduction of an off-cycle technology is 

complete, and the resulting value accounts for variations in driving, climate and other 

conditions across the country, the two approaches are treated fundamentally the same 

way and in a way that parallels the approach for determining the air conditioning credits 

described above. Once a gram per mile value is approved by the EPA, the manufacturer 

will determine the total credit value by multiplying the gram per mile per vehicle credit 

by the production volume of vehicles with that technology and approved for use of the 

credit. This would then be multiplied by the lifetime vehicle miles for cars or trucks, 

whichever applies, and divided by 1,000,000 to obtain total megagrams of CO2 credits. 

These credits would then be added to the manufacturer’s total balance for the given 

model year. Just like the above air conditioning case, an off-cycle technology that is 
318 

demonstrated to achieve an average CO2 reduction of 4.4 grams /mile and that is installed 

in 175,000 cars would generate credits as follows: 

[ 4.4 × 175,000 × 195,264] ÷ 1,000,000 = 150,353 Mg. 

h. End-of-Year Reporting 

In general, implementation of the averaging, banking, and trading (ABT) 

program, including the calculation of credits and deficits, will be accomplished via 

existing reporting mechanisms. EPA’s existing regulations define how manufacturers 

calculate fleet average miles per gallon for CAFE compliance purposes. Today’s action 

modifies these regulations to also require the parallel calculation of fleet average CO2

levels for car and light truck compliance categories. These regulations already require an 

end-of-year report for each model year, submitted to EPA, which details the test results 

and calculations that determine each manufacturer’s CAFE levels. EPA will now require 

a similar report that includes fleet average CO2 levels and related information. That can 

be integrated with the CAFE report at the manufacturer’s option. In addition to requiring 

reporting of the actual fleet average achieved, this end-of-year report will also contain the 

calculations and data determining the manufacturer’s applicable fleet average standard 

for that model year. As under the existing Tier 2 program, the report will be required to 

contain the fleet average standard, all values required to calculate the fleet average 

standard, the actual fleet average CO2 that was achieved, all values required to calculate 

the actual fleet average, the number of credits generated or debits incurred, all the values 

required to calculate the credits or debits, the number of credits bought or sold, and the 

resulting balance of credits or debits. 

Because of the multitude of credit programs that are available under the 

greenhouse gas program, the end-of-year report will be required to have more data and a 

more defined and specific structure than the CAFE end–of-year report does today. 

Although requiring “all the data required” to calculate a given value should be inclusive, 

the report will contain some requirements specific to certain types of credits. For 

advanced technology credits that apply to vehicles like electric vehicles and plug-in 

hybrid electric vehicles, manufacturers will be required to identify the number and type 

of these vehicles and the effect of these credits on their fleet average. The same will be 

true for credits due to flexible-fuel and alternative-fuel vehicles, although for 2016 and 

later flexible-fuel credits manufacturers may also have to provide a demonstration of the 

actual use of the alternative fuel in-use and the resulting calculations of CO2 values for 

such vehicles. For air conditioning leakage credits manufacturers will have to include a 

summary of their use of such credits that will include which air conditioning systems 

were subject to such credits, information regarding the vehicle models which were 

equipped with credit-earning air conditioning systems, the production volume of these air 

conditioning systems, the leakage score of each air conditioning system generating 

credits, and the resulting calculation of leakage credits. Air conditioning efficiency 

reporting will be somewhat more complicated given the phase-in of the efficiency test 

procedure, and reporting will have to detail compliance with the phase-in as well as the 

test results and the resulting efficiency credits generated. Similar reporting requirements 
319 

will also apply to the variety of possible off-cycle credit options, where manufacturers 

will have to report the applicable technology, the amount of credit per unit, the 

production volume of the technology, and the total credits from that technology. 

Although it is the final end-of-year report, when final production numbers are 

known, that will determine the degree of compliance and the actual values of any credits 

being generated by manufacturers, EPA will expect manufacturers to be prepared to 

discuss their compliance approach and their potential use of the variety of credit options 

in pre-certification meetings that EPA routinely has with manufacturers. In addition, and 

in conjunction with a pre-model year report required under the CAFE program, the 

manufacturer will be required to submit projections of all of the elements described 

above, plus any projected credit trading transactions (described below). 

Finally, to the extent that there are any credit transactions, the manufacturer will 

have to detail in the end-of-year report documentation on all credit transactions that the 

manufacturer has engaged in. Information for each transaction will include: the name of 

the credit provider, the name of the credit recipient, the date the transfer occurred, the 

quantity of credits transferred, and the model year in which the credits were earned. The 

final report is due to EPA within 90 days of the end of the model year, or no later than 

March 31 in the calendar year after the calendar year named for the model year. For 

example, the final GHG report for the 2012 model year is due no later than March 31, 

2013. Failure by the manufacturer to submit the annual report in the specified time 

period will be considered to be a violation of section 203(a)(1) of the Clean Air Act. 

6. Enforcement

As discussed above in Section III.E.5, 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. see Section III.E.5), 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 (Section III.B.4, 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 
320 

the one in place 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. 

 Section 205 of the CAA authorizes EPA to assess penalties of up to $37,500 per 

vehicle for violations of the requirements or prohibitions of this rule.281 This section of 

the CAA provides that the agency shall take the following penalty factors into 

consideration in determining the appropriate penalty for any specific case: the gravity of 

the violation, the economic benefit or savings (if any) resulting from the violation, the 

size of the violator's business, the violator's history of compliance with this title, action 

taken to remedy the violation, the effect of the penalty on the violator's ability to continue 

in business, and such other matters as justice may require. 

 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 CAA specifies different civil penalty provisions for noncompliance than 

EPCA does, and EPA cannot therefore adopt the CAFE penalty structure. However, 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.282. The 

underlying principle of this penalty factor is to operate as a safety mechanism when 

necessary to prevent injustice.283 

 

281 42 U.S.C. 7524(a), Civil Monetary Penalty Inflation Adjustment, 69 FR 7121 (Feb. 13, 2004) and Civil 

Monetary Penalty Inflation Adjustment Rule, 73 FR 75340 (Dec. 11,2008). 

282 In re Spang & Co., 6 E.A.D. 226, 249 (EAB 1995) 283 B.J. Carney Industries, 7 E.A.D. 171, 232, n. 82 (EAB 1997). 
321 

 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 violator of penalties previously 

assessed for the same violation" when assessing penalties for certain violations of Title I 

of the Act. 

 7. Prohibited Acts in the CAA

 

Section 203 of the Clean Air Act describes acts that are prohibited by law. This 

section and associated regulations apply equally to the greenhouse gas standards as to any 

other regulated pollutant. Acts that are prohibited by section 203 of the Clean Air Act 

include the introduction into commerce or the sale of a vehicle without a certificate of 

conformity, removing or otherwise defeating emission control equipment, the sale or 

installation of devices designed to defeat emission controls, and other actions. EPA 

proposed to include in the regulations a new section that details these prohibited acts. 

Prior regulations, such as the NLEV program, had included such a section, and although 

there is no burden associated with the regulations or any specific need to repeat what is in 

the Clean Air Act, EPA believes that including this language in the regulations provides 

clarity and improves the ease of use and completeness of the regulations. No comments 

were received on the proposal, and EPA is finalizing the section on prohibited acts (see 

40 CFR 86.1854-12). 

8. Other Certification Issues

 a. Carryover/Carry Across Certification Test Data 

EPA's certification program for vehicles allows manufacturers to carry certification test 

data over and across certification testing from one model year to the next, when no 

significant changes to models are made. EPA will also apply this policy to CO2, N2O and 

CH4 certification test data. A manufacturer may also be eligible to use carryover and 

carry across data to demonstrate CO2 fleet average compliance if they have done so for 

CAFE purposes. 

 

b. Compliance Fees 

 The CAA allows EPA to collect fees to cover the costs of issuing certificates of 

conformity for the classes of vehicles and engines covered by this rule. On May 11, 

2004, EPA updated its fees regulation based on a study of the costs associated with its 

motor vehicle and engine compliance program (69 FR 51402). At the time that cost 

study was conducted the current rulemaking was not considered. 
322 

At this time the extent of any added costs to EPA as a result of this rule is not 

known. EPA will assess its compliance testing and other activities associated with the 

rule and may amend its fees regulations in the future to include any warranted new costs. 

c. Small Entity Deferment 

 EPA is deferring CO2 standards for certain small entities, and these entities 

(necessarily) would not be subject to the certification requirements of this rule. 

As discussed in Section III.B.8, businesses meeting the Small Business 

Administration (SBA) criterion of a small business as described in 13 CFR 121.201 

would not be subject to the GHG requirements, pending future regulatory action. Such 

entities instead are required to submit a declaration to EPA containing a detailed written 

description of how that manufacturer qualifies as a small entity under the provisions of 13 

CFR 121.201. This declaration would have to be signed by a chief officer of the 

company, and would have to be made at least 30 days prior to the introduction into 

commerce of any vehicles for each model year for which the small entity status is 

requested, but not later than December of the calendar year prior to the model year for 

which deferral is requested. For example, if a manufacturer will be introducing model 

year 2012 vehicles in October of 2011, then the small entity declaration would be due in 

September, 2011. If 2012 model year vehicles are not planned for introduction until 

March, 2012, then the declaration would have to be submitted in December, 2011. Such 

entities are not automatically exempted from other EPA regulations for light-duty 

vehicles and light-duty trucks; therefore, absent this annual declaration EPA would 

assume that each entity was not deferred from compliance with the greenhouse gas 

standards. 

As discussed in detail in Section III.B.6, small volume manufacturers with annual 

sales volumes of less than 5,000 vehicles will also be deferred from the CO2 standards, 

pending future regulatory action. These manufacturers would still be required to meet 

N2O and CH4 standards, however. To qualify for CO2 standard deferral, manufacturers 

would need to submit a declaration to EPA as described above, and would also be 

required to demonstrate due diligence in having attempted to first secure credits from 

other manufacturers. 

 

d. Onboard Diagnostics (OBD) and CO2 Regulations 

 The light-duty on-board diagnostics (OBD) regulations require manufacturers to 

detect and identify malfunctions in all monitored emission-related powertrain systems or 

components.284 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 

 

284 40 CFR 86.1806-04 
323 

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 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 requiringCO2, 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 includeCO2, N2O, and CH4

emissions as part of the OBD requirements in a future regulatory action. 

e. Applicability of Current High Altitude Provisions to Greenhouse Gases 

Vehicles covered by this proposal must meet the CO2, N2O and CH4 standard at 

altitude. The CAA requires emission standards under section 202 for light-duty vehicles 

and trucks to apply at all altitudes.285 EPA does not expect vehicle CO2, CH4, or N2O 

emissions to be significantly different at high altitudes based on vehicle calibrations 

commonly used at all altitudes. Therefore, EPA will retain its current high altitude 

regulations so manufacturers will not normally be required to submit vehicle CO2 test 

data for high altitude. Instead, they must submit an engineering evaluation indicating that 

common calibration approaches will be utilized at high altitude. Any deviation in 

emission control practices employed only at altitude will need to be included in the 

auxiliary emission control device (AECD) descriptions submitted by manufacturers at 

certification. In addition, any AECD specific to high altitude will be required to include 

emissions data to allow EPA evaluate and quantify any emission impact and validity of 

the AECD. 

 f. Applicability of Standards to Aftermarket Conversions 

 

285 See CAA 206(f). 
324 

 With the exception of the small entity and small volume deferments, EPA’s 

emission standards, including greenhouse gas standards, will continue to apply as stated 

in the applicability sections of the relevant regulations. The greenhouse gas standards are 

being incorporated into 40 CFR part 86, subpart S, which includes exhaust and 

evaporative emission standards for criteria pollutants. Subpart S includes requirements 

for new light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, Ottocycle complete heavy-duty vehicles, and some incomplete light-duty trucks. Subpart S 

is currently specifically applicable to aftermarket conversion systems, aftermarket 

conversion installers, and aftermarket conversion certifiers, as those terms are defined in 

40 CFR 85.502. EPA expects that some aftermarket conversion companies will qualify 

for and seek the small entity and/or small volume deferment, but those that do not qualify 

will be required to meet the applicable emission standards, including the greenhouse gas 

standards. 

g. 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 compliance286 in the 50 states, the 

District of Columbia, and Puerto Rico. However, EPA emission certification regulations 

require emission compliance287 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 comment 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. This 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. 

Although EPA has tried to harmonize greenhouse gas and CAFE requirements in 

this rule to the extent possible, EPA believes that the approach suggested in comment 

would be contrary to the requirements of the Act. EPA does not believe that the Agency 

has discretion under the CAA to exclude from greenhouse gas requirements production 

 

286 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." 

287 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.” 
325 

vehicles introduced into commerce in the Virgin Islands, Guam, American Samoa, and 

the Commonwealth of the Northern Mariana Islands. In addition, this change 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. For these reasons, EPA will retain the proposed 

greenhouse gas production vehicle sales area location as defined in the CAA. 

 

9. Miscellaneous Revisions to Existing Regulations 

a. Revisions and Additions to Definitions 

EPA has amended its definitions of "engine code," "transmission class," and 

"transmission configuration" in its vehicle certification regulations (Part 86) to conform 

to the definitions for those terms in its fuel economy regulations (Part 600). The exact 

terms in Part 86 are used for reporting purposes and are not used for any compliance 

purpose (e.g., an engine code will not determine which vehicle is selected for emission 

testing). However, the terms are used for this purpose in Part 600 (e.g., engine codes, 

transmission class, and transmission configurations are all criteria used to determine 

which vehicles are to be tested for the purposes of establishing corporate average fuel 

economy). Since the same vehicles tested to determine corporate average fuel economy 

will also be tested to determine fleet average CO2, the same definitions will apply. Thus 

EPA has amended its Part 86 definitions of the above terms to conform to the definitions 

in Part 600. 

 

 Two provisions have been amended to bring EPA's fuel economy regulations in 

Part 600 into conformity with the fleet average CO2 requirement contained in this 

rulemaking and with NHTSA's reform truck regulations. First, the definition of 

"footprint" in this rule is also being added to EPA's Part 86 and 600 regulations. This 

definition is based on the definition promulgated by NHTSA at 49 CFR 523.2. Second, 

EPA is amending its model year CAFE reporting regulations to include the footprint 

information necessary for EPA to determine the reformed truck standards and the 

corporate average fuel economy. This same information is included in this rule for fleet 

average CO2 and fuel economy compliance. 

 b. Addition of Ethanol Fuel Economy Calculation Procedures 

 EPA has amended part 600 to add calculation procedures for determining the 

carbon-related exhaust emissions and calculating the fuel economy of vehicles operating 

on ethanol fuel. Manufacturers have been using these procedures as needed, but the 

regulatory language – which specifies how to determine the fuel economy of gasoline, 

diesel, compressed natural gas, and methanol fueled vehicles – has not previously been 

updated to specify procedures for vehicles operating on ethanol. Under today’s rule EPA 

is requiring use of a carbon balance approach for ethanol-fueled vehicles that is similar to 
326 

the way carbon-related exhaust emissions are calculated for vehicles operating on other 

fuels for the purpose of determining fuel economy and for compliance with the fleet 

average CO2 standards. The carbon balance formula is similar to the one in place for 

methanol, except that ethanol and acetaldehyde emissions must also be measured for 

ethanol-fueled vehicles. The carbon balance equation for determining fuel economy is as 

follows, where CWF is the carbon weight fraction of the fuel and CWFexHC is the carbon 

weight fraction of the exhaust hydrocarbons: 

mpg = (CWF × SG × 3781.8)/((CWFexHC× HC) + (0.429 × CO) + (0.273 × CO2) + (0.375 

× CH3OH) + (0.400 × HCHO) + (0.521 × C2H5OH) + (0.545 × C2H4O)) 

The equation for determining the total carbon-related exhaust emissions for compliance 

with the CO2 fleet average standards is the following, where CWFexHC is the carbon 

weight fraction of the exhaust hydrocarbons: 

CO2-eq = (CWFexHC× HC) + (0.429 × CO) + (0.375 × CH3OH) + (0.400 × HCHO) + 

(0.521 × C2H5OH) + (0.545 × C2H4O) + CO2. 

c. Revision of Electric Vehicle Applicability Provisions 

In 1980 EPA issued a rule that provided for the inclusion of electric vehicles in 

the CAFE program.288 EPA now believes that certain provisions of the regulations 

should be updated to reflect the current state of motor vehicle emission and fuel economy 

regulations. In particular, EPA believes that the exemption of electric vehicles in certain 

cases from fuel economy labeling and CAFE requirements should be reevaluated and 

revised. 

The 1980 rule created an exemption for electric vehicles from fuel economy 

labeling in the following cases: (1) if the electric vehicles are produced by a company 

that produces only electric vehicles; and (2) if the electric vehicles are produced by a 

company that produces fewer than 10,000 vehicles of all kinds worldwide. EPA believes 

that this exemption language is no longer appropriate and is deleting it from the affected 

regulations. First, since 1980 many regulatory provisions have been put in place to 

address the concerns of small manufacturers and enable them to comply with fuel 

economy and emission programs with reduced burden. EPA believes that all small 

volume manufacturers should compete on a fair and level regulatory playing field and 

that there is no longer a need to treat small volume electric vehicles any differently than 

small volume manufacturers of other types of vehicles. Current regulations contain 

streamlined certification procedures for small companies, and because electric vehicles 

emit no direct pollution there is effectively no certification emission testing burden. For 

example, the greenhouse gas regulations contain a provision allowing the deferral of 

certain small entities. Meeting the requirements for fuel economy labeling and CAFE 

will entail a testing, reporting, and labeling burden, but these burdens are not 

extraordinary and should be applied equally to all small volume manufacturers, 

regardless of the fuel that moves their vehicles. EPA has been working with existing 

 

288 45 FR 49256, July 24, 1980. 
327 

electric vehicle manufacturers on fuel economy labeling, and EPA believes it is important 

for the consumer to have impartial, accurate, and useful label information regarding the 

energy consumption of these vehicles. Second, EPCA does not provide for an 

exemption of electric vehicles from NHTSA’s CAFE program, and NHTSA regulations 

regarding the applicability of the CAFE program do not provide an exemption for electric 

vehicles. Third, the blanket exemption for any manufacturer of only electric vehicles 

assumed at the time that these companies would all be small, but the exemption language 

inappropriately did not account for size and would allow large manufacturers to be 

exempt as well. Finally, because of growth expected in the electric vehicle market in the 

future, EPA believes that the labeling and CAFE regulations need to be designed to more 

specifically accommodate electric vehicles and to require that consumers be provided 

with appropriate information regarding these vehicles. For these reasons EPA has revised 

40 CFR Part 600 applicability regulations such that these electric vehicle exemptions are 

deleted starting with the 2012 model year. 

d. Miscellaneous Conforming Regulatory Amendments 

EPA has made a number of minor amendments to update the regulations as 

needed or to ensure that the regulations are consistent with changes discussed in this 

preamble. For example, for consistency with the ethanol fuel economy calculation 

procedures discussed above, EPA has amended regulations where necessary to require 

the collection of emissions of ethanol and acetaldehyde. Other changes are made to 

applicability sections to remove obsolete regulatory requirements such as phase-ins 

related to EPA’s Tier 2 emission standards program, and still other changes are made to 

better accommodate electric vehicles in EPA emission control regulations. Not all of 

these minor amendments are noted in this preamble, thus the reader should carefully 

evaluate regulatory text to ensure a complete understanding of the regulatory changes 

being promulgated by EPA. 

In the process of amending regulations that vary in applicability by model year, 

EPA has several approaches that can be taken. The first option is to amend an existing 

section of the regulations. For example, EPA did this in the final regulations with 

§86.111-94. In this case EPA chose to directly amend this section – which applies to 

1994 and later model years as indicated by the suffix after the hyphen – but ensure that 

the model year of applicability of the amendments (2015 and later for N2O measurement) 

is stated clearly in the regulatory text. A second option is to create a new section with 

specific applicability to the 2012 and later model years; i.e., a section number with a “12” 

following the hyphen. This approach typically involves pulling forward all the language 

from an earlier model year section, then amending as needed (but it could also involve a 

wholesale revision and replacement with entirely new language). For example, EPA took 

this approach with §86.1809-12. Although only paragraphs (d) and (e) contain revisions 

pertaining to this greenhouse gas rule, the remainder of the section is “pulled forward” 

from a prior model year section (in this case, §86.1809-10) for completeness. Thus 

paragraphs (a) through (c) are unchanged relative to the prior model year section. 

Readers should therefore be aware that sections that are indicated as taking effect in the 

2012 model year may differ in only subtle ways from the prior model year section being 
328 

superseded. A third approach (not used in this regulation) is to use the “Reserved. For 

guidance see...” technique. For example, in the §86.1809-12, rather than bring forward 

the existing language from paragraphs (a) through (c) EPA could have simply put a 

statement in the regulations directing the reader to refer back to §86.1809-10 for those 

requirements. This method has been used in the past, but is not being used in this 

regulation. 

10. Warranty, Defect Reporting, and Other Emission-related Components 

Provisions

As outlined in the proposal, Section 207(a) of the Clean Air Act (CAA) requires 

manufacturers to provide a defect warranty that warrants a vehicle is designed to comply 

with emission standards 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 

which must function properly to assure continued compliance with emission standards. 

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 twoyear/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. 
329 

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. EPA’s current policy for defect warranty requirements is 

provided in Section 207 of the Act. There are currently no defect warranty regulations. 

Congress provided under Section 207(a) and (b) of the CAA that emission-related 

components shall be covered under the 207(a) defect warranty and the 207(b) 

performance warranty for the warranty period outlined in section 207(i) of the CAA. For 

example, section 207(a) reads in part: 

“....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 light-duty 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....." 
330 

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 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 emissionrelated components necessary to meet CO2, CH4, and N2O standards, including emissionrelated 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 offcycle 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. 

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 twoyear/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 
331 

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 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 

procedure outlined in 40 CFR 85.2207 and 85.2222, the NPRM did not propose that the 

OBD system would be required monitor CO2, CH4 or N2O emission performance, ref 74 

FR 49574 and 74 FR 49755. Therefore, the performance warranty preconditions in 

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 not 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 emissionrelated 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 emission-related recall 

reports within 15 working days of the date when owner notification begins. 

Similar to the performance 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 that 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 
332 

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 emission-related defects and voluntary emission recalls to EPA, including 

emission-related defects and voluntary emission recalls related to greenhouse gas 

emissions (CH4, N2O and CO2). 

 11. Light Duty Vehicles and Fuel Economy Labeling 

 American consumers need accurate and meaningful information about the 

environmental and fuel economy performance of new light duty vehicles. EPA believes 

it is important that the fuel-economy label affixed to the new vehicles provide consumers 

with the critical information they need to make smart purchase decisions, especially in 

light of the expected increase in market share of electric and other advanced technology 

vehicles. Consumers may need new and different information than today’s vehicle labels 

provide in order to help them understand the energy use and associated cost of owning 

these electric and advanced technology vehicles. 

Therefore, in proposing this greenhouse gas action, EPA sought comment on 

issues surrounding consumer vehicle labeling in general, and labeling of advanced 

technology vehicles in particular. EPA specifically asked for input as to whether today’s 

miles per gallon fuel economy metric provides adequate information to consumers. 

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 interested public to stay engaged and continue to provide input on this 

issue in the context of the vehicle labeling rulemaking. 

F. How Will This Final Rule Reduce GHG Emissions and Their 

Associated Effects?

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 steady growth. Table III.F-1 shows emissions of CO2, 

methane, nitrous oxide and air conditioning refrigerants on a CO2-equivalent basis for 
333 

calendar years 2010, 2020, 2030, 2040 and 2050. As shown below, 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. As discussed later in this section, 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. 

Table III.F-1 Reference Case GHG Emissions by Calendar Year (MMTCO2eq)

 2010 2020 2030 2040 2050 

All Sectors (Worldwide)a 41,016 48,059 52,870 56,940 60,209 

All Sectors (U.S. Only)a 7,118 7,390 7,765 8,101 8,379 

U.S. Cars/Light Truck 

Onlyb 1,243 1,293 1,449 1,769 2,219 

a

ADAGE model projections, U.S. EPA 289 

b MOVES2010 (2010), OMEGA Model (2020-50) U.S. EPA. See RIA Chapter 5.3 for modeling 

details. 

EPA’s GHG rule will result in significant reductions as newer, cleaner vehicles 

come into the fleet, and the rule is estimated to have a measurable impact on world global 

temperatures. As discussed in Section I, this GHG rule is part of a joint National 

Program such that a large majority of the projected benefits would be achieved jointly 

with NHTSA’s CAFE standards, which are described in detail in Section IV. EPA 

estimates the reductions attributable to the GHG program over time assuming the model 

year 2016 standards continue indefinitely post-2016,290 compared to a reference scenario 

in which the 2011 model year fuel economy standards continue beyond 2011. 

Using this approach EPA estimates these standards would cut annual fleetwide 

car and light truck tailpipe CO2-eq emissions by 21 percent by 2030, when 90 percent of 

car and light truck miles will be travelled by vehicles meeting the new standards. 

Roughly 20 percent of these reductions are due to “upstream” emission reductions from 

gasoline extraction, production and distribution processes as a result of reduced gasoline 

demand associated with this rule. Some of the overall emission reductions also come 

from projected improvements in the efficiency of vehicle air conditioning systems, which 

will substantially reduce direct emissions of HFCs, one of the most potent greenhouse 

gases, as well as indirect emissions of tailpipe CO2 emissions attributable to reduced 

engine load from air conditioning. In total, EPA estimates that compared to a baseline of 

 

289 U.S. EPA (2009). “EPA Analysis of the American Clean Energy and Security Act of 2009: H.R. 2454 

in the 111th Congress.” U.S. Environmental Protection Agency, Washington, DC, USA 

(www.epa.gov/climatechange/economics/economicanalyses.html). ADAGE model projections of 

worldwide and U.S. totals include EISA, and are provided for context. 

290 This analysis does not include the EISA requirement for 35 MPG through 2020 or California’s Pavley 1 

GHG standards. The standards are intended to supersede these requirements, and the baseline case for 

comparison are the emissions that would result without further action above the currently promulgated fuel 

economy standards. 
334 

indefinite 2011 model year standards, net GHG emission reductions from the program 

would be 307 million metric tons CO2-equivalent (MMTCO2eq) annually by 2030, which 

represents a reduction of 4 percent of total U.S. GHG emissions and 0.6 percent of total 

worldwide GHG emissions projected in that year. This estimate accounts for all 

upstream fuel production and distribution emission reductions, vehicle tailpipe emission 

reductions including air conditioning benefits, as well as increased vehicle miles travelled 

(VMT) due to the "rebound" effect discussed in Section III.H. EPA estimates this would 

be the equivalent of removing approximately 60 million cars and light trucks from the 

road in this timeframe.291 

EPA projects the total reduction of the program over the full life of model year 

2012-2016 vehicles to be about 960 MMTCO2eq, with fuel savings of 78 billion gallons 

(1.8 billion barrels) of gasoline over the life of these vehicles, assuming that some 

manufacturers take advantage of low-cost HFC reduction strategies to help meet these 

standards. 

The impacts on global mean temperature and global mean sea level rise resulting 

from these emission reductions are discussed in Section III.F.3. 

1. Impact on GHG Emissions

This action will reduce GHG emissions emitted directly from vehicles due to 

reduced fuel use and more efficient air conditioning systems. In addition to these 

“downstream” emissions, reducing CO2 emissions translates directly to reductions in the 

emissions associated with the processes involved in getting petroleum to the pump, 

including the extraction and transportation of crude oil, and the production and 

distribution of finished gasoline (termed “upstream” emissions). Reductions from 

tailpipe GHG standards grow over time as the fleet turns over to vehicles subject to the 

standards, meaning the benefit of the program will continue as long as the oldest vehicles 

in the fleet are replaced by newer, lower CO2 emitting vehicles. 

EPA is not projecting any reductions in tailpipe CH4 or N2O emissions as a result 

of the emission caps set forth in this rule, which are meant to prevent emission 

backsliding and to bring diesel vehicles equipped with advanced technology 

aftertreatment, and other advanced technology vehicles such as lean-burn gasoline 

vehicles, into alignment with current gasoline vehicle emissions.292

No substantive comments were received on the emissions modeling methods or 

on the greenhouse gas inventories presented in the proposal. These analyses are updated 

here to include model revisions and more recent economic analysis, including revised 

 

291 Estimated using MOVES2010, the average vehicle in the light duty fleet emitted 5.1 tons of CO2 during 

calendar year 2008. 

292 EPA is adopting a compliance option whereby manufacturers can comply with a CO2 equivalent 

standard in lieu of meeting the CH4 and N2O standards. This should have no effect on the estimated GHG 

reductions attributable to the rule since a condition of meeting that alternative standard is that the fleetwide 

CO2 target remains in place. 
335 

estimates of future vehicle sales, fuel prices, and vehicle miles traveled. The primary 

source for these data is the AEO 2010 preliminary release.293 For more details, please see 

the TSD and RIA Chapter 5. 

 As detailed in the RIA, EPA estimated calendar year tailpipe CO2 reductions 

based on pre- and post-control CO2 gram per mile levels from EPA’s OMEGA model and 

assumed to continue indefinitely into the future, coupled with VMT projections derived 

from AEO 2010 Early Release. These estimates reflect the real-world CO2 emissions 

reductions projected for the entire U.S. vehicle fleet in a specified calendar year, 

including the projected effect of air conditioning credits, the TLAAS program and FFV 

credits. EPA also estimated full lifetime reductions for model years 2012-2016 using 

pre- and post-control CO2 levels projected by the OMEGA model, coupled with projected 

vehicle sales and lifetime mileage estimates. These estimates reflect the real-world CO2

emissions reductions projected for model years 2012 through 2016 vehicles over their 

entire life. 

This rule allows manufacturers to earn credits for improved vehicle air 

conditioning efficiency. Since these improvements are relatively low cost, EPA projects 

that manufacturers will take advantage of this flexibility, leading to reductions from 

emissions associated with vehicle air conditioning systems. As explained above, these 

reductions will come from both direct emissions of air conditioning refrigerant over the 

life of the vehicle and tailpipe CO2 emissions produced by the increased load of the A/C 

system on the engine. In particular, EPA estimates that direct emissions of HFCs, one of 

the most potent greenhouse gases, would be reduced 50 percent from light-duty vehicles 

when the fleet has turned over to more efficient vehicles. The fuel savings derived from 

lower tailpipe CO2 would also lead to reductions in upstream emissions. Our estimated 

reductions from the A/C credits program are based on our analysis of how manufacturers 

are expected to take advantage of this credit opportunity in complying with the CO2

fleetwide average tailpipe standards. 

Upstream emission reductions associated with the production and distribution of 

fuel were estimated using emission factors from DOE’s GREET1.8 model, with some 

modifications as detailed in Chapter 5 of the RIA. These estimates include both 

international and domestic emission reductions, since reductions in foreign exports of 

finished gasoline and/or crude would make up a significant share of the fuel savings 

resulting from the GHG standards. Thus, significant portions of the upstream GHG 

emission reductions will occur outside of the U.S.; a breakdown of projected international 

versus domestic reductions is included in the RIA. 

a. Calendar Year Reductions for Future Years 

 

Table III.F.1-1 shows reductions estimated from these GHG standards assuming a 

pre-control case of 2011 MY standards continuing indefinitely beyond 2011, and a post-

 

293 Energy Information Administration. Annual Energy Outlook 2010 Early Release. 

http://www.eia.doe.gov/oiaf/aeo/. 
336 

control case in which 2016 MY GHG standards continue indefinitely beyond 2016.294 

These reductions are broken down by upstream and downstream components, including 

air conditioning improvements, and also account for the offset from a 10 percent VMT 

“rebound” effect as discussed in Section III.H. Including the reductions from upstream 

emissions, total reductions are estimated to reach 307 MMTCO2eq annually by 2030 (a 

21 percent reduction in U.S. car and light truck emissions), and grow to over 500 

MMTCO2eq in 2050 as cleaner vehicles continue to come into the fleet (a 23 percent 

reduction in U.S. car and light truck emissions). 

Table III.F.1-1 Projected GHG Reductions (MMTCO2eq per year)

Calendar Year: 2020 2030 2040 2050 

Net Reduction* 156.4 307.0 401.5 505.9 

Net CO2 139.1 273.3 360.4 458.7 

Net other GHG 17.3 33.7 41.1 47.2 

Downstream Reduction 125.2 245.7 320.7 403.0

CO2 (excluding A/C) 101.2 199.5 263.2 335.1

A/C – indirect CO2 10.6 20.2 26.5 33.8

 A/C – direct HFCs 13.3 26.0 30.9 34.2

 CH4 (rebound effect) 0.0 0.0 0.0 0.0 

 N2O (rebound effect) 0.0 -0.1 -0.1 -0.1 

Upstream Reduction 31.2 61.3 80.8 102.9

CO2 27.2 53.5 70.6 89.9 

CH4 3.9 7.6 10.0 12.7 

N2O 0.1 0.3 0.3 0.4 

 

Percent reduction relative to U.S. 

reference (cars + light trucks) 12.1% 21.2% 22.7% 22.8%

Percent reduction relative to U.S. 

reference (all sectors) 2.1% 4.0% 5.0% 6.0%

Percent reduction relative to 

worldwide reference 0.3% 0.6% 0.7% 0.8%

* includes impacts of 10% VMT rebound rate presented in Table III.F.1-3 

 

b. Lifetime Reductions for 2012-2016 Model Years 

EPA also analyzed the emission reductions over the full life of the 2012-2016 model 

year cars and trucks affected by this program.295 These results, including both upstream 

 

294 Legally, the 2011 CAFE standards only apply to the 2011 model year and no standards apply to future 

model years. However, we do not believe that it would be appropriate to assume that no CAFE standards 

would apply beyond the 2011 model year when projecting the impacts of this rule. 

295 As detailed in the RIA Chapter 5 and TSD Chapter 4, for this analysis the full life of the vehicle is 

represented by average lifetime mileages for cars (195,000 miles) and trucks (226,000 miles) averaged over 

calendar years 2012 through 2030, a function of how far vehicles drive per year and scrappage rates. 
337 

and downstream GHG contributions, are presented in Table III.F.1-2, showing lifetime 

reductions of about 960 MMTCO2eq, with fuel savings of 78 billion gallons (1.8 billion 

barrels) of gasoline. 

Table III.F.1-2 Projected Net GHG Reductions (MMTCO2eq per year)

Model Year Lifetime GHG 

Reduction 

(MMT CO2 EQ) 

Lifetime Fuel 

Savings 

(Billion Gallons) 

2012 88.9 7.3 

2013 130.2 10.5 

2014 174.2 13.9 

2015 244.2 19.5 

2016 324.6 26.5 

Total Program Benefit 962.0 77.7 

c. Impacts of VMT Rebound Effect 

As noted above and discussed more fully in Section III.H., the effect of fuel cost 

on VMT (“rebound”) was accounted for in our assessment of economic and 

environmental impacts of this rule. A 10 percent rebound case was used for this 

analysis, meaning that VMT for affected model years is modeled as increasing by 10 

percent as much as the increase in fuel economy; i.e., a 10 percent increase in fuel 

economy would yield a 1.0 percent increase in VMT. Results are shown in Table III.F.1-

3; using the 10 percent rebound rate results in an overall emission increase of 25.0 

MMTCO2eq annually in 2030 (this increase is accounted for in the reductions presented 

in Tables III.F.1-1 and III.F.1-2). Our estimated changes in CH4 or N2O emissions as a 

result of these vehicle GHG standards are attributed solely to this rebound effect. 

Table III.F.1-3 GHG Impact Of 10% VMT Rebounda

(MMTCO2eq per year)

 2020 2030 2040 2050 

Total GHG Increase 13.0 25.0 32.9 41.9 

Tailpipe & Indirect A/C CO2 10.2 19.6 25.8 32.8 

Upstream GHGs b 2.8 5.4 7.1 9.1 

Tailpipe CH4 0.0 0.0 0.0 0.0 

Tailpipe N2O 0.0 0.1 0.1 0.1 

a

 These impacts are included in the reductions shown in Table III.F.1-1 and III.F.1-2. 

b

 Upstream rebound impact calculated as upstream total CO2 effect times ratio of downstream tailpipe 

rebound CO2 effect to downstream tailpipe total CO2 effect. 

d. Analysis of Alternatives 

EPA analyzed two alternative scenarios, including 4% and 6% annual increases in 

GHG emission standards. In addition to this annual increase, EPA assumed that 

manufacturers would use air conditioning improvements in identical penetrations as in 
338 

the primary scenario. Under these assumptions, EPA expects achieved fleetwide average 

emission levels of 253 g/mile CO2eq (4%), and 230 g/mile CO2eq(6%) in 2016. 

As in the primary scenario, EPA assumed that the fleet complied with the 

standards. For full details on modeling assumptions, please refer to RIA Chapter 5. 

EPA’s assessment of these alternative standards, including our response to public 

comments, is discussed in Section III.D. 

Table III.F.1-4 Calendar Year Impacts Of Alternative Scenarios

Calendar Year 

 Scenario CY 2020 CY2030 CY 2040 CY 2050 

Primary -156.4 -307.0 -401.5 -505.8 

4% -141.9 -286.2 -375.4 -472.9 

Total GHG 

Reductions (MMT 

CO2eq) 6% -202.6 -403.4 -529.3 -668.7 

Primary -12.6 -24.7 -32.6 -41.5 

4% -11.3 -22.9 -30.3 -38.6 

Fuel Savings 

(Billion Gallons 

Gasoline 

Equivalent) 

6% -16.7 -33.2 -43.9 -55.9 

Table III.F.1-5 Model Year Impacts of Alternative Scenarios

Model Year Lifetime 

 Scenario MY 2012 MY 2013 MY 2014 MY 2015 MY 2016 Total 

Primary -88.8 -130.2 -174.2 -244.2 -324.6 -962.0 

4% -39.9 -96.6 -155.4 -226.5 -303.6 -822.0 

Total GHG 

Reductions (MMT 

CO2eq) 6% -61.7 -146.5 -237.0 -332.2 -427.6 -1,204.9 

Primary -7.3 -10.5 -13.9 -19.5 -26.5 -77.7 

4% -2.9 -7.1 -12.2 -18.0 -24.6 -64.8 

Fuel Savings 

(Billion Gallons 

Gasoline 

Equivalent) 

6% -4.9 -12.0 -19.4 -27.3 -35.6 -99.1 

2. Overview of Climate Change Impacts from GHG Emissions

Once emitted, GHGs that are the subject of this regulation can remain in the 

atmosphere for decades to centuries, meaning that 1) their concentrations become wellmixed throughout the global atmosphere regardless of emission origin, and 2) their 

effects on climate are long lasting. GHG emissions come mainly from the combustion of 

fossil fuels (coal, oil, and gas), with additional contributions from the clearing of forests 

and agricultural activities. The transportation sector represents a significant portion, 28%, 

of U.S. GHG emissions.296

This section provides a summary of observed and projected changes in GHG 

emissions and associated climate change impacts. The source document for the section 

below is the Technical Support Document (TSD)297 for EPA’s Endangerment and Cause 

 

296 U.S. EPA (2009) Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2007. EPA-430-R-09-

004, Washington, DC.

297 “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 
339 

or Contribute Findings Under the Clean Air Act.298 Below is the Executive Summary of 

the TSD which provides technical support for the endangerment and cause or contribute 

analyses concerning GHG emissions under section 202(a) of the Clean Air Act. The 

TSD reviews observed and projected changes in climate based on current and projected 

atmospheric GHG concentrations and emissions, as well as the related impacts and risks 

from climate change that are projected in the absence of GHG mitigation actions, 

including this action and other U.S. and global actions. The TSD was updated and revised 

based on expert technical review and public comment as part of EPA’s rulemaking 

process for the final Endangerment Findings. The key findings synthesized here and the 

information throughout the TSD are primarily drawn from the 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).299

a. Observed Trends in Greenhouse Gas Emissions and Concentrations 

The primary long-lived GHGs directly emitted by human activities include carbon 

dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). Greenhouse gases have a 

warming effect by trapping heat in the atmosphere that would otherwise escape to space. 

In 2007, U.S. GHG emissions were 7,150 teragrams300 of CO2 equivalent301 (TgCO2eq). 

The dominant gas emitted is CO2, mostly from fossil fuel combustion. Methane is the 

second largest component of U.S. emissions, followed by N2O and the fluorinated gases 

(HFCs, PFCs, and SF6). Electricity generation is the largest emitting sector (34% of total 

U.S. GHG emissions), followed by transportation (28%) and industry (19%). 

Transportation sources under Section 202(a)302 of the Clean Air Act (passenger 

cars, light duty trucks, other trucks and buses, motorcycles, and passenger cooling) 

emitted 1,649 TgCO2eq in 2007, representing 23% of total U.S. GHG emissions. U.S. 

transportation sources under Section 202(a) made up 4.3% of total global GHG emissions 

in 2005,303 which, in addition to the United States as a whole, ranked only behind total 

GHG emissions from China, Russia, and India but ahead of Japan, Brazil, Germany, and 

 

298 See 74 FR 66496 (Dec. 15, 2009) 299 For a complete list of core references from IPCC, USGCRP/CCSP, NRC and others relied upon for 

development of the TSD for EPA’s Endangerment and Cause or Contribute Findings see section 1(b), 

specifically, Table 1.1 of the TSD. 

300 One teragram (Tg) = 1 million metric tons. 1 metric ton = 1,000 kilograms = 1.102 short tons = 2,205 

pounds. 

301 Long-lived GHGs are compared and summed together on a CO2-equivalent basis by multiplying each 

gas by its global warming potential (GWP), as estimated by IPCC. In accordance with United Nations 

Framework Convention on Climate Change (UNFCCC) reporting procedures, the U.S. quantifies GHG 

emissions using the 100-year timeframe values for GWPs established in the IPCC Second Assessment 

Report. 

302 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. 

303 More recent emission data are available for the United States and other individual countries, but 2005 is 

the most recent year for which data for all countries and all gases are available. 
340 

the rest of the world’s countries. In 2005, total U.S. GHG emissions were responsible for 

18% of global emissions, ranking only behind China, which was responsible for 19% of 

global GHG emissions. The scope of this action focuses on GHG emissions under 

Section 202(a) from passenger cars and light duty trucks source categories (see Section 

III.F.1). 

The global atmospheric CO2 concentration has increased about 38% from preindustrial levels to 2009, and almost all of the increase is due to anthropogenic emissions. 

The global atmospheric concentration of CH4 has increased by 149% since pre-industrial 

levels (through 2007); and the N2O concentration has increased by 23% (through 2007). 

The observed concentration increase in these gases can also be attributed primarily to 

anthropogenic emissions. The industrial fluorinated gases, HFCs, PFCs, and SF6, have 

relatively low atmospheric concentrations but the total radiative forcing due to these 

gases is increasing rapidly; these gases are almost entirely anthropogenic in origin. 

Historic data show that current atmospheric concentrations of the two most 

important directly emitted, long-lived GHGs (CO2 and CH4) are well above the natural 

range of atmospheric concentrations compared to at least the last 650,000 years. 

Atmospheric GHG concentrations have been increasing because anthropogenic emissions 

have been outpacing the rate at which GHGs are removed from the atmosphere by natural 

processes over timescales of decades to centuries. 

b. Observed Effects Associated With Global Elevated Concentrations of 

GHGs 

Current ambient air concentrations of CO2 and other GHGs remain well below 

published exposure thresholds for any direct adverse health effects, such as respiratory or 

toxic effects. 

The global average net effect of the increase in atmospheric GHG concentrations, 

plus other human activities (e.g., land-use change and aerosol emissions), on the global 

energy balance since 1750 has been one of warming. This total net heating effect, 

referred to as forcing, is estimated to be +1.6 (+0.6 to +2.4) watts per square meter 

(W/m2

), with much of the range surrounding this estimate due to uncertainties about the 

cooling and warming effects of aerosols. However, as aerosol forcing has more regional 

variability than the well-mixed, long-lived GHGs, the global average might not capture 

some regional effects. The combined radiative forcing due to the cumulative (i.e., 1750 to 

2005) increase in atmospheric concentrations of CO2, CH4, and N2O is estimated to be 

+2.30 (+2.07 to +2.53) W/m2. The rate of increase in positive radiative forcing due to 

these three GHGs during the industrial era is very likely to have been unprecedented in 

more than 10,000 years.

Warming of the climate system is unequivocal, as is now evident from 

observations of increases in global average air and ocean temperatures, widespread 

melting of snow and ice, and rising global average sea level. Global mean surface 

temperatures have risen by 1.3 ± 0.32°F (0.74°C ± 0.18°C) over the last 100 years. Eight 
341 

of the 10 warmest years on record have occurred since 2001. Global mean surface 

temperature was higher during the last few decades of the 20th century than during any 

comparable period during the preceding four centuries. 

Most of the observed increase in global average temperatures since the mid-20th 

century is very likely due to the observed increase in anthropogenic GHG concentrations. 

Climate model simulations suggest natural forcing alone (i.e., changes in solar irradiance) 

cannot explain the observed warming. 

U.S. temperatures also warmed during the 20th and into the 21st century; 

temperatures are now approximately 1.3°F (0.7°C) warmer than at the start of the 20th

century, with an increased rate of warming over the past 30 years. Both the IPCC304 and 

the CCSP reports attributed recent North American warming to elevated GHG 

concentrations. In the CCSP (2008) report,305 the authors find that for North America, 

“more than half of this warming [for the period 1951-2006] is likely the result of humancaused greenhouse gas forcing of climate change.” 

Observations show that changes are occurring in the amount, intensity, frequency 

and type of precipitation. Over the contiguous United States, total annual precipitation 

increased by 6.1% from 1901 to 2008. It is likely that there have been increases in the 

number of heavy precipitation events within many land regions, even in those where 

there has been a reduction in total precipitation amount, consistent with a warming 

climate. 

There is strong evidence that global sea level gradually rose in the 20th century 

and is currently rising at an increased rate. It is not clear whether the increasing rate of 

sea level rise is a reflection of short-term variability or an increase in the longer-term 

trend. Nearly all of the Atlantic Ocean shows sea level rise during the last 50 years with 

the rate of rise reaching a maximum (over 2 millimeters [mm] per year) in a band along 

the U.S. east coast running east-northeast. 

Satellite data since 1979 show that annual average Arctic sea ice extent has 

shrunk by 4.1% per decade. The size and speed of recent Arctic summer sea ice loss is 

highly anomalous relative to the previous few thousands of years. 

Widespread changes in extreme temperatures have been observed in the last 50 

years across all world regions, including the United States. Cold days, cold nights, and 

 

304 Hegerl, G.C. et al. (2007) Understanding and Attributing Climate Change. 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. 

305 CCSP (2008) Reanalysis of Historical Climate Data for Key Atmospheric Features: Implications for 

Attribution of Causes of Observed Change. A Report by the U.S. Climate Change Science Program and the 

Subcommittee on Global Change Research [Randall Dole, Martin Hoerling, and Siegfried Schubert (eds.)]. 

National Oceanic and Atmospheric Administration, National Climatic Data Center, Asheville, NC, 156 pp. 
342 

frost have become less frequent, while hot days, hot nights, and heat waves have become 

more frequent. 

Observational evidence from all continents and most oceans shows that many 

natural systems are being affected by regional climate changes, particularly temperature 

increases. However, directly attributing specific regional changes in climate to 

emissions of GHGs from human activities is difficult, especially for precipitation. 

Ocean CO2 uptake has lowered the average ocean pH (increased acidity) level by 

approximately 0.1 since 1750. Consequences for marine ecosystems can include reduced 

calcification by shell-forming organisms, and in the longer term, the dissolution of 

carbonate sediments.

Observations show that climate change is currently affecting U.S. physical and 

biological systems in significant ways. The consistency of these observed changes in 

physical and biological systems and the observed significant warming likely cannot be 

explained entirely due to natural variability or other confounding non-climate factors.

c. Projections of Future Climate Change With Continued Increases in 

Elevated GHG Concentrations

Most future scenarios that assume no explicit GHG mitigation actions (beyond 

those already enacted) project increasing global GHG emissions over the century, with 

climbing GHG concentrations. Carbon dioxide is expected to remain the dominant 

anthropogenic GHG over the course of the 21st century. The radiative forcing associated 

with the non-CO2 GHGs is still significant and increasing over time. 

Future warming over the course of the 21st century, even under scenarios of lowemission growth, is very likely to be greater than observed warming over the past 

century. According to climate model simulations summarized by the IPCC,306 through 

about 2030, the global warming rate is affected little by the choice of different future 

emissions scenarios. By the end of the 21st century, projected average global warming 

(compared to average temperature around 1990) varies significantly depending on the 

emission scenario and climate sensitivity assumptions, ranging from 3.2 to 7.2°F (1.8 to 

4.0°C), with an uncertainty range of 2.0 to 11.5°F (1.1 to 6.4°C).

All of the United States is very likely to warm during this century, and most areas 

of the United States are expected to warm by more than the global average. The largest 

warming is projected to occur in winter over northern parts of Alaska. In western, central 

and eastern regions of North America, the projected warming has less seasonal variation 

and is not as large, especially near the coast, consistent with less warming over the 

oceans. 

 

306 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. 
343 

It is very likely that heat waves will become more intense, more frequent, and 

longer lasting in a future warm climate, whereas cold episodes are projected to decrease 

significantly. 

Increases in the amount of precipitation are very likely in higher latitudes, while 

decreases are likely in most subtropical latitudes and the southwestern United States, 

continuing observed patterns. The mid-continental area is expected to experience drying 

during summer, indicating a greater risk of drought. 

Intensity of precipitation events is projected to increase in the United States and 

other regions of the world. More intense precipitation is expected to increase the risk of 

flooding and result in greater runoff and erosion that has the potential for adverse water 

quality effects. 

It is likely that hurricanes will become more intense, with stronger peak winds 

and more heavy precipitation associated with ongoing increases of tropical sea surface 

temperatures. Frequency changes in hurricanes are currently too uncertain for confident 

projections. 

By the end of the century, global average sea level is projected by IPCC307 to rise 

between 7.1 and 23 inches (18 and 59 centimeter [cm]), relative to around 1990, in the 

absence of increased dynamic ice sheet loss. Recent rapid changes at the edges of the 

Greenland and West Antarctic ice sheets show acceleration of flow and thinning. While 

an understanding of these ice sheet processes is incomplete, their inclusion in models 

would likely lead to increased sea level projections for the end of the 21st century. 

Sea ice extent is projected to shrink in the Arctic under all IPCC emissions 

scenarios. 

d. Projected Risks and Impacts Associated With Future Climate Change 

Risk to society, ecosystems, and many natural Earth processes increase with 

increases in both the rate and magnitude of climate change. Climate warming may 

increase the possibility of large, abrupt regional or global climatic events (e.g., 

disintegration of the Greenland Ice Sheet or collapse of the West Antarctic Ice Sheet). 

The partial deglaciation of Greenland (and possibly West Antarctica) could be triggered 

by a sustained temperature increase of 2 to 7°F (1 to 4oC) above 1990 levels. Such 

warming would cause a 13 to 20 feet (4 to 6 meter) rise in sea level, which would occur 

over a time period of centuries to millennia. 

 

307 IPCC (2007) Summary for Policymakers. 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. 
344 

The CCSP308 reports that climate change has the potential to accentuate the 

disparities already evident in the American health care system, as many of the expected 

health effects are likely to fall disproportionately on the poor, the elderly, the disabled, 

and the uninsured. The IPCC309 states with very high confidence that climate change 

impacts on human health in U.S. cities will be compounded by population growth and an 

aging population. 

Severe heat waves are projected to intensify in magnitude and duration over the 

portions of the United States where these events already occur, with potential increases in 

mortality and morbidity, especially among the elderly, young, and frail. 

Some reduction in the risk of death related to extreme cold is expected. It is not 

clear whether reduced mortality from cold will be greater or less than increased heatrelated mortality in the United States due to climate change. 

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. 

Within settlements experiencing climate change, certain parts of the population 

may be especially vulnerable; these include the poor, the elderly, those already in poor 

health, the disabled, those living alone, and/or indigenous populations dependent on one 

or a few resources. Thus, the potential impacts of climate change raise environmental 

justice issues. 

The CCSP310 concludes that, with increased CO2 and temperature, the life cycle 

of grain and oilseed crops will likely progress more rapidly. But, as temperature rises, 

these crops will increasingly begin to experience failure, especially if climate variability 

increases and precipitation lessens or becomes more variable. Furthermore, the 

 

308 Ebi, K.L., J. Balbus, P.L. Kinney, E. Lipp, D. Mills, M.S. O’Neill, and M. Wilson (2008) Effects of 

Global Change on Human Health. In: Analyses of the effects of global change on human health and welfare 

and human systems. A Report by the U.S. Climate Change Science Program and the Subcommittee on 

Global Change Research. [Gamble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J. Wilbanks, (Authors)]. U.S. 

Environmental Protection Agency, Washington, DC, USA, pp. 2-1 to 2-78. 

309 Field, C.B. et al. (2007) North America. In: Climate Change 2007: Impacts, Adaptation and 

Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental 

Panel on Climate Change [M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson 

(eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 

310 Backlund, P., A. Janetos, D.S. Schimel, J. Hatfield, M.G. Ryan, S.R. Archer, and D. Lettenmaier (2008) 

Executive Summary. In: The Effects of Climate Change on Agriculture, Land Resources, Water Resources, 

and Biodiversity in the United States. A Report by the U.S. Climate Change Science Program and the 

Subcommittee on Global Change Research. Washington, DC., USA, 362 pp. 
345 

marketable yield of many horticultural crops (e.g., tomatoes, onions, fruits) is very likely 

to be more sensitive to climate change than grain and oilseed crops. 

Higher temperatures will very likely reduce livestock production during the 

summer season in some areas, but these losses will very likely be partially offset by 

warmer temperatures during the winter season. 

Cold-water fisheries will likely be negatively affected; warm-water fisheries will 

generally benefit; and the results for cool-water fisheries will be mixed, with gains in the 

northern and losses in the southern portions of ranges. 

Climate change has very likely increased the size and number of forest fires, 

insect outbreaks, and tree mortality in the interior West, the Southwest, and Alaska, and 

will continue to do so. Over North America, forest growth and productivity have been 

observed to increase since the middle of the 20th century, in part due to observed climate 

change. Rising CO2 will very likely increase photosynthesis for forests, but the increased 

photosynthesis will likely only increase wood production in young forests on fertile soils. 

The combined effects of expected increased temperature, CO2, nitrogen deposition, 

ozone, and forest disturbance on soil processes and soil carbon storage remain unclear. 

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. Salt 

marshes, other coastal habitats, and dependent species are threatened by sea level rise, 

fixed structures blocking landward migration, and changes in vegetation. Population 

growth and rising value of infrastructure in coastal areas increases vulnerability to 

climate variability and future climate change. 

Climate change will likely further constrain already overallocated water resources 

in some regions of the United States, increasing competition among agricultural, 

municipal, industrial, and ecological uses. Although water management practices in the 

United States are generally advanced, particularly in the West, the reliance on past 

conditions as the basis for current and future planning may no longer be appropriate, as 

climate change increasingly creates conditions well outside of historical observations. 

Rising temperatures will diminish snowpack and increase evaporation, affecting seasonal 

availability of water. In the Great Lakes and major river systems, lower water levels are 

likely to exacerbate challenges relating to water quality, navigation, recreation, 

hydropower generation, water transfers, and binational relationships. Decreased water 

supply and lower water levels are likely to exacerbate challenges relating to aquatic 

navigation in the United States. 

Higher water temperatures, increased precipitation intensity, and longer periods of 

low flows will exacerbate many forms of water pollution, potentially making attainment 

of water quality goals more difficult. As waters become warmer, the aquatic life they 
346 

now support will be replaced by other species better adapted to warmer water. In the 

long term, warmer water and changing flow may result in deterioration of aquatic 

ecosystems. 

Ocean acidification is projected to continue, resulting in the reduced biological 

production of marine calcifiers, including corals. 

Climate change is likely to affect U.S. energy use and energy production and 

physical and institutional infrastructures. It will also likely interact with and possibly 

exacerbate ongoing environmental change and environmental pressures in settlements, 

particularly in Alaska where indigenous communities are facing major environmental and 

cultural impacts. The U.S. energy sector, which relies heavily on water for hydropower 

and cooling capacity, may be adversely impacted by changes to water supply and quality 

in reservoirs and other water bodies. Water infrastructure, including drinking water and 

wastewater treatment plants, and sewer and stormwater management systems, will be at 

greater risk of flooding, sea level rise and storm surge, low flows, and other factors that 

could impair performance. 

Disturbances such as wildfires and insect outbreaks are increasing in the United 

States and are likely to intensify in a warmer future with warmer winters, drier soils, and 

longer growing seasons. Although recent climate trends have increased vegetation 

growth, continuing increases in disturbances are likely to limit carbon storage, facilitate 

invasive species, and disrupt ecosystem services. 

Over the 21st century, changes in climate will cause species to shift north and to 

higher elevations and fundamentally rearrange U.S. ecosystems. Differential capacities 

for range shifts and constraints from development, habitat fragmentation, invasive 

species, and broken ecological connections will alter ecosystem structure, function, and 

services. 

Climate change impacts will vary in nature and magnitude across different 

regions of the United States. 

• Sustained high summer temperatures, heat waves, and declining air quality are 

projected in the Northeast,311 Southeast,312 Southwest,313 and Midwest.314 Projected 

climate change would continue to cause loss of sea ice, glacier retreat, permafrost 

thawing, and coastal erosion in Alaska. 

• Reduced snowpack, earlier spring snowmelt, and increased likelihood of seasonal 

summer droughts are projected in the Northeast, Northwest,315 and Alaska. More 

 

311 Northeast includes West Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, 

Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine. 

312 Southeast includes Kentucky, Virginia, Arkansas, Tennessee, North Carolina, South Carolina, southeast 

Texas, Louisiana, Mississippi, Alabama, Georgia, and Florida. 313 Southwest includes California, Nevada, Utah, western Colorado, Arizona, New Mexico (except the 

extreme eastern section), and southwest Texas. 

314 The Midwest includes Minnesota, Wisconsin, Michigan, Iowa, Illinois, Indiana, Ohio, and Missouri. 315 The Northwest includes Washington, Idaho, western Montana, and Oregon. 
347 

severe, sustained droughts and water scarcity are projected in the Southeast, Great 

Plains,316 and Southwest. 

• The Southeast, Midwest, and Northwest in particular are expected to be impacted by 

an increased frequency of heavy downpours and greater flood risk. 

• Ecosystems of the Southeast, Midwest, Great Plains, Southwest, Northwest, and 

Alaska are expected to experience altered distribution of native species (including 

local extinctions), more frequent and intense wildfires, and an increase in insect pest 

outbreaks and invasive species. 

• 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. 

• Warmer water temperatures and ocean acidification are expected to degrade 

important aquatic resources of islands and coasts such as coral reefs and fisheries. 

• A longer growing season, low levels of warming, and fertilization effects of carbon 

dioxide may benefit certain crop species and forests, particularly in the Northeast and 

Alaska. Projected summer rainfall increases in the Pacific islands may augment 

limited freshwater supplies. Cold-related mortality is projected to decrease, 

especially in the Southeast. In the Midwest in particular, heating oil demand and 

snow-related traffic accidents are expected to decrease.

Climate change impacts in certain regions of the world may exacerbate problems 

that raise humanitarian, trade, and national security issues for the United States. The 

IPCC317 identifies the most vulnerable world regions as the Arctic, because of the effects 

of high rates of projected warming on natural systems; Africa, especially the sub-Saharan 

region, because of current low adaptive capacity as well as climate change; small islands, 

due to high exposure of population and infrastructure to risk of sea level rise and 

increased storm surge; and Asian mega-deltas, such as the Ganges-Brahmaputra and the 

Zhujiang, due to large populations and high exposure to sea level rise, storm surge and 

river flooding. Climate change has been described as a potential threat multiplier with 

regard to national security issues. 

3. Changes in Global Climate Indicators Associated with the Rule’s GHG 

Emissions Reductions 

EPA examined318 the reductions in CO2 and other GHGs associated with this 

action and analyzed the projected effects on global mean surface temperature and sea 

 

316 The Great Plains includes central and eastern Montana, North Dakota, South Dakota, Wyoming, 

Nebraska, eastern Colorado, Nebraska, Kansas, extreme eastern New Mexico, central Texas, and 

Oklahoma 

317 Parry, M.L. et al. (2007) Technical Summary. In: Climate Change 2007: Impacts, Adaptation and 

Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental 

Panel on Climate Change [M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden, and C.E. Hanson 

(eds.)], Cambridge University Press, Cambridge, United Kingdom, pp. 23S78. 318 Using the Model for the Assessment of Greenhouse Gas Induced Climate Change (MAGICC, 

http://www.cgd.ucar.edu/cas/wigley/magicc/), EPA estimated the effects of this action’s greenhouse gas 

emissions reductions on global mean temperature and sea level. Please refer to Chapter 7.4 of the RIA for 

additional information. 

Deleted: Mean Temperature and Sea 

Level Rise
348 

level, two common indicators of climate change. The analysis projects that this action 

will reduce climate warming and sea level rise. Although the projected reductions are 

small in overall magnitude by themselves, they are quantifiable and would contribute to 

reducing climate change risks. A commenter agreed that the 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 this action, across all climate sensitivities. As such, the commenter 

encourages the agencies to move forward with this action while continuing to develop 

additional, more stringent vehicle standards beyond 2016. 

Another commenter indicated that the projected changes in climate impacts 

resulting from this action are small and therefore not meaningful. EPA disagrees with this 

view as the reductions may be small in overall magnitude, but in the global climate 

change context, they are quantifiable showing a clear directional signal across a range of 

climate sensitivities.319,320 EPA therefore determines that the projected reductions in 

atmospheric CO2, global mean temperature and sea level rise are meaningful in the 

context of this rule. EPA addresses this point further in the Response to Comments 

document. For the final rule, EPA provides an additional climate change impact analysis 

for projected changes in ocean pH in the context of this action. In addition, EPA updated 

the modeling analysis based on the revised GHG emission reductions provided in Section 

III.F.1; however, the change in modeling results was very small in magnitude. Based on 

the reanalysis the results for projected atmospheric CO2 concentrations are estimated to 

be reduced by an average of 2.9 ppm (previously 3.0 ppm), global mean temperature is 

estimated to be reduced by 0.006 to 0.015 °C by 2100 (previously 0.007 to 0.016 °C) and 

sea-level rise is projected to be reduced by approximately 0.06-0.14cm by 2100 

(previously 0.06-0.15cm). 

a. Estimated Projected Reductions in Atmospheric CO2 Concentration, 

Global Mean Surface Temperatures Sea Level Rise and Ocean pH

EPA estimated changes in the atmospheric CO2 concentration, global mean 

surface temperature and sea level to 2100 resulting from the emissions reductions in this 

action using the Model for the Assessment of Greenhouse Gas Induced Climate Change 

(MAGICC, version 5.3). This widely-used, peer reviewed modeling tool was also used to 

project temperature and sea level rise under different emissions scenarios in the Third and 

Fourth Assessments of the Intergovernmental Panel on Climate Change (IPCC). 

GHG emissions reductions from Section III.F.1 were applied as net reductions to 

a peer reviewed global reference case (or baseline) emissions scenario to generate an 

emissions scenario specific to this action. For the scenario related to this action, all 

 

319 The National Research Council (NRC) 2001 study, Climate Change Science: An Analysis of Some Key 

Questions, defines climate sensitivity as the sensitivity of the climate system to a forcing is commonly 

expressed in terms of the global mean temperature change that would be expected after a time sufficiently 

long enough for both the atmosphere and ocean to come to equilibrium with the change in climate forcing. 

320 To capture some of the uncertainty in the climate system, the changes in atmospheric CO2, projected 

temperatures and sea level were estimated across the most current Intergovernmental Panel on Climate 

Change (IPCC) range of climate sensitivities, 1.5°C to 6.0°C. 

Deleted: this 

Deleted: has provided 

Deleted: and 
349 

emissions reductions were assumed to begin in 2012, with zero emissions change in 2011 

(from the reference case) followed by emissions linearly increasing to equal the value 

supplied in Section III.F.1 for 2020 and then continuing to 2100. Details about the 

reference case scenario and how the emissions reductions were applied to generate the 

scenario can be found in the RIA Chapter 7. 

Changes in atmospheric CO2 concentration, temperature, and sea-level for both 

the reference case and the emissions scenarios associated with this action were computed 

using MAGICC. To compute the reductions in the atmospheric CO2 concentrations as 

well as in temperature and sea level resulting from this action, the output from the 

scenario associated with this final rule was subtracted from an existing Global Change 

Assessment Model (GCAM, formerly MiniCAM) reference emission scenario. To 

capture some key uncertainties in the climate system with the MAGICC model, changes 

in temperature and sea-level rise were projected across the most current IPCC range for 

climate sensitivities which ranges from 1.5°C to 6.0°C (representing the 90% confidence 

interval).321 This wide range reflects the uncertainty in this measure of how much the 

global mean temperature would rise if the concentration of carbon dioxide in the 

atmosphere were to double. Details about this modeling analysis can be found in the RIA 

Chapter 7.4. 

The results of this modeling, summarized in Table III.F.3-1, show small, but 

quantifiable, reductions in atmospheric CO2 concentrations, projected global mean 

surface temperature and sea level resulting from this action, across all climate 

sensitivities. As a result of the emission reductions from this action, the atmospheric CO2

concentration is projected to be reduced by an average of 2.9 parts per million (ppm), the 

global mean temperature is projected to be reduced by approximately 0.006-0.015°C by 

2100, and global mean sea level rise is projected to be reduced by approximately 0.06-

0.14cm by 2100. The reductions are small relative to the IPCC’s 2100 “best estimates” 

for global mean temperature increases (1.8 – 4.0oC) and sea level rise (0.20-0.59m) for all 

global GHG emissions sources for a range of emissions scenarios. EPA used a peer 

reviewed model, the MAGICC model, to do this analysis. This analysis is specific to this 

rule and therefore does not come from previously published work. Further discussion of 

EPA’s modeling analysis is found in the final RIA.

Table III.F.3-1 Effect of GHG Emissions Reductions On Projected Changes in Global 

Climate for the Final Vehicles Rulemaking (for climate sensitivities ranging from 1.5-

6°C)

Measure Units Year Projected Change 

Atmospheric CO2

Concentration ppm 2100 -2.7-3.1

 

321 In IPCC reports, equilibrium climate sensitivity refers to the equilibrium change in the annual mean 

global surface temperature following a doubling of the atmospheric equivalent carbon dioxide 

concentration. The IPCC states that climate sensitivity is “likely” to be in the range of 2°C to 4.5°C, “very 

unlikely” to be less than 1.5°C, and “values substantially higher than 4.5°C cannot be excluded.” IPCC 

WGI, 2007, Climate Change 2007 - The Physical Science Basis, Contribution of Working Group I to the 

Fourth Assessment Report of the IPCC, http://www.ipcc.ch/ 
350 

Global Mean Surface 

Temperature o C 2100 -0.006-0.015

Sea Level Rise cm 2100 -0.06-0.14

Ocean pH pH units 2100 0.0015

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. Though the magnitude 

of the avoided climate change projected here is small, these reductions would represent a 

reduction in the adverse risks associated with climate change (though these risks were not 

formally estimated for this action) across all climate sensitivities. 

The IPCC322 has noted that ocean acidification due to the direct effects of 

elevated CO2 concentrations will impair a wide range of planktonic and other marine 

organisms that use aragonite to make their shells or skeletons. EPA used the Program 

CO2SYS,323 version 1.05 to estimate projected changes in tropical ocean pH based on the 

atmospheric CO2 concentration reductions resulting from this action and other specified 

input conditions (e.g., sea surface temperature characteristic of tropical waters). The 

program performs calculations relating parameters of the carbon dioxide (CO2) system in 

seawater. EPA used the program to calculate ocean pH as a function of atmospheric CO2, 

among other specified input conditions. Based on the projected atmospheric CO2

concentration reductions (average of 2.9 ppm by 2100) that would result from this rule, 

the program calculates an increase in ocean pH of about 0.0015 pH units in 2100. Thus, 

this analysis indicates the projected decrease in atmospheric CO2 concentrations from 

today’s rule would result in an increase in ocean pH. 

EPA’s analysis of the rule’s effect on global climate conditions is intended to 

quantify these potential reductions using the best available science. While EPA’s 

modeling results of the effect of this rule alone show small differences in climate effects 

(CO2 concentration, temperature, sea-level rise, ocean pH), when expressed in terms of 

global climate endpoints and global GHG emissions, they yield results that are repeatable 

and consistent within the modeling frameworks used. 

G. How Will the Standards Impact Non-GHG Emissions and Their 

Associated Effects? 

In addition to reducing the emissions of greenhouse gases, this rule will influence 

the emissions of “criteria” air pollutants and air toxics (i.e., hazardous air pollutants). 

 

322 Fischlin, A. et al. (2007) Ecosystems, their Properties, Goods, and Services. In: Climate Change 2007: 

Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report 

of the Intergovernmental Panel on Climate Change [M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der 

Linden and C.E. Hanson (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, 

NY, USA. 

323 Lewis, E., and D. W. R. Wallace. 1998. Program Developed for CO2 System Calculations. 

ORNL/CDIAC-105. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. 

Department of Energy, Oak Ridge, Tennessee. 
351 

The criteria air pollutants include carbon monoxide (CO), fine particulate matter 

(PM2.5), sulfur dioxide (SOX) and the ozone precursors hydrocarbons (VOC) and oxides 

of nitrogen (NOX); the air toxics include benzene, 1,3-butadiene, formaldehyde, 

acetaldehyde, and acrolein. Our estimates of these non-GHG emission impacts from the 

GHG program are shown by pollutant in Table III.G-1 and Table III.G-2 in total, and 

broken down by the two drivers of these changes: a) “upstream” emission reductions due 

to decreased extraction, production and distribution of motor gasoline; and b) 

“downstream” emission increases, reflecting the effects of VMT rebound (discussed in 

Sections III.F and III.H) and the effects of our assumptions about ethanol-blended fuel 

(E10), as discussed below. Total program impacts on criteria and toxics emissions are 

discussed below, followed by individual discussions of the upstream and downstream 

impacts. Those are followed by discussions of the effects on air quality, health, and other 

environmental concerns. 

As in the proposal, for this analysis we attribute decreased fuel consumption from 

this program to gasoline only, while assuming no effect on volumes of ethanol and other 

renewable fuels because they are mandated under the Renewable Fuel Standard (RFS2). 

However, because this rule does not assume RFS2 volumes of ethanol in the baseline, the 

result is a greater projected market share of E10 in the control case.

324 In fact, the GHG 

standards will not be affecting the market share of E10, because EPA’s analysis for the 

RFS2 rule predicts 100% E10 penetration by 2014.325

The amount of E10 affects downstream non-GHG emissions. In the proposal, 

EPA stated these same fuel assumptions and qualitatively noted that there were likely 

unquantified impacts on non-GHG emissions between the two cases. In DRIA Chapter 5, 

EPA indicated its plans to quantify these impacts in the air quality modeling and in the 

final rule inventories. Upstream emission impacts depend only on fuel volumes, so the 

impacts presented here reflect only the reduced gasoline consumption. 

The inventories presented in this rulemaking include an analysis of these fuel 

effects which was conducted using EPA’s Motor Vehicle Emission Simulator 

(MOVES2010). The most notable impact, although still relatively slight, is a 2.2 percent 

increase in 2030 in national acetaldehyde emissions over the baseline scenario. It should 

be noted that these emission impacts are not due to the new GHG vehicle standards. 

These impacts are instead a consequence of the assumed ethanol volumes. This program 

does not mandate an increase in E10, nor any particular fuel blend. The emission impact 

of this shift was also modeled in the RFS2 rule. 

As shown in Table III.G-1, EPA estimates that this program would result in 

reductions of NOX, VOC, PM and SOX, but would increase CO emissions. For NOx,

 

324 When this rule’s analysis was initiated, the RFS2 rule was not yet final. Therefore, it assumes the 

ethanol volumes in Annual Energy Outlook 2007 (U.S. Energy Information Administration, Annual Energy 

Outlook 2007, Transportation Demand Sector Supplemental Table. 

http://www.eia.doe.gov/oiaf/archive/aeo07/supplement/index.html)

325 EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. EPA-420-R-10-

006. February 2010. Docket EPA-HQ-OAR-2009-0472-11332. See also 75 FR 14670, March 26, 2010.

Deleted: an increased market share 

Deleted: 10 percent

Deleted: 

Deleted: . Since the absolute volume

Deleted: renewable fuel components 

used in the gasoline pool is mandated

Deleted: , which

Deleted: 

Deleted: The emission model results 

indicate that increased E10 market share 

has some effect on fleetwide average 

non-GHG emission rates. 

Deleted: estimated as a consequence of 

an assumed constant ethanol volume in 

the face of reduced gasoline volumes 

which result from

Deleted: ; in actuality this rule will not 

be the driver of this shift.
352 

VOC, and PM we estimate net reductions because the emissions reductions from 

upstream sources are larger than the emission increases due to downstream sources. In 

the case of CO, we estimate slight emission increases, because there are relatively small 

reductions in upstream emissions, and thus the projected downstream emission increases 

are greater than the projected emission decreases due to reduced fuel production. For 

SOx, downstream emissions are roughly proportional to fuel consumption, therefore a 

decrease is seen in both upstream and downstream sources. 

 For all criteria pollutants the overall impact of the program would be relatively 

small compared to total U.S. inventories across all sectors. In 2030, EPA estimates the 

program would reduce total NOX, PM and SOX inventories by 0.1 to 0.8 percent and 

reduce the VOC inventory by 1.0 percent, while increasing the total national CO 

inventory by 0.6 percent. 

As shown in Table III.G-2, EPA estimates that the GHG program would result in 

small changes for air toxic emissions compared to total U.S. inventories across all 

sectors. In 2030, EPA estimates the program would reduce total benzene and 1,3 

butadiene emissions by 0.1 to 0.3 percent. Total acrolein and formaldehyde emissions 

would increase by 0.1 percent. Acetaldehyde emissions would increase by 2.2 percent. 

One commenter requested that EPA present emission inventories for additional air 

toxics. EPA is presenting inventories for certain air toxic emissions which were 

identified as key national and regional-scale cancer and noncancer risk drivers in past 

National Air Toxics Assessments (NATA). For additional details, please refer to the 

Response to Comments document.326 

Other factors which may impact non-GHG emissions, but are not estimated in this 

analysis, include: 

• Vehicle technologies used to reduce tailpipe CO2 emissions; because the 

regulatory standards for non-GHG emissions are the primary driver for these 

emissions, EPA expects the impact of this program to be negligible on non-GHG 

emission rates per mile. 

• The potential for increased market penetration of diesel vehicles; because these 

vehicles would be held to the same certification and in-use standards for criteria 

pollutants as their gasoline counterparts, EPA expects their impact to be 

negligible on criteria pollutants and other non-GHG emissions. EPA does not 

project increased penetration of diesels as necessary to meet the GHG standards. 

• Early introduction of electric vehicles and plug-in hybrid electric vehicles, which 

would reduce criteria emissions in cases where those vehicles are able to be 

certified to lower certification standards. This would also likely reduce gaseous 

air toxics. 

• Reduced refueling emissions due to less frequent refueling events and reduced 

annual refueling volumes resulting from the GHG standards. 

 

326 U.S. EPA. National Air Toxics Assessment. 2002, 1999, and 1996. Available at: 

http://www.epa.gov/nata/ 
353 

• Increased hot soak evaporative emissions due to the likely increase in number of 

trips associated with VMT rebound modeled in this rule. 

Table III.G-1 Annual Criteria Emission Impacts of Program (short tons) 

 Total Impacts Upstream Impacts Downstream Impacts 

 2020 2030 2020 2030 2020 2030 

VOC -60,187 -115,542 -64,506 -126,749 4,318 11,207 

 % of total 

inventory -0.51% -1.01% -0.55% -1.11% 0.04% 0.01% 

CO 3,992 170,675 -6,165 -12,113 10,156 182,788 

 % of total 

inventory 0.01% 0.56% -0.02% -0.04% 0.01% 0.6% 

NOX -5,881 -21,763 -19,291 -37,905 13,410 16,143 

 % of total 

inventory -0.02 -0.07% -0.06% -0.12% 0.04% 0.05% 

PM2.5 -2,398 -4,564 -2,629 -5,165 231.0 602.3 

 % of total 

inventory -0.03% -0.05% -0.03% -0.06% 0.00% 0.01% 

SOX -13,832 -27,443 -11,804 -23,194 -2,027 -4,249 

 % of total 

inventory -0.41% -0.82% -0.35% -0.69% -0.06% -0.13% 

Table III.G-2 Annual Air Toxic Emission Impacts of Program (short tons) 

 Total Impacts Upstream Impacts Downstream Impacts 

 2020 2030 2020 2030 2020 2030 

1,3-Butadiene -95 -21 -1.5 -3.0 -93.6 -18.1 

 % of total 

inventory -0.38% -0.10% -0.01% -0.01% -0.37% -0.09% 

Acetaldehyde 760 668 -6.8 -13.4 766.9 681.5 

 % of total 

inventory 2.26% 2.18% -0.02% -0.04% 2.28% 2.22% 

Acrolein 1 5 -0.9 -1.8 1.7 6.5 

 % of total 

inventory 0.01% 0.07% -0.01% -0.03% 0.03% 0.10% 

Benzene -890 -523 -139.6 -274.3 -750.0 -248.3 

 % of total 

inventory -0.48% -0.29% -0.08% -0.15% -0.40% -0.14% 

Formaldehyde -49 15 -51.4 -101.0 2.1 116.3 

 % of total 

inventory -0.06% 0.02% -0.06% -0.12% 0.00% 0.14% 

1. Upstream Impacts of Program 

 

No substantive comments were received on the upstream inventory modeling used 

in the proposal. The rulemaking inventories were updated with the revised estimates of 

fuel savings as detailed in Section III.F. 

 

Reducing tailpipe CO2 emissions from light-duty cars and trucks through tailpipe 

standards and improved A/C efficiency will result in reduced fuel demand and reductions 
354 

in the emissions associated with all of the processes involved in getting petroleum to the 

pump. These upstream emission impacts on criteria pollutants are summarized in Table 

III.G-1. The upstream reductions grow over time as the fleet turns over to cleaner CO2

vehicles, so that by 2030 VOC would decrease by 127,000 tons, NOX by 38,000 tons, and 

PM2.5 by 5,000 tons. Table III.G-2 shows the corresponding impacts on upstream air 

toxic emissions in 2030. Formaldehyde decreases by 101 tons, benzene by 274 tons, 

acetaldehyde by 13 tons, acrolein by 2 tons, and 1,3-butadiene by 3 tons. 

To determine these impacts, EPA estimated the impact of reduced petroleum 

volumes on the extraction and transportation of crude oil as well as the production and 

distribution of finished gasoline. For the purpose of assessing domestic-only emission 

reductions it was necessary to estimate the fraction of fuel savings attributable to 

domestic finished gasoline, and of this gasoline what fraction is produced from domestic 

crude. For this analysis EPA estimated that 50 percent of fuel savings is attributable to 

domestic finished gasoline and that 90 percent of this gasoline originated from imported 

crude. Emission factors for most upstream emission sources are based on the GREET1.8 

model, developed by DOE’s Argonne National Laboratory,327 but in some cases the 

GREET values were modified or updated by EPA to be consistent with the National 

Emission Inventory (NEI).328 The primary updates for this analysis were to incorporate 

newer information on gasoline distribution emissions for VOC from the NEI, which were 

significantly higher than GREET estimates; and the incorporation of upstream emission 

factors for the air toxics estimated in this analysis: benzene, 1,3-butadiene, acetaldehyde, 

acrolein, and formaldehyde. The development of these emission factors is detailed in 

RIA Chapter 5. 

2. Downstream Impacts of Program

No substantive comments were received on the emission modeling or emission 

inventories presented in this section. However, two changes in modeling differentiate the 

analysis presented here from that presented in the proposal. Economic inputs such as fuel 

prices and vehicle sales were updated from AEO 2009 to AEO 2010 Early Release, and 

as described above, the effects of ethanol volume assumptions were explicitly modeled. 

Thus, the primary differences in non-GHG emissions between the proposed rule and final 

rule are attributed more to these changes in analytic inputs, and less to changes in the 

GHG standards program. 

 Downstream emission impacts attributable to this program are due to the VMT 

rebound effect and the ethanol volume assumptions. As discussed in more detail in 

Section III.H, the effect of fuel cost on VMT (“rebound”) was accounted for in our 

assessment of economic and environmental impacts of this rule. A 10 percent rebound 

case was used for this analysis, meaning that VMT for affected model years is modeled 

 

327 Greenhouse Gas, Regulated Emissions, and Energy Use in Transportation model (GREET), U.S. 

Department of Energy, Argonne National Laboratory, 

http://www.transportation.anl.gov/modeling_simulation/GREET/ 

328 U.S. EPA. 2002 National Emissions Inventory (NEI) Data and Documentation, 

http://www.epa.gov/ttn/chief/net/2002inventory.html . 

Deleted: fuel supplies were updated to 

include 

Deleted: increased market share of E10 

fuel in the control case.

Deleted: modeled change in fuel 

supply.
355 

as increasing by 10 percent as much as the increase in fuel economy; i.e., a 10 percent 

increase in fuel economy would yield approximately a 1 percent increase in VMT. 

 As detailed in the introduction to this section, fuel composition also has effects on 

vehicle emissions and particularly air toxics. The relationship between fuel composition 

and emission impacts used in MOVES2010 and applied in this analysis match those 

developed for the recent Renewable Fuels Standard (RFS2) requirement, and are 

extensively documented in the RFS2 RIA and supporting documents.329 

 

Downstream emission impacts of the rebound effect are summarized in Table 

III.G-1 for criteria pollutants and precursors and Table III.G-2 for air toxics. The 

emission impacts from the rebound effect and the change in fuel supply grow over time 

as the fleet turns over to cleaner CO2 vehicles, so that by 2030 VOC would increase by 

11,000 tons, NOX by 16,000 tons, and PM2.5 by 600 tons. Table III.G-2 shows the 

corresponding impacts on air toxic emissions. These impacts in 2030 include 18 fewer 

tons of 1,3-butadiene, 668 additional tons of acetaldehyde, 248 fewer tons of benzene, 

116 additional tons of formaldehyde, and 6.5 additional tons of acrolein. 

For this analysis, MOVES2010 was used to estimate base VOC, CO, NOX, PM 

and air toxics emissions for both control and reference cases. Rebound emissions from 

light duty cars and trucks were then calculated using the OMEGA model post-processor 

and added to the control case. A more complete discussion of the inputs, methodology, 

and results is contained in RIA Chapter 5. 

3. Health Effects of Non-GHG Pollutants

In this section we discuss health effects associated with exposure to some of the 

criteria and air toxics impacted by the vehicle standards; PM, ozone, NOX and SOX, CO 

and air toxics. No substantive comments were received on the health effects of non-GHG 

pollutants. 

a. Particulate Matter 

i. Background

Particulate matter is a generic term for a broad class of chemically and physically 

diverse substances. It can be principally characterized as discrete particles that exist in the 

condensed (liquid or solid) phase spanning several orders of magnitude in size. Since 

1987, EPA has delineated that subset of inhalable particles small enough to penetrate to 

the thoracic region (including the tracheobronchial and alveolar regions) of the 

respiratory tract (referred to as thoracic particles). Current NAAQS use PM2.5 as the 

indicator for fine particles (with PM2.5 referring to particles with a nominal mean 

aerodynamic diameter less than or equal to 2.5 μm), and use PM10 as the indicator for 

purposes of regulating the coarse fraction of PM10 (referred to as thoracic coarse particles 

 

329 EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. EPA-420-R-10-

006. February 2010. Docket EPA-HQ-OAR-2009-0472-11332. See also 75 FR 14670, March 26, 2010
356 

or coarse-fraction particles; generally including particles with a nominal mean 

aerodynamic diameter greater than 2.5 μm and less than or equal to 10 μm, or PM10-2.5). 

Ultrafine particles are a subset of fine particles, generally less than 100 nanometers (0.1 

μm) in aerodynamic diameter. 

Fine particles are produced primarily by combustion processes and by 

transformations of gaseous emissions (e.g., SOX, NOX and VOC) in the atmosphere. The 

chemical and physical properties of PM2.5 may vary greatly with time, region, 

meteorology, and source category. Thus, PM2.5 may include a complex mixture of 

different pollutants including sulfates, nitrates, organic compounds, elemental carbon and 

metal compounds. These particles can remain in the atmosphere for days to weeks and 

travel hundreds to thousands of kilometers. 

ii. Health Effects of PM

Scientific studies show ambient PM is associated with a series of adverse health 

effects. These health effects are discussed in detail in EPA’s Integrated Science 

Assessment for Particulate Matter (ISA).330 Further discussion of health effects 

associated with PM can also be found in the RIA for this rule. The ISA summarizes 

evidence associated with PM2.5, PM10-2.5, and ultrafine particles (UFPs). 

The ISA concludes that health effects associated with short-term exposures (hours 

to days) to ambient PM2.5 include non-fatal cardiovascular effects, mortality, and 

respiratory effects, such as exacerbation of asthma symptoms in children and hospital 

admissions and emergency department visits for chronic obstructive pulmonary disease 

(COPD) and respiratory infections.331 The ISA notes that long-term exposure to PM2.5

(months to years) is associated with the development/progression of cardiovascular 

disease, premature mortality, and respiratory effects, including reduced lung function 

growth, increased respiratory symptoms, and asthma development.332 The ISA concludes 

that that the currently available scientific evidence from epidemiologic, controlled human 

exposure studies, and toxicological studies supports that a causal association exists 

between short- and long-term exposures to PM2.5 and cardiovascular effects and 

mortality. Furthermore, the ISA concludes that the collective evidence supports likely 

causal associations between short- and long-term PM2.5 exposures and respiratory effects. 

The ISA also concludes that the evidence is suggestive of a causal association for 

 

330 U.S. EPA (2009) Integrated Science Assessment for Particulate Matter. EPA 600/R-08/139F, Docket 

EPA-HQ-OAR-2009-0472-11295 

331 U.S. EPA (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. Section 2.3.1.1. 

332 U.S. EPA (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. page 2-12, Sections 

7.3.1.1 and 7.3.2.1. 
357 

reproductive and developmental effects and cancer, mutagenicity, and genotoxicity and 

long-term exposure to PM2.5.

333

For PM10-2.5, the ISA concludes that the current evidence is suggestive of a causal 

relationship between short-term exposures and cardiovascular effects, such as 

hospitalization for ischemic heart disease. There is also suggestive evidence of a causal 

relationship between short-term PM10-2.5 exposure and mortality and respiratory effects. 

Data are inadequate to draw conclusions regarding the health effects associated with 

long-term exposure to PM10-2.5.

334

 

For UFPs, the ISA concludes that there is suggestive evidence of a causal 

relationship between short-term exposures and cardiovascular effects, such as changes in 

heart rhythm and blood vessel function. It also concludes that there is suggestive 

evidence of association between short-term exposure to UFPs and respiratory effects. 

Data are inadequate to draw conclusions regarding the health effects associated with 

long-term exposure to UFP’s.335

b. Ozone 

i. Background 

Ground-level ozone pollution is typically formed by the reaction of VOC and 

NOX in the lower atmosphere in the presence of heat and sunlight. These pollutants, 

often referred to as ozone precursors, are emitted by many types of pollution sources, 

such as highway and nonroad motor vehicles and engines, power plants, chemical plants, 

refineries, makers of consumer and commercial products, industrial facilities, and smaller 

area sources. 

The science of ozone formation, transport, and accumulation is complex.336 

Ground-level ozone is produced and destroyed in a cyclical set of chemical reactions, 

many of which are sensitive to temperature and sunlight. When ambient temperatures 

and sunlight levels remain high for several days and the air is relatively stagnant, ozone 

and its precursors can build up and result in more ozone than typically occurs on a single 

high-temperature day. Ozone can be transported hundreds of miles downwind from 

precursor emissions, resulting in elevated ozone levels even in areas with low local VOC 

or NOX emissions. 

ii. Health Effects of Ozone 

 

333 U.S. EPA (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. Section 2.3.2. 

334 U.S. EPA (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. Section 2.3.4, Table 2-6. 

335 U.S. EPA (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. Section 2.3.5, Table 2-6. 

336 U.S. EPA. (2006). Air Quality Criteria for Ozone and Related Photochemical Oxidants (Final). 

EPA/600/R-05/004aF-cF. Washington, DC: U.S. EPA. Docket EPA-HQ-OAR-2009-0472-0099 through -

0101. 
358 

The health and welfare effects of ozone are well documented and are assessed in 

EPA’s 2006 Air Quality Criteria Document (ozone AQCD) and 2007 Staff Paper.337, 338 

Ozone can irritate the respiratory system, causing coughing, throat irritation, and/or 

uncomfortable sensation in the chest. Ozone can reduce lung function and make it more 

difficult to breathe deeply; breathing may also become more rapid and shallow than 

normal, thereby limiting a person’s activity. Ozone can also aggravate asthma, leading to 

more asthma attacks that require medical attention and/or the use of additional 

medication. In addition, there is suggestive evidence of a contribution of ozone to 

cardiovascular-related morbidity and highly suggestive evidence that short-term ozone 

exposure directly or indirectly contributes to non-accidental and cardiopulmonary-related 

mortality, but additional research is needed to clarify the underlying mechanisms causing 

these effects. In a recent report on the estimation of ozone-related premature mortality 

published by the National Research Council (NRC), a panel of experts and reviewers 

concluded that short-term exposure to ambient ozone is likely to contribute to premature 

deaths and that ozone-related mortality should be included in estimates of the health 

benefits of reducing ozone exposure.339 Animal toxicological evidence indicates that 

with repeated exposure, ozone can inflame and damage the lining of the lungs, which 

may lead to permanent changes in lung tissue and irreversible reductions in lung function. 

People who are more susceptible to effects associated with exposure to ozone can include 

children, the elderly, and individuals with respiratory disease such as asthma. Those with 

greater exposures to ozone, for instance due to time spent outdoors (e.g., children and 

outdoor workers), are of particular concern. 

The 2006 ozone AQCD also examined relevant new scientific information that 

has emerged in the past decade, including the impact of ozone exposure on such health 

effects as changes in lung structure and biochemistry, inflammation of the lungs, 

exacerbation and causation of asthma, respiratory illness-related school absence, hospital 

admissions and premature mortality. Animal toxicological studies have suggested 

potential interactions between ozone and PM with increased responses observed to 

mixtures of the two pollutants compared to either ozone or PM alone. The respiratory 

morbidity observed in animal studies along with the evidence from epidemiologic studies 

supports a causal relationship between acute ambient ozone exposures and increased 

respiratory-related emergency room visits and hospitalizations in the warm season. In 

addition, there is suggestive evidence of a contribution of ozone to cardiovascular-related 

morbidity and non-accidental and cardiopulmonary mortality. 

c. NOX and SOX 

 

337 U.S. EPA.(2006). Air Quality Criteria for Ozone and Related Photochemical Oxidants (Final). 

EPA/600/R-05/004aF-cF. Washington, DC: U.S. EPA.

338 U.S. EPA. (2007). Review of the National Ambient Air Quality Standards for Ozone: Policy 

Assessment of Scientific and Technical Information, OAQPS Staff Paper. EPA-452/R-07-003. 

Washington, DC, U.S. EPA. Docket EPA-HQ-OAR-2009-0472-0105 through -0106. 

339 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits 

from Controlling Ozone Air Pollution. The National Academies Press: Washington, D.C. Docket EPAHQ-OAR-2009-0472-0322. 
359 

i. Background 

Nitrogen dioxide (NO2) is a member of the NOX family of gases. Most NO2 is 

formed in the air through the oxidation of nitric oxide (NO) emitted when fuel is burned 

at a high temperature. SO2, a member of the sulfur oxide (SOX) family of gases, is 

formed from burning fuels containing sulfur (e.g., coal or oil derived), extracting gasoline 

from oil, or extracting metals from ore. 

SO2 andNO2 can dissolve in water vapor and further oxidize to form sulfuric and 

nitric acid which react with ammonia to form sulfates and nitrates, both of which are 

important components of ambient PM. The health effects of ambient PM are discussed in 

Section III.G.3.a of this preamble. NOX along with non-methane hydrocarbon (NMHC) 

are the two major precursors of ozone. The health effects of ozone are covered in Section 

III.G.3.b. 

ii. Health Effects of NO2

Information on the health effects of NO2 can be found in the EPA Integrated 

Science Assessment (ISA) for Nitrogen Oxides.340 The EPA has concluded that the 

findings of epidemiologic, controlled human exposure, and animal toxicological studies 

provide evidence that is sufficient to infer a likely causal relationship between respiratory 

effects and short-term NO2 exposure. The ISA concludes that the strongest evidence for 

such a relationship comes from epidemiologic studies of respiratory effects including 

symptoms, emergency department visits, and hospital admissions. The ISA also draws 

two broad conclusions regarding airway responsiveness following NO2 exposure. First, 

the ISA concludes that NO2 exposure may enhance the sensitivity to allergen-induced 

decrements in lung function and increase the allergen-induced airway inflammatory 

response following 30-minute exposures of asthmatics to NO2 concentrations as low as 

0.26 ppm. In addition, small but significant increases in non-specific airway 

hyperresponsiveness were reported following 1-hour exposures of asthmatics to 0.1 ppm 

NO2. Second, exposure to NO2 has been found to enhance the inherent responsiveness of 

the airway to subsequent nonspecific challenges in controlled human exposure studies of 

asthmatic subjects. Enhanced airway responsiveness could have important clinical 

implications for asthmatics since transient increases in airway responsiveness following 

NO2 exposure have the potential to increase symptoms and worsen asthma control. 

Together, the epidemiologic and experimental data sets form a plausible, consistent, and 

coherent description of a relationship between NO2 exposures and an array of adverse 

health effects that range from the onset of respiratory symptoms to hospital admission. 

Although the weight of evidence supporting a causal relationship is somewhat 

less certain than that associated with respiratory morbidity, NO2 has also been linked to 

other health endpoints. These include all-cause (nonaccidental) mortality, hospital 

 

340 U.S. EPA (2008). Integrated Science Assessment for Oxides of Nitrogen – Health Criteria (Final 

Report). EPA/600/R-08/071. Washington, DC: U.S.EPA. Docket EPA-HQ-OAR-2009-0472-0350. 
360 

admissions or emergency department visits for cardiovascular disease, and decrements in 

lung function growth associated with chronic exposure. 

iii. Health Effects of SO2

Information on the health effects of SO2 can be found in the EPA Integrated 

Science Assessment for Sulfur Oxides.341 SO2 has long been known to cause adverse 

respiratory health effects, particularly among individuals with asthma. Other potentially 

sensitive groups include children and the elderly. During periods of elevated ventilation, 

asthmatics may experience symptomatic bronchoconstriction within minutes of exposure. 

Following an extensive evaluation of health evidence from epidemiologic and laboratory 

studies, the EPA has concluded that there is a causal relationship between respiratory 

health effects and short-term exposure to SO2. Separately, based on an evaluation of the 

epidemiologic evidence of associations between short-term exposure to SO2 and 

mortality, the EPA has concluded that the overall evidence is suggestive of a causal 

relationship between short-term exposure to SO2 and mortality. 

 d. Carbon Monoxide 

Information on the health effects of carbon monoxide (CO) can be found in the 

EPA Integrated Science Assessment (ISA) for Carbon Monoxide.342 The ISA concludes 

that ambient concentrations of CO are associated with a number of adverse health 

effects.343 This section provides a summary of the health effects associated with 

exposure to ambient concentrations of CO.344 

Human clinical studies of subjects with coronary artery disease show a decrease 

in the time to onset of exercise-induced angina (chest pain) and electrocardiogram 

changes following CO exposure. In addition, epidemiologic studies show associations 

between short-term CO exposure and cardiovascular morbidity, particularly increased 

emergency room visits and hospital admissions for coronary heart disease (including 

ischemic heart disease, myocardial infarction, and angina). Some epidemiologic 

evidence is also available for increased hospital admissions and emergency room visits 

for congestive heart failure and cardiovascular disease as a whole. The ISA concludes 

that a causal relationship is likely between short-term exposures to CO and 

cardiovascular morbidity. It also concludes that available data are inadequate to conclude 

 

341 U.S. EPA. (2008). Integrated Science Assessment (ISA) for Sulfur Oxides – Health Criteria (Final 

Report). EPA/600/R-08/047F. Washington, DC: U.S. Environmental Protection Agency. Docket EPA-HQOAR-2009-0472-0335. 

342 U.S. EPA, 2010. Integrated Science Assessment for Carbon Monoxide (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-09/019F, 2010. 

http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686 

343 The ISA evaluates the health evidence associated with different health effects, assigning one of five 

“weight of evidence” determination: causal relationship, likely to be a causal relationship, suggestive of a 

causal relationship, inadequate to infer a causal relationship, and not likely to be a causal relationship. For 

definitions of these levels of evidence, please refer to Section 1.6 of the ISA. 

344 Personal exposure includes contributions from many sources, and in many different environments. 

Total personal exposure to CO includes both ambient and nonambient components; and both components 

may contribute to adverse health effects. 
361 

that a causal relationship exists between long-term exposures to CO and cardiovascular 

morbidity. 

Animal studies show various neurological effects with in-utero CO exposure. 

Controlled human exposure studies report inconsistent neural and behavioral effects 

following low-level CO exposures. The ISA concludes the evidence is suggestive of a 

causal relationship with both short- and long-term exposure to CO and central nervous 

system effects. 

A number of epidemiologic and animal toxicological studies cited in the ISA have 

evaluated associations between preterm birth and cardiac birth defects and CO exposure. 

The epidemiologic studies provide limited evidence of a CO-induced effect on pre-term 

births and birth defects, with weak evidence for a decrease in birth weight. Animal 

toxicological studies have found associations between perinatal CO exposure and 

decrements in birth weight, as well as other developmental outcomes. The ISA 

concludes these studies are suggestive of a causal relationship between long-term 

exposures to CO and developmental effects and birth outcomes. 

Epidemiologic studies provide evidence of effects on respiratory morbidity such 

as changes in pulmonary function, respiratory symptoms, and hospital admissions 

associated with ambient CO concentrations. A limited number of epidemiologic studies 

considered copollutants such as ozone, SO2, and PM in two-pollutant models and found 

that CO risk estimates were generally robust, although this limited evidence makes it 

difficult to disentangle effects attributed to CO itself from those of the larger complex air 

pollution mixture. Controlled human exposure studies have not extensively evaluated the 

effect of CO on respiratory morbidity. Animal studies at levels of 50-100 ppm CO show 

preliminary evidence of altered pulmonary vascular remodeling and oxidative injury. 

The ISA concludes that the evidence is suggestive of a causal relationship between shortterm CO exposure and respiratory morbidity, and inadequate to conclude that a causal 

relationship exists between long-term exposure and respiratory morbidity. 

Finally, the ISA concludes that the epidemiologic evidence is suggestive of a 

causal relationship between short-term exposures to CO and mortality. Epidemiologic 

studies provide evidence of an association between short-term exposure to CO and 

mortality, but limited evidence is available to evaluate cause-specific mortality outcomes 

associated with CO exposure. In addition, the attenuation of CO risk estimates which 

was often observed in copollutant models contributes to the uncertainty as to whether CO 

is acting alone or as an indicator for other combustion-related pollutants. The ISA also 

concludes that there is not likely to be a causal relationship between relevant long-term 

exposures to CO and mortality. 

e. Air Toxics 

Motor vehicle emissions contribute to ambient levels of air toxics known or 

suspected as human or animal carcinogens, or that have noncancer health effects. The 

population experiences an elevated risk of cancer and other noncancer health effects from 
362 

exposure to the class of pollutants known collectively as “air toxics”. 345 These 

compounds include, but are not limited to, benzene, 1,3-butadiene, formaldehyde, 

acetaldehyde, acrolein, polycyclic organic matter (POM), and naphthalene. These 

compounds, except acetaldehyde, were identified as national or regional risk drivers in 

the 2002 National-scale Air Toxics Assessment (NATA) and have significant inventory 

contributions from mobile sources.346 Emissions and ambient concentrations of 

compounds are discussed in the RIA chapters on emission inventories and air quality 

(Chapters 5 and 7, respectively). 

i. Benzene

The EPA’s IRIS database lists benzene as a known human carcinogen (causing 

leukemia) by all routes of exposure, and concludes that exposure is associated with 

additional health effects, including genetic changes in both humans and animals and 

increased proliferation of bone marrow cells in mice.347,348,349 EPA states in its IRIS 

database that data indicate a causal relationship between benzene exposure and acute 

lymphocytic leukemia and suggest a relationship between benzene exposure and chronic 

non-lymphocytic leukemia and chronic lymphocytic leukemia. The International Agency 

for Research on Carcinogens (IARC) has determined that benzene is a human carcinogen 

and the U.S. Department of Health and Human Services (DHHS) has characterized 

benzene as a known human carcinogen.350,351 

A number of adverse noncancer health effects including blood disorders, such as 

preleukemia and aplastic anemia, have also been associated with long-term exposure to 

benzene.352,353 The most sensitive noncancer effect observed in humans, based on 

 

345 U. S. EPA. 2002 National-Scale Air Toxics Assessment. 

http://www.epa.gov/ttn/atw/nata12002/risksum.html Docket EPA-HQ-OAR-2009-0472-11322 

346 U.S. EPA .2009. National-Scale Air Toxics Assessment for 2002. http://www.epa.gov/ttn/atw/nata2002/ 

Docket EPA-HQ-OAR-2009-0472-11321 

347 U.S. EPA. 2000. Integrated Risk Information System File for Benzene. This material is available 

electronically at http://www.epa.gov/iris/subst/0276.htm. Docket EPA-HQ-OAR-2009-0472-1659. 348 International Agency for Research on Cancer (IARC). 1982. Monographs on the evaluation of 

carcinogenic risk of chemicals to humans, Volume 29. Some industrial chemicals and dyestuffs, World 

Health Organization, Lyon, France, p. 345-389. Docket EPA-HQ-OAR-2009-0472-0366 349 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, V.A. 1992. Synergistic action of the benzene 

metabolite hydroquinone on myelopoietic stimulating activity of granulocyte/macrophage colonystimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691-3695. Docket EPA-HQ-OAR-2009-0472-0370. 

350 International Agency for Research on Cancer (IARC). 1982. Monographs on the evaluation of 

carcinogenic risk of chemicals to humans, Volume 29. Some industrial chemicals and dyestuffs, World 

Health Organization, Lyon, France. Docket EPA-HQ-OAR-2009-0472-0366 351 U.S. Department of Health and Human Services National Toxicology Program 11th Report on 

Carcinogens available at: http://ntp.niehs.nih.gov/go/16183. 

352 Aksoy, M. (1989). Hematotoxicity and carcinogenicity of benzene. Environ. Health Perspect. 82: 193-

197. Docket EPA-HQ-OAR-2009-0472-0368. 

353 Goldstein, B.D. (1988). Benzene toxicity. Occupational medicine. State of the Art Reviews. 3: 541-554. 

Docket EPA-HQ-OAR-2009-0472-0325. 
363 

current data, is the depression of the absolute lymphocyte count in blood.354, 355 In 

addition, recent work, including studies sponsored by the Health Effects Institute (HEI), 

provides evidence that biochemical responses are occurring at lower levels of benzene 

exposure than previously known.356,357,358,359 EPA’s IRIS program has not yet evaluated 

these new data.

ii. 1,3-Butadiene

EPA has characterized 1,3-butadiene as carcinogenic to humans by 

inhalation.360,361 The IARC has determined that 1,3-butadiene is a human carcinogen and 

the U.S. DHHS has characterized 1,3-butadiene as a known human carcinogen.362,363 

There are numerous studies consistently demonstrating that 1,3-butadiene is metabolized 

into genotoxic metabolites by experimental animals and humans. The specific 

mechanisms of 1,3-butadiene-induced carcinogenesis are unknown; however, the 

scientific evidence strongly suggests that the carcinogenic effects are mediated by 

genotoxic metabolites. Animal data suggest that females may be more sensitive than 

 

354 Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, 

M.T. Smith, N. Titenko-Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes (1996) Hematotoxicity 

among Chinese workers heavily exposed to benzene. Am. J. Ind. Med. 29: 236-246. Docket EPA-HQOAR-2009-0472-0326. 

355 U.S. EPA (2002) Toxicological Review of Benzene (Noncancer Effects). Environmental Protection 

Agency, Integrated Risk Information System (IRIS), Research and Development, National Center for 

Environmental Assessment, Washington DC. This material is available electronically at 

http://www.epa.gov/iris/subst/0276.htm. Docket EPA-HQ-OAR-2009-0472-0327. 

356 Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.; Melikian, A.; Eastmond, D.; Rappaport, S.; Li, 

H.; Rupa, D.; Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok, E.; Li, Y.; Mu, 

R.; Xu, B.; Zhang, X.; Li, K. (2003) HEI Report 115, Validation & Evaluation of Biomarkers in Workers 

Exposed to Benzene in China. Docket EPA-HQ-OAR-2009-0472-0328. 

357 Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et al. (2002) Hematological changes among 

Chinese workers with a broad range of benzene exposures. Am. J. Industr. Med. 42: 275-285. Docket 

EPA-HQ-OAR-2009-0472-0329. 

358 Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. (2004) Hematotoxically in Workers Exposed to Low 

Levels of Benzene. Science 306: 1774-1776. Docket EPA-HQ-OAR-2009-0472-0330. 

359 Turtletaub, K.W. and Mani, C. (2003) Benzene metabolism in rodents at doses relevant to human 

exposure from Urban Air. Research Reports Health Effect Inst. Report No.113. Docket EPA-HQ-OAR2009-0472-0385. 

360 U.S. EPA (2002) Health Assessment of 1,3-Butadiene. Office of Research and Development, National 

Center for Environmental Assessment, Washington Office, Washington, DC. Report No. EPA600-P-98-

001F. This document is available electronically at http://www.epa.gov/iris/supdocs/buta-sup.pdf. Docket 

EPA-HQ-OAR-2009-0472-0386. 

361 U.S. EPA (2002) Full IRIS Summary for 1,3-butadiene (CASRN 106-99-0). Environmental Protection 

Agency, Integrated Risk Information System (IRIS), Research and Development, National Center for 

Environmental Assessment, Washington, DC http://www.epa.gov/iris/subst/0139.htm. Docket EPA-HQOAR-2009-0472-1660 

362 International Agency for Research on Cancer (IARC) (1999) Monographs on the evaluation of 

carcinogenic risk of chemicals to humans, Volume 71, Re-evaluation of some organic chemicals, hydrazine 

and hydrogen peroxide and Volume 97 (in preparation), World Health Organization, Lyon, France. Docket 

EPA-HQ-OAR-2009-0472-0387 

363 U.S. Department of Health and Human Services (2005) National Toxicology Program 11th Report on 

Carcinogens available at: ntp.niehs.nih.gov/index.cfm?objectid=32BA9724-F1F6-975E7FCE50709CB4C932. 
364 

males for cancer effects associated with 1,3-butadiene exposure; there are insufficient 

data in humans from which to draw conclusions about sensitive subpopulations. 1,3-

butadiene also causes a variety of reproductive and developmental effects in mice; no 

human data on these effects are available. The most sensitive effect was ovarian atrophy 

observed in a lifetime bioassay of female mice.364

iii. Formaldehyde 

Since 1987, EPA has classified formaldehyde as a probable human carcinogen 

based on evidence in humans and in rats, mice, hamsters, and monkeys.365 EPA is 

currently reviewing recently published epidemiological data. For instance, research 

conducted by the National Cancer Institute (NCI) found an increased risk of 

nasopharyngeal cancer and lymphohematopoietic malignancies such as leukemia among 

workers exposed to formaldehyde.366, 367 In an analysis of the lymphohematopoietic 

cancer mortality from an extended follow-up of these workers, NCI confirmed an 

association between lymphohematopoietic cancer risk and peak exposures.368 A recent 

National Institute of Occupational Safety and Health (NIOSH) study of garment workers 

also found increased risk of death due to leukemia among workers exposed to 

formaldehyde.369 Extended follow-up of a cohort of British chemical workers did not 

find evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a 

continuing statistically significant excess in lung cancers was reported.370 Recently, the 

IARC re-classified formaldehyde as a human carcinogen (Group 1).371 

Formaldehyde exposure also causes a range of noncancer health effects, including 

irritation of the eyes (burning and watering of the eyes), nose and throat. Effects from 

repeated exposure in humans include respiratory tract irritation, chronic bronchitis and 

 

364 Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996) Subchronic toxicity of 4-vinylcyclohexene in rats and 

mice by inhalation. Fundam. Appl. Toxicol. 32:1-10. Docket EPA-HQ-OAR-2009-0472-0388. 

365 U.S. EPA (1987) Assessment of Health Risks to Garment Workers and Certain Home Residents from 

Exposure to Formaldehyde, Office of Pesticides and Toxic Substances, April 1987. Docket EPA-HQ-OAR2009-0472-0389. 

366 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2003. Mortality from 

lymphohematopoetic malignancies among workers in formaldehyde industries. Journal of the National 

Cancer Institute 95: 1615-1623. Docket EPA-HQ-OAR-2009-0472-0336.

367 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2004. Mortality from solid 

cancers among workers in formaldehyde industries. American Journal of Epidemiology 159: 1117-1130. 

Docket EPA-HQ-OAR-2009-0472-0337.

368 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, 

M. 2009. Mortality from lymphohematopoietic malignancies among workers in formaldehyde industries: 

The National Cancer Institute cohort. J. National Cancer Inst. 101: 751-761. Docket EPA-HQ-OAR-2009-

0472-0338. 

369 Pinkerton, L. E. 2004. Mortality among a cohort of garment workers exposed to formaldehyde: an 

update. Occup. Environ. Med. 61: 193-200. Docket EPA-HQ-OAR-2009-0472-0339.

370 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended follow-up of a cohort of British chemical 

workers exposed to formaldehyde. J National Cancer Inst. 95:1608-1615. Docket EPA-HQ-OAR-2009-

0472-0340. 

371 International Agency for Research on Cancer (IARC). 2006. Formaldehyde, 2-Butoxyethanol and 1-tertButoxypropan-2-ol. Volume 88. (in preparation), World Health Organization, Lyon, France. Docket EPAHQ-OAR-2009-0472-1164 
365 

nasal epithelial lesions such as metaplasia and loss of cilia. Animal studies suggest that 

formaldehyde may also cause airway inflammation – including eosinophil infiltration into 

the airways. There are several studies that suggest that formaldehyde may increase the 

risk of asthma – particularly in the young.372,373 

iv. Acetaldehyde 

Acetaldehyde is classified in EPA’s IRIS database as a probable human 

carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, 

and intravenous routes.374 Acetaldehyde is reasonably anticipated to be a human 

carcinogen by the U.S. DHHS in the 11th Report on Carcinogens and is classified as 

possibly carcinogenic to humans (Group 2B) by the IARC.375,376 EPA is currently 

conducting a reassessment of cancer risk from inhalation exposure to acetaldehyde. 

The primary noncancer effects of exposure to acetaldehyde vapors include 

irritation of the eyes, skin, and respiratory tract.377 In short-term (4 week) rat studies, 

degeneration of olfactory epithelium was observed at various concentration levels of 

acetaldehyde exposure.378, 379 Data from these studies were used by EPA to develop an 

inhalation reference concentration. Some asthmatics have been shown to be a sensitive 

subpopulation to decrements in functional expiratory volume (FEV1 test) and 

bronchoconstriction upon acetaldehyde inhalation.380 The agency is currently conducting 

a reassessment of the health hazards from inhalation exposure to acetaldehyde. 

 

372 Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for 

Formaldehyde. Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. 

http://www.atsdr.cdc.gov/toxprofiles/tp111.html Docket EPA-HQ-OAR-2009-0472-1191. 

373 WHO (2002) Concise International Chemical Assessment Document 40: Formaldehyde. Published 

under the joint sponsorship of the United Nations Environment Programme, the International Labour 

Organization, and the World Health Organization, and produced within the framework of the InterOrganization Programme for the Sound Management of Chemicals. Geneva. Docket EPA-HQ-OAR-2009-

0472-1199. 

374 U.S. EPA. 1991. Integrated Risk Information System File of Acetaldehyde. Research and Development, 

National Center for Environmental Assessment, Washington, DC. This material is available electronically 

at http://www.epa.gov/iris/subst/0290.htm. Docket EPA-HQ-OAR-2009-0472-0390.

375 U.S. Department of Health and Human Services National Toxicology Program 11th Report on 

Carcinogens available at: ntp.niehs.nih.gov/index.cfm?objectid=32BA9724-F1F6-975E7FCE50709CB4C932. 

376 International Agency for Research on Cancer (IARC). 1999. Re-evaluation of some organic chemicals, 

hydrazine, and hydrogen peroxide. IARC Monographs on the Evaluation of Carcinogenic Risk of 

Chemical to Humans, Vol 71. Lyon, France. Docket EPA-HQ-OAR-2009-0472-0387 

377 U.S. EPA. 1991. Integrated Risk Information System File of Acetaldehyde. This material is available 

electronically at http://www.epa.gov/iris/subst/0290.htm. 

378 Appleman, L. M., R. A. Woutersen, V. J. Feron, R. N. Hooftman, and W. R. F. Notten. 1986. Effects 

of the variable versus fixed exposure levels on the toxicity of acetaldehyde in rats. J. Appl. Toxicol. 6: 331-

336. 

379 Appleman, L.M., R.A. Woutersen, and V.J. Feron. 1982. Inhalation toxicity of acetaldehyde in rats. I. 

Acute and subacute studies. Toxicology. 23: 293-297. Docket EPA-HQ-OAR-2009-0472-0392. 380 Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, T. 1993. Aerosolized acetaldehyde induces 

histamine-mediated bronchoconstriction in asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1): 940-3. Docket 

EPA-HQ-OAR-2009-0472-0408. 
366 

v. Acrolein

Acrolein is extremely acrid and irritating to humans when inhaled, with acute 

exposure resulting in upper respiratory tract irritation, mucus hypersecretion and 

congestion. The intense irritancy of this carbonyl has been demonstrated during 

controlled tests in human subjects, who suffer intolerable eye and nasal mucosal sensory 

reactions within minutes of exposure.381 These data and additional studies regarding 

acute effects of human exposure to acrolein are summarized in EPA’s 2003 IRIS Human 

Health Assessment for acrolein.382 Evidence available from studies in humans indicate 

that levels as low as 0.09 ppm (0.21 mg/m3

) for five minutes may elicit subjective 

complaints of eye irritation with increasing concentrations leading to more extensive eye, 

nose and respiratory symptoms.383 Lesions to the lungs and upper respiratory tract of 

rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein.384 

Acute exposure effects in animal studies report bronchial hyper-responsiveness.385 In a 

recent study, the acute respiratory irritant effects of exposure to 1.1 ppm acrolein were 

more pronounced in mice with allergic airway disease by comparison to non-diseased 

mice which also showed decreases in respiratory rate.386 Based on these animal data 

and demonstration of similar effects in humans (e.g., reduction in respiratory rate), 

individuals with compromised respiratory function (e.g., emphysema, asthma) are 

expected to be at increased risk of developing adverse responses to strong respiratory 

irritants such as acrolein. 

EPA determined in 2003 that the human carcinogenic potential of acrolein could 

not be determined because the available data were inadequate. No information was 

available on the carcinogenic effects of acrolein in humans and the animal data provided 

 

381 Sim VM, Pattle RE. Effect of possible smog irritants on human subjects JAMA165: 1980-2010, 1957. 

Docket EPA-HQ-OAR-2009-0472-0395. 

382 U.S. EPA (U.S. Environmental Protection Agency). (2003) Toxicological review of acrolein in support 

of summary information on Integrated Risk Information System (IRIS) National Center for Environmental 

Assessment, Washington, DC. EPA/635/R-03/003. Available online at: http://www.epa.gov/ncea/iris. 383 Weber-Tschopp, A; Fischer, T; Gierer, R; et al. (1977) Experimentelle reizwirkungen von Acrolein auf 

den Menschen. Int Arch Occup Environ Hlth 40(2):117-130. In German Docket EPA-HQ-OAR-2009-

0472-0394. 

384 Integrated Risk Information System File of Acrolein. Office of Research and Development, National 

Center for Environmental Assessment, Washington, DC. This material is available at 

http://www.epa.gov/iris/subst/0364.htm Docket EPA-HQ-OAR-2009-0472-0391. 

385 U.S. EPA (U.S. Environmental Protection Agency). (2003) Toxicological review of acrolein in support of 

summary information on Integrated Risk Information System (IRIS) National Center for Environmental 

Assessment, Washington, DC. EPA/635/R-03/003. Available online at: http://www.epa.gov/ncea/iris. 386 Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate sensory nerve-mediated respiratory 

responses to irritants in healthy and allergic airway-diseased mice. J Appl Physiol 94(4):1563-1571. Docket 

EPA-HQ-OAR-2009-0472-0396. 
367 

inadequate evidence of carcinogenicity.387 The IARC determined in 1995 that acrolein 

was not classifiable as to its carcinogenicity in humans.388

vi. Polycyclic Organic Matter (POM) 

POM is generally defined as a large class of organic compounds which have 

multiple benzene rings and a boiling point greater than 100 degrees Celsius. Many of the 

compounds included in the class of compounds known as POM are classified by EPA as 

probable human carcinogens based on animal data. One of these compounds, 

naphthalene, is discussed separately below. Polycyclic aromatic hydrocarbons (PAHs) 

are a subset of POM that contain only hydrogen and carbon atoms. A number of PAHs 

are known or suspected carcinogens. Recent studies have found that maternal exposures 

to PAHs (a subclass of POM) in a population of pregnant women were associated with 

several adverse birth outcomes, including low birth weight and reduced length at birth, as 

well as impaired cognitive development at age three.389,390 EPA has not yet evaluated 

these recent studies. 

vii. Naphthalene 

Naphthalene is found in small quantities in gasoline and diesel fuels. 

Naphthalene emissions have been measured in larger quantities in both gasoline and 

diesel exhaust compared with evaporative emissions from mobile sources, indicating it is 

primarily a product of combustion. EPA released an external review draft of a 

reassessment of the inhalation carcinogenicity of naphthalene based on a number of 

recent animal carcinogenicity studies.391 The draft reassessment completed external peer 

review.392 Based on external peer review comments received, additional analyses are 

being undertaken. This external review draft does not represent official agency opinion 

and was released solely for the purposes of external peer review and public comment. 

The National Toxicology Program listed naphthalene as "reasonably anticipated to be a 

 

387 U.S. EPA. 2003. Integrated Risk Information System File of Acrolein. Research and Development, 

National Center for Environmental Assessment, Washington, DC. This material is available at 

http://www.epa.gov/iris/subst/0364.htm 

388 International Agency for Research on Cancer (IARC). 1995. Monographs on the evaluation of 

carcinogenic risk of chemicals to humans, Volume 63. Dry cleaning, some chlorinated solvents and other 

industrial chemicals, World Health Organization, Lyon, France. Docket EPA-HQ-OAR-2009-0472-0393 389 Perera, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002) Effect of transplacental exposure to environmental 

pollutants on birth outcomes in a multiethnic population. Environ Health Perspect. 111: 201-205. Docket 

EPA-HQ-OAR-2009-0472-0372. 

390 Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Tang, D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; 

Camann, D.; Kinney, P. (2006) Effect of prenatal exposure to airborne polycyclic aromatic hydrocarbons 

on neurodevelopment in the first 3 years of life among inner-city children. Environ Health Perspect 114: 

1287-1292. Docket EPA-HQ-OAR-2009-0472-0373. 

391 U. S. EPA. 2004. Toxicological Review of Naphthalene (Reassessment of the Inhalation Cancer Risk), 

Environmental Protection Agency, Integrated Risk Information System, Research and Development, 

National Center for Environmental Assessment, Washington, DC. This material is available electronically 

at http://www.epa.gov/iris/subst/0436.htm. Docket EPA-HQ-OAR-2009-0472-0272. 392 Oak Ridge Institute for Science and Education. (2004). External Peer Review for the IRIS 

Reassessment of the Inhalation Carcinogenicity of Naphthalene. August 2004. 

http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=84403 Docket EPA-HQ-OAR-2009-0472-0273.
368 

human carcinogen" in 2004 on the basis of bioassays reporting clear evidence of 

carcinogenicity in rats and some evidence of carcinogenicity in mice.393 California EPA 

has released a new risk assessment for naphthalene, and the IARC has reevaluated 

naphthalene and re-classified it as Group 2B: possibly carcinogenic to humans.394 

Naphthalene also causes a number of chronic non-cancer effects in animals, including 

abnormal cell changes and growth in respiratory and nasal tissues.395

viii. Other Air Toxics

In addition to the compounds described above, other compounds in gaseous 

hydrocarbon and PM emissions from vehicles will be affected by this final rule. Mobile 

source air toxic compounds that would potentially be impacted include ethylbenzene, 

propionaldehyde, toluene, and xylene. Information regarding the health effects of these 

compounds can be found in EPA’s IRIS database.396

f. Exposure and Health Effects Associated with Traffic 

Populations who live, work, or attend school near major roads experience 

elevated exposure concentrations to a wide range of air pollutants, as well as higher risks 

for a number of adverse health effects. While the previous sections of this preamble have 

focused on the health effects associated with individual criteria pollutants or air toxics, 

this section discusses the mixture of different exposures near major roadways, rather than 

the effects of any single pollutant. As such, this section emphasizes traffic-related air 

pollution, in general, as the relevant indicator of exposure rather than any particular 

pollutant. 

 Concentrations of many traffic-generated air pollutants are elevated for up to 300-

500 meters downwind of roads with high traffic volumes.397 Numerous sources on roads 

contribute to elevated roadside concentrations, including exhaust and evaporative 

emissions, and resuspension of road dust and tire and brake wear. Concentrations of 

several criteria and hazardous air pollutants are elevated near major roads. Furthermore, 

different semi-volatile organic compounds and chemical components of particulate 

matter, including elemental carbon, organic material, and trace metals, have been 

reported at higher concentrations near major roads. 

 

393 National Toxicology Program (NTP). (2004). 11th Report on Carcinogens. Public Health Service, U.S. 

Department of Health and Human Services, Research Triangle Park, NC. Available from: http://ntpserver.niehs.nih.gov. 

394 International Agency for Research on Cancer (IARC). (2002). Monographs on the Evaluation of the 

Carcinogenic Risk of Chemicals for Humans. Vol. 82. Lyon, France. Docket EPA-HQ-OAR-2009-0472-

0274.

395 U. S. EPA. 1998. Toxicological Review of Naphthalene, Environmental Protection Agency, Integrated 

Risk Information System, Research and Development, National Center for Environmental Assessment, 

Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0436.htm 

396 U.S. EPA Integrated Risk Information System (IRIS) database is available at: www.epa.gov/iris 397 Zhou, Y.; Levy, J.I. (2007) Factors influencing the spatial extent of mobile source air pollution impacts: 

a meta-analysis. BMC Public Health 7: 89. doi:10.1186/1471-2458-7-89 
369 

 Populations near major roads experience greater risk of certain adverse health 

effects. The Health Effects Institute published a report on the health effects of trafficrelated air pollution.398 It concluded that evidence is “sufficient to infer the presence of a 

causal association” between traffic exposure and exacerbation of childhood asthma 

symptoms. The HEI report also concludes that the evidence is either “sufficient” or 

“suggestive but not sufficient” for a causal association between traffic exposure and new 

childhood asthma cases. A review of asthma studies by Salam et al. (2008) reaches 

similar conclusions.399 The HEI report also concludes that there is “suggestive” evidence 

for pulmonary function deficits associated with traffic exposure, but concluded that there 

is “inadequate and insufficient” evidence for causal associations with respiratory health 

care utilization, adult-onset asthma, COPD symptoms, and allergy. A review by Holguin 

(2008) notes that the effects of traffic on asthma may be modified by nutrition status, 

medication use, and genetic factors.400

 The HEI report also concludes that evidence is “suggestive” of a causal 

association between traffic exposure and all-cause and cardiovascular mortality. There is 

also evidence of an association between traffic-related air pollutants and cardiovascular 

effects such as changes in heart rhythm, heart attack, and cardiovascular disease. The 

HEI report characterizes this evidence as “suggestive” of a causal association, and an 

independent epidemiological literature review by Adar and Kaufman (2007) concludes 

that there is “consistent evidence” linking traffic-related pollution and adverse 

cardiovascular health outcomes.401

 Some studies have reported associations between traffic exposure and other health 

effects, such as birth outcomes (e.g., low birth weight) and childhood cancer. The HEI 

report concludes that there is currently “inadequate and insufficient” evidence for a 

causal association between these effects and traffic exposure. A review by RaaschouNielsen and Reynolds (2006) concluded that evidence of an association between 

childhood cancer and traffic-related air pollutants is weak, but noted the inability to draw 

firm conclusions based on limited evidence.402

 

There is a large population in the U.S. living in close proximity of major roads. 

According to the Census Bureau’s American Housing Survey for 2007, approximately 20 

million residences in the U.S., 15.6% of all homes, are located within 300 feet (91 m) of a 

highway with 4+ lanes, a railroad, or an airport.403 Therefore, at current population of 

 

398 HEI Panel on the Health Effects of Air Pollution. (2010) Traffic-related air pollution: a critical review 

of the literature on emissions, exposure, and health effects. [Online at www.healtheffects.org] 399 Salam, M.T.; Islam, T.; Gilliland, F.D. (2008) Recent evidence for adverse effects of residential 

proximity to traffic sources on asthma. Current Opin Pulm Med 14: 3-8. 

400 Holguin, F. (2008) Traffic, outdoor air pollution, and asthma. Immunol Allergy Clinics North Am 28: 

577-588. 

401 Adar, S.D.; Kaufman, J.D. (2007) Cardiovascular disease and air pollutants: evaluating and improving 

epidemiological data implicating traffic exposure. Inhal Toxicol 19: 135-149. 

402 Raaschou-Nielsen, O.; Reynolds, P. (2006) Air pollution and childhood cancer: a review of the 

epidemiological literature. Int J Cancer 118: 2920-2929. 

403 U.S. Census Bureau (2008) American Housing Survey for the United States in 2007. Series H-150 

(National Data), Table 1A-6. [Accessed at 

http://www.census.gov/hhes/www/housing/ahs/ahs07/ahs07.html on January 22, 2009] 
370 

approximately 309 million, assuming that population and housing similarly distributed, 

there are over 48 million people in the U.S. living near such sources. The HEI report also 

notes that in two North American cities, Los Angeles and Toronto, over 40% of each 

city’s population live within 500 meters of a highway or 100 meters of a major road. It 

also notes that about 33% of each city’s population resides within 50 meters of major 

roads. Together, the evidence suggests that a large U.S. population lives in areas with 

elevated traffic-related air pollution. 

 People living near roads are often socioeconomically disadvantaged. According 

to the 2007 American Housing Survey, a renter-occupied property is over twice as likely 

as an owner-occupied property to be located near a highway with 4+ lanes, railroad or 

airport. In the same survey, the median household income of rental housing occupants 

was less than half that of owner-occupants ($28,921/$59,886). Numerous studies in 

individual urban areas report higher levels of traffic-related air pollutants in areas with 

high minority or poor populations.404,405,406

 Students may also be exposed in situations where schools are located near major 

roads. In a study of nine metropolitan areas across the U.S., Appatova et al. (2008) found 

that on average greater than 33% of schools were located within 400 m of an Interstate, 

U.S., or state highway, while 12% were located within 100 m.407 The study also found 

that among the metropolitan areas studied, schools in the Eastern U.S. were more often 

sited near major roadways than schools in the Western U.S. 

 Demographic studies of students in schools near major roadways suggest that this 

population is more likely than the general student population to be of non-white race or 

Hispanic ethnicity, and more often live in low socioeconomic status locations. 408,409,410 

There is some inconsistency in the evidence, which may be due to different local 

development patterns and measures of traffic and geographic scale used in the studies.407 

4. Environmental Effects of Non-GHG Pollutants

 

404 Lena, T.S.; Ochieng, V.; Carter, M.; Holguín-Veras, J.; Kinney, P.L. (2002) Elemental carbon and 

PM2.5 levels in an urban community heavily impacted by truck traffic. Environ Health Perspect 110: 

1009-1015. 

405 Wier, M.; Sciammas, C.; Seto, E.; Bhatia, R.; Rivard, T. (2009) Health, traffic, and environmental 

justice: collaborative research and community action in San Francisco, California. Am J Public Health 99: 

S499-S504. 

406 Forkenbrock, D.J. and L.A. Schweitzer, Environmental Justice and Transportation Investment Policy. 

Iowa City: University of Iowa, 1997. 

407 Appatova, A.S.; Ryan, P.H.; LeMasters, G.K.; Grinshpun, S.A. (2008) Proximal exposure of public 

schools and students to major roadways: a nationwide U.S. survey. J Environ Plan Mgmt 

408 Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.; Ostro, B. (2004) Proximity of California 

public schools to busy roads. Environ Health Perspect 112: 61-66. 

409 Houston, D.; Ong, P.; Wu, J.; Winer, A. (2006) Proximity of licensed child care facilities to nearroadway vehicle pollution. Am J Public Health 96: 1611-1617. 

410 Wu, Y.; Batterman, S. (2006) Proximity of schools in Detroit, Michigan to automobile and truck traffic. 

J Exposure Sci Environ Epidemiol 16: 457-470. 
371 

In this section we discuss some of the environmental effects of PM and its 

precursors such as visibility impairment, atmospheric deposition, and materials damage 

and soiling, as well as environmental effects associated with the presence of ozone in the 

ambient air, such as impacts on plants, including trees, agronomic crops and urban 

ornamentals, and environmental effects associated with air toxics. No substantive 

comments were received on the environmental effects of non-GHG pollutants. 

a. Visibility 

Visibility can be defined as the degree to which the atmosphere is transparent to 

visible light.411 Visibility impairment is caused by light scattering and absorption by suspended 

particles and gases. Visibility is important because it has direct significance to people’s 

enjoyment of daily activities in all parts of the country. Individuals value good visibility 

for the well-being it provides them directly, where they live and work, and in places 

where they enjoy recreational opportunities. Visibility is also highly valued in significant 

natural areas, such as national parks and wilderness areas, and special emphasis is given 

to protecting visibility in these areas. For more information on visibility see the final 

2009 PM ISA.412

EPA is pursuing a two-part strategy to address visibility. First, EPA has 

concluded that PM2.5 causes adverse effects on visibility in various locations, depending 

on PM concentrations and factors such as chemical composition and average relative 

humidity, and has set secondary PM2.5 standards.413 The secondary PM2.5 standards act in 

conjunction with the regional haze program. The regional haze rule (64 FR 35714) was 

put in place in July 1999 to protect the visibility in mandatory class I federal areas. There 

are 156 national parks, forests and wilderness areas categorized as mandatory class I 

federal areas (62 FR 38680-81, July 18, 1997).414 Visibility can be said to be impaired in 

both PM2.5 nonattainment areas and mandatory class I federal areas. 

b. Plant and Ecosystem Effects of Ozone 

Elevated ozone levels contribute to environmental effects, with impacts to plants 

and ecosystems being of most concern. Ozone can produce both acute and chronic injury 

in sensitive species depending on the concentration level and the duration of the 

exposure. Ozone effects also tend to accumulate over the growing season of the plant, so 

that even low concentrations experienced for a longer duration have the potential to 

 

411 National Research Council, 1993. Protecting Visibility in National Parks and Wilderness Areas. 

National Academy of Sciences Committee on Haze in National Parks and Wilderness Areas. National 

Academy Press, Washington, DC. Docket EPA-HQ-OAR-2005-0161. This book can be viewed on the 

National Academy Press Website at http://www.nap.edu/books/0309048443/html/ 

412 U.S. EPA (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. Docket EPA-HQ-OAR2009-0472-11295. 

413 The existing annual primary and secondary PM2.5 standards have been remanded and are being 

addressed in the currently ongoing PM NAAQS review. 

414 These areas are defined in CAA section 162 as those national parks exceeding 6,000 acres, wilderness 

areas and memorial parks exceeding 5,000 acres, and all international parks which were in existence on 

August 7, 1977. 
372 

create chronic stress on vegetation. Ozone damage to plants includes visible injury to 

leaves and impaired photosynthesis, both of which can lead to reduced plant growth and 

reproduction, resulting in reduced crop yields, forestry production, and use of sensitive 

ornamentals in landscaping. In addition, the impairment of photosynthesis, the process 

by which the plant makes carbohydrates (its source of energy and food), can lead to a 

subsequent reduction in root growth and carbohydrate storage below ground, resulting in 

other, more subtle plant and ecosystems impacts. 

These latter impacts include increased susceptibility of plants to insect attack, 

disease, harsh weather, interspecies competition and overall decreased plant vigor. The 

adverse effects of ozone on forest and other natural vegetation can potentially lead to 

species shifts and loss from the affected ecosystems, resulting in a loss or reduction in 

associated ecosystem goods and services. Lastly, visible ozone injury to leaves can result 

in a loss of aesthetic value in areas of special scenic significance like national parks and 

wilderness areas. The final 2006 Ozone Air Quality Criteria Document presents more 

detailed information on ozone effects on vegetation and ecosystems. 

c. Atmospheric Deposition 

Wet and dry deposition of ambient particulate matter delivers a complex mixture 

of metals (e.g., mercury, zinc, lead, nickel, aluminum, cadmium), organic compounds 

(e.g., POM, dioxins, furans) and inorganic compounds (e.g., nitrate, sulfate) to terrestrial 

and aquatic ecosystems. The chemical form of the compounds deposited depends on a 

variety of factors including ambient conditions (e.g., temperature, humidity, oxidant 

levels) and the sources of the material. Chemical and physical transformations of the 

compounds occur in the atmosphere as well as the media onto which they deposit. These 

transformations in turn influence the fate, bioavailability and potential toxicity of these 

compounds. Atmospheric deposition has been identified as a key component of the 

environmental and human health hazard posed by several pollutants including mercury, 

dioxin and PCBs.415

Adverse impacts on water quality can occur when atmospheric contaminants 

deposit to the water surface or when material deposited on the land enters a waterbody 

through runoff. Potential impacts of atmospheric deposition to waterbodies include those 

related to both nutrient and toxic inputs. Adverse effects to human health and welfare 

can occur from the addition of excess nitrogen via atmospheric deposition. The nitrogennutrient enrichment contributes to toxic algae blooms and zones of depleted oxygen, 

which can lead to fish kills, frequently in coastal waters. Deposition of heavy metals or 

other toxics may lead to the human ingestion of contaminated fish, impairment of 

drinking water, damage to the marine ecology, and limits to recreational uses. Several 

 

415 U.S. EPA (2000) Deposition of Air Pollutants to the Great Waters: Third Report to Congress. Office of 

Air Quality Planning and Standards. EPA-453/R-00-0005. Docket EPA-HQ-OAR-2009-0472-0091. 
373 

studies have been conducted in U.S. coastal waters and in the Great Lakes Region in 

which the role of ambient PM deposition and runoff is investigated.416,417,418,419,420 

Atmospheric deposition of nitrogen and sulfur contributes to acidification, 

altering biogeochemistry and affecting animal and plant life in terrestrial and aquatic 

ecosystems across the U.S. The sensitivity of terrestrial and aquatic ecosystems to 

acidification from nitrogen and sulfur deposition is predominantly governed by geology. 

Prolonged exposure to excess nitrogen and sulfur deposition in sensitive areas acidifies 

lakes, rivers and soils. Increased acidity in surface waters creates inhospitable conditions 

for biota and affects the abundance and nutritional value of preferred prey species, 

threatening biodiversity and ecosystem function. Over time, acidifying deposition also 

removes essential nutrients from forest soils, depleting the capacity of soils to neutralize 

future acid loadings and negatively affecting forest sustainability. Major effects include a 

decline in sensitive forest tree species, such as red spruce (Picea rubens) and sugar maple 

(Acer saccharum), and a loss of biodiversity of fishes, zooplankton, and macro 

invertebrates.

In addition to the role nitrogen deposition plays in acidification, nitrogen 

deposition also leads to nutrient enrichment and altered biogeochemical cycling. In 

aquatic systems increased nitrogen can alter species assemblages and cause 

eutrophication. In terrestrial systems nitrogen loading can lead to loss of nitrogen 

sensitive lichen species, decreased biodiversity of grasslands, meadows and other 

sensitive habitats, and increased potential for invasive species. For a broader explanation 

of the topics treated here, refer to the description in Section 7.1.2 of the RIA. 

Adverse impacts on soil chemistry and plant life have been observed for areas 

heavily influenced by atmospheric deposition of nutrients, metals and acid species, 

resulting in species shifts, loss of biodiversity, forest decline and damage to forest 

productivity. Potential impacts also include adverse effects to human health through 

ingestion of contaminated vegetation or livestock (as in the case for dioxin deposition), 

reduction in crop yield, and limited use of land due to contamination. 

Atmospheric deposition of pollutants can reduce the aesthetic appeal of buildings 

and culturally important articles through soiling, and can contribute directly (or in 

 

416 U.S. EPA (2004) National Coastal Condition Report II. Office of Research and Development/ Office of 

Water. EPA-620/R-03/002. Docket EPA-HQ-OAR-2009-0472-0089. 

417 Gao, Y., E.D. Nelson, M.P. Field, et al. 2002. Characterization of atmospheric trace elements on PM2.5 

particulate matter over the New York-New Jersey harbor estuary. Atmos. Environ. 36: 1077-1086. Docket 

EPA-HQ-OAR-2009-0472-11297. 

418 Kim, G., N. Hussain, J.R. Scudlark, and T.M. Church. 2000. Factors influencing the atmospheric 

depositional fluxes of stable Pb, 210Pb, and 7Be into Chesapeake Bay. J. Atmos. Chem. 36: 65-79. 

Docket EPA-HQ-OAR-2009-0472-11299. 

419 Lu, R., R.P. Turco, K. Stolzenbach, et al. 2003. Dry deposition of airborne trace metals on the Los 

Angeles Basin and adjacent coastal waters. J. Geophys. Res. 108(D2, 4074): AAC 11-1 to 11-24. Docket 

EPA-HQ-OAR-2009-0472-11296. 

420 Marvin, C.H., M.N. Charlton, E.J. Reiner, et al. 2002. Surficial sediment contamination in Lakes Erie 

and Ontario: A comparative analysis. J. Great Lakes Res. 28(3): 437-450. Docket EPA-HQ-OAR-2009-

0472-11300. 
374 

conjunction with other pollutants) to structural damage by means of corrosion or erosion. 

Atmospheric deposition may affect materials principally by promoting and accelerating 

the corrosion of metals, by degrading paints, and by deteriorating building materials such 

as concrete and limestone. Particles contribute to these effects because of their 

electrolytic, hygroscopic, and acidic properties, and their ability to adsorb corrosive gases 

(principally sulfur dioxide). 

d. Environmental Effects of Air Toxics 

Fuel combustion emissions contribute to ambient levels of pollutants that 

contribute to adverse effects on vegetation. Volatile organic compounds (VOCs), some 

of which are considered air toxics, have long been suspected to play a role in vegetation 

damage.421 In laboratory experiments, a wide range of tolerance to VOCs has been 

observed.422 Decreases in harvested seed pod weight have been reported for the more 

sensitive plants, and some studies have reported effects on seed germination, flowering 

and fruit ripening. Effects of individual VOCs or their role in conjunction with other 

stressors (e.g., acidification, drought, temperature extremes) have not been well studied. 

In a recent study of a mixture of VOCs including ethanol and toluene on herbaceous 

plants, significant effects on seed production, leaf water content and photosynthetic 

efficiency were reported for some plant species.423 

Research suggests an adverse impact of vehicle exhaust on plants, which has in 

some cases been attributed to aromatic compounds and in other cases to nitrogen 

oxides.424, 425, 426 The impacts of VOCs on plant reproduction may have long-term 

implications for biodiversity and survival of native species near major roadways. Most of 

the studies of the impacts of VOCs on vegetation have focused on short-term exposure 

and few studies have focused on long-term effects of VOCs on vegetation and the 

potential for metabolites of these compounds to affect herbivores or insects. 

5. Air Quality Impacts of Non-GHG Pollutants

Air quality modeling was performed to assess the impact of the vehicle standards 

on criteria and air toxic pollutants. In this section, we present information on current 

 

421 U.S. EPA. 1991. Effects of organic chemicals in the atmosphere on terrestrial plants. EPA/600/3-91/001. 

Docket EPA-HQ-OAR-2009-0472-0401. 

422 Cape JN, ID Leith, J Binnie, J Content, M Donkin, M Skewes, DN Price AR Brown, AD Sharpe. 2003. 

Effects of VOCs on herbaceous plants in an open-top chamber experiment. Environ. Pollut. 124:341-343. 

Docket EPA-HQ-OAR-2009-0472-0357. 

423 Cape JN, ID Leith, J Binnie, J Content, M Donkin, M Skewes, DN Price AR Brown, AD Sharpe. 2003. 

Effects of VOCs on herbaceous plants in an open-top chamber experiment. Environ. Pollut. 124:341-343. 

Docket EPA-HQ-OAR-2009-0472-0357. 

424 Viskari E-L. 2000. Epicuticular wax of Norway spruce needles as indicator of traffic pollutant 

deposition. Water, Air, and Soil Pollut. 121:327-337. Docket EPA-HQ-OAR-2009-0472-1128. 

425 Ugrekhelidze D, F Korte, G Kvesitadze. 1997. Uptake and transformation of benzene and toluene by 

plant leaves. Ecotox. Environ. Safety 37:24-29. Docket EPA-HQ-OAR-2009-0472-1142. 426 Kammerbauer H, H Selinger, R Rommelt, A Ziegler-Jons, D Knoppik, B Hock. 1987. Toxic 

components of motor vehicle emissions for the spruce Picea abies. Environ. Pollut. 48:235-243. Docket 

EPA-HQ-OAR-2009-0472-0358. 
375 

modeled levels of pollution as well as projections for 2030, with respect to ambient 

PM2.5, ozone, selected air toxics, visibility levels and nitrogen and sulfur deposition. The 

air quality modeling results indicate that the GHG standards have relatively small but 

measureable impacts on ambient concentrations of these pollutants. The results are 

discussed in more detail below and in Section 7.2 of the RIA. No substantive comments 

were received on our plans for non-GHG air quality modeling that were detailed in the 

proposal for this rule. 

We used the Community Multi-scale Air Quality (CMAQ) photochemical model, 

version 4.7.1, for our analysis. This version of CMAQ includes a number of 

improvements to previous versions of the model. These improvements are discussed in 

Section 7.2 of the RIA. 

a. Particulate Matter 

i. Current Levels 

PM2.5 concentrations exceeding the level of the PM2.5 NAAQS occur in many 

parts of the country. In 2005, EPA designated 39 nonattainment areas for the 1997 PM2.5

NAAQS (70 FR 943, January 5, 2005). These areas are composed of 208 full or partial 

counties with a total population exceeding 88 million. The 1997 PM2.5 NAAQS was 

revised in 2006 and the 2006 24-hour PM2.5 NAAQS became effective on December 18, 

2006. On October 8, 2009, the EPA issued final nonattainment area designations for the 

2006 24-hour PM2.5 NAAQS (74 FR 58688, November 13, 2009). These designations 

include 31 areas composed of 120 full or partial counties with a population of over 70 

million. In total, there are 54 PM2.5 nonattainment areas composed of 243 counties with a 

population of almost 102 million people. 

ii. Projected Levels without this Rule 

States with PM2.5 nonattainment areas are required to take action to bring those 

areas into compliance in the future. Areas designated as not attaining the 1997 PM2.5

NAAQS will need to attain the 1997 standards in the 2010 to 2015 time frame, and then 

maintain them thereafter. The 2006 24-hour PM2.5 nonattainment areas will be required 

to attain the 2006 24-hour PM2.5 NAAQS in the 2014 to 2019 time frame and then be 

required to maintain the 2006 24-hour PM2.5 NAAQS thereafter. The vehicle standards 

finalized in this action become effective in 2012 and therefore may be useful to states in 

attaining or maintaining the PM2.5 NAAQS. 

EPA has already adopted many emission control programs that are expected to 

reduce ambient PM2.5 levels and which will assist in reducing the number of areas that 

fail to achieve the PM2.5 NAAQS. Even so, our air quality modeling projects that in 

2030, with all current controls but excluding the impacts of the vehicle standards adopted 

here, at least 9 counties with a population of almost 28 million may not attain the 1997 

annual PM2.5 standard of 15 μg/m3

 and 26 counties with a population of over 41 million 

may not attain the 2006 24-hour PM2.5 standard of 35 μg/m3

. These numbers do not 

account for those areas that are close to (e.g., within 10 percent of) the PM2.5 standards. 
376 

These areas, although not violating the standards, will also benefit from any reductions in 

PM2.5 ensuring long-term maintenance of the PM2.5 NAAQS. 

iii. Projected Levels with this Rule 

 

Air quality modeling performed for this final rule shows that in 2030 the majority 

of the modeled counties will see decreases of less than 0.05 μg/m3

 in their annual PM2.5

design values. The decreases in annual PM2.5 design values that we see in some counties 

are likely due to emission reductions related to lower gasoline production at existing oil 

refineries; reductions in direct PM2.5 emissions and PM2.5 precursor emissions (NOX and 

SOX) contribute to reductions in ambient concentrations of both direct PM2.5 and 

secondarily-formed PM2.5. The maximum projected decrease in an annual PM2.5 design 

value is 0.07 μg/m3

 in Harris County, TX. There are also a few counties that are 

projected to see increases of no more than 0.01 μg/m3

 in their annual PM2.5 design values. 

These small increases in annual PM2.5 design values are likely related to downstream 

emission increases. On a population-weighted basis, the average modeled 2030 annual 

PM2.5 design value is projected to decrease by 0.01 μg/m3

 due to this final rule. Those 

counties that are projected to be above the annual PM2.5 standard in 2030 will see slightly 

larger population-weighted decreases of 0.03 μg/m3

 in their design values due to this 

final rule. 

In addition to looking at annual PM2.5 design values, we also modeled the impact 

of the standards on 24-hour PM2.5 design values. Air quality modeling performed for this 

final rule shows that in 2030 the majority of the modeled counties will see changes of 

between -0.05 μg/m3

 and +0.05 μg/m3 in their 24-hour PM2.5 design values. The 

decreases in 24-hour PM2.5 design values that we see in some counties are likely due to 

emission reductions related to lower gasoline production at existing oil refineries; 

reductions in direct PM2.5 emissions and PM2.5 precursor emissions (NOX and SOX) 

contribute to reductions in ambient concentrations of both direct PM2.5 and secondarilyformed PM2.5. The maximum projected decrease in a 24-hour PM2.5 design value is 0.21 

μg/m3

 in Harris County, TX. There are also some counties that are projected to see 

increases of less than 0.05 μg/m3

 in their 24-hour PM2.5 design values. These small 

increases in 24-hour PM2.5 design values are likely related to downstream emission 

increases. On a population-weighted basis, the average modeled 2030 24-hour PM2.5

design value is projected to decrease by 0.01 μg/m3

 due to this final rule. Those counties 

that are projected to be above the 24-hour PM2.5 standard in 2030 will see slightly larger 

population-weighted decreases of 0.05 μg/m3

 in their design values due to this final rule. 

b. Ozone 

i. Current Levels 

8-hour ozone concentrations exceeding the level of the ozone NAAQS occur in 

many parts of the country. In 2008, the EPA amended the ozone NAAQS (73 FR 16436, 

March 27, 2008). The final 2008 ozone NAAQS rule set forth revisions to the previous 

1997 NAAQS for ozone to provide increased protection of public health and welfare. 

EPA recently proposed to reconsider the 2008 ozone NAAQS (75 FR 2938, January 19, 
377 

2010). Because of the uncertainty the reconsideration proposal creates regarding the 

continued applicability of the 2008 ozone NAAQS, EPA has used its authority to extend 

by 1 year the deadline for promulgating designations for those NAAQS (75 FR 2936, 

January 19, 2010). The new deadline is March 12, 2011. EPA intends to complete the 

reconsideration by August 31, 2010. If EPA establishes new ozone NAAQS as a result 

of the reconsideration, they would replace the 2008 ozone NAAQS and requirements to 

designate areas and implement the 2008 NAAQS would no longer apply. 

As of January 6, 2010 there are 51 areas designated as nonattainment for the 1997 

8-hour ozone NAAQS, comprising 266 full or partial counties with a total population of 

over 122 million people. These numbers do not include the people living in areas where 

there is a future risk of failing to maintain or attain the 1997 8-hour ozone NAAQS. The 

numbers above likely underestimate the number of counties that are not meeting the 

ozone NAAQS because the nonattainment areas associated with the more stringent 2008 

8-hour ozone NAAQS have not yet been designated. Table III.G.5-1 provides an 

estimate, based on 2005-07 air quality data, of the counties with design values greater 

than the 2008 8-hour ozone NAAQS of 0.075 ppm. 

Table III.G.5-1 

Counties with Design Values Greater Than the Ozone NAAQS 

 NUMBER OF 

COUNTIES 

POPULATIONA

1997 Ozone Standard: counties within the 54 

areas currently designated as nonattainment 

(as of 1/6/10) 

266 122,343, 799 

2008 Ozone Standard: additional counties 

that would not meet the 2008 NAAQS (based 

on 2006-2008 air quality data)b

156 36,678,478 

Total 422 159,022,277 

Notes: 

a

 Population numbers are from 2000 census data. 

b

 Area designations for the 2008 ozone NAAQS have not yet been made. Nonattainment for the 2008 

Ozone NAAQS would be based on three years of air quality data from later years. Also, the county 

numbers in this row include only the counties with monitors violating the 2008 Ozone NAAQS. The 

numbers in this table may be an underestimate of the number of counties and populations that will 

eventually be included in areas with multiple counties designated nonattainment. 

ii. Projected Levels without this Rule 

States with 8-hour ozone nonattainment areas are required to take action to bring 

those areas into compliance in the future. Based on the final rule designating and 

classifying 8-hour ozone nonattainment areas for the 1997 standard (69 FR 23951, April 

30, 2004), most 8-hour ozone nonattainment areas will be required to attain the ozone 

NAAQS in the 2007 to 2013 time frame and then maintain the NAAQS thereafter. As 

noted, EPA is reconsidering the 2008 ozone NAAQS. If EPA promulgates different 

ozone NAAQS in 2010 as a result of the reconsideration, these standards would replace 

the 2008 ozone NAAQS and there would no longer be a requirement to designate areas 
378 

for the 2008 NAAQS. EPA would designate nonattainment areas for a potential new 

2010 primary ozone NAAQS in 2011. The attainment dates for areas designated 

nonattainment for a potential new 2010 primary ozone NAAQS are likely to be in the 

2014 to 2031 timeframe, depending on the severity of the problem.427 

EPA has already adopted many emission control programs that are expected to 

reduce ambient ozone levels and assist in reducing the number of areas that fail to 

achieve the ozone NAAQS. Even so, our air quality modeling projects that in 2030, with 

all current controls but excluding the impacts of the vehicle standards, up to 16 counties 

with a population of almost 35 million may not attain the 2008 ozone standard of 0.075 

ppm (75 ppb). These numbers do not account for those areas that are close to (e.g., 

within 10 percent of) the 2008 ozone standard. These areas, although not violating the 

standards, will also be impacted by changes in ozone as they work to ensure long-term 

maintenance of the ozone NAAQS. 

iii. Projected Levels with this Rule 

 We do not expect this rule to have a meaningful impact on ozone concentrations, 

given the small magnitude of the ozone impacts and the fact that much of the impact is 

due to ethanol assumptions that are independent of this rule. Our modeling projects 

increases in ozone design value concentrations in many areas of the country and 

decreases in ozone design value concentrations in a few areas. However, the increases in 

ozone design values 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.428 

The ethanol volume assumptions are discussed in the introduction to Section III.G 

of this preamble. We attribute decreased fuel consumption and production from this 

program to gasoline only, while assuming constant ethanol volumes in our reference and 

control cases. Holding ethanol volumes constant while decreasing gasoline volumes 

increases the market share of 10% ethanol (E10) in the control case. However, the 

increased E10 market share is projected to occur regardless of this rule; in the RFS2 

analysis we project 100% E10 by 2014. The air quality impacts of this effect are 

included in our analyses for the recent RFS2 rule. As the RFS2 analyses indicate, 

increasing usage of E10 fuels (when compared with E0 fuels) can increase NOX

emissions and thereby increase ozone concentrations, especially in NOX-limited areas 

where relatively small amounts of NOX enable ozone to form rapidly.429 

 

427 U.S. EPA 2010, Fact Sheet Revisions to Ozone Standards. 

http://www.epa.gov/groundlevelozone/pdfs/fs20100106std.pdf 

428 EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. EPA-420-R-10-

006. February 2010. Docket EPA-HQ-OAR-2009-0472-11332. See also 75 FR 14670, March 26, 2010 429 Sections 3.4.2.1.2 and 3.4.3.3 of the Renewable Fuel Standard Program (RFS2) Regulatory Impact 

Analysis, EPA-420-R-10-006, February 2010. Docket EPA-HQ-OAR-2009-0472-11332 
379 

The majority of the ozone design value increases are less than 0.1 ppb. The 

maximum projected increase in an 8-hour ozone design value is 0.25 ppb in Richland 

County, South Carolina. As mentioned above there are some areas which see decreases 

in their ozone design values. The decreases in ambient ozone concentration are likely 

due to projected upstream emissions decreases in NOX and VOCs from reduced gasoline 

production. The maximum decrease projected in an 8-hour ozone design value is 0.22 

ppb in Riverside County, California. On a population-weighted basis, the average 

modeled 8-hour ozone design values are projected to increase by 0.01 ppb in 2030 and 

the design values for those counties that are projected to be above the 2008 ozone 

standard in 2030 will see population-weighted decreases of 0.10 ppb. 

c. Air Toxics 

i. Current Levels 

The majority of Americans continue to be exposed to ambient concentrations of 

air toxics at levels which have the potential to cause adverse health effects.430 The levels 

of air toxics to which people are exposed vary depending on where people live and work 

and the kinds of activities in which they engage, as discussed in detail in U.S. EPA’s 

most recent Mobile Source Air Toxics Rule.431 According to the National Air Toxic 

Assessment (NATA) for 2002,432 mobile sources were responsible for 47 percent of 

outdoor toxic emissions, over 50 percent of the cancer risk, and over 80 percent of the 

noncancer hazard. Benzene is the largest contributor to cancer risk of all 124 pollutants 

quantitatively assessed in the 2002 NATA and mobile sources were responsible for 59 

percent of benzene emissions in 2002. Over the years, EPA has implemented a number 

of mobile source and fuel controls resulting in VOC reductions, which also reduce 

benzene and other air toxic emissions. 

ii. Projected Levels 

Our modeling indicates that the GHG standards have relatively little impact on 

national average ambient concentrations of the modeled air toxics. Additional detail on 

the air toxics results can be found in Section 7.2.2.3 of the RIA. 

 

430 U. S. EPA. (2009) 2002 National-Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata2002/. 

Docket EPA-HQ-OAR-2009-0472-11321 

431 U. S. Environmental Protection Agency (2007). Control of Hazardous Air Pollutants from Mobile 

Sources; Final Rule. 72 FR 8434, February 26, 2007. Docket EPA-HQ-OAR-2009-0472-0271, 0271.1 and 

0271.2 

432 U. S. EPA. (2009) 2002 National-Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata2002/. 

Docket EPA-HQ-OAR-2009-0472-11321 
380 

d. Nitrogen and Sulfur Deposition 

i. Current Levels 

Over the past two decades, the EPA has undertaken numerous efforts to reduce 

nitrogen and sulfur deposition across the U.S. Analyses of long-term monitoring data for 

the U.S. show that deposition of both nitrogen and sulfur compounds has decreased over 

the last 17 years although many areas continue to be negatively impacted by deposition. 

Deposition of inorganic nitrogen and sulfur species routinely measured in the U.S. 

between 2004 and 2006 were as high as 9.6 kilograms of nitrogen per hectare per year 

(kg N/ha/yr) and 21.3 kilograms of sulfur per hectare per year (kg S/ha/yr). The data 

show that reductions were more substantial for sulfur compounds than for nitrogen 

compounds. These numbers are generated by the U.S. national monitoring network and 

they likely underestimate nitrogen deposition because neither ammonia nor organic 

nitrogen is measured. In the eastern U.S., where data are most abundant, total sulfur 

deposition decreased by about 44% between 1990 and 2007, while total nitrogen 

deposition decreased by 25% over the same time frame.433 

ii. Projected Levels 

Our air quality modeling does not show substantial overall nationwide impacts on 

the annual total sulfur and nitrogen deposition occurring across the U.S. as a result of the 

vehicle standards required by this rule. For sulfur deposition the vehicle standards will 

result in annual percent decreases of 0.5% to more than 2% in locations with refineries as 

a result of the lower output from refineries due to less gasoline usage. These locations 

include the Texas and Louisiana portions of the Gulf Coast; the Washington D.C. area; 

Chicago, IL; portions of Oklahoma and northern Texas; Bismarck, North Dakota; 

Billings, Montana; Casper, Wyoming; Salt Lake City, Utah; Seattle, Washington; and 

San Francisco, Los Angeles, and San Luis Obispo, California. The remainder of the 

country will see only minimal changes in sulfur deposition, ranging from decreases of 

less than 0.5% to increases of less than 0.5%. For a map of 2030 sulfur deposition 

impacts and additional information on these impacts, see Section 7.2.2.5 of the RIA. The 

impacts of the vehicle standards on nitrogen deposition are minimal, ranging from 

decreases of up to 0.5% to increases of up to 0.5%. 

e. Visibility 

i. Current Levels 

As mentioned in Section III.G.5.a, millions of people live in nonattainment areas 

for the PM2.5 NAAQS. These populations, as well as large numbers of individuals who 

travel to these areas, are likely to experience visibility impairment. In addition, while 

 

433 U.S. EPA. U.S. EPA's 2008 Report on the Environment (Final Report). U.S. Environmental Protection 

Agency, Washington, D.C., EPA/600/R-07/045F (NTIS PB2008-112484). Docket EPA-HQ-OAR-2009-

0472-11298. Updated data available online at: 

http://cfpub.epa.gov/eroe/index.cfm?fuseaction=detail.viewInd&ch=46&subtop=341&lv=list.listByChapter

&r=201744 
381 

visibility trends have improved in mandatory class I federal areas, the most recent data 

show that these areas continue to suffer from visibility impairment. In summary, 

visibility impairment is experienced throughout the U.S., in multi-state regions, urban 

areas, and remote mandatory class I federal areas. 

ii. Projected Levels 

Air quality modeling conducted for this final rule was used to project visibility 

conditions in 138 mandatory class I federal areas across the U.S. in 2030. The results 

show that all the modeled areas will continue to have annual average deciview levels 

above background in 2030.434 The results also indicate that the majority of the modeled 

mandatory class I federal areas will see no change in their visibility, but some mandatory 

class I federal areas will see improvements in visibility due to the vehicle standards and a 

few mandatory class I federal areas will see visibility decreases. The average visibility at 

all modeled mandatory class I federal areas on the 20% worst days is projected to 

improve by 0.002 deciviews, or 0.01%, in 2030. Section 7.2.2.6.2 of the RIA contains 

more detail on the visibility portion of the air quality modeling. 

H. What are the Estimated Cost, Economic, and Other Impacts of the 

Program? 

In this section, EPA presents the costs and impacts of EPA’s GHG program. It is 

important to note that NHTSA’s CAFE standards and EPA’s GHG standards will both be 

in effect, and each will lead to average fuel economy increases and CO2 emissions 

reductions. The two agencies’ standards comprise the National Program, and this 

discussion of costs and benefits of EPA’s GHG standard does not change the fact that 

both the CAFE and GHG standards, jointly, are the source of the benefits and costs of the 

National Program. These costs and benefits are appropriately analyzed separately by each 

agency and should not be added together.

This section outlines the basis for assessing the benefits and costs of the GHG 

standards and provides estimates of these costs and benefits. Some of these effects are 

private, meaning that they affect consumers and producers directly in their sales, 

purchases, and use of vehicles. These private effects include the upfront costs of the 

technology, fuel savings, and the benefits of additional driving and reduced refueling. 

Other costs and benefits affect people outside the markets for vehicles and their use; these 

effects are termed external, because they affect people in ways other than the effect on 

the market for and use of new vehicles and are generally not taken into account by the 

purchaser of the vehicle. The external effects include the climate impacts, the effects on 

non-GHG pollutants, energy security impacts, and the effects on traffic, accidents, and 

noise due to additional driving. The sum of the private and external benefits and costs is 

 

434 The level of visibility impairment in an area is based on the light-extinction coefficient and a unitless 

visibility index, called a “deciview”, which is used in the valuation of visibility. The deciview metric 

provides a scale for perceived visual changes over the entire range of conditions, from clear to hazy. Under 

many scenic conditions, the average person can generally perceive a change of one deciview. The higher 

the deciview value, the worse the visibility. Thus, an improvement in visibility is a decrease in deciview 

value. 

Deleted: costs
382 

the net social benefits of the program. There is some debate about the role of private 

benefits in assessing the benefits and costs of the program: if consumers optimize their 

purchases of fuel economy, with full information and perfect foresight, in perfectly 

efficient markets, it is possible that they have already considered these benefits in their 

vehicle purchase decisions. If so, then no net private benefits would result from the 

program, because consumers would already buy vehicles with the amount of fuel 

economy that is optimal for them; requiring additional fuel economy would alter both the 

purchase prices of new cars and their lifetime streams of operating costs in ways that will 

inevitably reduce consumers’ well-being. If these conditions do not hold, then it is likely 

that the private benefits will outweigh any consumer welfare and upfront costs and 

therefore would count toward the program’s net benefits. Section III.H.1 discusses this 

issue more fully. 

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, 

• other pollutants, 

• noise, congestion, accidents, 

• energy security impacts,

• reduced refueling events 

• increased driving due to the “rebound” effect. 

EPA also presents the cost-effectiveness of the standards. 

The total monetized benefits (excluding fuel savings) under the program are 

projected to be $17.5 to $41.8 billion in 2030, using a 3 percent discount rate applied to 

the valuation of PM2.5-related premature mortality and depending on the value used for 

the social cost of carbon. The total monetized benefits (excluding fuel savings) under the 

program are projected to be $17.4 to $41.7 billion in 2030, using a 7 percent discount rate 

applied to the valuation of PM2.5-related premature mortality and depending on the value 

used for the social cost of carbon. These benefits are summarized below in Table 

III.H.10-2. The costs of the program in 2030 are estimated to be approximately $15.8 

billion for new vehicle technology less $79.8 billion in savings realized by consumers 

through fewer fuel expenditures (calculated using pre-tax fuel prices). These costs are 

summarized below in Table III.H.10-1. The estimates developed here use as a baseline 

for comparison the fuel economy associated with MY 2011 vehicles. To the extent that 

greater fuel economy improvements than those assumed to occur under the baseline may 

have occurred due to market forces alone (absent the rule), the analysis overestimates 

private and social net benefits. 

EPA has undertaken an analysis of the economy-wide impacts of the GHG 

tailpipe standards as an exploratory exercise that EPA believes could provide additional 

Deleted: with complete and accurate 

technology cost and fuel savings 

estimates, 

Deleted: and 

Deleted: be a part of 

Deleted: EPA’s final program costs 

consist of the vehicle program costs 

(costs of complying with the vehicle CO2

standards, taking into account FFV 

credits through 2015, the temporary leadtime alternative allowance standard 

program (TLAASP), full car/truck 

trading, and the A/C credit program, and 

other flexibilities built into the final 

program), along with the cost reduction 

due to fuel savings associated with 

reduced fuel usage resulting from the 

program. The program benefits include 

external benefits associated with 

greenhouse gas emissions, noise, 

congestion, accidents, other pollutants, 

and energy security impacts, and private 

benefits from reduced refueling events 

and increased driving due to the 

“rebound” effect. EPA also presents the 

cost-effectiveness of the standards. 

Deleted: XX

Deleted: XX

Deleted: assuming a 3 percent discount 

rate 

Deleted: 
383 

insights into the potential impacts of the program.435 These results were not a factor 

regarding the appropriateness of the GHG tailpipe standards. It is important to note that 

the results of this modeling exercise are dependent on the assumptions associated with 

how producers will make fuel economy improvements and how consumers will respond 

to increases in higher vehicle costs and improved vehicle fuel economy as a result of the 

program. Section III.H.1 discusses the underlying distinctions and implications of the 

role of consumer response in economic impacts. 

Further information on these and other aspects of the economic impacts of our 

rule are summarized in the following sections and are presented in more detail in the RIA 

for this rulemaking. 

1. Conceptual Framework for Evaluating Consumer Impacts

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. If our analysis projects 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 

 

435 See Memorandum to Docket, “Economy-Wide Impacts of Proposed Greenhouse Gas Tailpipe 

Standards,” March 4, 2010. Docket EPA-HQ-OAR-2009-0472. 

Deleted: Assuming those conditions, i

Deleted: that there are 
384 

in additional private impacts to vehicle buyers from requiring increased fuel economy. 

Most comments generally supported the cost estimates and the maintenance of vehicle 

quality, though two comments expressed concern over unspecified losses to vehicle 

quality. Even if there is some such unidentified loss (which, given existing evidence and 

modeling capabilities, is very difficult to quantify), EPA believes that under realistic 

assumptions, the private gains from the rule, together with the social gains (in the form of 

reduction of externalities), will continue to substantially outweigh the costs. 

The central conundrum has been referred to as the Energy Paradox in this setting 

(and in several others).436 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:

437 

• Consumers might be myopic and hence undervalue the long-term.

• Consumers might lack information or a full appreciation of information even 

when it is presented.

• Consumers might be especially averse to the short-term losses associated with the 

higher prices of energy efficient products relative to the uncertain future fuel 

savings, even if the expected present value of those fuel savings exceeds the cost 

(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, and the 

lack of salience might lead consumers to neglect an attribute that it would be in 

their economic interest to consider.

• In the case of vehicle fuel efficiency, and perhaps as a result of one or more of the

foregoing factors, consumers may have relatively few choices to purchase 

vehicles with greater fuel economy once other characteristics, such as vehicle 

class, are chosen.438 

A great deal of work in behavioral economics identifies and elaborates factors of 

this sort, which help account for the Energy Paradox.439 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.440 For example, it might 

 

436 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. 

437 For an overview, see id. 438 For instance, the range of fuel economy (combined city and highway) available among all listed 2010 6-

cylinder minivans is 18 to 20 miles per gallon. With a manual-transmission 4-cylinder minivan, it is 

possible to get 24 mpg. See http://www.fueleconomy.gov, which is jointly maintained by the U.S. 

Department of Energy and the EPA. For recent but unpublished evidence, see Allcott, Hunt, and Nathan 

Wozny, “Gasoline Prices, Fuel Economy, and the Energy Paradox” (2010), available at 

http://web.mit.edu/allcott/www/Allcott%20and%20Wozny%202010%20-

%20Gasoline%20Prices,%20Fuel%20Economy,%20and%20the%20Energy%20Paradox.pdf .

439 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. 

See also Allcott and Wozny, supra note.

440 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 

Deleted: significantly 

Deleted: .

Deleted: ; t

Deleted: hey 

Deleted: ; they 

Deleted: 

Deleted: ; e

Deleted: 

Deleted: ; or, i
385 

well be questioned whether significant reductions in refueling time, and corresponding 

private savings, are fully internalized when consumers are making purchasing decisions.

Considerable research findings indicate that the Energy Paradox is real and 

significant but the literature has not reached a consensus about the reasons for its 

existence. Several researchers have found evidence suggesting that consumers do not 

give full or appropriate weight to fuel economy in purchasing decisions. For example, 

Sanstad and Howarth441 argue that consumers optimize behavior without full information 

by resorting to imprecise but convenient rules of thumb. Some studies find that a 

substantial portion of this undervaluation can be explained by inaccurate assessments of 

energy savings, or by uncertainty and irreversibility of energy investments due to 

fluctuations in energy prices.442 For a number of reasons, consumers may undervalue 

future energy savings due to routine mistakes in how they evaluate these trade-offs. For 

instance, the calculation of fuel savings is complex, and consumers may not make it 

correctly.443 The attribute of fuel economy may be insufficiently salient, leading to a 

situation in which consumers pay less than $1 for an expected $1 benefit in terms of 

discounted gasoline costs.444 Larrick and Soll (2008) find that consumers do not 

understand how to translate changes in miles-per-gallon into fuel savings (a concern that 

EPA is continuing to attempt to address).445 In addition, future fuel price (a major 

component of fuel savings) is highly uncertain. Consumer fuel savings also vary across 

 

have adequate information to do so, or whether that factor is sufficiently salient to play the proper role in 

purchasing decisions.

441 Sanstad, A., and R. Howarth (1994). “’Normal’ Markets, Market Imperfections, and Energy 

Efficiency.” Energy Policy 22(10): 811‐818 (Docket EPA-HQ-OAR-2009-0472-11416).

442 Greene, D., J. German, and M. Delucchi (2009). “Fuel Economy: The Case for Market Failure” in 

Reducing Climate Impacts in the Transportation Sector, Sperling, D., and J. Cannon, eds. Springer Science

(Docket EPA-HQ-OAR-2009-0472-11538); Dasgupta, S., S. Siddarth, and J. Silva‐Risso (2007). “To Lease 

or to Buy? A Structural Model of a Consumer’s Vehicle and Contract Choice Decisions.” Journal of 

Marketing Research 44: 490 – 502 (Docket EPA-HQ-OAR-2009-0472-11539); Metcalf, G., and D. 

Rosenthal (1995). "The ‘New’ View of Investment Decisions and Public Policy Analysis: An Application 

to Green Lights and Cold Refrigerators,’’ Journal of Policy Analysis and Management 14: 517–531(Docket 

EPA-HQ-OAR-2009-0472-11540); Hassett, K., and G. Metcalf (1995), "Energy Tax Credits and 

Residential Conservation Investment: Evidence from Panel Data," Journal of Public Economics 57: 

201‐217(Docket EPA-HQ-OAR-2009-0472-11543); Metcalf, G., and K. Hassett (1999), "Measuring the 

Energy Savings from Home Improvement Investments: Evidence from Monthly Billing Data," The Review 

of Economics and Statistics 81(3): 516‐528 (Docket EPA-HQ-OAR-2009-0472-0051); van Soest D., and E. 

Bulte (2001), “Does the Energy‐Efficiency Paradox Exist? Technological Progress and Uncertainty.” 

Environmental and Resource Economics 18: 101–12 (Docket EPA-HQ-OAR-2009-0472-11542).

443 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). 444 Allcott, Hunt, and Nathan Wozny, “Gasoline Prices, Fuel Economy, and the Energy Paradox” (2010), 

available at http://web.mit.edu/allcott/www/Allcott%20and%20Wozny%202010%20-

%20Gasoline%20Prices,%20Fuel%20Economy,%20and%20the%20Energy%20Paradox.pdf (Docket EPAHQ-OAR-2009-0472-11554) .

445 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).

Deleted: suggests 

Deleted: due in part to consumers’ 

inability to value future fuel savings 

appropriately

Deleted: (1994) 

Deleted: C

Deleted: face difficulty in predicting 

the fuel savings that they are likely to get 

from a vehicle, for a number of reasons

Deleted: evidence 
386 

individuals, who travel different amounts and have different driving styles. Cost 

calculations based on the average do not distinguish between those that may gain or lose 

as a result of the policy.446 Studies regularly show that fuel economy plays a role in 

consumers’ vehicle purchases, but modeling that role is still in development, and there is 

no consensus that most consumers make fully informed tradeoffs.

447 

Some studies find that a substantial portion of the Energy Paradox can be 

explained in models of consumer behavior. For instance, one set of studies finds that 

accounting for uncertainty in fuel savings over time due to unanticipated changes in fuel 

prices goes a long way toward explaining this paradox. In this case, consumers give up 

some uncertain future fuel savings to avoid higher upfront costs.

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 decisions.448 The review finds no consensus on the role of fuel economy in 

consumer purchase decisions. Of 27 studies, significant numbers of them 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. 

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 calculate 

savings. Also as noted, 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. 

 

446 Hausman J., Joskow P. (1982). “Evaluating the Costs and Benefits of Appliance Efficiency Standards.” 

American Economic Review 72: 220–25 (Docket EPA-HQ-OAR-2009-0472-11541).

447 E.g., Goldberg, Pinelopi Koujianou, “Product Differentiation and Oligopoly in International Markets: 

The Case of the U.S. Automobile Industry,” Econometrica 63(4) (July 1995): 891-951 (Docket EPA-HQOAR-2009-0472-0021); Goldberg, Pinelopi Koujianou, “The Effects of the Corporate Average Fuel 

Efficiency Standards in the U.S.,” Journal of Industrial Economics 46(1) (March 1998): 1-33 (Docket 

EPA-HQ-OAR-2009-0472-0017); 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). 448 Greene, David L. “How Consumers Value Fuel Economy: A Literature Review.” EPA Report EPA420-R-10-008, March 2010. 

Deleted: may 

Deleted: be 

Deleted: estimate 

Deleted: In addition
387 

EPA requested and received a number of comments discussing the role of the 

Energy Paradox in consumer vehicle purchase decisions. Ten commenters, primarily 

from a number of academic and non-governmental organizations, argued that there is a 

gap between the fuel economy that consumers purchased and the cost-effective amount, 

due to a number of market and behavioral phenomena. These include consumers having 

inadequate information about future fuel savings relative to up-front costs; imperfect 

competition among auto manufacturers; lack of choice over fuel economy within classes; 

lack of salience of fuel economy relative to other vehicle features at the time of vehicle 

purchase; consumer use of heuristic decision-making processes or other rules of thumb, 

rather than analyzing fuel economy decisions; consumer risk and loss aversion leading to 

more attention to up-front costs than future fuel savings; and consumer emphasis on 

visible, status-providing features of vehicles more than on relatively invisible features 

such as fuel economy. The RIA, Chapter 8.1.2, includes further discussion of these 

phenomena. 

Because of the gap between the fuel economy consumers purchase and the costeffective amount, those and additional commenters support using the full value of fuel 

savings as a benefit of the rule. A few asserted, in addition, that auto companies would 

benefit from offering vehicles with improved fuel economy. Automakers might 

underprovide fuel economy because they believe consumers would not buy it, or that it is 

not as salient as price when consumers are buying a vehicle. The commenters who 

supported the existence of the gap cite these phenomena as a basis for regulation of fuel 

economy. In contrast, two commenters (the United Auto Workers and one nonprofit 

research organization) argued that the market for fuel economy works efficiently; 

consumers reveal through their purchase decisions that additional fuel economy is not 

important for them. These commenters expressed concern that regulation to promote 

more fuel economy would limit consumers’ choices as well as the value of the vehicles to 

consumers. Yet other commenters (including some states) noted that the rule protects the 

existing variety and choice of vehicles in the market; for this reason, the value of vehicles 

to consumers should not suffer as a result of the rule. 

While acknowledging the diversity of perspectives, EPA continues to include the 

full fuel savings as private benefits of the rule. Improved fuel economy will significantly 

reduce consumer expenditures on fuel, thus benefiting consumers. It is true that 

limitations in modeling affect our ability to estimate how much of these savings would 

have occurred in the absence of the rule. For example, some of the technologies 

predicted to be adopted in response to the rule may already be developing due to shifts in 

consumer demand for fuel economy. It is possible that some of these savings would have 

occurred in the absence of the rule. To the extent that greater fuel economy 

improvements than those assumed to occur under the baseline may have occurred due to 

market forces alone (absent the rule), the analysis overestimates private and social net 

benefits. In the absence of robust means to identify the changes in fuel economy that 

would have occurred without the rule, we estimate the benefits and costs under the 

assumption that the rule will lead to more fuel-efficient vehicles than would have 

occurred without the rule. As discussed below, limitations in modeling also affect our 

ability to estimate the effects of the rule on net benefits in the market for vehicles. 

Deleted: supported the existence of 

Deleted: s

Deleted: ing

Deleted: , because consumers will 

spend less money on fuel

Deleted: due to 

Deleted: a 

Deleted: However, 

Deleted: taking place 

Deleted: If so, then some of the fuel 

savings, as well as some of the costs of 

the technology to achieve those savings, 

may be due to market forces, not to the 

rule itself. 
388 

Consumer vehicle choice models estimate what vehicles consumers buy based on 

vehicle and consumer characteristics. In principle, such models 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. 

The responses were varied. Of the six commenters on this issue, five supported 

EPA’s performing consumer vehicle choice modeling, but only in general terms; they did 

not provide recommendations for how to evaluate the quality of different models or 

identify a model appropriate for EPA’s purposes. One commenter argued that, if key 

differences across models were controlled, then different models would produce similar 

results, but there were no suggestions for what choices to make to control the key 

differences. One commenter specifically asked for estimates that quantify losses to 

consumer welfare. Two commenters mentioned the importance of taking into account 

any losses in vehicle attributes due to increasing fuel economy, but without specific 

guidance for how to do so. Some commenters, including some who supported the use of 

these models, highlighted some of the models’ potential limitations. Two commenters 

noted the challenges of modeling for vehicles that are not yet in the market. Most 

consumer vehicle choice models are based on existing vehicle fleets. Future vehicles will 

present combinations of vehicle characteristics not previously seen in markets, such as 

higher fuel economy and higher price with other characteristics constant; the existing 

models may not do well in predicting consumer responses to these changes. One 

comment suggested that the models might be sufficient for predicting changes in 

consumer purchase patterns, but not for calculating the welfare gains and losses to 

consumers of the changes. 

EPA has not used a consumer vehicle choice model for the final rule analysis, due 

to concerns we explained in the proposal (and discussed in Chapter 8.1 of the RIA), and 

because no new information became available to resolve those concerns. It is likely that 

variation exists in measuring consumer response to changes in fuel economy as well as 

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. As noted earlier, EPA’s and NHTSA’s cost estimates are based on 

Deleted: they 

Deleted: 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 

decisions.

Deleted: 449 It finds no consensus on 

the role of fuel economy in consumer 

purchase decisions. Of 22 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. 

Deleted: this 

Deleted: as well 
389 

maintaining these other vehicle attributes. Comments generally supported the finding 

that our cost and technology estimates succeeded in maintaining these other attributes. 

EPA will continue its efforts to review the literature, but, given the known 

difficulties, EPA has not conducted an analysis using these models for this program. 

These issues are discussed in detail in RIA Chapter 8.1.2. 

The next issue is the potential for loss in consumer welfare due to the rule. As 

mentioned above (and discussed more thoroughly 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. 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,450 the price increase 

measures the loss to the consumer.451 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 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. Any consumer welfare loss 

cannot be quantified at this time. For reasons stated above, EPA believes that any such 

loss is likely far smaller than the private gains, including fuel savings and reduced 

refueling time.

Chapter 8.1 of the RIA discusses in more depth the research on the Energy 

Paradox and the state of the art of consumer vehicle choice modeling. 

2. Costs Associated with the Vehicle Program 

 

450 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 

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. 

451 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. 
390 

 In this section, EPA presents our estimate of the costs associated with the final 

vehicle program. The presentation here summarizes the costs associated with the new 

vehicle technology expected to be added to meet the new GHG standards, including 

hardware costs to comply with the A/C credit program. The analysis summarized here 

provides our estimate of incremental costs on a per vehicle basis and on an annual total 

basis. 

 The presentation here summarizes the outputs of the OMEGA model that was 

discussed in some detail in Section III.D of this preamble. For details behind the analysis 

such as the OMEGA model inputs and the estimates of costs associated with individual 

technologies, the reader is directed to Chapters 1 and 2 of the RIA, and Chapter 3 of the 

Joint TSD. For more detail on the outputs of the OMEGA model and the overall vehicle 

program costs summarized here, the reader is directed to Chapters 4 and 7 of the RIA. 

With respect to the cost estimates for vehicle technologies, EPA notes that, 

because these estimates relate to technologies which are in most cases already available, 

these cost estimates are technically robust. Some comments were received that addressed 

the technology costs that served as inputs to the OMEGA model as was mentioned in 

Section II.E. While those comments did not result in changes to the technology cost 

inputs, the technology cost estimates for a select group of technologies have changed 

since the NPRM thus changing the vehicle program costs presented here. These changes, 

as summarized in Section II.E and in Chapter 3 of the Joint TSD, were made in response 

to updated cost estimates, from the FEV teardown study, available to the agencies shortly 

after publication of the NPRM, not in response to comments. Those cost changes are 

summarized in Section II.E and in Chapter 3 of the Joint TSD. EPA believes that we 

have been conservative in estimating the vehicle hardware costs associated with this rule. 

With respect to the aggregate cost estimations presented in Section III.H.2.b, EPA 

notes that there are a number of areas where the results of our analysis may be 

conservative and, in general, EPA believes we have directionally overestimated the costs 

of compliance with these new standards, especially in not accounting for the full range of 

credit opportunities available to manufacturers. For example, some cost saving programs 

are considered in our analysis, such as full car/truck trading, while others are not, such as 

early credit generation and advanced vehicle technology credits. 

a. Vehicle Compliance Costs Associated with the CO2 Standards 

 For the technology and vehicle package costs associated with adding new CO2-

reducing technology to vehicles, EPA began with EPA’s 2008 Staff Report and 

NHTSA’s 2011 CAFE FRM both of which presented costs generated using existing 

literature, meetings with manufacturers and parts suppliers, and meetings with other 

experts in the field of automotive cost estimation.452 EPA has updated some of those 

technology costs with new information from our contract with FEV, through further 

 

452 “EPA Staff Technical Report: Cost and Effectiveness Estimates of Technologies Used to Reduce 

Light-duty Vehicle Carbon Dioxide Emissions,” EPA 420-R-08-008; NHTSA 2011 CAFE FRM is at 74 

FR 14196; both documents are contained in Docket EPA-HQ-OAR-2009-0472. 
391 

discussion with NHTSA, and by converting from 2006 dollars to 2007 dollars using the 

GDP price deflator. The estimated costs presented here represent the incremental costs 

associated with this rule relative to what the future vehicle fleet would be expected to 

look like absent this rule. A more detailed description of the factors considered in our 

reference case is presented in Section III.D. 

The estimates of vehicle compliance costs cover the years of implementation of 

the program – 2012 through 2016. EPA has also estimated compliance costs for the years 

following implementation so that we can shed light on the long term (2022 and later) cost 

impacts of the program.453 EPA used the year 2022 here because our short-term and 

long-term markup factors described shortly below are applied in five year increments 

with the 2012 through 2016 implementation span and the 2017 through 2021 span both 

representing the short-term. Some of the individual technology cost estimates are 

presented in brief in Section III.D, and account for both the direct and indirect costs 

incurred in the automobile manufacturing and dealer industries (for a complete 

presentation of technology costs, please refer to Chapter 3 of the Joint TSD). To account 

for the indirect costs, EPA has applied an indirect cost markup (ICM) factor to all of our 

direct costs to arrive at the estimated technology cost.454 The ICM factors used range 

from 1.11 to 1.64 in the short-term (2012 through 2021), depending on the complexity of 

the given technology, to account for differences in the levels of R&D, tooling, and other 

indirect costs that will be incurred. Once the program has been fully implemented, some 

of the indirect costs will no longer be attributable to these standards and, as such, a lower 

ICM factor is applied to direct costs in years following full implementation. The ICM 

factors used range from 1.07 to 1.39 in the long-term (2022 and later) depending on the 

complexity of the given technology.455 Note that the short-term ICMs are used in the 

2012 through 2016 years of implementation and continue through 2021. EPA does this 

since the standards are still being implemented during the 2012 through 2016 model 

years. Therefore, EPA considers the five year period following full implementation also 

to be short-term. Note that, in general the comments received were supportive of our use 

of ICMs as opposed to the more traditional Retail Price Equivalent (RPE).456 However, 

 

453 Note that the assumption made here is that the standards would continue to apply for years beyond 2016 

so that new vehicles sold in model years 2017 and later would continue to incur costs as a result of this 

rule. Those costs are estimated to get lower in 2022 because some of the indirect costs attributable to this 

rule in the years prior to 2022 would be eliminated in 2022 and later. 

454 Need to add the recent reference for this study by RTI. Alex Rogozhin et al., Automobile Industry 

Regail Price Equivalent and Indirect Cost Multipliers. Prepared for EPA by RTI International and 

Transportation Research Institute, University of Michigan. EPA-420-R-09-003, February 2009 (Docket 

EPA-HQ-OAR-2009-0472). 

455 Gloria Helfand and Todd Sherwood, “Documentation of the Development of Indirect Cost Multipliers 

for Three Automotive Technologies,” Office of Transportation and Air Quality, U.S. EPA, August 2009 

(Docket EPA-HQ-OAR-2009-0472). 

456 The RPE is based on the historical relationship between direct costs and consumer prices; it is intended 

to reflect the average markup over time required to sustain the industry as a viable operation. Unlike the 

RPE approach, the ICM focuses more narrowly on the changes that are required in direct response to 

regulation-induced vehicle design changes which may not directly influence all of the indirect costs that are 

incurred in the normal course of business. For example, an RPE markup captures all indirect costs 

including costs such as the retirement benefits of retired employees. However, the retirement benefits for 

retired employees are not expected to change as a result of a new GHG regulation and, therefore, those 

indirect costs should not increase in relation to newly added hardware in response to a regulation. 
392 

we did receive some comment that we applied inappropriate ICM factors to some 

technologies. We have not changed our approach in response to those comments as 

explained in greater detail in our Response to Comments document. 

EPA has also considered the impacts of manufacturer learning on the technology 

cost estimates. Consistent with past EPA rulemakings, EPA has estimated that some 

costs would decline by 20 percent with each of the first two doublings of production 

beginning with the first year of implementation. These volume-based cost declines, 

which EPA calls “volume” based learning, take place after manufacturers have had the 

opportunity to find ways to improve upon their manufacturing processes or otherwise 

manufacture these technologies in a more efficient way. After two 20 percent cost 

reduction steps, the cost reduction learning curve flattens out considerably as only minor 

improvements in manufacturing techniques and efficiencies remain to be had. By then, 

costs decline roughly three percent per year as manufacturers and suppliers continually 

strive to reduce costs. These time-based cost declines, which EPA calls “time” based 

learning, take place at a rate of three percent per year. EPA has considered learning 

impacts on most but not all of the technologies expected to be used because some of the 

expected technologies are already used rather widely in the industry and, presumably, 

learning impacts have already occurred. EPA has considered volume-based learning for 

only a handful of technologies that EPA considers to be new or emerging technologies 

such as the hybrids and electric vehicles. For most technologies, EPA has considered 

them to be more established given their current use in the fleet and, hence, we have 

applied the lower time based learning. We have more discussion of our learning 

approach and the technologies to which we have applied which type of learning in 

Chapter 3 of the Joint TSD. 

The technology cost estimates discussed in Section III.D and detailed in Chapter 3 

of the Joint TSD are used to build up technology package cost estimates which are then 

used as inputs to the OMEGA model. EPA discusses our technology packages and 

package costs in Chapter 1 of the RIA. The model determines what level of CO2

improvement is required considering the reference case for each manufacturer’s fleet. 

The vehicle compliance costs are the outputs of the model and take into account FFV 

credits through 2015, TLAASP, full car/truck trading, and the A/C credit program. Table 

III.H.2-1 presents the fleet average incremental vehicle compliance costs for this rule. As 

the table indicates, 2012-2016 costs increase every year as the standards become more 

stringent. Costs per car and per truck then remain stable through 2021 while cost per 

vehicle (car/truck combined) decline slightly as the fleet mix trends slowly to increasing 

car sales. In 2022, costs per car and per truck decline as the long-term ICM is applied 

because some indirect costs decrease or are no longer considered attributable to the 

program (e.g., warranty costs go down). Costs per car and per truck remain constant 

thereafter while the cost per vehicle declines slightly as the fleet continues to trend 

toward cars. By 2030, projections of fleet mix changes become static and the cost per 

vehicle remains constant. EPA has a more detailed presentation of vehicle compliance 

costs on a manufacturer by manufacturer basis in Chapter 6 of the RIA. 
393 

Table III.H.2-1 Industry Average Vehicle Compliance Costs Associated with the Tailpipe 

CO2 Standards 

($/vehicle in 2007 dollars) 

Calendar Year $/car $/truck 

$/vehicle 

(car & truck 

combined) 

2012 $342 $314 $331 

2013 $507 $496 $503 

2014 $631 $652 $639 

2015 $749 $820 $774 

2016 $869 $1,098 $948 

2017 $869 $1,098 $947 

2018 $869 $1,098 $945 

2019 $869 $1,098 $943 

2020 $869 $1,098 $940 

2021 $869 $1,098 $939 

2022 $817 $1,032 $882 

2030 $817 $1,032 $878 

2040 $817 $1,032 $875 

2050 $817 $1,032 $875 

b. Annual Costs of the Vehicle Program 

 The costs presented here represent the incremental costs for newly added 

technology to comply with the final program. Together with the projected increases in 

car and light-truck sales, the increases in per-vehicle average costs shown in Table 

III.H.2-1 above result in the total annual costs reported in Table III.H.2-2 below. Note 

that the costs presented in Table III.H.2-2 do not include the savings that would occur as 

a result of the improvements to fuel consumption. Those impacts are presented in 

Section III.H.4. 

 

Table III.H.2-2 Quantified Annual Costs Associated with the Vehicle Program 

($Millions of 2007 dollars)

Year Quantified 

Annual Costs

2012 $4,900

2013 $8,000

2014 $10,300

2015 $12,700

2016 $15,600

2020 $15,600

2030 $15,800

2040 $17,400

2050 $19,000

NPV, 3% $345,900
394 

NPV, 7% $191,900

3. Cost per Ton of Emissions Reduced

EPA has calculated the cost per ton of GHG (CO2-equivalent, or CO2e) reductions 

associated with this rule using the above costs and the emissions reductions described in 

Section III.F. More detail on the costs, emission reductions, and the cost per ton can be 

found in the RIA and Joint TSD. EPA has calculated the cost per metric ton of GHG 

emissions reductions in the years 2020, 2030, 2040, and 2050 using the annual vehicle 

compliance costs and emission reductions for each of those years. The value in 2050 

represents the long-term cost per ton of the emissions reduced. EPA has also calculated 

the cost per metric ton of GHG emission reductions including the savings associated with 

reduced fuel consumption (presented below in Section III.H.4). This latter calculation 

does not include the other benefits associated with this rule such as those associated with 

criteria pollutant reductions or energy security benefits as discussed later in sections 

III.H.4 through III.H.9. By including the fuel savings in the cost estimates, the cost per 

ton is less than $0, since the estimated value of fuel savings outweighs the vehicle 

program costs. With regard to the CH4 and N2O standards, since these standards will be 

emissions caps designed to ensure that manufacturers do not backslide from current 

levels, EPA has not estimated costs associated with the standards (since the standards will 

not require any change from current practices nor does EPA estimate they will result in 

emissions reductions). 

The results for CO2e costs per ton under the rule are shown in Table III.H.3-1. 

Table III.H.3-1 Annual Cost Per Metric Ton of CO2e Reduced, in $2007 dollars 

Year 

Vehicle 

Program 

Costa 

($Millions) 

Fuel Savings b

($Millions) 

CO2e Reduced 

(Million Metric 

Tons) 

Cost per Ton 

of the Vehicle 

Program Onlya

Cost per Ton 

of the Vehicle 

Program with 

Fuel Savings b

2020 $15,600 -$35,700 160 $100 -$130 

2030 $15,800 -$79,800 310 $50 -$210 

2040 $17,400 -$119,300 400 $40 -$250 

2050 $19,000 -$171,200 510 $40 -$300 

a

 Costs here include vehicle compliance costs and do not include any fuel savings. 

b Fuel savings calculated using pre-tax fuel prices. 

4. Reduction in Fuel Consumption and its Impacts

a. What Are the Projected Changes in Fuel Consumption? 

The new CO2 standards will result in significant improvements in the fuel 

efficiency of affected vehicles. Drivers of those vehicles will see corresponding savings 

associated with reduced fuel expenditures. EPA has estimated the impacts on fuel 

consumption for both the tailpipe CO2 standards and the A/C credit program. To do this, 

fuel consumption is calculated using both current CO2 emission levels and the new CO2

standards. The difference between these estimates represents the net savings from the 
395 

CO2 standards. Note that the total number of miles that vehicles are driven each year is 

different under each of the control case scenarios than in the reference case due to the 

“rebound effect,” which is discussed in Section III.H.4.c. EPA also notes that consumers 

who drive more than our average estimates for vehicle miles traveled (VMT) will 

experience more fuel savings; consumers who drive less than our average VMT estimates 

will experience less fuel savings. 

The expected impacts on fuel consumption are shown in Table III.H.4-1. The 

gallons shown in the tables reflect impacts from the new CO2 standards, including the 

A/C credit program, and include increased consumption resulting from the rebound 

effect. 

Table III.H.4-1 Fuel Consumption Impacts of the Vehicle Standards and A/C Credit 

Programs 

 (Million gallons) 

Year Total 

2012 550

2013 1,320

2014 2,330

2015 3,750

2016 5,670

2020 12,590

2030 24,730

2040 32,620

2050 41,520

 

b. What are the Monetized Fuel Savings? 

 Using the fuel consumption estimates presented in Section III.H.4.a, EPA can 

calculate the monetized fuel savings associated with the CO2 standards. To do this, we 

multiply reduced fuel consumption in each year by the corresponding estimated average 

fuel price in that year, using the reference case taken from the AEO 2010 Early 

Release.457 AEO is the government consensus estimate used by NHTSA and many other 

government agencies to estimate the projected price of fuel. EPA has done this 

calculation using both the pre-tax and post-tax fuel prices. Since the post-tax fuel prices 

are what consumers pay, the fuel savings calculated using these prices represent the 

savings consumers will see. The pre-tax fuel savings are those savings that society will 

see. These results are shown in Table III.H.4-2. Note that in Section III.H.10, EPA 

presents the benefit-cost of the rule and, for that reason, presents only the pre-tax fuel 

savings and presents them as negative costs of the program while here EPA presents them 

as positive savings. 

 

457 Energy Information Administration. Annual Energy Outlook 2010 Early Release. Supplemental 

Transportation Tables. December 2009. http://www.eia.doe.gov/oiaf/aeo/supplement/sup_tran.xls 
396 

Table III.H.4-2 Estimated Monetized Fuel Savings 

(Millions of 2007 dollars) 

Calendar Year 

Fuel 

Savings 

(pre-tax) 

Fuel 

Savings 

(post-tax) 

2012 $1,137 $1,400

2013 $2,923 $3,800

2014 $5,708 $6,900

2015 $9,612 $11,300

2016 $14,816 $17,400

2020 $35,739 $41,100

2030 $79,838 $89,100

2040 $119,324 $131,700

2050 $171,248 $186,300

NPV, 3% $1,545,638 $1,723,900

NPV, 7% $672,629 $755,700

As shown in Table III.H.4-2, EPA is projecting that consumers would realize very 

large fuel savings as a result of the standards contained in this rule. As discussed further 

in Section III.H.1, it is a conundrum from an economic perspective that these large fuel 

savings have not been provided by automakers and purchased by consumers. A number 

of behavioral and market phenomena may lead to this disparity between the fuel 

economy that makes financial sense to consumers and the fuel economy they purchase. 

Regardless how consumers make their decisions on how much fuel economy to purchase, 

EPA expects that, in the aggregate, they will gain these fuel savings, which will provide 

actual money in consumers’ pockets. We received considerable comment on this issue, 

as discussed in Section III.H.1, and the issue is discussed further in Chapter 8 of the RIA. 

c. VMT Rebound Effect 

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 increase in vehicle use 

occurs because higher fuel economy reduces the fuel cost of driving, which is typically 

the largest single component of the monetary cost of operating a vehicle, and vehicle 

owners respond to this reduction in operating costs by driving slightly more. 

For this rule, EPA is using an estimate of 10% for the rebound effect. This value 

is based on the most recent time period analyzed in the Small and Van Dender 2007 

paper,458 and falls within the range of the larger body of historical work on the rebound 

 

458 Small, K. and K. Van Dender, 2007a. “Fuel Efficiency and Motor Vehicle Travel: The Declining 

Rebound Effect”, The Energy Journal, vol. 28, no. 1, pp. 25-51 (Docket EPA-HQ-OAR-2009-0472-0018). 
397 

effect.459 Recent work by David Greene on the rebound effect for light-duty vehicles in 

the U.S. further supports the hypothesis that the rebound effect is decreasing over time.

460 If we were to use a dynamic estimate of the future rebound effect, our analysis shows 

that the rebound effect could be in the range of 5% or lower.461 The rebound effect is 

also further discussed in Chapter 4 of the Joint TSD which reviews the relevant literature 

and discusses in more depth the reasoning for the rebound values used here. 

We received several comments on the proposed value of the rebound effect. The 

California Air Resources Board (CARB) and the New Jersey Department of 

Environmental Protection supported the use of a 10% rebound effect, although CARB 

encouraged EPA to consider lowering the value to 5%. Other commenters, such as the 

Missouri Department of Natural Resources, the International Council on Clean 

Transportation (ICCT), the Center for Biological Diversity, and the Consumer Federation 

of America, recommended using a lower rebound effect. ICCT specifically 

recommended that the dynamic rebound effect methodology utilized by Small & Van 

Dender was the most appropriate methodology, which would support a rebound effect of 

5% or lower. In contrast, the National Association of Dealerships asserted that the 

rebound effect should be higher (e.g., in the lower range of the 15-30% historical range), 

but did not submit any data to support this claim. 

While we appreciate 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, we believe the 

larger body of historical studies should also be considered when determining the value of 

the rebound effect. As we described in the 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 as new data becomes available. 

We also invited comments on whether we should also explore other alternatives 

for estimating the rebound effect, such as whether it would be appropriate to use the price 

elasticity of demand for gasoline to guide the choice of a value for the rebound effect. 

We received only one comment on this issue from ICCT. In their comments, ICCT 

stated that the short run elasticity can provide a useful point of comparison for rebound 

 

459 Sorrell, S. and J. Dimitropoulos, 2007. “UKERC Review of Evidence for the Rebound Effect, Technical 

Report 2: Econometric Studies”, UKERC/WP/TPA/2007/010, UK Energy Research Centre, London, 

October (Docket EPA-HQ-OAR-2009-0472-0012). 

460 Report by Kenneth A. Small of University of California at Irvine to EPA, “The Rebound Effect from 

Fuel Efficiency Standards: Measurement and Projection to 2030”, June 12, 2009 (Docket EPA-HQ-OAR2009-0472-0002). 

461 Revised Report by David Greene of Oak Ridge National Laboratory to EPA, “Rebound 2007: Analysis 

of National Light-Duty Vehicle Travel Statistics,” February 9, 2010 (Docket EPA-HQ-OAR-2009-0472-

0220). This paper has been accepted for an upcoming special issue of Energy Policy, although the 

publication date has not yet been determined. 

Deleted: March 24, 2009

Deleted: the 

Deleted: Journal
398 

effect estimates, but it should not be used to guide the choice of a value for the rebound 

effect. Therefore, we have not incorporated this metric into our analysis. 

5. Impacts on U.S. Vehicle Sales and Payback Period

a. Vehicle Sales Impacts 

 

 This analysis compares two effects. On the one hand, the vehicles will become 

more expensive, which would, by itself, discourage sales. On the other hand, the vehicles 

will have improved fuel economy and thus lower operating costs, which makes them 

more attractive to consumers. The basic question is, then, which effect dominates? The 

methodology EPA used for estimating the impact on vehicle sales is relatively 

straightforward, but makes a number of simplifying assumptions. According to the 

literature, the price elasticity of demand for vehicles is commonly estimated to be -1.0.462 

In other words, a one percent increase in the price of a vehicle would be expected to 

decrease sales by one percent, holding all other factors constant. For our estimates, EPA 

calculated the effect of an increase in vehicle costs due to the GHG standards and 

assumes that consumers will face the full increase in costs, not an actual (estimated) 

change in vehicle price. (The estimated increases in vehicle cost due to the rule are 

discussed in Section III.H.2) This is a conservative methodology, since an increase in 

cost may not pass fully into an increase in market price in an oligopolistic industry such 

as the automotive sector.463 EPA also notes that we have not used these estimated sales 

impacts in the OMEGA Model. 

Although EPA uses the one percent price elasticity of demand for vehicles as the 

basis for our vehicle sales impact estimates, we assumed that the consumer would take 

into account both the higher vehicle purchasing costs as well as some of the fuel savings 

benefits when deciding whether to purchase a new vehicle. Therefore, the incremental 

cost increase of a new vehicle would be offset by reduced fuel expenditures over a certain 

period of time (i.e., the “payback period”). For the purposes of this rulemaking, EPA 

used a five-year payback period, which is consistent with the length of a typical new 

light-duty vehicle loan.464 The one commenter on this analysis stated that use of the fiveyear payback period was reasonable. This approach may not accurately reflect the role of 

fuel savings in consumers’ purchase decisions, as the discussion in Section III.H.1 

 

462 Kleit A.N., 1990. “The Effect of Annual Changes in Automobile Fuel Economy Standards.” 

Journal of Regulatory Economics 2: 151-172 (Docket EPA-HQ-OAR-2009-0472-0015); McCarthy, 

Patrick S., 1996. “Market Price and Income Elasticities of New Vehicle Demands.” Review of Economics 

and Statistics 78: 543-547 (Docket EPA-HQ-OAR-2009-0472-0016); Goldberg, Pinelopi K., 1998. “The 

Effects of the Corporate Average Fuel Efficiency Standards in the U.S.,” Journal of Industrial Economics

46(1): 1-33 (Docket EPA-HQ-OAR-2009-0472-0017). 

463 See, for instance, Gron, Ann, and Deborah Swenson, 2000. “Cost Pass-Through in the U.S. Automobile 

Market,” Review of Economics and Statistics 82: 316-324 (Docket EPA-HQ-OAR-2009-0472-0007). 

464 As discussed further in Section III.H.1, there is not a consensus in the literature on how consumers 

consider fuel economy in their vehicle purchases. Results are inconsistent, possibly due to fuel economy 

not being a major focus of many of the studies, and possibly due to sensitivity of results to modeling and 

data used. A survey by Greene (2010) finds that estimates in the literature of the value that consumers 

place on fuel economy when buying a vehicle range from negative – consumers would pay to reduce fuel 

economy – to more than 1000 times the value of fuel savings. 
399 

suggests. If consumers consider fuel savings in a different fashion than modeled here, 

then this approach will not accurately reflect the impact of this rule on vehicle sales. 

This increase in costs has other effects on consumers as well: if vehicle prices 

increase, consumers will face higher insurance costs and sales tax, and additional finance 

costs if the vehicle is bought on credit. In addition, the resale value of the vehicles will 

increase. EPA received no comments on these adjustments. The only change to these 

adjustments between the NPRM and this discussion is an updating of the interest rate on 

auto loans. EPA estimates that, with corrections for these factors, the effect on consumer 

expenditures of the cost of the new technology should be 0.914 times the cost of the 

technology at a 3% discount rate, and 0.876 times the cost of the technology at a 7% 

discount rate. The details of this calculation are in the RIA, Chapter 8.l. 

Once the cost estimates are adjusted for these additional factors, the fuel cost 

savings associated with the rule, discussed in Section III.H.4, are subtracted to get the net 

effect on consumer expenditures for a new vehicle. With the assumed elasticity of 

demand of -1, the percent change in this “effective price,” estimated as the adjusted 

increase in cost, is equal to the negative of the percent change in vehicle purchases. The 

net effect of this calculation is in Table III.H.5-1 and Table III.H.5-2. The values have 

changed slightly from the NPRM, due to changes in fuel prices and fuel savings, 

technology costs, and baseline vehicle sales projections, in addition to the adjustment in 

financing costs. 

The estimates provided in Table III.H.5-1 and Table III.H.5-2 are meant to be 

illustrative rather than a definitive prediction. When viewed at the industry-wide level, 

they give a general indication of the potential impact on vehicle sales. As shown below, 

the overall impact is positive and growing over time for both cars and trucks. Because 

the fuel savings associated with this rule are expected to exceed the technology costs, the 

effective prices of vehicles (the adjusted increase in technology cost less the fuel savings 

over five years) to consumers will fall, and consumers will buy more new vehicles. As a 

result, the lower net cost of the vehicles is projected to lead to an increase in sales for 

both cars and trucks. Note this analysis has not accounted for a number of factors that 

might affect consumer vehicle purchases, such as changing market conditions, changes in 

vehicle characteristics that might accompany improvements in fuel economy, or 

consumers considering a different “payback period” for their fuel economy purchases. If 

consumers use a shorter payback period, the sales impacts will be less positive, possibly 

negative; if consumers use a higher payback period, the impacts will be more positive. 

Also, this is an aggregate analysis; some individual consumers (those who drive less than 

estimated here) will face lower net benefits, while others (who drive more than estimated 

here) will have even greater savings. These complications add considerable uncertainty 

to our vehicle sales impact analysis. 

Table III.H.5-1 Vehicle Sales Impacts Using a 3% Discount Rate 

 Change in Car 

Sales 

% Change Change in 

Truck Sales 

% Change 

2012 67,500 0.7 62,100 1.1 
400 

2013 76,000 0.8 190,200 3.2 

2014 114,000 1.1 254,900 4.3 

2015 222,200 2.1 352,800 6.1 

2016 360,500 3.3 488,000 8.6 

Table III.H.5-1 shows the impacts on new vehicle sales using a 3% discount rate. 

The fuel savings over five years are always higher than the technology costs. Although 

both cars and trucks show very small effects initially, over time vehicle sales become 

increasingly positive, as increased fuel prices make improved fuel economy more 

desirable. The increases in sales for trucks are larger than the increases for trucks (except 

in 2012) in both absolute numbers and percentage terms. 

Table III.H.5-2 New Vehicle Sales Impacts Using a 7% Discount Rate 

 Change in Car 

Sales 

% Change Change in 

Truck Sales 

% Change 

2012 62,800 0.7 58,300 1 

2013 70,500 0.7 92,300 1.5 

2014 106,100 1 127,700 2.1 

2015 208,400 2 194,200 3.3 

2016 339,400 3.1 280,000 4.9 

Table III.H.5-2 shows the impacts on new vehicle sales using a 7% interest rate. 

While a 7% interest rate shows slightly lower impacts than using a 3% discount rate, the 

results are qualitatively similar to those using a 3% discount rate. Sales increase for 

every year. For both cars and trucks, sales become increasingly positive over time, as 

higher fuel prices make improved fuel economy more valuable. The car market grows 

more than the truck market in absolute numbers, but less on a percentage basis. 

The effect of this rule on the use and scrappage of older vehicles will be related to 

its effects on new vehicle prices, the fuel efficiency of new vehicle models, and the total 

sales of new vehicles. If the value of fuel savings resulting from improved fuel efficiency 

to the typical potential buyer of a new vehicle outweighs the average increase in new 

models’ prices, sales of new vehicles will rise, while scrappage rates of used vehicles will 

increase slightly. This will cause the “turnover” of the vehicle fleet (i.e., the retirement 

of used vehicles and their replacement by new models) to accelerate slightly, thus 

accentuating the anticipated effect of the rule on fleet-wide fuel consumption and CO2

emissions. However, if potential buyers value future fuel savings resulting from the 

increased fuel efficiency of new models at less than the increase in their average selling 

price, sales of new vehicles will decline, as will the rate at which used vehicles are retired 

from service. This effect will slow the replacement of used vehicles by new models, and 

thus partly offset the anticipated effects of this rule on fuel use and emissions. 

Because the agencies are uncertain about how the value of projected fuel savings 

from this rule to potential buyers will compare to their estimates of increases in new 
401 

vehicle prices, we have not attempted to estimate explicitly the effects of the rule on 

scrappage of older vehicles and the turnover of the vehicle fleet. 

A detailed discussion of the vehicle sales impacts methodology is provided in the 

Chapter 8 of EPA’s RIA. 

b. Consumer Payback Period and Lifetime Savings on New Vehicle 

Purchases 

Another factor of interest is the payback period on the purchase of a new vehicle 

that complies with the new standards. In other words, how long would it take for the 

expected fuel savings to outweigh the increased cost of a new vehicle? For example, a 

new 2016 MY vehicle is estimated to cost $948 more (on average, and relative to the 

reference case vehicle) due to the addition of new GHG reducing technology (see Section 

III.D.6 for details on this cost estimate). This new technology will result in lower fuel 

consumption and, therefore, savings in fuel expenditures (see Section III.H.10) for details 

on fuel savings). But how many months or years would pass before the fuel savings 

exceed the upfront cost of $948? 

Table III.H.5-3 provides the answer to this question for a vehicle purchaser who 

pays for the new vehicle upfront in cash (we discuss later in this section the payback 

period for consumers who finance the new vehicle purchase with a loan). The table uses 

annual miles driven (vehicle miles traveled, or VMT) and survival rates consistent with 

the emission and benefits analyses presented in Chapter 4 of the Joint TSD. The control 

case includes rebound VMT but the reference case does not, consistent with other parts of 

the analysis. Also included are fuel savings associated with A/C controls (in the control 

case only). Not included here are the likely A/C-related maintenance savings as 

discussed in Chapter 2 of EPA’s RIA. Further, this analysis does not include other 

societal impacts such as the value of increased driving, or noise, congestion and accidents 

since the focus is meant to be on those factors consumers think about most while in the 

showroom considering a new car purchase. Car/truck fleet weighting is handled as 

described in Chapter 1 of the Joint TSD. As can be seen in the table, it will take under 3 

years (2 years and 7 months at a 3% discount rate, 2 years and 9 months at a 7% discount 

rate) for the cumulative discounted fuel savings to exceed the upfront increase in vehicle 

cost. More detail on this analysis can be found in Chapter 8 of EPA’s RIA. 

Table III.H.5-3 Payback Period on a 2016 MY New Vehicle Purchase via Cash (2007 

dollars) 

YEAR OF 

OWNERSHIP 

INCREASED 

VEHICLE COSTa 

ANNUAL FUEL 

SAVINGSb

CUMULATIVE 

DISCOUNTED 

FUEL SAVINGS 

AT 3% 

CUMULATIVE 

DISCOUNTED 

FUEL SAVINGS 

AT 7% 

1 $1,018 $424 $418 $410 

2 $420 $820 $790 

3 $414 $1,204 $1,139 

4 $402 $1,567 $1,457 a

 Increased vehicle cost due to the rule is $948; the value here includes nationwide average sales tax of 

5.3% and increased insurance premiums of 1.98%; both of these percentages are discussed in Section 8.1.1 
402 

of EPA’s RIA. 

b Calculated using AEO 2010 Early Release reference case fuel price including taxes.

 However, most people purchase a new vehicle using credit rather than paying 

cash up front. The typical car loan today is a five year, 60 month loan. As of February 9, 

2010, the national average interest rate for a 5 year new car loan was 6.54 percent. If the 

increased vehicle cost is spread out over 5 years at 6.54 percent, the analysis would look 

like that shown in Table III.H.5-4. As can be seen in this table, the fuel savings 

immediately outweigh the increased payments on the car loan, amounting to $177 in 

discounted net savings (3% discount rate) in the first year and similar savings for the next 

two years before reduced VMT starts to cause the fuel savings to fall. Results are similar 

using a 7% discount rate. This means that for every month that the average owner is 

making a payment for the financing of the average new vehicle their monthly fuel savings 

would be greater than the increase in the loan payments. This amounts to a savings on 

the order of $9 to $15 per month throughout the duration of the 5 year loan. Note that in 

year six when the car loan is paid off, the net savings equal the fuel savings (as would be 

the case for the remaining years of ownership). 

Table III.H.5-4 Payback Period on a 2016 MY New Vehicle Purchase via Credit (2007 

dollars) 

YEAR OF 

OWNERSHIP 

INCREASED 

VEHICLE COSTa ANNUAL FUEL 

SAVINGSb

ANNUAL 

DISCOUNTED 

NET SAVINGS AT 

3% 

ANNUAL 

DISCOUNTED 

NET SAVINGS AT 

7% 

1 $245 $424 $177 $173 

2 $245 $420 $167 $158 

3 $245 $414 $157 $142 

4 $245 $402 $142 $124 

5 $245 $391 $127 $107 

6 $0 $374 $318 $258 a This uses the same increased cost as Table III.H.4-3 but spreads it out over 5 years assuming a 5 year car 

loan at 6.54 percent. 

b

 Calculated using AEO 2010 Early Release reference case fuel price including taxes.

 The lifetime fuel savings and net savings can also be calculated for those who 

purchase the vehicle using cash and for those who purchase the vehicle with credit. This 

calculation applies to the vehicle owner who retains the vehicle for its entire life and 

drives the vehicle each year at the rate equal to the national projected average. The 

results are shown in Table III.H.5-5. In either case, the present value of the lifetime net 

savings is greater than $3,100 at a 3% discount rate, or $2,300 at a 7% discount rate. 

Table III.H.5-5 Lifetime Discounted Net Savings on a 2016 MY New Vehicle Purchase 

(2007 dollars) 

PURCHASE 

OPTION 

INCREASED 

DISCOUNTED 

LIFETIME 

DISCOUNTED 

LIFETIME 

DISCOUNTED 
403 

VEHICLE COST FUEL SAVINGS B NET SAVINGS 

3% discount rate 

Cash $1,018 $4,306 $3,303 

Credit a $1,140 $4,306 $3,166 

7% discount rate 

Cash $1,018 $3,381 $2,396 

Credit a $1,040 $3,381 $2,340 a

 Assumes a 5 year loan at 6.54 percent. 

b Fuel savings here were calculated using AEO 2010 Early Release reference case 

fuel price including taxes.

 Note that throughout this consumer payback discussion, the average number of 

vehicle miles traveled per year has been used. Drivers who drive more miles than the 

average would incur fuel related savings more quickly and, therefore, the payback would 

come sooner. Drivers who drive fewer miles than the average would incur fuel related 

savings more slowly and, therefore, the payback would come later. 

6. Benefits of Reducing GHG Emissions

a. Social Cost of Carbon 

In today’s final rule, EPA and NHTSA assigned a dollar value to reductions in 

CO2 emissions using the marginal dollar value of climate-related damages resulting from 

carbon emissions, also referred to as “social cost of carbon” (SCC). The SCC estimates 

used in today’s rule were recently developed by an interagency process, in which EPA 

and NHTSA participated. As part of the interagency group, EPA and NHTSA have 

critically evaluated the new SCC estimates and endorse them for use in these regulatory 

analyses, for the reasons presented below. The SCC TSD, Social Cost of Carbon for 

Regulatory Impact Analysis Under Executive Order 12866, presents a more detailed 

description of the methodology used to generate the new estimates, the underlying 

assumptions, and the limitations of the new SCC estimates. 

Under Executive Order 12866, 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.” The purpose of the SCC estimates presented here is to incorporate the social 

benefits of reducing carbon dioxide (CO2) emissions from light-duty vehicles into a costbenefit analysis of this final rule, which has a small, or “marginal,” impact on cumulative 

global emissions. The estimates are presented with an acknowledgement of the many 

uncertainties involved and with a clear understanding that they should be updated over 

time to reflect increasing knowledge of the science and economics of climate impacts. 

The interagency process that developed these SCC estimates involved a group of 

technical experts from numerous agencies, which met on a regular basis to consider 

public comments, explore the technical literature in relevant fields, and discuss key 

model inputs and assumptions. 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 

Deleted: EPA and NHTSA have 

critically evaluated the decisions of the 

interagency group and the new SCC 

estimates and endorse them as reasonable 

for this final rule for the reasons 

presented below
404 

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. 

The interagency group selected four SCC values for use in regulatory analyses, 

which EPA and NHTSA have applied to this final rule. Three values are based on the 

average SCC from three integrated assessment models, at discount rates of 2.5, 3, and 5 

percent. The fourth value, which represents the 95th percentile SCC estimate across all 

three models at a 3 percent discount rate, is included to represent higher-than-expected 

impacts from temperature change further out in the tails of the SCC distribution. 

Table III.H.6-1 Social Cost of CO2, 2010 – 2050a

 (in 2007 dollars)

Discount Rate 5% 3% 2.5% 3% 

Year Avg Avg Avg 95th 

2010 5 21 35 65 

2015 6 24 38 73 

2020 7 26 42 81 

2025 8 30 46 90 

2030 10 33 50 100 

2035 11 36 54 110 

2040 13 39 58 119 

2045 14 42 62 128 

2050 16 45 65 136 a

 The SCC estimates presented above have been rounded to nearest dollar 

for consistency with the benefits analysis. The SCC TSD presents 

estimates rounded to the nearest tenth of a cent. 

i. Monetizing Carbon Dioxide Emissions 

The “social cost of carbon” (SCC) is an estimate of the monetized damages 

associated with an incremental increase in carbon emissions in a given year. It is 

intended to include (but is not limited to) changes in net agricultural productivity, human 

health, property damages from increased flood risk, and the value of ecosystem services. 

We report estimates of the social cost of carbon in dollars per metric ton of carbon 

dioxide throughout this document. 

When attempting to assess the incremental economic impacts of carbon dioxide 

emissions, the analyst faces a number of serious challenges. A 2009 report from the 

National Academies of Science points out that any assessment will suffer from 

uncertainty, speculation, and lack of information about (1) future emissions of 

greenhouse gases, (2) the effects of past and future emissions on the climate system, (3) 

the impact of changes in climate on the physical and biological environment, and (4) the 

translation of these environmental impacts into economic damages.465 As a result, any 

 

465National Research Council (2009). Hidden Costs of Energy: Unpriced Consequences of Energy 

Production and Use. National Academies Press. 
405 

effort to quantify and monetize the harms associated with climate change will raise 

serious questions of science, economics, and ethics and should be viewed as provisional. 

Despite the serious limits of both quantification and monetization, SCC estimates 

can be useful in estimating the social benefits of reducing carbon dioxide emissions. 

Under Executive Order 12866, 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.” 

EPA and NHTSA have used the SCC estimates to incorporate social benefits from 

reducing carbon dioxide emissions from light-duty vehicles into a cost-benefit analysis of 

this final rule, which has a small, or “marginal,” impacts on cumulative global emissions. 

Most federal regulatory actions can be expected to have marginal impacts on global 

emissions. 

For policies that have marginal impacts on global emissions, the benefits from 

reduced (or costs from increased) emissions in any future year can be estimated by 

multiplying the change in emissions in that year by the SCC value appropriate for that 

year. The net present value of the benefits can then be calculated by multiplying each of 

these future benefits by an appropriate discount factor and summing across all affected 

years. This approach assumes that the marginal damages from increased emissions are 

constant for small departures from the baseline emissions path, an approximation that is 

reasonable for policies that have effects on emissions that are small relative to cumulative 

global carbon dioxide emissions. For policies that have a large (non-marginal) impact on 

global cumulative emissions, there is a separate question of whether the SCC is an 

appropriate tool for calculating the benefits of reduced emissions; we do not attempt to 

answer that question here. 

As noted above, the interagency group convened on a regular basis to consider 

public comments, explore the technical literature in relevant fields, and discuss key inputs 

and assumptions in order to generate SCC estimates. In addition to EPA and NHTSA, 

agencies that actively participated in the interagency process included the Departments of 

Agriculture, Commerce, Energy, and Treasury. This process was convened by the 

Council of Economic Advisers and the Office of Management and Budget, with active 

participation and regular input from the Council on Environmental Quality, National 

Economic Council, Office of Energy and Climate Change, and Office of Science and 

Technology Policy. The main objective of this process was to develop a range of SCC 

values using a defensible set of input assumptions that are grounded in the existing 

literature. In this way, key uncertainties and model differences can more transparently 

and consistently inform the range of SCC estimates used in the rulemaking process. 

The interagency group selected four global SCC estimates for use in regulatory 

analyses. For 2010, these estimates are $5, $21, $35, and $65 (in 2007 dollars). The first 

three estimates are based on the average SCC across models and socio-economic and 

emissions scenarios at the 5, 3, and 2.5 percent discount rates, respectively. The fourth 

value is included to represent the higher-than-expected impacts from temperature change 
406 

further out in the tails of the SCC distribution. For this purpose, we use the SCC value for 

the 95th percentile at a 3 percent discount rate. The central value is the average SCC 

across models at the 3 percent discount rate. For purposes of capturing the uncertainties 

involved in regulatory impact analysis, we emphasize the importance and value of 

considering the full range. These SCC estimates also grow over time. For instance, the 

central value increases to $24 per ton of CO2 in 2015 and $26 per ton of CO2 in 2020. 

See the SCC TSD for the full range of annual SCC estimates from 2010 to 2050. 

These new SCC estimates represent global measures and the center of our current 

attention because of the distinctive nature of the climate change problem. The climate 

change problem is highly unusual in at least two respects. First, it involves a global 

externality: emissions of most greenhouse gases contribute to damages around the world 

even when they are emitted in the United States. Consequently, to address the global 

nature of the problem, the SCC must incorporate the full (global) damages caused by 

GHG emissions. Second, climate change presents a problem that the United States alone 

cannot solve. Even if the United States were to reduce its greenhouse gas emissions to 

zero, that step would be far from enough to avoid substantial climate change. Other 

countries would also need to take action to reduce emissions if significant changes in the 

global climate are to be avoided. 

It is important to emphasize that the interagency process is committed to updating 

these estimates as the science and economic understanding of climate change and its 

impacts on society improves over time. Specifically, the interagency group has 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. In the meantime, the interagency group will continue to explore the issues 

raised in the SCC TSD and consider public comments as part of the ongoing interagency 

process. 

ii. Social Cost of Carbon Values Used in Past Regulatory Analyses 

To date, economic analyses for Federal regulations have used a wide range of 

values to estimate the benefits associated with reducing carbon dioxide emissions. In the 

final model year 2011 CAFE rule, the Department of Transportation (DOT) used both a 

“domestic” SCC value of $2 per ton of CO2 and a “global” SCC value of $33 per ton of 

CO2 for 2007 emission reductions (in 2007 dollars), increasing both values at 2.4 percent 

per year. It also included a sensitivity analysis at $80 per ton of CO2. A domestic SCC 

value is meant to reflect the value of damages in the United States resulting from a unit 

change in carbon dioxide emissions, while a global SCC value is meant to reflect the 

value of damages worldwide. 

A 2008 regulation proposed by DOT assumed a domestic SCC value of $7 per ton 

CO2 (in 2006 dollars) for 2011 emission reductions (with a range of $0-$14 for sensitivity 

analysis), also increasing at 2.4 percent per year. A regulation finalized by DOE in 

October of 2008 used a domestic SCC range of $0 to $20 per ton CO2 for 2007 emission 

reductions (in 2007 dollars). In addition, EPA’s 2008 Advance Notice of Proposed 
407 

Rulemaking for Greenhouse Gases identified what it described as “very preliminary” 

SCC estimates subject to revision. EPA’s global mean values were $68 and $40 per ton 

CO2 for discount rates of approximately 2 percent and 3 percent, respectively (in 2006 

dollars for 2007 emissions). 

In 2009, an interagency process was initiated to offer a preliminary assessment of 

how best to quantify the benefits from reducing carbon dioxide emissions. To ensure 

consistency in how benefits are evaluated across agencies, the Administration sought to 

develop a transparent and defensible method, specifically designed for the rulemaking 

process, to quantify avoided climate change damages from reduced CO2 emissions. The 

interagency group did not undertake any original analysis. Instead, it combined SCC 

estimates from the existing literature to use as interim values until a more comprehensive 

analysis could be conducted. 

The outcome of the preliminary assessment by the interagency group was a set of 

five interim values: global SCC estimates for 2007 (in 2006 dollars) of $55, $33, $19, 

$10, and $5 per ton of CO2. The $33 and $5 values represented model-weighted means 

of the published estimates produced from the most recently available versions of three 

integrated assessment models (DICE, PAGE, and FUND) at approximately 3 and 5 

percent discount rates.466 The $55 and $10 values were derived by adjusting the 

published estimates for uncertainty in the discount rate (using factors developed by 

Newell and Pizer (2003)) at 3 and 5 percent discount rates, respectively.467 The $19 value 

was chosen as a central value between the $5 and $33 per ton estimates. All of these 

values were assumed to increase at 3 percent annually to represent growth in incremental 

damages over time as the magnitude of climate change increases. 

These interim values represent the first sustained interagency effort within the 

U.S. government to develop an SCC for use in regulatory analysis. The results of this 

preliminary effort were presented in several proposed and final rules and were offered for 

public comment in connection with proposed rules. In particular, EPA and NHTSA used 

the interim SCC estimates in the joint proposal leading to this final rule. 

iii. Approach and Key Assumptions 

Since the release of the interim values, interagency group has reconvened on a 

regular basis to generate improved SCC estimates, which EPA and NHTSA used in this 

final rule. Specifically, the group has considered public comments and further explored 

the technical literature in relevant fields. The general approach to estimating SCC values 

 

466 The DICE (Dynamic Integrated Climate and Economy) model by William Nordhaus evolved from a 

series of energy models and was first presented in 1990 (Nordhaus and Boyer 2000, Nordhaus 2008). The 

PAGE (Policy Analysis of the Greenhouse Effect) model was developed by Chris Hope in 1991 for use by 

European decision-makers in assessing the marginal impact of carbon emissions (Hope 2006, Hope 2008). 

The FUND (Climate Framework for Uncertainty, Negotiation, and Distribution) model, developed by 

Richard Tol in the early 1990s, originally to study international capital transfers in climate policy. is now 

widely used to study climate impacts (e.g., Tol 2002a, Tol 2002b, Anthoff et al. 2009, Tol 2009). 

467 Newell, R., and W. Pizer. 2003. Discounting the distant future: how much do uncertain rates increase 

valuations? Journal of Environmental Economics and Management 46: 52-71. 
408 

was to run the three integrated assessment models (FUND, DICE, and PAGE) using the 

following inputs agreed upon by the interagency group: 

• A Roe and Baker distribution for the climate sensitivity parameter 

bounded between 0 and 10 with a median of 3 °C and a cumulative 

probability between 2 and 4.5 °C of two-thirds.468

• Five sets of GDP, population and carbon emissions trajectories based 

on the recent Stanford Energy Modeling Forum, EMF-22. 

• Constant annual discount rates of 2.5, 3, and 5 percent. 

The SCC TSD presents a summary of the results and details the modeling exercise and 

the choices and assumptions that underlie the resulting estimates of the SCC. The 

complete model results are available in the docket for this final rule [EPA-HQ-OAR2009-0472]. 

It is important to recognize that a number of key uncertainties remain, and that 

current SCC estimates should be treated as provisional and revisable since they will 

evolve with improved scientific and economic understanding. The interagency group also 

recognizes that the existing models are imperfect and incomplete. The National 

Academy of Science (2009) points out that there is tension between the goal of producing 

quantified estimates of the economic damages from an incremental ton of carbon and the 

limits of existing efforts to model these effects. The SCC TSD highlights a number of 

concerns and problems that should be addressed by the research community, including 

research programs housed in many of the agencies participating in the interagency 

process to estimate the SCC. 

The U.S. Government will periodically review and reconsider estimates of the 

SCC used for cost-benefit analyses to reflect increasing knowledge of the science and 

economics of climate impacts, as well as improvements in modeling. In this context, 

statements recognizing the limitations of the analysis and calling for further research take 

on exceptional significance. The interagency group offers the new SCC values with all 

due humility about the uncertainties embedded in them and with a sincere promise to 

continue work to improve them. 

iv. Use of New SCC Estimates to Calculate GHG Benefits for this Final Rule 

The table below summarizes the total GHG benefits for the lifetime of the rule, 

which are calculated by using the four new SCC values. Specifically, EPA calculated the 

total monetized benefits in each year by multiplying the marginal benefits estimates per 

metric ton of CO2 (the SCC) by the reductions in CO2 for that year. 

Table III.H.6-2 Monetized CO2 Benefits of Vehicle Program, CO2 Emissionsa,b (Million 

2007$) 

BENEFITS YEAR 

CO2 EMISSIONS 

REDUCTION 

(Million Metric Avg SCC at 5% Avg SCC at 3% Avg SCC at 2.5% 95th

 percentile 

 

468 Roe, G., and M. Baker. 2007. “Why is climate sensitivity so unpredictable?” Science 318:629-632 
409 

Tons) ($5-$16)c

 ($21-$45)c ($35-$65)c SCC at 3% 

($65-$136)c

2020 139 $900 $3,700 $5,800 $11,000 

2030 273 $2,700 $8,900 $14,000 $27,000 

2040 360 $4,600 $14,000 $21,000 $43,000 

2050 459 $7,200 $21,000 $30,000 $62,000 a Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. b

 Numbers may not compute exactly from Tables III.H.6-1 and III.H.6-2 due to rounding. 

c As noted above, SCC increases over time; tables lists ranges for years 2010 through 2050. See Table 

III.H.6-1 for the SCC estimates corresponding to the years in this table. 

b. Summary of the Response to Comments 

EPA and NHTSA received extensive public comments about the scientific, 

economic, and ethical issues involved in estimating the SCC, including the proposed 

rule’s estimates of the value of emissions reductions from new cars and trucks.469 In 

particular, the comments addressed the methodology used to derive the interim SCC 

estimates, limitations of integrated assessment models, discount rate selection, treatment 

of uncertainty and catastrophic impacts, use of global and domestic SCC, and the 

presentation and use of SCC estimates. The rest of this preamble section briefly 

summarizes EPA’s response to the comments; the Response to Comments document 

provides the complete responses to all comments received. 

 

EPA received extensive comments about the methodology and discount rates used 

to derive the interim SCC estimates. While one commenter from the auto industry 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, stated that model-weighting averaging was inappropriate, and 

recommended that EPA use lower discount rates. These commenters also discussed 

alternative approaches to select discount rates and generally recommended that EPA use 

lower rates to give more weight to climate damages experienced by future generations. 

For the final rule, EPA conducted new analyses of SCC. EPA did not continue 

with its interim approach to derive estimates from the existing literature and instead 

conducted new model runs that produced a vast amount of SCC data at three separate 

certainty-equivalent discount rates (2.5, 3, and 5 percent). As discussed further in the 

SCC TSD, this modeling exercise resulted in a fuller distribution of SCC estimates and 

better accounted for uncertainty through a Monte Carlo analysis. Comments on specific 

issues are addressed in the Response to Comments document. 

 

469 EPA estimated GHG benefits in the proposed rule using a set of interim SCC values developed by an 

interagency group, in which EPA and NHTSA participated. As discussed in the SCC TSD, the interagency 

group selected the interim estimates from the existing literature and agreed to use those interim estimates in 

regulatory analyses until it could develop a more comprehensive characterization of the SCC. 
410 

EPA received comments on the limitations of the integrated assessment models 

concluding that the selection of models and reliance on the model authors’ datasets 

contributed to the downward bias of the interim SCC estimates. In this final rule, EPA 

relied on the default values in each model for the remaining parameter; research gaps and 

practical constraints required EPA to limit its modification of the models to 

socioeconomic and emissions scenarios, climate sensitivity, and discount rate. 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 currently 

available representations. EPA also considered, for each model, the treatment of 

uncertainty, catastrophic impacts, and omitted impacts, and as discussed in the SCC TSD 

and the Response to Comments document, used best available information and 

techniques to quantify such impacts as feasible and supplemented the SCC with 

qualitative assessments. Comments on specific issues are addressed in the Response to 

Comments document. 

Six 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. EPA agrees that a global measure of GHG mitigation benefits is both 

appropriate and lawful for EPA to consider in evaluating the benefits of GHG emissions 

standards adopted under section 202(a). Global climate change represents a problem that 

the United States cannot solve alone without global action, and for a variety of reasons 

there is a value to the U.S. from domestic emissions reductions that reduce the harm 

occurring globally. This is not exercise of regulatory authority over conduct occurring 

overseas, but instead is a reasonable exercise of discretion in how to place a monetary 

value on a reduction in domestic emissions. See the Response to Comments document 

for a complete discussion of this issue. 

Finally, EPA received various comments regarding the presentation of the SCC 

methodology and resulting estimates. EPA has responded to these concerns by 

presenting a detailed discussion about the methodology, including key model 

assumptions, as well as uncertainties and research gaps associated with the SCC 

estimates and the implications for the SCC estimates. Among these key assumptions and 

uncertainties are issues involving discount rates, climate sensitivity and socioeconomic 

scenario assumptions, incomplete treatment of potential catastrophic impacts, incomplete 

treatment of non-catastrophic impacts, uncertainty in extrapolation of damages to high 

temperatures, incomplete treatment of adaptation and technological change, and 

assumptions about risk aversion to high-impact outcomes (see SCC TSD). 

 

7. Non-Greenhouse Gas Health and Environmental Impacts 

This section presents EPA’s analysis of the non-GHG health and environmental 

impacts that can be expected to occur as a result of the light-duty vehicle GHG rule. 

GHG emissions are predominantly the byproduct of fossil fuel combustion processes that 

also produce criteria and hazardous air pollutants. The vehicles that are subject to the 
411 

standards are also significant sources of mobile source air pollution such as direct PM, 

NOX, VOCs and air toxics. The standards will affect exhaust emissions of these 

pollutants from vehicles. They will also affect emissions from upstream sources related 

to changes in fuel consumption. Changes in ambient ozone, PM2.5, and air toxics that 

will result from the standards are expected to affect human health in the form of 

premature deaths and other serious human health effects, as well as other important 

public health and welfare effects. 

As many commenters noted, it is important to quantify the health and 

environmental impacts associated with the final rule because a failure to adequately 

consider these ancillary co-pollutant impacts could lead to an incorrect assessment of 

their net costs and 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. 

This section is split into two sub-sections: the first presents the PM- and ozonerelated health and environmental impacts associated with final rule in calendar year (CY) 

2030; the second presents the PM-related benefits-per-ton values used to monetize the 

PM-related co-benefits associated with the model year (MY) analysis of the final rule.470 

a. Quantified and Monetized Non-GHG Human Health Benefits of the 2030 

Calendar Year (CY) Analysis 

This analysis reflects the impact of the final light-duty GHG rule in 2030 

compared to a future-year reference scenario without the rule in place. Overall, we 

estimate that the final rule will lead to a net decrease in PM2.5-related health impacts (see 

Section III.G.5 of this preamble for more information about the air quality modeling 

results). While the PM-related air quality impacts are relatively small, the decrease in 

population-weighted national average PM2.5 exposure results in a net decrease in adverse 

PM-related human health impacts (the decrease in national population-weighted annual 

average PM2.5 is 0.0036 μg/m3). 

The air quality modeling (discussed in Section III.G.5) projects very small 

increases in ozone concentrations in many areas, but these are driven by the ethanol 

production volumes mandated by the recently finalized RFS2 rule and are not due to the 

standards finalized in this rule. While the ozone-related impacts are very small, the 

increase in population-weighted national average ozone exposure results in a small 

increase in ozone-related health impacts (population-weighted maximum 8-hour average 

ozone increases by 0.0104 ppb). 

 

470 EPA typically analyzes rule impacts (emissions, air quality, costs and benefits) in the year in which they 

occur; for this analysis, we selected 2030 as a representative future year. We refer to this analysis as the 

“Calendar Year” (CY) analysis. EPA also conducted a separate analysis of the impacts over the model year 

lifetimes of the 2012 through 2016 model year vehicles. We refer to this analysis as the “Model Year” 

(MY) analysis. In contrast to the CY analysis, the MY lifetime analysis shows the lifetime impacts of the 

program on each of these MY fleets over the course of its lifetime. 
412 

We base our analysis of the final rule’s impact on human health in 2030 on peerreviewed studies of air quality and human health effects.471,472 These methods are 

described in more detail in the RIA that accompanies this action. Our benefits methods 

are also consistent with recent rulemaking analyses such as the proposed Portland 

Cement National Emissions Standards for Hazardous Air Pollutants (NESHAP) RIA,473

the final NO2 NAAQS, 474 and the final Category 3 Marine Engine rule.475 To model the 

ozone and PM air quality impacts of the final rule, we used the Community Multiscale 

Air Quality (CMAQ) model (see Section III.G.5). The modeled ambient air quality data 

serves as an input to the Environmental Benefits Mapping and Analysis Program 

(BenMAP).476 BenMAP is a computer program developed by the U.S. EPA that 

integrates a number of the modeling elements used in previous analyses (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. 

The range of total monetized ozone- and PM-related health impacts is presented 

in Table III.H.7-1. We present total benefits based on the PM- and ozone-related 

premature mortality function used. The benefits ranges therefore reflect the addition of 

each estimate of ozone-related premature mortality (each with its own row in Table 

III.H.7-1) to estimates of PM-related premature mortality. These estimates represent 

EPA’s preferred approach to characterizing a best estimate of benefits. As is the nature 

of Regulatory Impact Analyses (RIAs), the assumptions and methods used to estimate air 

quality benefits evolve to reflect the Agency’s most current interpretation of the scientific 

and economic literature. 

 

471 U.S. Environmental Protection Agency. (2006). Final Regulatory Impact Analysis (RIA) for the 

National Ambient Air Quality Standards for Particulate Matter. Prepared by: Office of Air and Radiation. 

Retrieved March, 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html. EPA-HQ-OAR-2009-0472-0240 472 U.S. Environmental Protection Agency. (2008). Final Ozone NAAQS Regulatory Impact Analysis. 

Prepared by: Office of Air and Radiation, Office of Air Quality Planning and Standards. Retrieved March, 

26, 2009 at http://www.epa.gov/ttn/ecas/ria.html. EPA-HQ-OAR-2009-0472-0238 

473 U.S. Environmental Protection Agency (U.S. EPA). 2009. Regulatory Impact Analysis: National 

Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry. 

Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. Available on the 

Internet at http://www.epa.gov/ttn/ecas/regdata/RIAs/portlandcementria_4-20-09.pdf. Accessed March 15, 

2010. EPA-HQ-OAR-2009-0472-0241 

474 U.S. Environmental Protection Agency (U.S. EPA). 2010. Final NO2 NAAQS Regulatory Impact 

Analysis (RIA). Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. 

Available on the Internet at http://www.epa.gov/ttn/ecas/regdata/RIAs/FinalNO2RIAfulldocument.pdf. 

Accessed March 15, 2010. EPA-HQ-OAR-2009-0472-0237 

475 U.S. Environmental Protection Agency. 2009. Regulatory Impact Analysis: Control of Emissions of 

Air Pollution from Category 3 Marine Diesel Engines. EPA-420-R-09-019, December 2009. Prepared by 

Office of Air and Radiation. http://www.epa.gov/otaq/regs/nonroad/marine/ci/420r09019.pdf. Accessed 

February 9, 2010. EPA-HQ-OAR-2009-0472-0283 

476 Information on BenMAP, including downloads of the software, can be found at 

http://www.epa.gov/ttn/ecas/ benmodels.html. 
413 

Table III.H.7-1 Estimated 2030 Monetized PM-and Ozone-Related Health Benefitsa

2030 Total Ozone and PM Benefits – PM Mortality Derived from American Cancer Society Analysis and 

Six-Cities Analysisa

Premature Ozone 

Mortality Function 

Reference Total Benefits 

(Millions, 2007$, 3% 

Discount Rate)b,c,d 

Total Benefits 

(Millions, 2007$, 7% 

Discount Rate) b,c,d

Bell et al., 2004 Total: $510 - $1,300 

PM: $550 - $1,300 

Ozone: -$40 

Total: $460 - $1,200 

PM: $500 - $1,200 

Ozone: -$40 

Huang et al., 2005 Total: $490 - $1,300 

PM: $550 - $1,300 

Ozone: -$64 

Total: $440 - $1,200 

PM: $500 - $1,200 

Ozone: -$64 

Multi-city analyses 

Schwartz, 2005 Total: $490 - $1,300 

PM: $550 - $1,300 

Ozone: -$60 

Total: $440 - $1,200 

PM: $500 - $1,200 

Ozone: -$60 

Bell et al., 2005 Total: $430 - $1,200 

PM: $550 - $1,300 

Ozone: -$120 

Total: $380 - $1,100 

PM: $500 - $1,200 

Ozone: -$120 

Ito et al., 2005 Total: $380 - $1,200 

PM: $550 - $1,300 

Ozone: -$170 

Total: $330 - $1,000 

PM: $500 - $1,200 

Ozone: -$170 

Meta-analyses 

Levy et al., 2005 Total: $380 - $1,200 

PM: $550 - $1,300 

Ozone: -$170 

Total: $330 - $1,000 

PM: $500 - $1,200 

Ozone: -$170 

Notes: 

a Total includes premature mortality-related and morbidity-related ozone and PM2.5 benefits. Range was 

developed by adding the estimate from the ozone premature mortality function to the estimate of PM2.5-

related premature mortality derived from either the ACS study (Pope et al., 2002)477 or the Six-Cities study 

(Laden et al., 2006).478 

b

 Note that total benefits presented here do not include a number of unquantified benefits categories. A 

detailed listing of unquantified health and welfare effects is provided in Table III.H.7-2. 

c

 Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA’s Guidelines for 

Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant digits for 

ease of presentation and computation. 

d

 Negatives indicate a disbenefit, or an increase in health effect incidence. 

The benefits in Table III.H.7-1 include all of the human health impacts we are 

able to quantify and monetize at this time. However, the full complement of human 

health and welfare effects associated with PM and ozone remain unquantified because of 

current limitations in methods or available data. We have 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). Additionally, we are 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. These are listed in Table III.H.7-2. As a 

 

477 Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D. Krewski, K. Ito, and G.D. Thurston. (2002). 

“Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure to Fine Particulate Air Pollution.” 

Journal of the American Medical Association 287:1132-1141. EPA-HQ-OAR-2009-0472-0263 

478 Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery. (2006). Reduction in Fine Particulate Air 

Pollution and Mortality. American Journal of Respiratory and Critical Care Medicine. 173: 667-672. 

EPA-HQ-OAR-2009-0472-1661 
414 

result, the health benefits quantified in this section are likely underestimates of the total 

benefits attributable to the final rule. 

Table III.H.7-2 Unquantified and Non-Monetized Potential Effects 

Pollutant/Effects Effects Not Included in Analysis - Changes in: 

Ozone Healtha Chronic respiratory damageb 

Premature aging of the lungsb 

Non-asthma respiratory emergency room visits 

Exposure to UVb (+/-)e

Ozone Welfare Yields for 

-commercial forests 

-some fruits and vegetables 

-non-commercial crops 

Damage to urban ornamental plants 

Impacts on recreational demand from damaged forest aesthetics 

Ecosystem functions 

Exposure to UVb (+/-)e 

PM Healthc Premature mortality - short term exposuresd

Low birth weight 

Pulmonary function 

Chronic respiratory diseases other than chronic bronchitis 

Non-asthma respiratory emergency room visits 

Exposure to UVb (+/-)e 

PM Welfare Residential and recreational visibility in non-Class I areas 

Soiling and materials damage 

Damage to ecosystem functions 

Exposure to UVb (+/-)e 

Nitrogen and Sulfate 

Deposition Welfare 

Commercial forests due to acidic sulfate and nitrate deposition 

Commercial freshwater fishing due to acidic deposition 

Recreation in terrestrial ecosystems due to acidic deposition 

Existence values for currently healthy ecosystems 

Commercial fishing, agriculture, and forests due to nitrogen deposition 

Recreation in estuarine ecosystems due to nitrogen deposition 

Ecosystem functions 

Passive fertilization 

CO Health Behavioral effects 

HC/Toxics Healthf Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde) 

Anemia (benzene) 

Disruption of production of blood components (benzene) 

Reduction in the number of blood platelets (benzene) 

Excessive bone marrow formation (benzene) 

Depression of lymphocyte counts (benzene) 

Reproductive and developmental effects (1,3-butadiene) 

Irritation of eyes and mucus membranes (formaldehyde) 

Respiratory irritation (formaldehyde) 

Asthma attacks in asthmatics (formaldehyde) 

Asthma-like symptoms in non-asthmatics (formaldehyde) 

Irritation of the eyes, skin, and respiratory tract (acetaldehyde) 

Upper respiratory tract irritation and congestion (acrolein) 
415 

HC/Toxics Welfare Direct toxic effects to animals 

Bioaccumulation in the food chain 

Damage to ecosystem function 

Odor 

Notes: 

a

 The public health impact of biological responses such as increased airway responsiveness to stimuli, 

inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to 

respiratory infection are likely partially represented by our quantified endpoints. 

b

 The public health impact of effects such as chronic respiratory damage and premature aging of the lungs 

may be partially represented by quantified endpoints such as hospital admissions or premature mortality, 

but a number of other related health impacts, such as doctor visits and decreased athletic performance, 

remain unquantified. 

c

 In addition to primary economic endpoints, there are a number of biological responses that have been 

associated with PM health effects including morphological changes and altered host defense mechanisms. 

The public health impact of these biological responses may be partly represented by our quantified 

endpoints. 

d

 While some of the effects of short-term exposures are likely to be captured in the estimates, there may be 

premature mortality due to short-term exposure to PM not captured in the cohort studies used in this 

analysis. However, the PM mortality results derived from the expert elicitation do take into account 

premature mortality effects of short term exposures. 

e

 May result in benefits or disbenefits. 

f

 Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the CAA. 

While there will be impacts associated with air toxic pollutant emission changes 

that result from the final rule, we do not attempt to monetize those impacts. This is 

primarily because currently available tools and methods to assess air toxics risk from 

mobile sources at the national scale are not adequate for extrapolation to incidence 

estimations or benefits assessment. The best suite of tools and methods currently 

available for assessment at the national scale are those used in the National-Scale Air 

Toxics Assessment (NATA). The EPA Science Advisory Board specifically commented 

in their review of the 1996 NATA that these tools were not yet ready for use in a 

national-scale benefits analysis, because they did not consider the full distribution of 

exposure and risk, or address sub-chronic health effects.479 While EPA has since 

improved the tools, there remain critical limitations for estimating incidence and 

assessing benefits of reducing mobile source air toxics. EPA continues to work to 

address these limitations; however, we did not have the methods and tools available for 

national-scale application in time for the analysis of the final rule.480 

 

479 Science Advisory Board. 2001. NATA – Evaluating the National-Scale Air Toxics Assessment for 

1996 – an SAB Advisory. http://www.epa.gov/ttn/atw/sab/sabrev.html. EPA-HQ-OAR-2009-0472-0244 480 In April, 2009, EPA hosted a workshop on estimating the benefits or reducing hazardous air pollutants. 

This workshop built upon the work accomplished in the June 2000 Science Advisory Board/EPA 

Workshop on the Benefits of Reductions in Exposure to Hazardous Air Pollutants, which generated 

thoughtful discussion on approaches to estimating human health benefits from reductions in air toxics 

exposure, but no consensus was reached on methods that could be implemented in the near term for a broad 

selection of air toxics. Please visit http://epa.gov/air/toxicair/2009workshop.html for more information 

about the workshop and its associated materials. 
416 

EPA is also unaware of specific information identifying any effects on listed 

endangered species from the small fluctuations in pollutant concentrations associated 

with this rule (see Section III.G.5). Furthermore, our current modeling tools are not 

designed to trace fluctuations in ambient concentration levels to potential impacts on 

particular endangered species. 

i. Quantified Human Health Impacts 

Tables III.H.7-3 and III.H.7-4 present the annual PM2.5 and ozone health impacts 

in the 48 contiguous U.S. states associated with the final rule for 2030. For each 

endpoint presented in Tables III.H.7-3 and III.H.7-4, we provide both the mean estimate 

and the 90% confidence interval. 

Using EPA’s preferred estimates, based on the American Cancer Society (ACS) 

and Six-Cities studies and no threshold assumption in the model of mortality, we estimate 

that the final rule will result in between 60 and 150 cases of avoided PM2.5-related 

premature deaths annually in 2030. As a sensitivity analysis, when the range of expert 

opinion is used, we estimate between 22 and 200 fewer premature mortalities in 2030 

(see Table 7.7 in the RIA that accompanies this rule). For ozone-related premature 

mortality in 2030, we estimate a range of between 4 to 18 additional premature 

mortalities related to the ethanol production volumes mandated by the recently finalized 

RFS2 rule481 (and reflected in the air quality modeling for this rule), but are not due to the 

final standards themselves. 

Table III.H.7-3 Estimated PM2.5-Related Health Impactsa

Health Effect 

2030 Annual Reduction 

in Incidence 

(5th% - 95th%ile) 

Premature Mortality – Derived from epidemiology 

literatureb

 Adult, age 30+, ACS Cohort Study (Pope et al., 

2002) 

 Adult, age 25+, Six-Cities Study (Laden et al., 2006)

 Infant, age <1 year (Woodruff et al., 1997) 

60 

(23 – 96) 

150 

(83 – 220) 

0 

(0-1) 

Chronic bronchitis (adult, age 26 and over) 42 

(8 – 77) 

Non-fatal myocardial infarction (adult, age 18 and 

over) 

100 

(38 – 170) 

 

481 EPA 2010, Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis. EPA-420-R-10-

006. February 2010. Docket EPA-HQ-OAR-2009-0472-11332. EPA-HQ-OAR-2009-0472-11332. See also 

75 FR 14670, March 26, 2010
417 

Hospital admissions - respiratory (all ages)c

 13 

(7 – 20) 

Hospital admissions - cardiovascular (adults, age 

>18)d

 

32 

(23 – 38) 

Emergency room visits for asthma (age 18 years and 

younger) 

42 

(25 – 59) 

Acute bronchitis, (children, age 8-12) 95 

(0 – 190) 

Lower respiratory symptoms (children, age 7-14) 1,100 

(540 – 1,700) 

Upper respiratory symptoms (asthmatic children, age 

9-18) 

850 

(270 – 1,400) 

Asthma exacerbation (asthmatic children, age 6-18) 1,000 

(120 – 2,900) 

Work loss days 7,600 

(6,600 – 8,500) 

Minor restricted activity days (adults age 18-65) 45,000 

(38,000 – 52,000) 

Notes: 

a Incidence is rounded to two significant digits. Estimates represent incidence within the 48 

contiguous United States. 

b PM-related adult mortality based upon the American Cancer Society (ACS) Cohort Study (Pope et 

al., 2002) and the Six-Cities Study (Laden et al., 2006). Note that these are two alternative estimates 

of adult mortality and should not be summed. PM-related infant mortality based upon a study by 

Woodruff, Grillo, and Schoendorf, (1997).482

c Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary 

disease (COPD), pneumonia and asthma. 

d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for 

ischemic heart disease, dysrhythmias, and heart failure. 

 

482 Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997. “The Relationship Between Selected Causes of 

Postneonatal Infant Mortality and Particulate Air Pollution in the United States.” Environmental Health 

Perspectives 105(6):608-612. EPA-HQ-OAR-2009-0472-0382 
418 

Table III.H.7-4 Estimated Ozone-Related Health Impactsa 

Health Effect 

2030 Annual Reduction in 

Incidence 

(5th% - 95th%ile) 

Premature Mortality, All agesb

Multi-City Analyses 

 Bell et al. (2004) – Non-accidental 

 Huang et al. (2005) – Cardiopulmonary 

 Schwartz (2005) – Non-accidental 

Meta-analyses: 

 Bell et al. (2005) – All cause 

 Ito et al. (2005) – Non-accidental 

 Levy et al. (2005) – All cause 

-4 

(-8 – 0) 

-7 

(-14 – 1) 

-6 

(-13 – 1) 

-13 

(-24 - -2) 

-18 

(-30 - -6) 

-18 

(-28 - -9) 

Hospital admissions- respiratory causes (adult, 

65 and older)c 

-38 

(-86 - -6) 

Hospital admissions -respiratory causes 

(children, under 2) 

-6 

(-13 – 1) 

Emergency room visit for asthma (all ages) -16 

(-51 – 8) 

Minor restricted activity days (adults, age 18-

65) 

-18,000 

(-40,000 – 3,700) 

School absence days -7,700 

(-16,000 – 1,200) 

Notes: 

a

 Negatives indicate a disbenefit, or an increase in health effect incidence. Incidence is rounded 

to two significant digits. Estimates represent incidence within the 48 contiguous U.S. 

b

 Estimates of ozone-related premature mortality are based upon incidence estimates derived from 

several alternative studies: Bell et al. (2004); Huang et al. (2005); Schwartz (2005) ; Bell et al. 

(2005); Ito et al. (2005); Levy et al. (2005). The estimates of ozone-related premature mortality 

should therefore not be summed. 

c Respiratory hospital admissions for ozone include admissions for all respiratory causes and 

subcategories for COPD and pneumonia. 

ii. Monetized Benefits 

Table III.H.7-5 presents the estimated monetary value of changes in the incidence 

of ozone and PM2.5-related health effects. All monetized estimates are stated in 2007$. 

These estimates account for growth in real gross domestic product (GDP) per capita 

between the present and 2030. Our estimate of total monetized benefits in 2030 for the 

final rule, using the ACS and Six-Cities PM mortality studies and the range of ozone 

mortality assumptions, is between $380 and $1,300 million, assuming a 3 percent 
419 

discount rate, or between $330 and $1,200 million, assuming a 7 percent discount rate. 

As the results indicate, total benefits are driven primarily by the reduction in PM2.5-

related premature fatalities each year. 

Table III.H.7-5 Estimated Monetary Value of Changes in Incidence of Health and 

Welfare Effects (in millions of 2007$) a,b

 2030 

PM2.5-Related Health Effect (5th and 95th %ile) 

Adult, age 30+ - ACS study 

(Pope et al., 2002) 

 3% discount rate 

 7% discount rate 

$510 

($70 - $1,300) 

$460 

($63 - $1,200) 

Adult, age 25+ - Six-Cities study 

(Laden et al., 2006) 

 3% discount rate 

 7% discount rate 

$1,300 

($190 - $3,300) 

$1,200 

($180 - $3,000) 

Premature Mortality – 

Derived from Epidemiology 

Studiesc,d,

Infant Mortality, <1 year – 

(Woodruff et al. 1997) 

$1.8 

($0 - $7.0) 

Chronic bronchitis (adults, 26 and over) $22 

($1.9 - $77) 

Non-fatal acute myocardial infarctions 

 3% discount rate 

 7% discount rate 

$14 

($3.9 - $35) 

$14 

($3.6 - $35) 

Hospital admissions for respiratory causes $0.20 

($0.01 - $0.29) 

Hospital admissions for cardiovascular causes $0.91 

($0.58 - $1.3) 

Emergency room visits for asthma $0.016 

($0.009 - $0.024) 

Acute bronchitis (children, age 8–12) $0.007 

($0 – $0.018) 

Lower respiratory symptoms (children, 7–14) $0.022 

($0.009 - $0.043) 

Upper respiratory symptoms (asthma, 9–11) $0.027 

($0.008 - $0.061) 

Asthma exacerbations $0.058 

($0.006 - $0.17) 

Work loss days $1.2 

($1.0 - $1.3) 

Minor restricted-activity days (MRADs) $2.9 

($1.7 - $4.2) 

Ozone-related Health Effect 
420 

Bell et al., 2004 -$38 

(-$110 - $4.2) 

Huang et al., 2005 -$62 

(-$180 - $4.7) 

Premature Mortality, All ages – 

Derived from Multi-city analyses

Schwartz, 2005 -$58 

(-$170 - $8.8) 

Bell et al., 2005 -$120 

(-$330 - -$7.9) 

Ito et al., 2005 -$170 

(-$430 - -$19) 

Premature Mortality, All ages – 

Derived from Meta-analyses 

Levy et al., 2005 -$170 

(-$410 - -$21) 

Hospital admissions- respiratory causes (adult, 65 and older) -$0.92 

(-$2.1 - $0.27) 

Hospital admissions- respiratory causes (children, under 2) -$.21 

(-$.45 - $0.031) 

Emergency room visit for asthma (all ages) -$0.006 

(-$0.018 - $0.003) 

Minor restricted activity days (adults, age 18-65) -$1.2 

(-$2.7 - $0.25) 

School absence days -$0.71 

(-$1.4 - $0.11) 

Notes: 

a

 Negatives indicate a disbenefit, or an increase in health effect incidence. Monetary benefits are 

rounded to two significant digits for ease of presentation and computation. PM and ozone benefits 

are nationwide. 

b

 Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the 

analysis year (2030). 

c

 Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. 

Results reflect the use of 3 percent and 7 percent discount rates consistent with EPA and OMB 

guidelines for preparing economic analyses. 

iii. What Are the Limitations of the Benefits Analysis? 

Every benefit-cost analysis examining the potential effects of a change in 

environmental protection requirements is limited to some extent by data gaps, limitations 

in model capabilities (such as geographic coverage), and uncertainties in the underlying 

scientific and economic studies used to configure the benefit and cost models. 

Limitations of the scientific literature often result in the inability to estimate quantitative 

changes in health and environmental effects, such as potential increases in premature 

mortality associated with increased exposure to carbon monoxide. Deficiencies in the 

economics literature often result in the inability to assign economic values even to those 

health and environmental outcomes which can be quantified. These general uncertainties 

in the underlying scientific and economics literature, which can lead to valuations that are 

higher or lower, are discussed in detail in the RIA and its supporting references. Key 

uncertainties that have a bearing on the results of the benefit-cost analysis of the final rule 

include the following: 
421 

• The exclusion of potentially significant and unquantified benefit categories (such 

as health, odor, and ecological impacts of air toxics, ozone, and PM); 

• Errors in measurement and projection for variables such as population growth; 

• Uncertainties in the estimation of future year emissions inventories and air 

quality; 

• Uncertainty in the estimated relationships of health and welfare effects to changes 

in pollutant concentrations including the shape of the C-R function, the size of the 

effect estimates, and the relative toxicity of the many components of the PM 

mixture; 

• Uncertainties in exposure estimation; and 

• Uncertainties associated with the effect of potential future actions to limit 

emissions. 

As Table III.H.7-5 indicates, total benefits are driven primarily by the reduction in 

PM2.5-related premature mortalities each year. Some key assumptions underlying the 

premature mortality estimates include the following, which may also contribute to 

uncertainty: 

• Inhalation of fine particles is causally associated with premature death at 

concentrations near those experienced by most Americans on a daily basis. 

Although biological mechanisms for this effect have not yet been completely 

established, the weight of the available epidemiological, toxicological, and 

experimental evidence supports an assumption of causality. The impacts of 

including a probabilistic representation of causality were explored in the expert 

elicitation-based results of the PM NAAQS RIA. 

• All fine particles, regardless of their chemical composition, are equally potent in 

causing premature mortality. This is an important assumption, because PM 

produced via transported precursors emitted from engines may differ significantly 

from PM precursors released from electric generating units and other industrial 

sources. However, no clear scientific grounds exist for supporting differential 

effects estimates by particle type. 

• The C-R function for fine particles is approximately linear within the range of 

ambient concentrations under consideration. Thus, the estimates include health 

benefits from reducing fine particles in areas with varied concentrations of PM, 

including both regions that may be in attainment with PM2.5 standards and those 

that are at risk of not meeting the standards. 

• There is uncertainty in the magnitude of the association between ozone and 

premature mortality. The range of ozone impacts associated with the final rule is 

estimated based on the risk of several sources of ozone-related mortality effect 

estimates. In a recent report on the estimation of ozone-related premature 

mortality published by the National Research Council, a panel of experts and 

reviewers concluded that short-term exposure to ambient ozone is likely to 

contribute to premature deaths and that ozone-related mortality should be 
422 

included in estimates of the health benefits of reducing ozone exposure.483 EPA 

has requested advice from the National Academy of Sciences on how best to 

quantify uncertainty in the relationship between ozone exposure and premature 

mortality in the context of quantifying benefits. 

Acknowledging omissions and uncertainties, we present a best estimate of the 

total benefits based on our interpretation of the best available scientific literature and 

methods supported by EPA’s technical peer review panel, the Science Advisory Board’s 

Health Effects Subcommittee (SAB-HES). The National Academies of Science (NRC, 

2002) has also reviewed EPA’s methodology for analyzing the health benefits of 

measures taken to reduce air pollution. EPA addressed many of these comments in the 

analysis of the final PM NAAQS.484,485 This analysis incorporates this most recent work 

to the extent possible. 

b. PM-related Monetized Benefits of the Model Year (MY) Analysis 

As described in Section III.G, the final standards will reduce emissions of several 

criteria and toxic pollutants and precursors. In the MY analysis, EPA estimates the 

economic value of the human health benefits associated with reducing PM2.5 exposure. 

Due to analytical limitations, this analysis does not estimate benefits related to other 

criteria pollutants (such as ozone, NO2 or SO2) or toxics pollutants, nor does it monetize 

all of the potential health and welfare effects associated with PM2.5. 

The MY analysis uses a “benefit-per-ton” method to estimate a selected suite of 

PM2.5-related health benefits described below. These PM2.5 benefit-per-ton estimates 

provide the total monetized human health benefits (the sum of premature mortality and 

premature morbidity) of reducing one ton of directly emitted PM2.5, or its precursors 

(such as NOX, SOX, and VOCs), from a specified source. Ideally, the human health 

benefits associated with the MY analysis would be estimated based on changes in 

ambient PM2.5 as determined by full-scale air quality modeling. However, this modeling 

was not possible in the timeframe for the final rule. 

The dollar-per-ton estimates used in this analysis are provided in Table III.H.7-6. 

In the summary of costs and benefits, Section III.H.10 of this preamble, EPA presents the 

monetized value of PM-related improvements associated with the rule. 

Table III.H.7-6 Benefits-per-ton Values (2007$) Derived Using the ACS Cohort Study 

for PM-related Premature Mortality (Pope et al., 2002)a

Yearc All Sourcesd Stationary (Non-EGU) Mobile Sources

 

483 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits 

from Controlling Ozone Air Pollution. The National Academies Press: Washington, D.C. EPA-HQ-OAR2009-0472-0322 

484 National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air 

Pollution Regulations. The National Academies Press: Washington, D.C. 

485 U.S. Environmental Protection Agency. October 2006. Final Regulatory Impact Analysis (RIA) for the 

National Ambient Air Quality Standards for Particulate Matter. Prepared by: Office of Air and Radiation. 

Available at http://www.epa.gov/ttn/ecas/ria.html. EPA-HQ-OAR-2009-0472-0240 

Deleted: and a 3% Discount Rateb
423 

Sources

SOX VOC NOX Direct PM2.5 NOX Direct PM2.5

Estimated Using a 3 Percent Discount Rateb

2015 $28,000 $1,200 $4,700 $220,000 $4,900 $270,000

2020 $31,000 $1,300 $5,100 $240,000 $5,300 $290,000

2030 $36,000 $1,500 $6,100 $280,000 $6,400 $350,000

2040 $43,000 $1,800 $7,200 $330,000 $7,600 $420,000

Estimated Using a 7 Percent Discount Rateb

2015 $26,000 $1,100 $4,200 $200,000 $4,400 $240,000

2020 $28,000 $1,200 $4,600 $220,000 $4,800 $270,000

2030 $33,000 $1,400 $5,500 $250,000 $5,800 $320,000

2040 $39,000 $1,600 $6,600 $300,000 $6,900 $380,000 a The benefit-per-ton estimates presented in this table are based on an estimate of premature mortality 

derived from the ACS study (Pope et al., 2002). If the benefit-per-ton estimates were based on the SixCities study (Laden et al., 2006), the values would be approximately 145% (nearly two-and-a-half times) 

larger.

b

 The benefit-per-ton estimates presented in this table assume either a 3 percent or 7 percent discount rate in 

the valuation of premature mortality to account for a twenty-year segmented cessation lag. 

c

 Benefit-per-ton values were estimated for the years 2015, 2020, and 2030. For 2040, EPA and NHTSA 

extrapolated exponentially based on the growth between 2020 and 2030. 

d

 Note that the benefit-per-ton value for SOX is based on the value for Stationary (Non-EGU) sources; no 

SOX value was estimated for mobile sources. The benefit-per-ton value for VOCs was estimated across all 

sources. 

The benefit per-ton technique has been used in previous analyses, including 

EPA’s recent Ozone National Ambient Air Quality Standards (NAAQS) RIA,486 the 

proposed Portland Cement National Emissions Standards for Hazardous Air Pollutants 

(NESHAP) RIA,487 and the final NO2 NAAQS (U.S. EPA, 2009b).488 Table III.H.7 -7 

shows the quantified and unquantified PM2.5-related co-benefits captured in those benefitper-ton estimates. 

Table III.H.7-7 Human Health and Welfare Effects of PM2.5 

Pollutant / 

Effect 

Quantified and Monetized 

in Primary Estimates 

Unquantified Effects 

Changes in: 

PM2.5 Adult premature mortality 

Bronchitis: chronic and acute 

Hospital admissions: respiratory and 

cardiovascular 

Subchronic bronchitis cases 

Low birth weight 

Pulmonary function 

Chronic respiratory diseases other than chronic 

 

486 U.S. Environmental Protection Agency (U.S. EPA). 2008. Regulatory Impact Analysis, 2008 National 

Ambient Air Quality Standards for Ground-level Ozone, Chapter 6. Office of Air Quality Planning and 

Standards, Research Triangle Park, NC. March. Available at 

<http://www.epa.gov/ttn/ecas/regdata/RIAs/6-ozoneriachapter6.pdf>. Accessed March 15, 2010. EPAHQ-OAR-2009-0472-0108 

487 U.S. Environmental Protection Agency (U.S. EPA). 2009. Regulatory Impact Analysis: National 

Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry. 

Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. Available on the 

Internet at <http://www.epa.gov/ttn/ecas/regdata/RIAs/portlandcementria_4-20-09.pdf>. Accessed March 

15, 2010. EPA-HQ-OAR-2009-0472-0241 

488 U.S. Environmental Protection Agency (U.S. EPA). 2010. Final NO2 NAAQS Regulatory Impact 

Analysis (RIA). Office of Air Quality Planning and Standards, Research Triangle Park, NC. April. 

Available on the Internet at http://www.epa.gov/ttn/ecas/regdata/RIAs/FinalNO2RIAfulldocument.pdf. 

Accessed March 15, 2010. EPA-HQ-OAR-2009-0472-0237 
424 

Pollutant / 

Effect 

Quantified and Monetized 

in Primary Estimates 

Unquantified Effects 

Changes in: 

Emergency room visits for asthma 

Nonfatal heart attacks (myocardial infarction) 

Lower and upper respiratory illness 

Minor restricted-activity days 

Work loss days 

Asthma exacerbations (asthmatic population) 

Infant mortality 

bronchitis 

Non-asthma respiratory emergency room visits 

Visibility 

Household soiling 

Consistent with the NO2 NAAQS,489 the benefits estimates utilize the 

concentration-response functions as reported in the epidemiology literature. To calculate 

the total monetized impacts associated with quantified health impacts, EPA applies 

values derived from a number of sources. For premature mortality, EPA applies a value 

of a statistical life (VSL) derived from the mortality valuation literature. For certain 

health impacts, such as chronic bronchitis and a number of respiratory-related ailments, 

EPA applies willingness-to-pay estimates derived from the valuation literature. For the 

remaining health impacts, EPA applies values derived from current cost-of-illness and/or 

wage estimates. 

Readers interested in reviewing the complete methodology for creating the 

benefit-per-ton estimates used in this analysis can consult the Technical Support 

Document (TSD)490 accompanying the recent final ozone NAAQS RIA. Readers can 

also refer to Fann et al. (2009)491 for a detailed description of the benefit-per-ton 

methodology.492 A more detailed description of the benefit-per-ton estimates is also 

provided in the Joint TSD that accompanies this rulemaking. 

As described in the documentation for the benefit per-ton estimates cited above, 

national per-ton estimates were developed for selected pollutant/source category 

combinations. The per-ton values calculated therefore apply only to tons reduced from 

those specific pollutant/source combinations (e.g., NO2 emitted from mobile sources; 

direct PM emitted from stationary sources). Our estimate of PM2.5 benefits is therefore 

 

489 Although we summarize the main issues in this chapter, we encourage interested readers to see the 

benefits chapter of the final NO2 NAAQS for a more detailed description of recent changes to the PM 

benefits presentation and preference for the no-threshold model. 

490 U.S. Environmental Protection Agency (U.S. EPA). 2008b. Technical Support Document: Calculating 

Benefit Per-Ton estimates, Ozone NAAQS Docket #EPA-HQ-OAR-2007-0225-0284. Office of Air 

Quality Planning and Standards, Research Triangle Park, NC. March. Available on the Internet at 

<http://www.regulations.gov>. EPA-HQ-OAR-2009-0472-0228 

491 Fann, N. et al. (2009). The influence of location, source, and emission type in estimates of the human 

health benefits of reducing a ton of air pollution. Air Qual Atmos Health. Published online: 09 June, 2009. 

EPA-HQ-OAR-2009-0472-0229 

492 The values included in this report are different from those presented in the article cited above. Benefits 

methods change to reflect new information and evaluation of the science. Since publication of the June 

2009 article, EPA has made two significant changes to its benefits methods: (1) We no longer assume that a 

threshold exists in PM-related models of health impacts; and (2) We have revised the Value of a Statistical 

Life to equal $6.3 million (year 2000$), up from an estimate of $5.5 million (year 2000$) used in the June 

2009 report. Please refer to the following website for updates to the dollar-per-ton estimates: 

http://www.epa.gov/air/benmap/bpt.html. EPA-HQ-OAR-2009-0472-0227 
425 

based on the total direct PM2.5 and PM-related precursor emissions controlled by sector 

and multiplied by each per-ton value. 

The benefit-per-ton estimates are subject to a number of assumptions and 

uncertainties. 

• Dollar-per-ton estimates do not reflect local variability in population 

density, meteorology, exposure, baseline health incidence rates, or other 

local factors that might lead to an overestimate or underestimate of the 

actual benefits of controlling fine particulates. In Section III.G, we 

describe the full-scale air quality modeling conducted for the 2030 

calendar year analysis in an effort to capture this variability. 

• There are several health benefits categories that EPA was unable to 

quantify in the MY analysis due to limitations associated with using 

benefits-per-ton estimates, several of which could be substantial. Because 

NOX and VOC emissions are also precursors to ozone, changes in NOX 

and VOC would also impact ozone formation and the health effects 

associated with ozone exposure. Benefits-per-ton estimates do not exist 

for ozone, however, due to issues associated with the complexity of the 

atmospheric air chemistry and nonlinearities associated with ozone 

formation. The PM-related benefits-per-ton estimates also do not include 

any human welfare or ecological benefits. Please refer to Chapter 7 of the 

RIA that accompanies this rule for a description of the quantification and 

monetization of health impacts for the CY analysis and a description of the 

unquantified co-pollutant benefits associated with this rulemaking. 

• The benefit-per-ton estimates used in this analysis incorporate projections 

of key variables, including atmospheric conditions, source level emissions, 

population, health baselines and incomes, technology. These projections 

introduce some uncertainties to the benefit per ton estimates. 

• As described above, using the benefit-per-ton value derived from the ACS 

study (Pope et al., 2002) alone provides an incomplete characterization of 

PM2.5 benefits. When placed in the context of the Expert Elicitation 

results, this estimate falls toward the lower end of the distribution. By 

contrast, the estimated PM2.5 benefits using the coefficient reported by 

Laden in that author’s reanalysis of the Harvard Six-Cities cohort fall 

toward the upper end of the Expert Elicitation distribution results. 

As mentioned above, emissions changes and benefits-per-ton estimates alone are 

not a good indication of local or regional air quality and health impacts, as there may be 

localized impacts associated with this rulemaking. Additionally, the atmospheric 

chemistry related to ambient concentrations of PM2.5, ozone and air toxics is very 

complex. Full-scale photochemical modeling is therefore necessary to provide the 

needed spatial and temporal detail to more completely and accurately estimate the 

changes in ambient levels of these pollutants and their associated health and welfare 

impacts. Timing and resource constraints precluded EPA from conducting full-scale 

photochemical air quality modeling for the MY analysis. We have, however, conducted 
426 

national-scale air quality modeling for the CY analysis to analyze the impacts of the 

standards on PM2.5, ozone, and selected air toxics. 

8. Energy Security Impacts

 This rule to reduce GHG emissions in light-duty vehicles results in improved fuel 

efficiency which, in turn, helps to reduce U.S. petroleum imports. A reduction of U.S. 

petroleum imports reduces both financial and strategic risks caused by potential sudden 

disruptions in the supply of imported petroleum to the U.S. This reduction in risk is a 

measure of improved U.S. energy security. This section summarizes our estimate of the 

monetary value of the energy security benefits of the GHG vehicle standards against the 

reference case by estimating the impact of the expanded use of lower-GHG vehicle 

technologies on U.S. oil imports and avoided U.S. oil import expenditures. Additional 

discussion of this issue can be found in Chapter 5.1 of EPA’s RIA and Section 4.2.8 of 

the TSD. 

 a. Implications of Reduced Petroleum Use on U.S. Imports 

In 2008, U.S. petroleum import expenditures represented 21 percent of total U.S. 

imports of all goods and services.493 In 2008, the U.S. imported 66 percent of the 

petroleum it consumed, and the transportation sector accounted for 70 percent of total 

U.S. petroleum consumption. This compares to approximately 37 percent of petroleum 

from imports and 55 percent of consumption from petroleum in the transportation sector 

in 1975.494 It is clear that petroleum imports have a significant impact on the U.S. 

economy. Requiring lower-GHG vehicle technology in the U.S. is expected to lower 

U.S. petroleum imports. 

 

b. Energy Security Implications 

 In order to understand the energy security implications of reducing U.S. 

petroleum imports, EPA worked with Oak Ridge National Laboratory (ORNL), which 

has developed approaches for evaluating the economic costs and energy security 

implications of oil use. The energy security estimates provided below are based upon a 

methodology developed in a peer-reviewed study entitled "The Energy Security Benefits 

of Reduced Oil Use, 2006-2015," completed in March 2008. This study is included as 

part of the docket for this rulemaking.495,496

 

493 Source: U.S. Bureau of Economic Analysis, U.S. International Transactions Accounts Data, as shown on 

June 24, 2009. 

494 Source: U.S. Department of Energy, Annual Energy Review 2008, Report No. DOE/EIA-0384(2008), 

Tables 5.1 and 5.13c, June 26, 2009. 

495 Leiby, Paul N. "Estimating the Energy Security Benefits of Reduced U.S. Oil Imports" Oak Ridge 

National Laboratory, ORNL/TM-2007/028, Final Report, 2008. (Docket EPA-HQ-OAR-2009-0472) 

496 The ORNL study “The Energy Security Benefits of Reduced Oil Use, 2006-2015," completed in March 

2008, is an update version of the approach used for estimating the energy security benefits of U.S. oil 

import reductions developed in an ORNL 1997 Report by Leiby, Paul N., Donald W. Jones, T. Randall 

Curlee, and Russell Lee, entitled “Oil Imports: An Assessment of Benefits and Costs." (Docket EPA-HQOAR-2009-0472) 
427 

 When conducting this analysis, ORNL considered the economic cost of importing 

petroleum into the U.S. The economic cost of importing petroleum into the U.S. is 

defined to include two components in addition to the purchase price of petroleum itself. 

These are: (1) the higher costs for oil imports resulting from the effect of increasing U.S. 

import demand on the world oil price and on OPEC market power (i.e., the "demand" or 

"monopsony" costs); and (2) the risk of reductions in U.S. economic output and 

disruption of the U.S. economy caused by sudden disruptions in the supply of imported 

petroleum to the U.S. (i.e., macroeconomic disruption/adjustment costs). Maintaining a 

U.S. military presence to help secure stable oil supply from potentially vulnerable regions 

of the world was not included in this analysis because its attribution to particular missions 

or activities is hard to quantify. 

 

 One commenter on this rule 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 their 

comment. The Agency 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 consider, 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, the Agency 

has concluded that the ORNL disruption security premium estimates are more applicable 

for analyzing this final rule. 

 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. One 

commenter 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. 
428 

 This approach 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 Agencies believe it should be analyzed in 

more detail before being applied in a regulatory context. In addition, the Agencies also 

believe 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 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.”497 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.498 Therefore, the ORNL 

estimate of macroeconomic disruption and adjustment costs that the Agencies use 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. 

 

497 OMB Circular A-4, September 17, 2003. See 

http://www.whitehouse.gov/omb/assets/omb/circulars/a004/a-4.pdf

498 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.
429 

consumers of petroleum products. The Agencies believe 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. 

 For this rule, ORNL estimated the energy security premium by incorporating the 

oil price forecast of the Energy Information Administration’s 2009 Annual Energy 

Outlook (AEO) to its model. The Agency considered, but rejected the option, of further 

updating this analysis using the oil price estimates provided by the AEO 2010. Given the 

broad uncertainty bands around oil price forecasts and the relatively modest change in oil 

price forecasts between the AEO 2009 and AEO 2010, the Agency felt that updating to 

AEO 2010 oil prices would not significantly change the results of this energy security 

analysis. Finally, the EPA used its OMEGA model in conjunction with ORNL’s energy 

security premium estimates to develop the total energy security benefits for a number of 

different years; please refer to Table III.H.8-1 for this information for years 2015, 2020, 

2030 and 2040,499 as well as a breakdown of the components of the energy security 

premium for each of these years. The components of the energy security premium and 

their values are discussed in detail in the Joint TSD Chapter 4. 

Because the price of oil is determined globally, supply and demand shocks 

anywhere in the world will have an adverse impact on the United States (and on all other 

oil consuming countries). The total economic costs of those shocks to the U.S. will 

depend on both U.S. petroleum consumption and imports of petroleum and refined 

products. The analysis relied upon to estimate energy security benefits from reducing 

U.S. petroleum consumption estimates the value of energy security using the estimated 

oil import premium, and is thus consistent with how much of the energy security 

literature reports energy security impacts. Since this rule is expected to have little impact 

on the U.S. supply of crude petroleum, a reduction in U.S. fuel consumption is expected 

to be reflected predominantly in reduced imports of petroleum and refined fuel. The 

estimated energy security premium associated with a reduction in U.S. petroleum 

consumption that leads to a reduction in imports would likely be somewhat larger, due to 

diminished sensitivity of the U.S. economy to oil supply shocks that would accompany 

the reduction in oil consumption.

 In addition, while the estimates of energy security externalities used in this 

analysis depend on a combination of U.S. petroleum consumption and imports, they have 

been expressed as per barrel of petroleum imported into the U.S. The Agencies’ analyses 

apply these estimates to the reduction in U.S. imports of crude petroleum and refined 

products that is projected to result from the rule in order to determine the benefits that are 

likely to result from fuel savings and the consequent reduction in imports. Thus, the 

estimates of energy security externalities have been used in this analysis in a way that is 

completely consistent with how they are defined and measured in the ORNL analysis

 

499 AEO 2009 forecasts energy market trends and values only to 2030. The energy security premium 

estimates post-2030 were assumed to be the 2030 estimate. 
430 

Table III.H.8-1 Energy Security Premium in 2015, 2020, 2030 and 2040 (2007$/Barrel) 

Year 

(range) 

Monopsony Macroeconomic 

Disruption/Adjustment Costs 

Total Mid-Point 

2015 $11.79 

($4.26 - $21.37) 

$6.70 

($3.11 – $10.67) 

$18.49 

($9.80 - $28.08) 

2020 $12.31 

($4.46 - $22.53) 

$7.62 

($3.77 – $12.46) 

$19.94 

($10.58 - $30.47) 

2030 $10.57 

($3.84 – 18.94)) 

$8.12 

($3.90 – $13.04) 

$18.69 

($10.52 - $27.89) 

2040 $10.57 

($3.84 – $18.94) 

$8.12 

($3.90 - $13.04) 

$18.69 

($10.52 - $27.89) 

The literature on the energy security for the last two decades has routinely combined the 

monopsony and the macroeconomic disruption components when calculating the total 

value of the energy security premium. However, in the context of using a global value 

for the Social Cost of Carbon (SCC) the question arises: how should the energy security 

premium be used when some benefits from the rule, such as the benefits of reducing 

greenhouse gas emissions, are calculated using a global value? Monopsony benefits 

represent avoided payments by the U.S. to oil producers in foreign countries that result 

from a decrease in the world oil 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. OMB’s Circular A-4 gives 

guidance in this regard. Domestic pecuniary benefits (or transfers between buyers and 

sellers) generally should not be included because they do not represent real resource 

costs, though A-4 notes that transfers to the U.S. from other countries may be counted as 

benefits as long as the analysis is conducted from a U.S. perspective. 

 Energy security is broadly defined as protecting the U.S. economy against 

circumstances that threaten significant short- and long-term increases in energy costs. 

Energy security is inherently a domestic benefit. Accordingly, it is possible to argue that 

the use of the domestic monopsony benefit may not necessarily be in conflict with the use 

of the global SCC, because the global SCC represents the benefits against which the costs 

of our (i.e., the U.S.’s) domestic mitigation efforts should be judged. In the final analysis, 

the Agency has determined that using only the macroeconomic disruption component of 

the energy security benefit is the appropriate metric for this rule. 

At proposal, the Agency took the position that since a global perspective was 

being taken with the use of the global SCC, that the monopsony benefits “net out” and 

were a transfer. Two commenters 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. One of the commenters suggested that EPA instead conduct 

a distributional analysis of the monopsony impacts of the final rule. The Agency 

Deleted: 

Deleted: 

Deleted: ¶

Deleted: , on the other hand,

Deleted: is 

Deleted: 

Deleted: If this reasoning holds, the 

two benefits (the global benefits of 

reducing greenhouse gas emissions and 

the full energy security premium, 

including the monopsony benefits) should 

be counted in the net benefits estimates of 

the rule. 

Deleted: determined that the first 

argument is more compelling and 

therefore
431 

disagrees that all pecuniary externalities should necessarily be excluded from net benefits 

calculations as a general rule. In this case considered here, the oil market is noncompetitive, and if the social decision-making unit of interest is the U.S., there is an 

argument for accounting for the 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, the Agency continues to take a global perspective 

with respect to climate change by using the global SCC. Therefore, the Agency did not 

count monopsony benefits since they “net out” with losses to other countries outside the 

U.S. Since a global perspective has been taken, a distributional analysis was not 

undertaken 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, the Agency has included only the macroeconomic disruption portion of the energy 

security benefits to monetize the total energy security benefits of this rule. Hence, the 

total annual energy security benefits are derived from the estimated reductions in U.S. 

imports of finished petroleum products and crude oil using only the macroeconomic 

disruption/adjustment portion of the energy security premium. These values are shown in 

Table III.H.8-2.500 The reduced oil estimates were derived from the OMEGA model, as 

explained in Section III.F of this preamble. EPA used the same assumption that NHTSA 

used in its Corporate Average Fuel Economy and CAFE Reform for MY 2008-2011 

Light Trucks rule, which assumed that each gallon of fuel saved reduces total U.S. 

imports of crude oil or refined products by 0.95 gallons.501

Table III.H.8-2 Total Annual Energy Security Benefits Using Only the Macroeconomic 

Disruption/Adjustment Component of the Energy Security Premium in 2015, 2020, 2030 

and 2040 (billions of 2007$) 

Year Benefits 

2015 $0.57 

2020 $2.17 

2030 $4.55 

2040 $6.00 

9. Other Impacts

 

500 Estimated reductions in U.S. imports of finished petroleum products and crude oil are 95% of 89 million 

barrels (MMB) in 2015, 300 MMB in 2020, 590 MMB in 2030, and 778 MMB in 2040. 

501 Preliminary Regulatory Impacts Analysis, April 2008. Based on a detailed analysis of differences in 

fuel consumption, petroleum imports, and imports of refined petroleum products among the Reference 

Case, High Economic Growth, and Low Economic Growth Scenarios presented in the Energy Information 

Administration’s Annual Energy Outlook 2007, NHTSA estimated that approximately 50 percent of the 

reduction in fuel consumption is likely to be reflected in reduced U.S. imports of refined fuel, while the 

remaining 50 percent would be expected to be reflected in reduced domestic fuel refining. Of this latter 

figure, 90 percent is anticipated to reduce U.S. imports of crude petroleum for use as a refinery feedstock, 

while the remaining 10 percent is expected to reduce U.S. domestic production of crude petroleum. Thus on 

balance, each gallon of fuel saved is anticipated to reduce total U.S. imports of crude petroleum or refined 

fuel by 0.95 gallons. 
432 

There are other impacts associated with the CO2 emissions standards and 

associated reduced fuel consumption that vary with miles driven. Lower fuel 

consumption would, presumably, result in fewer trips to the filling station to refuel and, 

thus, time saved. The rebound effect, discussed in detail in Section III.H.4.c, produces 

additional benefits to vehicle owners in the form of consumer surplus from the increase in 

vehicle-miles driven, but may also increase the societal costs associated with traffic 

congestion, motor vehicle crashes, and noise. These effects are likely to be relatively 

small in comparison to the value of fuel saved as a result of the standards, but they are 

nevertheless important to include. Table III.H.9-1 summarizes the other economic 

impacts. Please refer to Preamble Section II.F and the Joint TSD that accompanies this 

rule for more information about these impacts and how EPA and NHTSA use them in 

their analyses. 

Note that for the estimated value of less frequent refueling events, EPA's estimate 

is subject to a number of uncertainties which we discuss in detail in Chapter 4.1.11 of the 

Joint TSD, and the actual value could be higher or lower than the value presented here. 

Specifically, the analysis makes three assumptions: (a) that manufacturers will not adjust 

fuel tank capacities downward (from the current average of 19.3 gallons) when they 

improve the fuel economy of their vehicle models. (b) that the average fuel purchase (55

percent of fuel tank capacity) is the typical fuel purchase. (c) that 100 percent of all 

refueling is demand-based; i.e., that every gallon of fuel which is saved would reduce the 

need to return to the refueling station. A new research project is being planned by DOT 

which will include a detailed study of refueling events, and which is expected to improve 

upon these assumptions. These assumptions and the new DOT research project are 

discussed in detail in Joint TSD Chapter 4.2.10.

Table III.H.9-1 Other Impacts Associated with the Light-Duty Vehicle GHG Program 

 ($Millions of 2007 dollars) 

 2020 2030 2040 2050 NPV, 3% NPV, 7% 

Value of Less 

Frequent 

Refueling 

$2,400 $4,800 $6,300 $8,000 $87,900 $40,100 

Value of 

Increased 

Drivinga

$4,200 $8,800 $13,000 $18,400 $171,500 $75,500 

Accidents, 

Noise, 

Congestion 

-$2,300 -$4,600 -$6,100 -$7,800 -$84,800 -$38,600 

a Calculated using post-tax fuel prices. 

10. Summary of Costs and Benefits
433 

 In this section, EPA presents a summary of costs, benefits, and net benefits of the 

rule. EPA presents fuel consumption impacts as negative costs of the vehicle program. 

 Table III.H.10-1 shows the estimated annual societal costs of the vehicle program 

for the indicated calendar years. The table also shows the net present values of those 

costs for the calendar years 2012-2050 using both a 3 percent and a 7 percent discount 

rate. In this table, fuel savings are calculated using pre-tax fuel prices and are presented 

as negative costs associated with the vehicle program (rather than positive savings). 

 Consumers are expected to receive the fuel savings presented here. The cost 

estimates for the fuel-saving technology are based on designs that will hold all vehicle 

attributes constant except fuel economy and technology cost. This analysis also assumes 

that consumers will not change the vehicles that they purchase. Automakers may 

redesign vehicles as part of their compliance strategies. The redesigns should be 

expected to make the vehicles more attractive to consumers, because the ability to hold 

all other attributes constant means that the only reason to change them is to make them 

more marketable to consumers. In addition, consumers may choose to purchase different 

vehicles than they would in the absence of this rule. These changes may affect the net 

benefits that consumers receive from their vehicles. If consumers can buy the same 

vehicle as before, except with increased price and fuel economy, then the increase in 

vehicle price is the maximum loss in welfare to the consumer, because compensating the 

increase in price would leave her able to buy her previous vehicle with no change. If she 

decides to purchase a different vehicle, or not to purchase a vehicle, she would do so only 

if she were better off than buying her original choice. Because of the unsettled state of the 

modeling of consumer choices (discussed in Section III.H.1 and in RIA Section 8.1.2), 

this analysis does not measure these effects. If the technology costs are not sufficient to 

maintain other vehicle attributes, then it is possible that automakers would be required to 

make less marketable vehicles in order to comply with the rule; as a result, there may be 

an additional loss in consumer welfare due to the rule. While EPA received comments 

expressing concern over the possibility of these losses, there were no specific losses 

identified. 

Table III.H.10-1 Estimated Societal Costs of the Light-Duty Vehicle GHG Program 

 (Millions of 2007 dollars) 

Social Costs 2020 2030 2040 2050 NPV, 3% NPV, 7% 

Vehicle 

Compliance 

Costs 

$15,600 $15,800 $17,400 $19,000 $345,900 $191,900 

Fuel Savingsa -$35,700 -$79,800 -$119,300 -$171,200 -$1,545,600 -$672,600 

Quantified 

Annual Costs -$20,100 -$64,000 -$101,900 -$152,200 -$1,199,700 -$480,700 

a Calculated using pre-tax fuel prices. 

Table III.H.10-2 presents estimated annual societal benefits for the indicated 

calendar years. The table also shows the net present values of those benefits for the 

calendar years 2012-2050 using both a 3 percent and a 7 percent discount rate. The table 

shows the benefits of reduced CO2 emissions—and consequently the annual quantified 
434 

benefits (i.e., total benefits)—for each of four SCC values considered by EPA. As 

discussed in the RIA Section 7.5, the IPCC Fourth Assessment Report (2007) concluded 

that that the benefit estimates from CO2 reductions are “very likely” underestimates. One 

of the primary reasons is that models used to calculate SCC values do not include 

information about impacts that have not been quantified. 

In addition, these monetized GHG benefits exclude the value of reductions in 

non-CO2 GHG emissions (HFC, CH4, N2O) expected under this final rule. Although 

EPA has not monetized the benefits of reductions in non-CO2 GHGs, the value of these 

reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs 

will contribute to this rule’s climate benefits, as explained in Section III.F. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and SCC and 

specifies a goal to develop methods to value non-CO2 emissions in future analyses. 

Table III.H.10-2 Estimated Societal Benefits Associated with the Light-Duty Vehicle 

GHG Program (Millions of 2007 dollars) 

Benefits Category 2020 2030 2040 2050 NPV, 3%a NPV, 7% a

Reduced CO2 Emissions at each assumed SCC valueb,c

Avg SCC at 5% $900 $2,700 $4,600 $7,200 $34,500 $34,500 

Avg SCC at 3% $3,700 $8,900 $14,000 $21,000 $176,700 $176,700 

Avg SCC at 2.5% $5,800 $14,000 $21,000 $30,000 $299,600 $299,600 

95th percentile SCC at 3% $11,000 $27,000 $43,000 $62,000 $538,500 $538,500 

Criteria Pollutant 

Benefitsd,e,f,g B $1,200-

$1,300

$1,200-

$1,300

$1,200- 

$1,300 $21,000 $14,000 

Energy Security Impacts 

(price shock) $2,200 $4,500 $6,000 $7,600 $81,900 $36,900 

Reduced Refueling $2,400 $4,800 $6,300 $8,000 $87,900 $40,100 

Value of Increased Drivingh $4,200 $8,800 $13,000 $18,400 $171,500 $75,500 

Accidents, Noise, 

Congestion -$2,300 -$4,600 -$6,100 -$7,800 -$84,800 -$38,600 

Quantified Annual Benefits at each assumed SCC valueb,c

Avg SCC at 5% $7,400 $17,500 $25,100 $34,700 $312,000 $162,400 

Avg SCC at 3% $10,200 $23,700 $34,500 $48,500 $454,200 $304,600 

Avg SCC at 2.5% $12,300 $28,800 $41,500 $57,500 $577,100 $427,500 

95th percentile SCC at 3% $17,500 $41,800 $63,500 $89,500 $816,000 $666,400 a

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more 

detail. 

b

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. c

 Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates. 
435 

d

 Note that “B” indicates unquantified criteria pollutant benefits in the year 2020. For the final rule, we 

only modeled the rule’s PM2.5- and ozone-related impacts in the calendar year 2030. For the purposes of 

estimating a stream of future-year criteria pollutant benefits, we assume that the benefits out to 2050 are 

equal to, and no less than, those modeled in 2030 as reflected by the stream of estimated future emission 

reductions. The NPV of criteria pollutant-related benefits should therefore be considered a conservative 

estimate of the potential benefits associated with the final rule. 

e

 The benefits presented in this table include an estimate of PM-related premature mortality derived from 

Laden et al., 2006, and the ozone-related premature mortality estimate derived from Bell et al., 2004. If the 

benefit estimates were based on the ACS study of PM-related premature mortality (Pope et al., 2002) and 

the Levy et al., 2005 study of ozone-related premature mortality, the values would be as much as 70% 

smaller. 

f

 The calendar year benefits presented in this table assume either a 3% discount rate in the valuation of PMrelated premature mortality ($1,300 million) or a 7% discount rate ($1,200 million) to account for a twentyyear segmented cessation lag. Note that the benefits estimated using a 3% discount rate were used to 

calculate the NPV using a 3% discount rate and the benefits estimated using a 7% discount rate were used 

to calculate the NPV using a 7% discount rate. For benefits totals presented at each calendar year, we used 

the mid-point of the criteria pollutant benefits range ($1,250). 

g Note that the co-pollutant impacts presented here do not include the full complement of endpoints that, if 

quantified and monetized, would change the total monetized estimate of impacts. The full complement of 

human health and welfare effects associated with PM and ozone remain unquantified because of current 

limitations in methods or available data. We have 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). Additionally, we are 

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. 

h Calculated using pre-tax fuel prices. 

 Table III.H.10-3 presents estimated annual net benefits for the indicated calendar 

years. The table also shows the net present values of those net benefits for the calendar 

years 2012-2050 using both a 3 percent and a 7 percent discount rate. The table includes 

the benefits of reduced CO2 emissions (and consequently the annual net benefits) for each 

of four SCC values considered by EPA. As noted above, the benefit estimates from CO2 

reductions are “very likely,” according to the IPCC Fourth Assessment Report, 

underestimates because, in part, models used to calculate SCC values do not include 

information about impacts that have not been quantified. 

Table III.H.10-3 Quantified Net Benefits Associated with the Light-Duty Vehicle GHG 

Programa

 (Millions of 2007 dollars) 

 2020 2030 2040 2050 NPV, 3%b NPV, 7% b

Quantified Annual 

Costs -$20,100 -$64,000 -$101,900 -$152,200 -$1,199,700 -$480,700 

Quantified Annual Benefits at each assumed SCC valuec,d

Avg SCC at 5% $7,400 $17,500 $25,100 $34,700 $312,000 $162,400 

Avg SCC at 3% $10,200 $23,700 $34,500 $48,500 $454,200 $304,600 

Avg SCC at 2.5% $12,300 $28,800 $41,500 $57,500 $577,100 $427,500 

95th percentile SCC at 

3% $17,500 $41,800 $63,500 $89,500 $816,000 $666,400 

Quantified Net Benefits at each assumed SCC valuec,d

Avg SCC at 5% $27,500 $81,500 $127,000 $186,900 $1,511,700 $643,100 

Avg SCC at 3% $30,300 $87,700 $136,400 $200,700 $1,653,900 $785,300 

Avg SCC at 2.5% $32,400 $92,800 $143,400 $209,700 $1,776,800 $908,200 

95th percentile SCC at $37,600 $105,800 $165,400 $241,700 $2,015,700 $1,147,100 
436 

3% a Fuel impacts were calculated using pre-tax fuel prices. b

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more 

detail. 

c

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. d

 Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates.

 

EPA also conducted a separate analysis of the total benefits over the model year 

lifetimes of the 2012 through 2016 model year vehicles. In contrast to the calendar year 

analysis presented in Table III.H.10-1 through Table III.H.10-3, the model year lifetime 

analysis shows the lifetime impacts of the program on each of these MY fleets over the 

course of its lifetime. Full details of the inputs to this analysis can be found in RIA 

Chapter 5. The societal benefits of the full life of each of the five model years from 2012 

through 2016 are shown in Tables III.H.10-4 and III.H.10-5 at both a 3 percent and a 7 

percent discount rate, respectively. The net benefits are shown in Tables III.H.10-6 and 

III.H.10-7 for both a 3 percent and a 7 percent discount rate. Note that the quantified 

annual benefits shown in Table III.H.10-4 and Table III.H.10-5 include fuel savings as a 

positive benefit. As such, the quantified annual costs as shown in Table III.H.10-6 and 

Table III.H.10-7 do not include fuel savings since those are included as benefits. Also 

note that each of the Tables III.H.10-4 through Table III.H.10-7 include the benefits of 

reduced CO2 emissions—and consequently the total benefits—for each of four SCC 

values considered by EPA. As noted above, the benefit estimates from CO2 reductions 

are “very likely,” according to the IPCC Fourth Assessment Report, underestimates 

because, in part, models used to calculate SCC values do not include information about 

impacts that have not been quantified. 

Table III.H.10-4 Estimated Societal Benefits Associated with the Lifetimes of 2012-2016 

Model Year Vehicles (Millions of 2007 dollars; 3% Discount Rate) 

Monetized Values (millions) 2012MY 2013MY 2014MY 2015MY 2016MY Sum 

Cost of Noise, Accident, Congestion ($) -$1,100 -$1,600 -$2,100 -$2,900 -$3,900 -$11,600 

Pretax Fuel Savings ($) $16,100 $23,900 $32,200 $46,000 $63,500 $181,800 

Energy Security (price shock) ($)a $900 $1,400 $1,800 $2,500 $3,500 $10,100 

Value of Reduced Refueling time ($) $1,100 $1,600 $2,100 $3,000 $4,000 $11,900 

Value of Additional Driving ($) $2,400 $3,400 $4,400 $6,000 $7,900 $24,000 

Value of PM2.5-related Health Impacts 

($)b,c,d $700 $900 $1,300 $1,800 $2,400 $7,000 

Reduced CO2 Emissions at each assumed SCC valuee,f,g 

Avg SCC at 5% $400 $500 $700 $1,000 $1,300 $3,800 

Avg SCC at 3% $1,700 $2,400 $3,100 $4,400 $5,900 $17,000 

Avg SCC at 2.5% $2,700 $3,900 $5,200 $7,200 $9,700 $29,000 
437 

95th percentile SCC at 3% $5,100 $7,300 $9,600 $13,000 $18,000 $53,000 

Total Benefits at each assumed SCC valuee,f,g

Avg SCC at 5% $20,500 $30,100 $40,400 $57,400 $78,700 $227,000 

Avg SCC at 3% $21,800 $32,000 $42,800 $60,800 $83,300 $240,200 

Avg SCC at 2.5% $22,800 $33,500 $44,900 $63,600 $87,100 $252,200 

95th percentile SCC at 3% $25,200 $36,900 $49,300 $69,400 $95,400 $276,200 a Note that, due to a calculation error in the proposal, the energy security impacts for the model year 

analysis were roughly half what they should have been. 

 b Note that the co-pollutant impacts associated with the standards presented here do not include the full 

complement of endpoints that, if quantified and monetized, would change the total monetized estimate of 

rule-related impacts. Instead, the co-pollutant benefits are based on benefit-per-ton values that reflect only 

human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and 

environmental benefits would be based on changes in ambient PM2.5 and ozone as determined by fullscale air quality modeling. However, EPA was unable to conduct a full-scale air quality modeling analysis 

associated with the vehicle model year lifetimes for the final rule. 

c

 The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table are based on an 

estimate of premature mortality derived from the ACS study (Pope et al., 2002). If the benefit-per-ton 

estimates were based on the Six Cities study (Laden et al., 2006), the values would be approximately 145% 

(nearly two-and-a-half times) larger. 

d

 The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table assume a 3% 

discount rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag. 

If a 7% discount rate had been used, the values would be approximately 9% lower. 

e

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more 

detail. 

f

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. g

 Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates.

Table III.H.10-5 Estimated Societal Benefits Associated with the Lifetimes of 2012-

2016 Model Year Vehicles (Millions of 2007 dollars; 7% Discount Rate) 

Monetized Values (millions) 2012MY 2013MY 2014MY 2015MY 2016MY Sum 

Cost of Noise, Accident, Congestion ($) -$900 -$1,200 -$1,600 -$2,300 -$3,100 -$9,200 

Pretax Fuel Savings ($) $12,500 $18,600 $25,100 $36,000 $49,600 $141,900 

Energy Security (price shock) ($)a $800 $1,100 $1,400 $2,000 $2,700 $8,000 

Value of Reduced Refueling time ($) $900 $1,300 $1,700 $2,400 $3,200 $9,400 

Value of Additional Driving ($) $1,900 $2,700 $3,500 $4,700 $6,200 $19,000 

Value of PM2.5-related Health Impacts 

($)b,c,d $500 $800 $1,000 $1,400 $1,900 $5,600 

Reduced CO2 Emissions at each assumed SCC valuee,f,g

Avg SCC at 5% $400 $500 $700 $1,000 $1,300 $3,800 

Avg SCC at 3% $1,700 $2,400 $3,100 $4,400 $5,900 $17,000 

Avg SCC at 2.5% $2,700 $3,900 $5,200 $7,200 $9,700 $29,000 

95th percentile SCC at 3% $5,100 $7,300 $9,600 $13,000 $18,000 $53,000 

Total Benefits at each assumed SCC valuee,f,g
438 

Avg SCC at 5% $16,100 $23,800 $31,800 $45,200 $61,800 $178,500 

Avg SCC at 3% $17,400 $25,700 $34,200 $48,600 $66,400 $191,700 

Avg SCC at 2.5% $18,400 $27,200 $36,300 $51,400 $70,200 $203,700 

95th percentile SCC at 3% $20,800 $30,600 $40,700 $57,200 $78,500 $227,700 a Note that, due to a calculation error in the proposal, the energy security impacts for the model year 

analysis were roughly half what they should have been. 

b

 Note that the co-pollutant impacts associated with the standards presented here do not include the full 

complement of endpoints that, if quantified and monetized, would change the total monetized estimate of 

rule-related impacts. Instead, the co-pollutant benefits are based on benefit-per-ton values that reflect only 

human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and 

environmental benefits would be based on changes in ambient PM2.5 and ozone as determined by fullscale air quality modeling. However, EPA was unable to conduct a full-scale air quality modeling analysis 

associated with the vehicle model year lifetimes for the final rule. 

c

 The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table are based on an 

estimate of premature mortality derived from the ACS study (Pope et al., 2002). If the benefit-per-ton 

estimates were based on the Six Cities study (Laden et al., 2006), the values would be approximately 145% 

(nearly two-and-a-half times) larger. 

d

 The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table assume a 3% 

discount rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag. 

If a 7% discount rate had been used, the values would be approximately 9% lower. 

e

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more 

detail. 

f

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. g

 Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates.

Table III.H.10-6 Quantified Net Benefits Associated with the Lifetimes of 2012-2016 

Model Year Vehicles (Millions of 2007 dollars; 3% Discount Rate) 

Monetized Values (millions) 2012MY 2013MY 2014MY 2015MY 2016MY Sum 

Quantified Annual Costs (excluding fuel 

savings)a $4,900 $8,000 $10,300 $12,700 $15,600 $51,500 

Quantified Annual Benefits at each assumed SCC valueb,c,d

Avg SCC at 5% $20,500 $30,100 $40,400 $57,400 $78,700 $227,000 

Avg SCC at 3% $21,800 $32,000 $42,800 $60,800 $83,300 $240,200 

Avg SCC at 2.5% $22,800 $33,500 $44,900 $63,600 $87,100 $252,200 

95th percentile SCC at 3% $25,200 $36,900 $49,300 $69,400 $95,400 $276,200 

Quantified Net Benefits at each assumed SCC valueb,c,d
439 

Avg SCC at 5% $15,600 $22,100 $30,100 $44,700 $63,100 $175,500 

Avg SCC at 3% $16,900 $24,000 $32,500 $48,100 $67,700 $188,700 

Avg SCC at 2.5% $17,900 $25,500 $34,600 $50,900 $71,500 $200,700 

95th percentile SCC at 3% $20,300 $28,900 $39,000 $56,700 $79,800 $224,700 a

 Quantified annual costs as shown here are the increased costs for new vehicles in each given model year. 

Since those costs are assumed to occur in the given model year (i.e., not over a several year time span), the 

discount rate does not affect the costs. 

b

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more 

detail. 

c Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. d

 Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates.

Table III.H.10-7 Quantified Net Benefits Associated with the Lifetimes of 2012-2016 

Model Year Vehicles (Millions of 2007 dollars; 7% Discount Rate) 

Monetized Values (millions) 2012MY 2013MY 2014MY 2015MY 2016MY Sum 

Quantified Annual Costs (excluding fuel 

savings) a $4,900 $8,000 $10,300 $12,700 $15,600 $51,500 

Quantified Annual Benefits at each assumed SCC valueb,c,d

Avg SCC at 5% $16,100 $23,800 $31,800 $45,200 $61,800 $178,500 

Avg SCC at 3% $17,400 $25,700 $34,200 $48,600 $66,400 $191,700 

Avg SCC at 2.5% $18,400 $27,200 $36,300 $51,400 $70,200 $203,700 

95th percentile SCC at 3% $20,800 $30,600 $40,700 $57,200 $78,500 $227,700 

Quantified Net Benefits at each assumed SCC valueb,c,d

Avg SCC at 5% $11,200 $15,800 $21,500 $32,500 $46,200 $127,000 

Avg SCC at 3% $12,500 $17,700 $23,900 $35,900 $50,800 $140,200 

Avg SCC at 2.5% $13,500 $19,200 $26,000 $38,700 $54,600 $152,200 

95th percentile SCC at 3% $15,900 $22,600 $30,400 $44,500 $62,900 $176,200 a

 Quantified annual costs as shown here are the increased costs for new vehicles in each given model year. 

Since those costs are assumed to occur in the given model year (i.e., not over a several year time span), the 

discount rate does not affect the costs. 

b

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The 

same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) 

is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more 

detail. 

c

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and 

N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these 

non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a 

goal to develop methods to value non-CO2 emissions in future analyses. 
440 

d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC 

estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for 

Average SCC at 2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also 

presents these SCC estimates. 

I. Statutory and Executive Order Reviews 

1. Executive Order 12866: Regulatory Planning and Review

 

 Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735, October 4, 

1993), this action is an "economically significant regulatory action” because it is likely to 

have an annual effect on the economy of $100 million or more. Accordingly, EPA 

submitted this action to the Office of Management and Budget (OMB) for review under 

EO 12866 and any changes made in response to OMB recommendations have been 

documented in the docket for this action. 

 In addition, EPA prepared an analysis of the potential costs and benefits 

associated with this action. This analysis is contained in the Final Regulatory Impact 

Analysis, which is available in the docket for this rulemaking and at the docket internet 

address listed under ADDRESSES above. 

2. Paperwork Reduction Act

The information collection requirements in this final rule have been submitted for 

approval to the Office of Management and Budget (OMB) under the Paperwork 

Reduction Act, 44 U.S.C. 3501 et seq., and has been assigned OMB control number 

0783.57. The information collection requirements are not enforceable until OMB 

approves them. 

The Agency is finalizing requirements for manufacturers to submit information to 

ensure compliance with the provisions in this rule. This includes a variety of 

requirements for vehicle manufacturers. Section 208(a) of the Clean Air Act requires that 

vehicle manufacturers provide information the Administrator may reasonably require to 

determine compliance with the regulations; submission of the information is therefore 

mandatory. We will consider confidential all information meeting the requirements of 

section 208(c) of the Clean Air Act. 

As shown in Table III.I.2-1, the total annual burden associated with this rule is 

about 39,900 hours and $5 million, based on a projection of 33 respondents. The 

estimated burden for vehicle manufacturers is a total estimate for new reporting 

requirements. Burden means the total time, effort, or financial resources expended by 

persons to generate, maintain, retain, or disclose or provide information to or for a 

Federal agency. This includes the time needed to review instructions; develop, acquire, 

install, and utilize technology and systems for the purposes of collecting, validating, and 

verifying information, processing and maintaining information, and disclosing and 

providing information; adjust the existing ways to comply with any previously applicable 

instructions and requirements; train personnel to be able to respond to a collection of 
441 

information; search data sources; complete and review the collection of information; and 

transmit or otherwise disclose the information. 

 

Table III.I.2-1 Estimated Burden for Reporting and Recordkeeping Requirements 

Number of 

respondents 

Annual burden 

hours 

Annual 

costs 

33 39,940 $5,001,000 

 

An agency may not conduct or sponsor, and a person is not required to respond to, 

a collection of information unless it displays a currently valid OMB control number. The 

OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. In 

addition, EPA is amending the table in 40 CFR part 9 of currently approved OMB control 

numbers for various regulations to list the regulatory citations for the information 

requirements contained in this final rule. 

3. Regulatory Flexibility Act

a. Overview 

 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 directly subject to the rule. Small entities include small 

businesses, small organizations, and small governmental jurisdictions. 

For purposes of assessing the impacts of this rule on small entities, small entity is 

defined as: (1) a small business as defined by the Small Business Administration’s (SBA) 

regulations at 13 CFR 121.201 (see table below); (2) a small governmental jurisdiction 

that is a government of a city, county, town, school district or special district with a 

population of less than 50,000; and (3) a small organization that is any not-for-profit 

enterprise which is independently owned and operated and is not dominant in its field. 

Table III.I.3-1 provides an overview of the primary SBA small business 

categories included in the light-duty vehicle sector: 
442 

Table III.I.3-1 Primary SBA Small Business Categories in the Light-Duty Vehicle 

Sector 

Industry a

Defined as small 

entity by SBA if less 

than or equal to: 

NAICS Codesb 

Light-duty vehicles: 

- vehicle manufacturers 

(including small volume manufacturers) 

- independent commercial importers 

- alternative fuel vehicle converters 

1,000 employees 

$7 million annual sales 

$23 million annual sales 

100 employees 

50 employees 

750 employees 

1,000 employees 

$7 million annual sales 

336111 

811111, 811112, 811198 

441120 

423110, 424990 

336312, 336322, 336399 

335312 

454312, 485310, 811198 

Notes: 

a Light-duty vehicle entities that qualify as small businesses would not be subject to this rule. We are 

deferring action on small vehicle entities, and we intend to address these entities in a future rule. 

b

 North American Industrial Classification System

b. Summary of Potentially Affected Small Entities 

 

 EPA has not conducted a Regulatory Flexibility Analysis or a SBREFA SBAR 

Panel for the rule because we are certifying that the rule would not have a significant 

economic impact on a substantial number of small entities directly subject to the rule. As 

proposed, EPA is deferring standards for manufacturers meeting SBA’s business size 

criteria for small business as provided in 13 CFR 121.201, due to the short lead time to 

develop this rule, the extremely small emissions contribution of these entities, and the 

potential need to develop a program that would be structured differently for them (which 

would require more time). EPA would instead consider appropriate GHG standards for 

these entities as part of a future regulatory action. This includes U.S. and foreign small 

entities in three distinct categories of businesses for light-duty vehicles: small volume 

manufacturers (SVMs), independent commercial importers (ICIs), and alternative fuel 

vehicle converters. EPA has identified a total of about 47 vehicle businesses; about 13 

entities (or 28 percent) fit the Small Business Administration (SBA) criteria of a small 

business. There are about 2 SVMs, 8 ICIs, and 3 alternative fuel vehicle converters in the 

light-duty vehicle market which are small businesses (no major vehicle manufacturers 

meet the small-entity criteria as defined by SBA). EPA estimates that these small entities 

comprise about 0.03 percent of the total light-duty vehicle sales in the U.S., and therefore 

the deferment will have a negligible impact on the GHG emissions reductions from the 

standards. 

To ensure that EPA is aware of which companies would be deferred, EPA 

proposed to require that such entities submit a declaration to EPA containing a detailed Deleted: is

Deleted: ing
443 

written description of how that manufacturer qualifies as a small entity under the 

provisions of 13 CFR 121.201. EPA has reconsidered the need for this additional 

submission under the regulations and is deleting it as not necessary. We already have 

information on the limited number of small entities that we expect would receive the 

benefits of the exemption, and do not need the proposed regulatory requirement to be 

able to effectively implement this exemption for those parties who in fact meet its terms. 

Small entities are currently covered by a number of EPA motor vehicle emission 

regulations, and they routinely submit information and data on an annual basis as part of 

their compliance responsibilities. Based on this, EPA is certifying that the rule would not 

have a significant economic impact on a substantial number of small entities. 

c. Conclusions 

I therefore certify that this 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. As explained in the preamble for 

the proposed PSD tailoring rule (74 FR 55292, Oct. 27, 2009), 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 that might occur as EPA considers regulations of GHGs. Concerns about 

the potential impacts of statutorily imposed PSD requirements on small entities were the 

subject of deliberations in that consultation and outreach. EPA has compiled a summary 

of that consultation and outreach, which is available in the docket for the Tailoring Rule 

(EPA-HQ-OAR-2009-0517). 

 

4. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-

1538, requires Federal agencies, unless otherwise prohibited by law, to assess the effects 

of their regulatory actions on State, local, and tribal governments and the private sector. 

Under section 202 of the UMRA, EPA generally must prepare a written statement, 

including a cost-benefit analysis, for proposed and final rules with "Federal mandates" 

that may result in expenditures to State, local, and tribal governments, in the aggregate, or 

to the private sector, of $100 million or more in any one year. 

This rule is not subject to the requirements of section 203 of UMRA because it 

contains no regulatory requirements that might significantly or uniquely affect small 

governments. This rule contains no Federal mandates (under the regulatory provisions of 

Title II of the UMRA) for State, local, or tribal governments. The rule imposes no 

enforceable duty on any State, local or tribal governments. EPA has determined that this 

rule contains no regulatory requirements that might significantly or uniquely affect small 

governments. EPA has determined that this rule contains a Federal mandate that may 

result in expenditures of $100 million or more for the private sector in any one year. 

EPA believes that the action represents the least costly, most cost-effective approach to 

Deleted: Because such entities are not 

automatically exempted from other EPA 

regulations for light-duty vehicles and 

light-duty trucks, absent such a 

declaration and EPA approval, EPA will 

assume that the entity is subject to the 

greenhouse gas control requirements in 

this GHG rule. The declaration must be 

submitted at time of vehicle emissions 

certification under the EPA Tier 2 

program. EPA expects that the additional 

paperwork burden associated with 

completing and submitting a small entity 

declaration to gain deferral from the 

GHG standards would be negligible and 

easily done in the context of other routine 

submittals to EPA. However, EPA has 

accounted for this cost with a nominal 

estimate included in the Information 

Collection Request completed under the 

Paperwork Reduction Act. Additional 

information can be found in the 

Paperwork Reduction Act discussion in 

Section III.I.2. 
444 

achieve the statutory requirements of the rule. The costs and benefits associated with the 

rule are discussed above and in the Final Regulatory Impact Analysis, as required by the 

UMRA. 

5. Executive Order 13132 (Federalism)

 This action does not have federalism implications. It will not have substantial 

direct effects on the States, on the relationship between the national government and the 

States, or on the distribution of power and responsibilities among the various levels of 

government, as specified in Executive Order 13132. This rulemaking applies to 

manufacturers of motor vehicles and not to state or local governments. Thus, Executive 

Order 13132 does not apply to this action. Although section 6 of Executive Order 13132 

does not apply to this action, EPA did consult with representatives of state governments 

in developing this action. 

 In the spirit of Executive Order 13132, and consistent with EPA policy to promote 

communications between EPA and State and local governments, EPA specifically 

solicited comment on the proposed action from State and local officials. Many state and 

local governments submitted public comments on the rule, the majority of which were 

supportive of the EPA’s greenhouse gas program. However, these entities did not 

provide comments indicating there would be a substantial direct effect on state or local 

governments resulting from this rule. 

6. Executive Order 13175 (Consultation and Coordination with Indian Tribal

Governments)

 This action does not have tribal implications, as specified in Executive Order 

13175 (65 FR 67249, November 9, 2000). This rule will be implemented at the Federal 

level and impose compliance costs only on vehicle manufacturers. Tribal governments 

will be affected only to the extent they purchase and use regulated vehicles. Thus, 

Executive Order 13175 does not apply to this action. 

7. Executive Order 13045: “Protection of Children from Environmental 

Health Risks and Safety Risks”

 This action is subject to EO 13045 (62 FR 19885, April 23, 1997) because it is an 

economically significant regulatory action as defined by EO 12866, and EPA believes 

that the environmental health or safety risk addressed by this action may have a 

disproportionate effect on children. A synthesis of the science and research regarding 

how climate change may affect children and other vulnerable subpopulations is contained 

in the Technical Support Document for Endangerment or Cause or Contribute Findings 

for Greenhouse Gases under Section 202(a) of the Clean Air Act, which can be found in 

the public docket for this rule.502 A summary of the analysis is presented below. 

 

502 U.S. EPA. (2009). Technical Support Document for Endangerment or Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean Air Act. Washington, D.C.: U.S. EPA.. Docket EPAHQ-OAR-2009-0472-11292 
445 

With respect to GHG emissions, the effects of climate change observed to date 

and projected to occur in the future include the increased likelihood of more frequent and 

intense heat waves. Specifically, EPA’s analysis of the scientific assessment literature has 

determined that severe heat waves are projected to intensify in magnitude, frequency, and 

duration over the portions of the U.S. where these events already occur, with potential 

increases in mortality and morbidity, especially among the young, elderly, and frail. EPA 

has estimated reductions in projected global mean surface temperatures as a result of 

reductions in GHG emissions associated with the standards finalized in this action 

(Section III.F). Children may receive benefits from reductions in GHG emissions 

because they are included in the segment of the population that is most vulnerable to 

extreme temperatures. 

For non-GHG pollutants, EPA has determined that climate change is expected to 

increase regional ozone pollution, with associated risks in respiratory infection, 

aggravation of asthma, and premature death. The directional effect of climate change on 

ambient PM levels remains uncertain. However, disturbances such as wildfires are 

increasing in the U.S. and are likely to intensify in a warmer future with drier soils and 

longer growing seasons. PM emissions from forest fires can contribute to acute and 

chronic illnesses of the respiratory system, particularly in children, including pneumonia, 

upper respiratory diseases, asthma and chronic obstructive pulmonary diseases. 

8. Executive Order 13211 (Energy Effects)

 This rule is not a “significant energy action” as defined in Executive Order 13211, 

“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, 

or Use” (66 FR 28355 (May 22, 2001)) because it is not likely to have a significant 

adverse effect on the supply, distribution, or use of energy. In fact, this rule has a 

positive effect on energy supply and use. Because the GHG emission standards finalized 

today result in significant fuel savings, this rule encourages more efficient use of fuels. 

Therefore, we have concluded that this rule is not likely to have any adverse energy 

effects. Our energy effects analysis is described above in Section III.H. 

9. National Technology Transfer Advancement Act

 Section 12(d) of the National Technology Transfer and Advancement Act of 1995 

(“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use 

voluntary consensus standards in its regulatory activities unless to do so would be 

inconsistent with applicable law or otherwise impractical. Voluntary consensus standards 

are technical standards (e.g., materials specifications, test methods, sampling procedures, 

and business practices) that are developed or adopted by voluntary consensus standards 

bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the 

Agency decides not to use available and applicable voluntary consensus standards. 

 The rulemaking involves technical standards. Therefore, the Agency conducted a 

search to identify potentially applicable voluntary consensus standards. For CO2, N2O, 
446 

and CH4 emissions, we identified no such standards, and none were brought to our 

attention in comments. Therefore, EPA is collecting data over the same test cycles that 

are used for the CAFE program following standardized test methods and sampling 

procedures. This will minimize the amount of testing done by manufacturers, since 

manufacturers are already required to run these tests. For A/C system leakage 

improvement credits, EPA identified a Society of Automotive Engineers (SAE) 

methodology and EPA’s approach is based closely on this SAE methodology. For the 

A/C system efficiency improvement credits, including the new idle test, EPA generally 

uses standardized test methods and sampling procedures. However, EPA knows of no 

consensus standard available for an A/C idle test to measure system efficiency 

improvements. 

10. Executive Order 12898: Federal Actions to Address Environmental 

Justice in Minority Populations and Low-Income Populations

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal 

executive policy on environmental justice. Its main provision directs federal agencies, to 

the greatest extent practicable and permitted by law, to make environmental justice part 

of their mission by identifying and addressing, as appropriate, disproportionately high 

and adverse human health or environmental effects of their programs, policies, and 

activities on minority populations and low-income populations in the United States. 

With respect to GHG emissions, EPA has determined that this final rule will not 

have disproportionately high and adverse human health or environmental effects on 

minority or low-income populations because it increases the level of environmental 

protection for all affected populations without having any disproportionately high and 

adverse human health or environmental effects on any population, including any minority 

or low-income population. The reductions in CO2 and other GHGs associated with the 

standards will affect climate change projections, and EPA has estimated reductions in 

projected global mean surface temperatures (Section III.F.3). Within communities 

experiencing climate change, certain parts of the population may be especially 

vulnerable; these include the poor, the elderly, those already in poor health, the disabled, 

those living alone, and/or indigenous populations dependent on one or a few resources.

503 In addition, the U.S. Climate Change Science Program504 stated as one of its 

conclusions: “The United States is certainly capable of adapting to the collective impacts 

of climate change. However, there will still be certain individuals and locations where 

the adaptive capacity is less and these individuals and their communities will be 

disproportionally impacted by climate change.” Therefore, these specific subpopulations may receive benefits from reductions in GHGs. 

 

503 U.S. EPA. (2009). Technical Support Document for Endangerment or Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean Air Act. Washington, D.C.: U.S. EPA. Docket EPAHQ-OAR-2009-0472-11292 

504 CCSP (2008) Analyses of the effects of global change on human health and welfare and human systems. 

A Report by the U.S. Climate Change Science Program and the Subcommittee on Global Change Research. 

[Gamble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J. Wilbanks, (Authors)]. U.S. Environmental Protection 

Agency, Washington, DC, USA.
447 

For non-GHG co-pollutants such as ozone, PM2.5, and toxics, EPA has concluded 

that it is not practicable to determine whether there would be disproportionately high and 

adverse human health or environmental effects on minority and/or low income 

populations from this final rule. 

11. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a 

rule may take effect, the agency promulgating the rule must submit a rule report, which 

includes a copy of the rule, to each House of the Congress and to the Comptroller 

General of the United States. EPA will submit a report containing this rule and other 

required information to the U.S. Senate, the U.S. House of Representatives, and the 

Comptroller General of the United States prior to publication of the rule in the Federal 

Register. A Major rule cannot take effect until 60 days after it is published in the Federal 

Register. This action is a “major rule” as defined by 5 U.S.C. 804(2). This rule will be 

effective [Insert date 60 days after publication in the Federal Register], sixty days 

after date of publication in the Federal Register. 

J. Statutory Provisions and Legal Authority 

Statutory authority for the vehicle controls finalized today is found in section 202 

(a) (which authorizes standards for emissions of pollutants from new motor vehicles 

which emissions cause or contribute to air pollution which may reasonably be anticipated 

to endanger public health or welfare), 202 (d), 203-209, 216, and 301 of the Clean Air 

Act, 42 U.S.C. 7521 (a), 7521 (d), 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7550, and 

7601. 

List of Subjects

40 CFR Part 85 

Confidential business information, Imports, Labeling, Motor vehicle pollution, Reporting 

and recordkeeping requirements, Research, Warranties. 

40 CFR Part 86 

Administrative practice and procedure, Confidential business information, Labeling, 

Motor vehicle pollution, Reporting and recordkeeping requirements. 

40 CFR Part 600 

Administrative practice and procedure, Electric power, Fuel economy, Incorporation by 

reference, Labeling, Reporting and recordkeeping requirements. 
448 

49 CFR Part 531 and 533 

Fuel economy. 

49 CFR Part 537 

Fuel economy, Reporting and recordkeeping requirements. 

49 CFR Part 538 

Administrative practice and procedure, Fuel economy, Motor vehicles, Reporting and 

recordkeeping requirements. 

Environmental Protection Agency 

40 CFR Chapter I 

PART 85—CONTROL OF AIR POLLUTION FROM MOBILE SOURCES 

1. The authority citation for part 85 continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart T -- [Amended] 

2. Section 85.1902 is amended by revising paragraphs (b) and (d) to read as follows: 

§85.1902 Definitions. 

* * * * * 

(b) The phrase emission-related defect shall mean: 

(1) A defect in design, materials, or workmanship in a device, system, or 

assembly described in the approved Application for Certification (required by 40 CFR 

86.1843-01 and 86.1844-01, and by 40 CFR 86.098-22 and similar provisions of 40 CFR 

part 86) which affects any parameter or specification enumerated in appendix VIII of this 

part; or 

(2) A defect in the design, materials, or workmanship in one or more emissions 

control or emission-related parts, components, systems, software or elements of design 

which must function properly to assure continued compliance with vehicle emission 

requirements, including compliance with CO2, CH4, N2O, and carbon-related exhaust 

emission standards; 

* * * * * 

(d) The phrase Voluntary Emissions Recall shall mean a repair, adjustment, or 

modification program voluntarily initiated and conducted by a manufacturer to remedy 

any emission-related defect for which direct notification of vehicle or engine owners has 

been provided, including programs to remedy defects related to emissions standards for 

CO2, CH4, N2O, and/or carbon-related exhaust emissions. 

* * * * * 

Deleted: For the reasons set forth in the 

preamble, the Environmental Protection 

Agency is amending parts 9, 85, 86, and 

600 of title 40, Chapter I of the Code of 

Federal Regulations as follows: ¶

¶

PART 9—[Amended]¶

¶

1. The authority citation for part 9 

continues to read as follows:¶

Authority: 7 U.S.C. 135 et seq ., 136–

136y; 15 U.S.C. 2001, 2003, 2005, 2006, 

2601–2671; 21 U.S.C. 331j, 346a, 31 

U.S.C. 9701; 33 U.S.C. 1251 et seq ., 

1311, 1313d, 1314, 1318, 1321, 1326, 

1330, 1342, 1344, 1345 (d) and (e), 1361; 

E.O. 11735, 38 FR 21243, 3 CFR, 1971–

1975 Comp. p. 973; 42 U.S.C. 241, 242b, 

243, 246, 300f, 300g, 300g–1, 300g–2, 

300g–3, 300g–4, 300g–5, 300g–6, 300j–

1, 300j–2, 300j–3, 300j–4, 300j–9, 1857 

et seq ., 6901–6992k, 7401–7671q, 7542, 

9601–9657, 11023, 11048.¶

¶

¶

2. The table in § 9.1 is amended by 

adding the following sections in 

numerical order under the undesignated 

center heading ‘‘Significant New Uses of 

Chemical Substances’’ to read as follows:¶

¶

§ 9.1 OMB approvals under the 

Paperwork Reduction Act.¶

* * * * *¶

40 CFR citation

Deleted: 3

Deleted: 4

Deleted: 

Deleted: 

Deleted: like

Deleted: subpart A of this part and 

Deleted: 

Deleted: compliance (

Deleted: greenhouse gas

Deleted: 

Deleted: )

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Page Break

... [1]
449 

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY 

VEHICLES AND ENGINES 

3. The authority citation for part 86 continues to read as follows: 

Authority: 42 U.S.C. 7401-7671q. 

4. Section 86.1 is amended by adding paragraphs (b)(2)(xxxix) through (xxxx) to read as 

follows: 

§86.1 Reference materials.

* * * * * 

 (b) * * * 

 (2) * * * 

 (xxxix) SAE J2064, December 2005, R134a Refrigerant Automotive AirConditioned Hose, IBR approved for §86.166-12. 

 (xxxx) SAE J2765, October, 2008, Procedure for Measuring System COP 

[Coefficient of Performance] of a Mobile Air Conditioning System on a Test Bench, IBR 

approved for §86.1866-12. 

* * * * * 

Subpart B--[Amended]

5. Section 86.111-94 is amended by revising paragraph (b) introductory text to read as 

follows: 

§86.111-94 Exhaust gas analytical system. 

* * * * * 

(b) Major component description. The exhaust gas analytical system, Figure B94–

7, consists of a flame ionization detector (FID) (heated, 235 °±15 °F (113 °±8 °C) for 

methanol-fueled vehicles) for the determination of THC, a methane analyzer (consisting 

of a gas chromatograph combined with a FID) for the determination of CH4, nondispersive infrared analyzers (NDIR) for the determination of CO and CO2, a 

chemiluminescence analyzer (CL) for the determination of NOX, and an analyzer meeting 

the requirements specified in §86.167-12 for the determination of N2O (required for 2015 

and later model year vehicles). A heated flame ionization detector (HFID) is used for the 

continuous determination of THC from petroleum-fueled diesel-cycle vehicles (may also 

be used with methanol-fueled diesel-cycle vehicles), Figure B94–5 (or B94–6). The 

analytical system for methanol consists of a gas chromatograph (GC) equipped with a 

flame ionization detector. The analysis for formaldehyde is performed using highpressure liquid chromatography (HPLC) of 2,4-dinitrophenylhydrazine (DNPH) 

derivatives using ultraviolet (UV) detection. The exhaust gas analytical system shall 

conform to the following requirements: 

* * * * * 

Deleted: 5

Deleted: 6

Deleted: 

Deleted: 

Deleted: 

Deleted: 7. 
450 

6. Section 86.113-04 is amended by revising the entry for RVP in the table in paragraph 

(a)(1) to read as follows:

§86.113-04 Fuel specifications.

* * * * * 

 (a) * * *

 (1) * * *

Item ASTM test method No. Value

* * * * * * *

RVP2,3 D 323 8.7-9.2 (60.0-63.4)

* * * * * * *

* * * * *

7. A new §86.127-12 is added to read as follows: 

§86.127-12 Test procedures; overview. 

Applicability. The procedures described in this subpart are used to determine the 

conformity of vehicles with the standards set forth in subpart A or S of this part (as 

applicable) for light-duty vehicles, light-duty trucks, and medium-duty passenger 

vehicles. Except where noted, the procedures of paragraphs (a) through (d) of this 

section, and the contents of §§86.135–00, 86.136–90, 86.137–96, 86.140–94, 86.142–90, 

and 86.144–94 are applicable for determining emission results for vehicle exhaust 

emission systems designed to comply with the FTP emission standards, or the FTP 

emission element required for determining compliance with composite SFTP standards. 

Paragraph (e) of this section discusses fuel spitback emissions. Paragraphs (f) and (g) of 

this section discuss the additional test elements of aggressive driving (US06) and air 

conditioning (SC03) that comprise the exhaust emission components of the SFTP. 

Paragraphs (h) and (i) of this section are applicable to all vehicle emission test 

procedures. 

(a) The overall test consists of prescribed sequences of fueling, parking, and 

operating test conditions. Vehicles are tested for any or all of the following emissions, 

depending upon the specific test requirements and the vehicle fuel type: 

(1) Gaseous exhaust THC, NMHC, NMOG, CO, NOX, CO2, N2O, CH4, CH3OH, 

C2H5OH, C2H4O, and HCHO. 

(2) Particulates. 

(3) Evaporative HC (for gasoline-fueled, methanol-fueled and gaseous-fueled 

vehicles) and CH3OH (for methanol-fueled vehicles). The evaporative testing portion of 

the procedure occurs after the exhaust emission test; however, exhaust emissions need 

not be sampled to complete a test for evaporative emissions. 

(4) Fuel spitback (this test is not required for gaseous-fueled vehicles). 

(b) The FTP Otto-cycle exhaust emission test is designed to determine gaseous 

THC, NMHC, NMOG, CO, CO2, CH4, NOX, N2O, and particulate mass emissions from 

gasoline-fueled, methanol-fueled and gaseous-fueled Otto-cycle vehicles as well as 

methanol and formaldehyde from methanol-fueled Otto-cycle vehicles, as well as 

methanol, ethanol, acetaldehyde, and formaldehyde from ethanol-fueled vehicles, while 

simulating an average trip in an urban area of approximately 11 miles (approximately 18 

Deleted: ¶

8. 

Deleted: section 

Deleted: 

Deleted: b

Deleted: §86.127–96 (c) and (d), 

Deleted: 94

Deleted: Section 86.127–96(e) 

discusses fuel spitback emissions and 

paragraphs

Deleted: Section 86.127–00 includes 

text that specifies requirements that differ 

from §86.127–96. 

Deleted: 
451 

kilometers). The test consists of engine start-ups and vehicle operation on a chassis 

dynamometer through a specified driving schedule (see paragraph (a) of appendix I to 

this part for the Urban Dynamometer Driving Schedule). A proportional part of the 

diluted exhaust is collected continuously for subsequent analysis, using a constant 

volume (variable dilution) sampler or critical flow venturi sampler. 

(c) The diesel-cycle exhaust emission test is designed to determine particulate and 

gaseous mass emissions during the test described in paragraph (b) of this section. For 

petroleum-fueled diesel-cycle vehicles, diluted exhaust is continuously analyzed for THC 

using a heated sample line and analyzer; the other gaseous emissions (CH4, CO, CO2, 

N2O, and NOX) are collected continuously for analysis as in paragraph (b) of this section. 

For methanol- and ethanol-fueled vehicles, THC, methanol, formaldehyde, CO, CO2, 

CH4, N2O, and NOX are collected continuously for analysis as in paragraph (b) of this 

section. Additionally, for ethanol-fueled vehicles, ethanol and acetaldehyde are collected 

continuously for analysis as in paragraph (b) of this section. THC, methanol, ethanol, 

acetaldehyde, and formaldehyde are collected using heated sample lines, and a heated 

FID is used for THC analyses. Simultaneous with the gaseous exhaust collection and 

analysis, particulates from a proportional part of the diluted exhaust are collected 

continuously on a filter. The mass of particulate is determined by the procedure described 

in §86.139. This testing requires a dilution tunnel as well as the constant volume sampler. 

(d) The evaporative emission test (gasoline-fueled vehicles, methanol-fueled and 

gaseous-fueled vehicles) is designed to determine hydrocarbon and methanol evaporative 

emissions as a consequence of diurnal temperature fluctuation, urban driving and hot 

soaks following drives. It is associated with a series of events that a vehicle may 

experience and that may result in hydrocarbon and/or methanol vapor losses. The test 

procedure is designed to measure: 

(1) Diurnal emissions resulting from daily temperature changes (as well as 

relatively constant resting losses), measured by the enclosure technique (see §86.133); 

(2) Running losses resulting from a simulated trip performed on a chassis 

dynamometer, measured by the enclosure or point-source technique (see §86.134; this 

test is not required for gaseous-fueled vehicles); and 

(3) Hot soak emissions, which result when the vehicle is parked and the hot 

engine is turned off, measured by the enclosure technique (see §86.138). 

(e) Fuel spitback emissions occur when a vehicle's fuel fill neck cannot 

accommodate dispensing rates. The vehicle test for spitback consists of a short drive 

followed immediately by a complete refueling event. This test is not required for 

gaseous-fueled vehicles. 

(f) The element of the SFTP for exhaust emissions related to aggressive driving 

(US06) is designed to determine gaseous THC, NMHC, CO, CO2, CH4, and NOX

emissions from gasoline-fueled or diesel-fueled vehicles (see §86.158–00 Supplemental 

test procedures; overview, and §86.159–00 Exhaust emission test procedures for US06 

emissions). The test cycle simulates urban driving speeds and accelerations that are not 

represented by the FTP Urban Dynamometer Driving Schedule simulated trips discussed 

in paragraph (b) of this section. The test consists of vehicle operation on a chassis 

dynamometer through a specified driving cycle (see paragraph (g), US06 Dynamometer 

Driving Schedule, of appendix I to this part). A proportional part of the diluted exhaust is 

Deleted: a test similar to 

Deleted: in §86.127

Deleted: )

Deleted: §86.127

Deleted: )

Deleted: §86.127

Deleted: )

Deleted: §86.127

Deleted: ). 

Deleted: NOX
452 

collected continuously for subsequent analysis, using a constant volume (variable 

dilution) sampler or critical flow venturi sampler. 

(g)(1) The element of the SFTP related to the increased exhaust emissions caused 

by air conditioning operation (SC03) is designed to determine gaseous THC, NMHC, 

CO, CO2, CH4, and NOX emissions from gasoline-fueled or diesel fueled vehicles related 

to air conditioning use (see §86.158–00 Supplemental federal test procedures; overview 

and §86.160–00 Exhaust emission test procedure for SC03 emissions). The test cycle 

simulates urban driving behavior with the air conditioner operating. The test consists of 

engine startups and vehicle operation on a chassis dynamometer through specified 

driving cycles (see paragraph (h), SC03 Dynamometer Driving Schedule, of appendix I to 

this part). A proportional part of the diluted exhaust is collected continuously for 

subsequent analysis, using a constant volume (variable dilution) sampler or critical flow 

venturi sampler. The testing sequence includes an approved preconditioning cycle, a 10 

minute soak with the engine turned off, and the SC03 cycle with measured exhaust 

emissions. 

(2) The SC03 air conditioning test is conducted with the air conditioner operating 

at specified settings and the ambient test conditions of: 

(i) Air temperature of 95 °F; 

(ii) 100 grains of water/pound of dry air (approximately 40 percent relative 

humidity); 

(iii) Simulated solar heat intensity of 850 W/m2

 (see §86.161–00(d)); and 

(iv) Air flow directed at the vehicle that will provide representative air conditioner 

system condenser cooling at all vehicle speeds (see §86.161–00(e)). 

(3) Manufacturers have the option of simulating air conditioning operation during 

testing at other ambient test conditions provided they can demonstrate that the vehicle tail 

pipe exhaust emissions are representative of the emissions that would result from the 

SC03 cycle test procedure and the ambient conditions of paragraph (g)(2) of this section. 

The simulation test procedure must be approved in advance by the Administrator (see 

§§86.162–00 and 86.163–00). 

(h) Except in cases of component malfunction or failure, all emission control 

systems installed on or incorporated in a new motor vehicle shall be functioning during 

all procedures in this subpart. Maintenance to correct component malfunction or failure 

shall be authorized in accordance with §86.098–25 or §86.1834–01 as applicable. 

(i) Background concentrations are measured for all species for which emissions 

measurements are made. For exhaust testing, this requires sampling and analysis of the 

dilution air. For evaporative testing, this requires measuring initial concentrations. (When 

testing methanol-fueled vehicles, manufacturers may choose not to measure background 

concentrations of methanol and/or formaldehyde, and then assume that the concentrations 

are zero during calculations.) 

8. A new §86.135-12 is added to read as follows: 

§86.135-12 Dynamometer procedure. 

(a) Overview. The dynamometer run consists of two tests, a “cold” start test, after 

a minimum 12-hour and a maximum 36-hour soak according to the provisions of 

§§86.132 and 86.133, and a “hot” start test following the “cold” start by 10 minutes. 

Deleted: NOX

Deleted: air

Deleted: Administrator has approved 

two optional air conditioning test 

simulation procedures AC1 and AC2 (see 

§86.162–00) for only the model years of 

2000 through 2002. If a manufacturer 

desires to conduct simulation SC03 

testing for model year 2003 and beyond, 

the 

Deleted: 9

Deleted: section 

Deleted: 
453 

Engine startup (with all accessories turned off), operation over the UDDS, and engine 

shutdown make a complete cold start test. Engine startup and operation over the first 505 

seconds of the driving schedule complete the hot start test. The exhaust emissions are 

diluted with ambient air in the dilution tunnel as shown in Figure B94–5 and Figure B94–

6. A dilution tunnel is not required for testing vehicles waived from the requirement to 

measure particulates. Six particulate samples are collected on filters for weighing; the 

first sample plus backup is collected during the first 505 seconds of the cold start test; the 

second sample plus backup is collected during the remainder of the cold start test 

(including shutdown); the third sample plus backup is collected during the hot start test. 

Continuous proportional samples of gaseous emissions are collected for analysis during 

each test phase. For gasoline-fueled, natural gas-fueled and liquefied petroleum gasfueled Otto-cycle vehicles, the composite samples collected in bags are analyzed for 

THC, CO, CO2, CH4, NOX, and, for 2015 and later model year vehicles, N2O. For 

petroleum-fueled diesel-cycle vehicles (optional for natural gas-fueled, liquefied 

petroleum gas-fueled and methanol-fueled diesel-cycle vehicles), THC is sampled and 

analyzed continuously according to the provisions of §86.110. Parallel samples of the 

dilution air are similarly analyzed for THC, CO, CO2, CH4, NOX, and, for 2015 and later 

model year vehicles, N2O. For natural gas-fueled, liquefied petroleum gas-fueled and 

methanol-fueled vehicles, bag samples are collected and analyzed for THC (if not 

sampled continuously), CO, CO2, CH4, NOX, and, for 2015 and later model year vehicles, 

N2O. For methanol-fueled vehicles, methanol and formaldehyde samples are taken for 

both exhaust emissions and dilution air (a single dilution air formaldehyde sample, 

covering the total test period may be collected). For ethanol-fueled vehicles, methanol, 

ethanol, acetaldehyde, and formaldehyde samples are taken for both exhaust emissions 

and dilution air (a single dilution air formaldehyde sample, covering the total test period 

may be collected). Parallel bag samples of dilution air are analyzed for THC, CO, CO2, 

CH4, NOX, and, for 2015 and later model year vehicles, N2O. 

(b) During dynamometer operation, a fixed speed cooling fan shall be positioned 

so as to direct cooling air to the vehicle in an appropriate manner with the engine 

compartment cover open. In the case of vehicles with front engine compartments, the fan 

shall be squarely positioned within 12 inches (30.5 centimeters) of the vehicle. In the case 

of vehicles with rear engine compartments (or if special designs make the above 

impractical), the cooling fan shall be placed in a position to provide sufficient air to 

maintain vehicle cooling. The fan capacity shall normally not exceed 5300 cfm (2.50 

m3

/sec). However, if the manufacturer can show that during field operation the vehicle 

receives additional cooling, and that such additional cooling is needed to provide a 

representative test, the fan capacity may be increased, additional fans used, variable 

speed fan(s) may be used, and/or the engine compartment cover may be closed, if 

approved in advance by the Administrator. For example, the hood may be closed to 

provide adequate air flow to an intercooler through a factory installed hood scoop. 

Additionally, the Administrator may conduct certification, fuel economy and in-use 

testing using the additional cooling set-up approved for a specific vehicle. 

(c) The vehicle speed as measured from the dynamometer rolls shall be used. A 

speed vs. time recording, as evidence of dynamometer test validity, shall be supplied on 

request of the Administrator. 

Deleted: 

Deleted: 

Deleted: Methanol and formaldehyde 

samples may be omitted for 1990 through 

1994 model years when a FID calibrated 

on methanol is used.
454 

(d) Practice runs over the prescribed driving schedule may be performed at test 

point, provided an emission sample is not taken, for the purpose of finding the minimum 

throttle action to maintain the proper speed-time relationship, or to permit sampling 

system adjustment. Note: When using two-roll dynamometers a truer speed-time trace 

may be obtained by minimizing the rocking of the vehicle in the rolls; the rocking of the 

vehicle changes the tire rolling radius on each roll. This rocking may be minimized by 

restraining the vehicle horizontally (or nearly so) by using a cable and winch. 

(e) The drive wheel tires may be inflated up to a gauge pressure of 45 psi (310 

kPa) in order to prevent tire damage. The drive wheel tire pressure shall be reported with 

the test results. 

(f) lf the dynamometer has not been operated during the 2-hour period 

immediately preceding the test, it shall be warmed up for 15 minutes by operating at 30 

mph (48 kph) using a non-test vehicle or as recommended by the dynamometer 

manufacturer. 

(g) If the dynamometer horsepower must be adjusted manually, it shall be set 

within 1 hour prior to the exhaust emissions test phase. The test vehicle shall not be used 

to make this adjustment. Dynamometers using automatic control of pre-selectable power 

settings may be set anytime prior to the beginning of the emissions test. 

(h) The driving distance, as measured by counting the number of dynamometer 

roll or shaft revolutions, shall be determined for the transient cold start, stabilized cold 

start, and transient hot start phases of the test. The revolutions shall be measured on the 

same roll or shaft used for measuring the vehicle's speed. 

(i) Four-wheel drive and all-wheel drive vehicles may be tested either in a fourwheel drive or a two-wheel drive mode of operation. In order to test in the two-wheel 

drive mode, four-wheel drive and all-wheel drive vehicles may have one set of drive 

wheels disengaged; four-wheel and all-wheel drive vehicles which can be shifted to a 

two-wheel mode by the driver may be tested in a two-wheel drive mode of operation. 

9. A new §86.165-12 is added to subpart B to read as follows: 

§86.165-12 Air conditioning idle test procedure. 

(a) Applicability. This section describes procedures for determining air 

conditioning-related CO2 emissions from light-duty vehicles, light-duty trucks, and 

medium-duty passenger vehicles. The results of this test are used to qualify for air 

conditioning efficiency CO2 credits according to §86.1866-12(c). 

(b) Overview. The test consists of a brief period to stabilize the vehicle at idle, 

followed by a ten-minute period at idle when CO2 emissions are measured without any 

air conditioning systems operating, followed by a ten-minute period at idle when CO2

emissions are measured with the air conditioning system operating. This test is designed 

to determine the air conditioning-related CO2 emission value, in grams per minute. If 

engine stalling occurs during cycle operation, follow the provisions of §86.136–90 to 

restart the test. Measurement instruments must meet the specifications described in this 

subpart. 

(c) Test cell ambient conditions. 

(1) Ambient humidity within the test cell during all phases of the test sequence 

shall be controlled to an average of 50 ± 5 grains of water/pound of dry air. 

Deleted: 10

Deleted: 

Deleted: 
455 

(2) Ambient air temperature within the test cell during all phases of the test 

sequence shall be controlled to 75 ± 2 °F on average and 75 ± 5 °F as an instantaneous 

measurement. Air temperature shall be recorded continuously at a minimum of 30 second 

intervals. 

(d) Test sequence. 

(1) Connect the vehicle exhaust system to the raw sampling location or dilution 

stage according to the provisions of this subpart. For dilution systems, dilute the exhaust 

as described in this subpart. Continuous sampling systems must meet the specifications 

provided in this subpart. 

(2) Test the vehicle in a fully warmed-up condition. If the vehicle has soaked for 

two hours or less since the last exhaust test element, preconditioning may consist of a 505 

Cycle, 866 Cycle, US06, or SC03, as these terms are defined in §86.1803-01, or a 

highway fuel economy test procedure, as defined in §600.002-08 of this chapter. For soak 

periods longer than two hours, precondition the vehicle using one full Urban 

Dynamometer Driving Schedule. Ensure that the vehicle has stabilized at test cell 

ambient conditions such that the vehicle interior temperature is not substantially different 

from the external test cell temperature. Windows may be opened during preconditioning 

to achieve this stabilization. 

(3) Immediately after the preconditioning, turn off any cooling fans, if present, 

close the vehicle’s hood, fully close all the vehicle’s windows, ensure that all the 

vehicle’s air conditioning systems are set to full off, start the CO2 sampling system, and 

then idle the vehicle for not less than 1 minute and not more than 5 minutes to achieve 

normal and stable idle operation. 

(4) Measure and record the continuous CO2 concentration for 600 seconds. 

Measure the CO2 concentration continuously using raw or dilute sampling procedures. 

Multiply this concentration by the continuous (raw or dilute) flow rate at the emission 

sampling location to determine the CO2 flow rate. Calculate the CO2 cumulative flow rate 

continuously over the test interval. This cumulative value is the total mass of the emitted 

CO2. 

(5) Within 60 seconds after completing the measurement described in paragraph 

(d)(4) of this section, turn on the vehicle’s air conditioning system. Set automatic air 

conditioning systems to a temperature 9 °F (5 °C) below the ambient temperature of the 

test cell. Set manual air conditioning systems to maximum cooling with recirculation 

turned off, except that recirculation shall be enabled if the air conditioning system 

automatically defaults to a recirculation mode when set to maximum cooling. Continue 

idling the vehicle while measuring and recording the continuous CO2 concentration for 

600 seconds as described in paragraph (d)(4) of this section. Air conditioning systems 

with automatic temperature controls are finished with the test after this 600 second idle 

period. Manually controlled air conditioning systems must complete one additional idle 

period as described in paragraph (d)(6) of this section. 

(6) This paragraph (d)(6) applies only to manually controlled air conditioning 

systems. Within 60 seconds after completing the measurement described in paragraph 

(d)(5) of this section, leave the vehicle’s air conditioning system on and set as described 

in paragraph (d)(5) of this section but set the fan speed to the lowest setting that continues 

to provide air flow. Recirculation shall be turned off except that if the system defaults to 

a recirculation mode when set to maximum cooling and maintains recirculation with the 

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Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

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456 

low fan speed, then recirculation shall continue to be enabled. After the fan speed has 

been set, continue idling the vehicle while measuring and recording the continuous CO2

concentration for a total of 600 seconds as described in paragraph (d)(4) of this section. 

(e) Calculations. (1) For the measurement with no air conditioning operation, 

calculate the CO2 emissions (in grams per minute) by dividing the total mass of CO2 from 

paragraph (d)(4) of this section by 10.0 (the duration in minutes for which CO2 is 

measured). Round this result to the nearest tenth of a gram per minute. 

(2)(i) For the measurement with air conditioning in operation for automatic air 

conditioning systems, calculate the CO2 emissions (in grams per minute) by dividing the 

total mass of CO2 from paragraph (d)(5) of this section by 10.0. Round this result to the 

nearest tenth of a gram per minute. 

(ii) For the measurement with air conditioning in operation for manually 

controlled air conditioning systems, calculate the CO2 emissions (in grams per minute) by 

summing the total mass of CO2 from paragraphs (d)(5) and (d)(6) of this section and 

dividing by 20.0. Round this result to the nearest tenth of a gram per minute. 

(3) Calculate the increased CO2 emissions due to air conditioning (in grams per 

minute) by subtracting the results of paragraph (e)(1) of this section from the results of 

paragraph (e)(2)(i) or (ii) of this section, whichever is applicable. 

(f) The Administrator may prescribe procedures other than those in this section 

for air conditioning systems and/or vehicles that may not be susceptible to satisfactory 

testing by the procedures and methods in this section. For example, the Administrator 

may prescribe alternative air conditioning system settings for systems with controls that 

are not able to meet the requirements in this section. 

10. A new §86.166-12 is added to subpart B to read as follows: 

§86.166-12 Method for calculating emissions due to air conditioning leakage.

This section describes procedures used to determine a refrigerant leakage rate in 

grams per year from vehicle-based air conditioning units. The results of this test are used 

to determine air conditioning leakage credits according to §86.1866-12(b). 

(a) Emission totals. Calculate an annual rate of refrigerant leakage from an air 

conditioning system using the following equation: 

Grams/YRTOT = Grams/YRRP + Grams/YRSP + Grams/YRFH + Grams/YRMC + 

Grams/YRC

Where: 

Grams/YRTOT = Total air conditioning system emission rate in grams per year and 

rounded to the nearest tenth of a gram per year. 

Grams/YRRP = Emission rate for rigid pipe connections as described in paragraph 

(b) of this section. 

Grams/YRSP = Emission rate for service ports and refrigerant control devices as 

described in paragraph (c) of this section. 

Grams/YRFH = Emission rate for flexible hoses as described in paragraph (d) of 

this section. 

Grams/YRMC = Emission rate for heat exchangers, mufflers, receiver/driers, and 

accumulators as described in paragraph (e) of this section. 

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Grams/YRC = Emission rate for compressors as described in paragraph (f) of this 

section. 

(b) Fittings. Determine the grams per year emission rate for rigid pipe 

connections using the following equation: 

Grams/YRRP = 0.00522 × [(125 × SO) + (75 × SCO) + (50 × MO) + (10 × SW) + 

(5 × SWO) + (MG)] 

Where: 

Grams/YRRP = Total emission rate for rigid pipe connections in grams per year. 

SO = The number of single O-ring connections. 

SCO = The number of single captured O-ring connections. 

MO = The number of multiple O-ring connections. 

SW = The number of seal washer connections. 

SWO = The number of seal washer with O-ring connections. 

MG = The number of metal gasket connections. 

(c) Service ports and refrigerant control devices. Determine the grams per year 

emission rate for service ports and refrigerant control devices using the following 

equation: 

Grams/YRSP = 0.522 × [(0.3 × HSSP) + (0.2 × LSSP) + (0.2 × STV) + (0.2 × 

TXV)]

Where: 

Grams/YRSP = The emission rate for service ports and refrigerant control devices, 

in grams per year. 

HSSP = The number of high side service ports. 

LSSP = The number of low side service ports. 

STV = The total number of switches, transducers, and pressure relief valves. 

TXV = The number of refrigerant control devices. 

(d) Flexible hoses. Determine the permeation emission rate in grams per year for 

each segment of flexible hose using the following equation, and then sum the values for 

all hoses in the system to calculate a total flexible hose emission rate for the system. Hose 

end connections shall be included in the calculations in paragraph (b) of this section. 

Grams/YRFH = 0.00522 × (3.14159 × ID × L × ER) 

Where: 

Grams/YRFH = Emission rate for a segment of flexible hose in grams per year. 

ID = Inner diameter of hose, in millimeters. 

L = Length of hose, in millimeters. 

ER = Emission rate per unit internal surface area of the hose, in g/mm2

. Select the 

appropriate value for ER from the following table: 

ER 

Material/configuration High-pressure 

side 

Low-pressure 

side 

All rubber hose 0.0216 0.0144 

Standard barrier or veneer hose 0.0054 0.0036 

Ultra-low permeation barrier or veneer hose 0.00225 0.00167 

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monitoring credit, as applicable, from 

paragraph (g) of this section. ¶

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(e) Heat exchangers, mufflers, receiver/driers, and accumulators. Use an 

emission rate of 0.261 grams per year as a combined value for all heat exchangers, 

mufflers, receiver/driers, and accumulators (Grams/YRMC). 

(f) Compressors. Determine the emission rate for compressors using the following 

equation, except that the final term in the equation (“1500/SSL”) is not applicable to 

electric (or semi-hermetic) compressors: 

Grams/YRC = 0.00522 × [(300 × OHS) + (200 × MHS) + (150 × FAP) + (100 × 

GHS) + (1500/SSL)] 

Where: 

Grams/YRC = The emission rate for the compressors in the air conditioning 

system, in grams per year. 

OHS = The number of O-ring housing seals. 

MHS = The number of molded housing seals. 

FAP = The number of fitting adapter plates. 

GHS = The number of gasket housing seals. 

SSL = The number of lips on shaft seal (for belt-driven compressors only). 

(g) Definitions. The following definitions apply to this section: 

(1) All rubber hose means a Type A or Type B hose as defined by SAE J2064 

with a permeation rate not greater than 15 kg/m2

/year when tested according to SAE 

J2064. SAE J2064 is incorporated by reference; see §86.1. 

(2) Standard barrier or veneer hose means a Type C, D, E, or F hose as defined 

by SAE J2064 with a permeation rate not greater than 5 kg/m2

/year when tested 

according to SAE J2064. SAE J2064 is incorporated by reference; see §86.1. 

(3) Ultra-low permeation barrier or veneer hose means a hose with a permeation 

rate not greater than 1.5 kg/m2

/year when tested according to SAE J2064. SAE J2064 is 

incorporated by reference; see §86.1. 

11. A new §86.167-12 is added to subpart B to read as follows: 

§86.167-12 N2O measurement devices. 

(a) General component requirements. We recommend that you use an analyzer 

that meets the specifications in Table 1 of 40 CFR 1065.205. Note that your system must 

meet the linearity verification in 40 CFR 1065.307. 

(b) Instrument types. You may use any of the following analyzers to measure 

N2O: 

(1) Nondispersive infra-red (NDIR) analyzer. You may use an NDIR analyzer that 

has compensation algorithms that are functions of other gaseous measurements and the 

engine’s known or assumed fuel properties. The target value for any compensation 

algorithm is 0.0 % (that is, no bias high and no bias low), regardless of the 

uncompensated signal’s bias. 

(2) Fourier transform infra-red (FTIR) analyzer. You may use an FTIR analyzer 

that has compensation algorithms that are functions of other gaseous measurements and 

the engine’s known or assumed fuel properties. The target value for any compensation 

algorithm is 0.0 % (that is, no bias high and no bias low), regardless of the 

uncompensated signal’s bias. Use EPA Test Method 320 “Measurement of Vapor Phase 

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Electronic monitoring systems that 

provide indication of a refrigerant loss to 

the operator through an interior driver 

information display or an air 

conditioning-specific malfunction 

indicator when the air conditioning 

system has lost 40 percent of its charge 

capacity shall use a credit of 1 g/yr.¶

(h) 

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Organic and Inorganic Emissions by Extractive Fourier Transform Infrared (FTIR) 

Spectroscopy” for spectral interpretation (see 40 CFR Part 63 Appendix A). 

(3) Photoacoustic analyzer. You may use a photoacoustic analyzer that has 

compensation algorithms that are functions of other gaseous measurements. The target 

value for any compensation algorithm is 0.0 % (that is, no bias high and no bias low), 

regardless of the uncompensated signal’s bias. Use an optical wheel configuration that 

gives analytical priority to measurement of the least stable components in the sample. 

Select a sample integration time of at least 5 seconds. Take into account sample chamber 

and sample line volumes when determining flush times for your instrument. 

(4) Gas chromatograph (GC) analyzer. You may use a gas chromatograph with 

Electron Capture Detector (ECD) to measure N2O concentrations of diluted exhaust for 

batch sampling. You may use a packed or porous layer open tubular (PLOT) column 

phase of suitable polarity and length to achieve adequate resolution of the N2O peak for 

analysis. Examples of acceptable columns are a PLOT column consisting of bonded 

polystyrene-divinylbenzene or a Porapack Q packed column. Take the column 

temperature profile and carrier gas selection into consideration when setting up your 

method to achieve adequate N2O peak resolution. 

(c) Interference validation. Perform interference validation for NDIR, FTIR, and 

Photoacoustic analyzers using the procedures of §86.168-12 as follows: 

(1) Certain interference gases can positively interfere with these analyzers by 

causing a response similar to N2O as follows: 

(i) The interference gases for NDIR analyzers are CO, CO2, H2O, CH4 and SO2. 

Note that interference species, with the exception of H2O, are dependent on the N2O 

infrared absorption band chosen by the instrument manufacturer and should be 

determined independently for each analyzer. 

(ii) Use good engineering judgment to determine interference gases for FTIR. 

Note that interference species, with the exception of H2O, are dependent on the N2O 

infrared absorption band chosen by the instrument manufacturer and should be 

determined independently for each analyzer. 

(iii) The interference gases for photoacoustic analyzers are CO, CO2, and H2O. 

(2) Analyzers must have combined interference that is within (0.0 ± 1.0) 

μmol/mol (micromols per mol). We strongly recommend a lower interference that is 

within (0.0 ± 0.5) μmol/mol (micromols per mol).

12. A new §86.168-12 is added to subpart B to read as follows: 

§86.168-12 Interference verification for N2O analyzers. 

(a) Scope and frequency. See 40 CFR 1065.275 to determine whether you need to 

verify the amount of interference after initial analyzer installation and after major 

maintenance. 

(b) Measurement principles. Interference gasses can positively interfere with 

certain analyzers by causing a response similar to N2O. If the analyzer uses compensation 

algorithms that utilize measurements of other gases to meet this interference verification, 

simultaneously conduct these other measurements to test the compensation algorithms 

during the analyzer interference verification. 

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(c) System requirements. See 40 CFR 1065.275 for system requirements related to 

allowable interference levels. 

(d) Procedure. Perform the interference verification as follows: 

(1) Start, operate, zero, and span the N2O FTIR analyzer as you would before an 

emission test. If the sample is passed through a dryer during emission testing, you may 

run this verification test with the dryer if it meets the requirements of 40 CFR 1065.342. 

Operate the dryer at the same conditions as you will for an emission test. You may also 

run this verification test without the sample dryer. 

(2) Create a humidified test gas by bubbling a multi component span gas that 

incorporates the target interference species and meets the specifications in 40 CFR 

1065.750 through distilled water in a sealed vessel. If the sample is not passed through a 

dryer during emission testing, control the vessel temperature to generate an H2O level at 

least as high as the maximum expected during emission testing. If the sample is passed 

through a dryer during emission testing, control the vessel temperature to generate an 

H2O level at least as high as the level determined in 40 CFR 1065.145(e)(2) for that 

dryer. Use interference span gas concentrations that are at least as high as the maximum 

expected during testing. 

(3) Introduce the humidified interference test gas into the sample system. You 

may introduce it downstream of any sample dryer, if one is used during testing. 

(4) If the sample is not passed through a dryer during this verification test, 

measure the water mole fraction, xH2O, of the humidified interference test gas as close as 

possible to the inlet of the analyzer. For example, measure dewpoint, Tdew, and absolute 

pressure, ptotal, to calculate xH2O. Verify that the water content meets the requirement in 

paragraph (d)(2) of this section. If the sample is passed through a dryer during this 

verification test, you must verify that the water content of the humidified test gas 

downstream of the vessel meets the requirement in paragraph (d)(2) of this section based 

on either direct measurement of the water content (e.g., dewpoint and pressure) or an 

estimate based on the vessel pressure and temperature. Use good engineering judgment to 

estimate the water content. For example, you may use previous direct measurements of 

water content to verify the vessel’s level of saturation. 

(5) If a sample dryer is not used in this verification test, use good engineering 

judgment to prevent condensation in the transfer lines, fittings, or valves from the point 

where xH2O is measured to the analyzer. We recommend that you design your system so 

that the wall temperatures in the transfer lines, fittings, and valves from the point where 

xH2O is measured to the analyzer are at least 5 oC above the local sample gas dewpoint. 

(6) Allow time for the analyzer response to stabilize. Stabilization time may 

include time to purge the transfer line and to account for analyzer response. 

(7) While the analyzer measures the sample’s concentration, record its output for 

30 seconds. Calculate the arithmetic mean of this data. 

(8) The analyzer meets the interference verification if the result of paragraph 

(d)(7) of this section meets the tolerance in 40 CFR 1065.275. 

(9) You may also run interference procedures separately for individual 

interference gases. If the interference gas levels used are higher than the maximum levels 

expected during testing, you may scale down each observed interference value by 

multiplying the observed interference by the ratio of the maximum expected 

concentration value to the actual value used during this procedure. You may run separate 

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interference concentrations of H2O (down to 0.025 mol/mol H2O content) that are lower 

than the maximum levels expected during testing, but you must scale up the observed 

H2O interference by multiplying the observed interference by the ratio of the maximum 

expected H2O concentration value to the actual value used during this procedure. The 

sum of the scaled interference values must meet the tolerance specified in 40 CFR 

1065.275. 

Subpart S--[Amended] 

13. A new §86.1801-12 is added to read as follows: 

§86.1801-12 Applicability. 

(a) Applicability. Except as otherwise indicated, the provisions of this subpart 

apply to new light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, and 

Otto-cycle complete heavy-duty vehicles, including multi-fueled, alternative fueled, 

hybrid electric, plug-in hybrid electric, and electric vehicles. These provisions also apply 

to new incomplete light-duty trucks below 8,500 Gross Vehicle Weight Rating. In cases 

where a provision applies only to a certain vehicle group based on its model year, vehicle 

class, motor fuel, engine type, or other distinguishing characteristics, the limited 

applicability is cited in the appropriate section of this subpart. 

(b) Aftermarket conversions. The provisions of this subpart apply to aftermarket 

conversion systems, aftermarket conversion installers, and aftermarket conversion 

certifiers, as those terms are defined in 40 CFR 85.502, of all model year light-duty 

vehicles, light-duty trucks, medium-duty passenger vehicles, and complete Otto-cycle 

heavy-duty vehicles. 

(c) Optional applicability. 

(1) [Reserved] 

(2) A manufacturer may request to certify any incomplete Otto-cycle heavy-duty 

vehicle of 14,000 pounds Gross Vehicle Weight Rating or less in accordance with the 

provisions for complete heavy-duty vehicles. Heavy-duty engine or heavy-duty vehicle 

provisions of subpart A of this part do not apply to such a vehicle. 

(3) [Reserved] 

(4) Upon preapproval by the Administrator, a manufacturer may optionally certify 

an aftermarket conversion of a complete heavy-duty vehicle greater than 10,000 pounds 

Gross Vehicle Weight Rating and of 14,000 pounds Gross Vehicle Weight Rating or less 

under the heavy-duty engine or heavy-duty vehicle provisions of subpart A of this part. 

Such preapproval will be granted only upon demonstration that chassis-based 

certification would be infeasible or unreasonable for the manufacturer to perform. 

(5) A manufacturer may optionally certify an aftermarket conversion of a 

complete heavy-duty vehicle greater than 10,000 pounds Gross Vehicle Weight Rating 

and of 14,000 pounds Gross Vehicle Weight Rating or less under the heavy-duty engine 

or heavy-duty vehicle provisions of subpart A of this part without advance approval from 

the Administrator if the vehicle was originally certified to the heavy-duty engine or 

heavy-duty vehicle provisions of subpart A of this part. 

(d) Small volume manufacturers. Special certification procedures are available for 

any manufacturer whose projected or actual combined sales in all states and territories of 

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462 

the United States of light-duty vehicles, light-duty trucks, heavy-duty vehicles, and 

heavy-duty engines in its product line (including all vehicles and engines imported under 

the provisions of 40 CFR 85.1505 and 85.1509) are fewer than 15,000 units for the model 

year in which the manufacturer seeks certification. The small volume manufacturer's 

light-duty vehicle and light-duty truck certification procedures are described in 

§86.1838–01. 

(e) - (g) [Reserved] 

(h) Applicability of provisions of this subpart to light-duty vehicles, light-duty 

trucks, medium-duty passenger vehicles, and heavy-duty vehicles. Numerous sections in 

this subpart provide requirements or procedures applicable to a “vehicle” or “vehicles.” 

Unless otherwise specified or otherwise determined by the Administrator, the term 

“vehicle” or “vehicles” in those provisions apply equally to light-duty vehicles (LDVs), 

light-duty trucks (LDTs), medium-duty passenger vehicles (MDPVs), and heavy-duty 

vehicles (HDVs), as those terms are defined in §86.1803-01. 

(i) Applicability of provisions of this subpart to exhaust greenhouse gas 

emissions. Numerous sections in this subpart refer to requirements relating to “exhaust 

emissions.” Unless otherwise specified or otherwise determined by the Administrator, the 

term “exhaust emissions” refers at a minimum to emissions of all pollutants described by 

emission standards in this subpart, including carbon dioxide (CO2), nitrous oxide (N2O), 

and methane (CH4), starting with the 2012 model year. 

(j) Exemption from greenhouse gas emission standards for small businesses. 

Manufacturers that qualify as a small business under the Small Business Administration 

regulations in 13 CFR part 121 are exempt from the greenhouse gas emission standards 

specified in §86.1818-12 and associated provisions in this part and in part 600 of this 

chapter. Both U.S.-based and non-U.S.-based businesses are eligible for this exemption. 

The following categories of businesses (with their associated NAICS codes) may be 

eligible for exemption based on the Small Business Administration size standards in 13 

CFR 121.201. 

(1) Vehicle manufacturers (NAICS code 336111). 

(2) Independent commercial importers (NAICS codes 811111, 811112, 811198, 

423110, 424990, and 441120). 

(3) Alternate fuel vehicle converters (NAICS codes 335312, 336312, 336322, 

336399, 454312, 485310, and 811198). 

(k) Conditional exemption from greenhouse gas emission standards. 

Manufacturers meeting the eligibility requirements described in paragraph (k)(1) and (2) 

of this section may request a conditional exemption from compliance with the emission 

standards described in §86.1818-12 paragraphs (c) through (e) and associated provisions 

in this part and in part 600 of this chapter. The terms “sales” and “sold” as used in this 

paragraph (k) shall mean vehicles produced and delivered for sale (or sold) in the states 

and territories of the United States. For the purpose of determining eligibility the sales of 

related companies shall be aggregated according to the provisions of §86.1838-01(b)(3). 

(1) Eligibility requirements. Eligibility as determined in this paragraph (k) shall 

be based on the total sales of combined passenger automobiles and light trucks. 

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Deleted: 

Deleted: Conditional exemption

Deleted: Businesses meeting the 

Deleted: size standard defining a small 

business as described in 

Deleted: .201

Deleted: eligible for exemption 

Deleted: under this paragraph (j). To 

be exempted from these provisions, 

businesses must submit a declaration to 

EPA containing a detailed written 

description of how the business qualifies 

as a small business under the provisions 

of 13 CFR 121.201. This declaration 

must be signed by a chief officer of the 

company, and must be made prior to each 

model year for which the small business 

status is requested. The declaration must 

be submitted to EPA at least 30 days 

prior to the introduction into commerce 

of any vehicles for each model year for 

which the small business status is 

requested, but not later than December of 

the calendar year prior to the model year 

for which exemption is requested. 

Exemption will be granted when EPA 

approves the small business declaration. 

The declaration of small business status 

must be sent to the Environmental 

Protection Agency at the following 

address: Director, Certification and 

Innovative Strategies Division, U.S. 

Environmental Protection Agency, 2000 

Traverwood Drive, Ann Arbor, Michigan 

48105.¶

(1) 

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Deleted: 2) For purposes of 

determining the number of employees or 

annual sales revenue for small entities, 

the entity shall include the employees or 

annual sales revenue of any subsidiary 

companies, any parent company, 

subsidiaries of the parent company in 

which the parent has a controlling 

Deleted: any joint ventures. ¶

(3) An entity

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responsibility for (A) designing and 

assembling the vehicles, (B) converting 

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vehicles under 

Deleted: j) only if that entity has 

primary responsibility

... [2]

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463 

Manufacturers must meet one of the requirements in paragraph (k)(1)(i) or (ii) of this 

section to initially qualify for this exemption. 

(i) A manufacturer with 2008 or 2009 model year sales of more than zero and 

fewer than 5,000 is eligible for a conditional exemption from the greenhouse gas 

emission standards described in §86.1818-12 paragraphs (c) through (e).

(ii) A manufacturer with 2008 or 2009 model year sales of more than zero and 

fewer than 5,000 while under the control of another manufacturer, where those 2008 or 

2009 model year vehicles bore the brand of the producing manufacturer but were sold by 

or otherwise under the control of another manufacturer, and where the manufacturer 

producing the vehicles became independent no later than December 31, 2010, is eligible 

for a conditional exemption from the greenhouse gas emission standards described in 

§86.1818-12 paragraphs (c) through (e).

(2) Maintaining eligibility for exemption from greenhouse gas emission 

standards. To remain eligible for exemption under this paragraph (k) the manufacturer’s 

average sales for the three most recent consecutive model years must remain below 

5,000. If a manufacturer’s average sales for the three most recent consecutive model 

years exceeds 4999, the manufacturer will no longer be eligible for exemption and must 

meet applicable emission standards according to the provisions in this paragraph (k)(2). 

(i) If a manufacturer’s average sales for three consecutive model years exceeds 

4999, and if the increase in sales is the result of corporate acquisitions, mergers, or 

purchase by another manufacturer, the manufacturer shall comply with the emission 

standards described in §86.1818-12 paragraphs (c) through (e), as applicable, beginning 

with the first model year after the last year of the three consecutive model years. 

(ii) If a manufacturer’s average sales for three consecutive model years exceeds 

4999 and is less than 50,000, and if the increase in sales is solely the result of the 

manufacturer’s expansion in vehicle production, the manufacturer shall comply with the 

emission standards described in §86.1818-12 paragraphs (c) through (e), as applicable, 

beginning with the second model year after the last year of the three consecutive model 

years.

(iii) If a manufacturer’s average sales for three consecutive model years exceeds 

49,999, the manufacturer shall comply with the emission standards described in 

§86.1818-12 paragraphs (c) through (e), as applicable, beginning with the first model 

year after the last year of the three consecutive model years.

(2) Requesting the conditional exemption from standards. To be exempted from 

the standards described in §86.1818-12 paragraphs (c) through (e), the manufacturer must 

submit a declaration to EPA containing a detailed written description of how the 

manufacturer qualifies under the provisions of this paragraph (k). The declaration must 

describe eligibility information that includes the following: model year 2008 and 2009 

sales, sales volumes for each of the most recent three model years, detailed information 

regarding ownership relationships with other manufacturers, details regarding the 

application of the provisions of §86.1838-01(b)(3) regarding the aggregation of sales of 

related companies, and documentation of good-faith efforts made by the manufacturer to 

purchase credits from other manufacturers. This declaration must be signed by a chief 

officer of the company, and must be made prior to each model year for which the 

exemption is requested. The declaration must be submitted to EPA at least 30 days prior 

to the introduction into commerce of any vehicles for each model year for which the 

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464 

exemption is requested, but not later than December of the calendar year prior to the 

model year for which exemption is requested. A conditional exemption will be granted 

when EPA approves the exemption declaration. The declaration must be sent to the 

Environmental Protection Agency at the following address: Director, Compliance and 

Innovative Strategies Division, U.S. Environmental Protection Agency, 2000 Traverwood 

Drive, Ann Arbor, Michigan 48105.

14. Section 86.1803-01 is amended as follows: 

a. By adding the definition for “Air conditioning idle test.” 

b. By adding the definition for “Air conditioning system.” 

c. By revising the definition for “Banking.” 

d. By adding the definition for “Base level.” 

e. By adding the definition for “Base tire.” 

f. By adding the definition for “Base vehicle.” 

g. By revising the definition for “Basic engine.” 

h. By adding the definition for “Carbon-related exhaust emissions.” 

i. By adding the definition for “Combined CO2.” 

j. By adding the definition for “Combined CREE.” 

k. By adding the definition for “Electric vehicle.” 

l. By revising the definition for “Engine code.” 

m. By adding the definition for “Ethanol fueled vehicle.” 

n. By revising the definition for “Flexible fuel vehicle.” 

o. By adding the definition for “Footprint.” 

p. By adding the definition for “Fuel cell.” 

q. By adding the definition for “Fuel cell electric vehicle.”

r. By adding the definition for “Highway fuel economy test procedure.” 

s. By adding the definition for “Hybrid electric vehicle.” 

t. By adding the definition for “Interior volume index.” 

u. By adding the definition for “Motor vehicle.” 

v. By adding the definition for “Multi-fuel vehicle.” 

w. By adding the definition for “Petroleum equivalency factor.” 

x. By adding the definition for “Petroleum-equivalent fuel economy.” 

y. By adding the definition for “Petroleum powered accessory.” 

z. By adding the definition for “Plug-in hybrid electric vehicle.” 

aa. By adding the definition for “Production volume.” 

bb. By revising the definition for “Round, rounded, or rounding.” 

cc. By adding the definition for “Subconfiguration.” 

dd. By adding the definition for “Track width.” 

ee. By revising the definition for “Transmission class.” 

ff. By revising the definition for “Transmission configuration.” 

gg. By adding the definition for “Wheelbase.” 

§86.1803-01 Definitions. 

* * * * * 

 Air Conditioning Idle Test means the test procedure specified in §86.165-12. 

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465 

Air conditioning system means a unique combination of air conditioning and 

climate control components, including: compressor type (e.g., belt, gear, or electricdriven, or a combination of compressor drive mechanisms); compressor refrigerant 

capacity; the number and type of rigid pipe and flexible hose connections; the number of 

high side service ports; the number of low side service ports; the number of switches, 

transducers, and expansion valves; the number of TXV refrigerant control devices; the 

number and type of heat exchangers, mufflers, receiver/dryers, and accumulators; and the 

length and type of flexible hose (e.g., rubber, standard barrier or veneer, ultra-low 

permeation). 

* * * * * 

Banking means one of the following: 

(1) The retention of NOX emission credits for complete heavy-duty vehicles by the 

manufacturer generating the emission credits, for use in future model year certification 

programs as permitted by regulation. 

(2) The retention of cold temperature non-methane hydrocarbon (NMHC) 

emission credits for light-duty vehicles, light-duty trucks, and medium-duty passenger 

vehicles by the manufacturer generating the emission credits, for use in future model year 

certification programs as permitted by regulation. 

(3) The retention of NOX emission credits for light-duty vehicles, light-duty 

trucks, and medium-duty passenger vehicles for use in future model year certification 

programs as permitted by regulation. 

(4) The retention of CO2 emission credits for light-duty vehicles, light-duty 

trucks, and medium-duty passenger vehicles for use in future model year certification 

programs as permitted by regulation. 

Base level has the meaning given in §600.002-08 of this chapter. 

Base tire has the meaning given in §600.002-08 of this chapter. 

Base vehicle has the meaning given in §600.002-08 of this chapter. 

Basic engine has the meaning given in §600.002-08 of this chapter 

* * * * * 

Carbon-related exhaust emissions (CREE) has the meaning given in §600.002-08 

of this chapter. 

* * * * * 

Combined CO2 means the CO2 value determined for a vehicle (or vehicles) by 

averaging the city and highway CO2 values, weighted 0.55 and 0.45 respectively. 

Combined CREE means the CREE value determined for a vehicle (or vehicles) by 

averaging the city and highway fuel CREE values, weighted 0.55 and 0.45 respectively. 

* * * * * 

Electric vehicle means a motor vehicle that is powered solely by an electric motor 

drawing current from a rechargeable energy storage system, such as from storage 

batteries or other portable electrical energy storage devices, including hydrogen fuel 

cells, provided that: 

(1) The vehicle is capable of drawing recharge energy from a source off the 

vehicle, such as residential electric service; and 

(2) The vehicle must be certified to the emission standards of Bin #1 of Table 

S04-1 in §86.1811-09(c)(6). 

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466 

(3) The vehicle does not have an onboard combustion engine/generator system as 

a means of providing electrical energy. 

* * * * * 

Engine code means a unique combination within a test group of displacement, 

fuel injection (or carburetor) calibration, choke calibration, distributor calibration, 

auxiliary emission control devices, and other engine and emission control system 

components specified by the Administrator. For electric vehicles, engine code means a 

unique combination of manufacturer, electric traction motor, motor configuration, motor 

controller, and energy storage device. 

* * * * * 

Ethanol-fueled vehicle means any motor vehicle or motor vehicle engine that is 

engineered and designed to be operated using ethanol fuel (i.e., a fuel that contains at 

least 50 percent ethanol (C2H5OH) by volume) as fuel. 

* * * * * 

Flexible fuel vehicle means any motor vehicle engineered and designed to be 

operated on a petroleum fuel and on a methanol or ethanol fuel, or any mixture of the 

petroleum fuel and methanol or ethanol. Methanol-fueled and ethanol-fueled vehicles that 

are only marginally functional when using gasoline (e.g., the engine has a drop in rated 

horsepower of more than 80 percent) are not flexible fuel vehicles. 

Footprint is the product of track width (measured in inches, calculated as the 

average of front and rear track widths, and rounded to the nearest tenth of an inch) and 

wheelbase (measured in inches and rounded to the nearest tenth of an inch), divided by 

144 and then rounded to the nearest tenth of a square foot. 

Fuel cell means an electrochemical cell that produces electricity via the noncombustion reaction of a consumable fuel, typically hydrogen. 

Fuel cell electric vehicle means an electric vehicle propelled solely by an electric 

motor where energy for the motor is supplied by a fuel cell. 

* * * * * 

Highway Fuel Economy Test Procedure (HFET) has the meaning given in 

§600.002-08 of this chapter. 

* * * * * 

Hybrid electric vehicle (HEV) means a motor vehicle which draws propulsion 

energy from onboard sources of stored energy that are both an internal combustion 

engine or heat engine using consumable fuel, and a rechargeable energy storage system 

such as a battery, capacitor, hydraulic accumulator, or flywheel, where recharge energy 

for the energy storage system comes solely from sources on board the vehicle. 

* * * * * 

Interior volume index has the meaning given in §600.315-08 of this chapter. 

* * * * * 

Motor vehicle has the meaning given in §85.1703 of this chapter. 

* * * * * 

Multi-fuel vehicle means any motor vehicle capable of operating on two or more 

different fuel types, either separately or simultaneously. 

* * * * * 

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467 

Petroleum equivalency factor means the value specified in 10 CFR 474.3(b), 

which incorporates the parameters listed in 49 U.S.C. 32904(a)(2)(B) and is used to 

calculate petroleum-equivalent fuel economy. 

Petroleum-equivalent fuel economy means the value, expressed in miles per 

gallon, that is calculated for an electric vehicle in accordance with 10 CFR 474.3(a), and 

reported to the Administrator of the Environmental Protection Agency for use in 

determining the vehicle manufacturer's corporate average fuel economy. 

* * * * * 

Petroleum-powered accessory means a vehicle accessory (e.g., a cabin heater, 

defroster, and/or air conditioner) that: 

(1) Uses gasoline or diesel fuel as its primary energy source; and 

(2) Meets the requirements for fuel, operation, and emissions in §88.104–94(g) of 

this chapter. 

Plug-in hybrid electric vehicle (PHEV) means a hybrid electric vehicle that has 

the capability to charge the battery from an off-vehicle electric source, such that the offvehicle source cannot be connected to the vehicle while the vehicle is in motion. 

* * * * * 

Production volume has the meaning given in §600.002-08 of this chapter. 

* * * * * 

Round, rounded or rounding means, unless otherwise specified, that numbers will 

be rounded according to ASTM-E29-93a, which is incorporated by reference in this part 

pursuant to §86.1. 

* * * * * 

Subconfiguration has the meaning given in §600.002-08 of this chapter.

* * * * * 

Track width is the lateral distance between the centerlines of the base tires at 

ground, including the camber angle. 

* * * * * 

Transmission class has the meaning given in §600.002-08 of this chapter. 

Transmission configuration has the meaning given in §600.002-08 of this chapter. 

* * * * * 

Wheelbase is the longitudinal distance between front and rear wheel centerlines. 

* * * * * 

15. A new §86.1805-12 is added to read as follows: 

§86.1805-12 Useful life. 

(a) Except as permitted under paragraph (b) of this section or required under 

paragraphs (c) and (d) of this section, the full useful life for all LDVs and LLDTs is a 

period of use of 10 years or 120,000 miles, whichever occurs first. The full useful life for 

all HLDTs, MDPVs, and complete heavy-duty vehicles is a period of 11 years or 120,000 

miles, whichever occurs first. These full useful life values apply to all exhaust, 

evaporative and refueling emission requirements except for standards which are specified 

to only be applicable at the time of certification. These full useful life requirements also 

apply to all air conditioning leakage credits, air conditioning efficiency credits, and other 

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468 

credit programs used by the manufacturer to comply with fleet average CO2 emission 

standards. 

(b) Manufacturers may elect to optionally certify a test group to the Tier 2 exhaust 

emission standards for 150,000 miles to gain additional NOX credits, as permitted in 

§86.1860–04(g), or to opt out of intermediate life standards as permitted in §86.1811–

04(c). In such cases, useful life is a period of use of 15 years or 150,000 miles, whichever 

occurs first, for all exhaust, evaporative and refueling emission requirements except for 

cold CO standards and standards which are applicable only at the time of certification. 

(c) Where intermediate useful life exhaust emission standards are applicable, such 

standards are applicable for five years or 50,000 miles, whichever occurs first. 

(d) Where cold CO standards are applicable, the useful life requirement for 

compliance with the cold CO standard only, is 5 years or 50,000 miles, whichever occurs 

first. 

16. Section 86.1806-05 is amended by revising paragraph (a)(1) to read as follows: 

§86.1806-05 On-board diagnostics for vehicles less than or equal to 14,000 pounds 

GVWR. 

(a) * * * 

(1) Except as provided by paragraph (a)(2) of this section, all light-duty vehicles, 

light-duty trucks and complete heavy-duty vehicles weighing 14,000 pounds GVWR or 

less (including MDPVs) must be equipped with an onboard diagnostic (OBD) system 

capable of monitoring all emission-related powertrain systems or components during the 

applicable useful life of the vehicle. All systems and components required to be 

monitored by these regulations must be evaluated periodically, but no less frequently than 

once per applicable certification test cycle as defined in paragraphs (a) and (d) of 

Appendix I of this part, or similar trip as approved by the Administrator. Emissions of 

CO2, CH4, and N2O are not required to be monitored by the OBD system. 

* * * * * 

17. A new §86.1809-12 is added to read as follows: 

§86.1809-12 Prohibition of defeat devices. 

(a) No new light-duty vehicle, light-duty truck, medium-duty passenger vehicle, 

or complete heavy-duty vehicle shall be equipped with a defeat device.

(b) The Administrator may test or require testing on any vehicle at a designated 

location, using driving cycles and conditions that may reasonably be expected to be 

encountered in normal operation and use, for the purposes of investigating a potential 

defeat device.

(c) For cold temperature CO and cold temperature NMHC emission control, the 

Administrator will use a guideline to determine the appropriateness of the CO and 

NMHC emission control at ambient temperatures between 25 °F (the upper bound of the 

FTP test temperature range) and 68 °F (the lower bound of the FTP test temperature 

range). The guideline for CO emission congruity across the intermediate temperature 

range is the linear interpolation between the CO standard applicable at 25 °F and the CO 

standard applicable at 68 °F. The guideline for NMHC emission congruity across the 

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paragraphs (d)(1) and (e)

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(d) * * *¶
469 

intermediate temperature range is the linear interpolation between the NMHC FEL pass 

limit (e.g. 0.3499 g/mi for a 0.3 g/mi FEL) applicable at 20 °F and the Tier 2 NMOG 

standard to which the vehicle was certified at 68 °F, where the intermediate temperature 

NMHC level is rounded to the nearest hundredth for comparison to the interpolated line. 

For vehicles that exceed this CO emissions guideline or this NMHC emissions guideline 

upon intermediate temperature cold testing:

(1) If the CO emission level is greater than the 20 °F emission standard, the 

vehicle will automatically be considered to be equipped with a defeat device without 

further investigation. If the intermediate temperature NMHC emission level, rounded to 

the nearest hundredth, is greater than the 20 °F FEL pass limit, the vehicle will be 

presumed to have a defeat device unless the manufacturer provides evidence to EPA's 

satisfaction that the cause of the test result in question is not due to a defeat device.

(2) If the CO emission level does not exceed the 20 °F emission standard, the 

Administrator may investigate the vehicle design for the presence of a defeat device 

under paragraph (d) of this section. If the intermediate temperature NMHC emission 

level, rounded to the nearest hundredth, does not exceed the 20 °F FEL pass limit the 

Administrator may investigate the vehicle design for the presence of a defeat device 

under paragraph (d) of this section.

(d) The following provisions apply for vehicle designs designated by the 

Administrator to be investigated for possible defeat devices:

(1) The manufacturer must show to the satisfaction of the Administrator that the 

vehicle design does not incorporate strategies that unnecessarily reduce emission control 

effectiveness exhibited during the Federal Test Procedure or Supplemental Federal Test 

Procedure (FTP or SFTP) or the Highway Fuel Economy Test Procedure (described in 

subpart B of 40 CFR part 600), or the Air Conditioning Idle Test (described in §86.165-

12), when the vehicle is operated under conditions that may reasonably be expected to be 

encountered in normal operation and use. 

(2) The following information requirements apply:

(i) Upon request by the Administrator, the manufacturer must provide an 

explanation containing detailed information regarding test programs, engineering 

evaluations, design specifications, calibrations, on-board computer algorithms, and 

design strategies incorporated for operation both during and outside of the Federal 

emission test procedures.

(ii) For purposes of investigations of possible cold temperature CO or cold 

temperature NMHC defeat devices under this paragraph (d), the manufacturer must 

provide an explanation to show, to the satisfaction of the Administrator, that CO 

emissions and NMHC emissions are reasonably controlled in reference to the linear 

guideline across the intermediate temperature range.

(e) For each test group the manufacturer must submit, with the Part II certification 

application, an engineering evaluation demonstrating to the satisfaction of the 

Administrator that a discontinuity in emissions of non-methane organic gases, carbon 

monoxide, carbon dioxide, oxides of nitrogen, nitrous oxide, methane, and formaldehyde 

measured on the Federal Test Procedure (subpart B of this part) and on the Highway Fuel 

Economy Test Procedure (subpart B of 40 CFR Part 600) does not occur in the 

temperature range of 20 to 86 °F. For diesel vehicles, the engineering evaluation must 

also include particulate emissions.

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years,

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470 

18. Section 86.1810-09 is amended by revising paragraph (f) to read as follows: 

§86.1810-09 General standards; increase in emissions; unsafe condition; waivers. 

* * * * * 

(f) Altitude requirements. (1) All emission standards apply at low altitude 

conditions and at high altitude conditions, except for the following standards, which 

apply only at low altitude conditions: 

(i) The supplemental exhaust emission standards as described in §86.1811–04(f); 

(ii) The cold temperature NMHC emission standards as described in §86.1811–

10(g); 

(iii) The evaporative emission standards as described in §86.1811-09(e). 

(2) For vehicles that comply with the cold temperature NMHC standards 

described in §86.1811–10(g) and the CO2, N2O, and CH4 exhaust emission standards 

described in §86.1818–12, manufacturers must submit an engineering evaluation 

indicating that common calibration approaches are utilized at high altitudes. Any 

deviation from low altitude emission control practices must be included in the auxiliary 

emission control device (AECD) descriptions submitted at certification. Any AECD 

specific to high altitude must require engineering emission data for EPA evaluation to 

quantify any emission impact and validity of the AECD. 

* * * * * 

19. A new §86.1818-12 is added to read as follows: 

 §86.1818-12 Greenhouse gas emission standards for light-duty vehicles, light-duty 

trucks, and medium-duty passenger vehicles. 

(a) Applicability. This section contains standards and other regulations applicable 

to the emission of the air pollutant defined as the aggregate group of six greenhouse 

gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and 

sulfur hexafluoride. This section applies to 2012 and later model year LDVs, LDTs and 

MDPVs, including multi-fuel vehicles, vehicles fueled with alternative fuels, hybrid 

electric vehicles, plug-in hybrid electric vehicles, electric vehicles, and fuel cell electric 

vehicles. Unless otherwise specified, multi-fuel vehicles must comply with all 

requirements established for each consumed fuel. The provisions of this section also 

apply to aftermarket conversion systems, aftermarket conversion installers, and 

aftermarket conversion certifiers, as those terms are defined in 40 CFR 85.502, of all 

model year light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles. 

Manufacturers that qualify as a small business according to the requirements of 

§86.1801-12(j) are exempt from the emission standards in this section. Manufacturers 

that have submitted a declaration for a model year according to the requirements of 

§86.1801-12(k) for which approval has been granted by the Administrator are 

conditionally exempted from the emission standards in paragraphs (c) through (e) of this 

section for that model year. 

(b) Definitions. For the purposes of this section, the following definitions shall 

apply: 

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greenhouse gas emission 

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Deleted: CH4

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Deleted: MDPVs

Deleted: 

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Deleted: exempted from the emission 

standards in this section. Manufacturers 

that have submitted a small manufacturer 

declaration for a model year according to 

the requirements of paragraph (h) of this 

section for which approval has been 

granted by the Administrator are

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471 

(1) Passenger automobile means a motor vehicle that is a passenger automobile as 

that term is defined in 49 CFR 523.4. 

(2) Light truck means a motor vehicle that is a non-passenger automobile as that 

term is defined by the Department of Transportation in 49 CFR 523.5. 

(c) Fleet average CO2 standards for passenger automobiles and light trucks. (1) 

For a given individual model year’s production of vehicles, manufacturers must comply 

with a fleet average CO2 standard calculated according to the provisions of this paragraph 

(c). Manufacturers must calculate separate fleet average CO2 standards for their 

passenger automobile and the light truck fleets, as those terms are defined in this section. 

Each manufacturer’s fleet average CO2 standards determined in this paragraph (c) shall 

be expressed in whole grams per mile, in the model year specified as applicable. 

Manufacturers eligible for and choosing to participate in the Temporary Leadtime 

Allowance Alternative Standards for qualifying manufacturers specified in paragraph (e) 

of this section shall not include vehicles subject to the Temporary Leadtime Allowance 

Alternative Standards in the calculations of their primary passenger automobile or light 

truck standards determined in this paragraph (c). Manufacturers shall demonstrate 

compliance with the applicable standards according to the provisions of §86.1865-12. 

(2) Passenger automobiles. 

(i) Calculation of CO2 target values for passenger automobiles. A CO2 target 

value shall be determined for each passenger automobile as follows: 

(A) For passenger automobiles with a footprint of less than or equal to 41 square 

feet, the gram/mile CO2 target value shall be selected for the appropriate model year from 

the following table: 

Model Year CO2 Target 

Value 

(grams/mile) 

2012 244.0 

2013 237.0 

2014 228.0 

2015 217.0 

2016 and later 206.0 

(B) For passenger automobiles with a footprint of greater than 56 square feet, the 

gram/mile CO2 target value shall be selected for the appropriate model year from the 

following table: 

Model Year CO2 Target 

Value 

(grams/mile) 

2012 315.0 

2013 307.0 

2014 299.0 

2015 288.0 

2016 and later 277.0 

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(C) For passenger automobiles with a footprint that is greater than 41 square feet 

and less than or equal to 56 square feet, the gram/mile CO2 target value shall be 

calculated using the following equation and rounded to the nearest 0.1 grams/mile: 

Target CO2 [ 72.4 ×= ]+ bf

Where: 

f is the vehicle footprint, as defined in §86.1803; and 

b is selected from the following table for the appropriate model year: 

Model Year b 

2012 50.5 

2013 43.3 

2014 34.8 

2015 23.4 

2016 and later 12.7 

 

(ii) Calculation of the fleet average CO2 standard for passenger automobiles. In 

each model year manufacturers must comply with the CO2 exhaust emission standard for 

their passenger automobile fleet, calculated for that model year as follows: 

(A) A CO2 target value shall be determined according to paragraph (c)(2)(i) of 

this section for each unique combination of model type and footprint value. 

(B) Each CO2 target value, determined for each unique combination of model 

type and footprint value, shall be multiplied by the total production of that model 

type/footprint combination for the appropriate model year. 

(C) The resulting products shall be summed, and that sum shall be divided by the 

total production of passenger automobiles in that model year. The result shall be rounded 

to the nearest whole gram per mile. This result shall be the applicable fleet average CO2

standard for the manufacturer’s passenger automobile fleet. 

(3) Light trucks. 

(i) Calculation of CO2 target values for light trucks. A CO2 target value shall be 

determined for each light truck as follows: 

(A) For light trucks with a footprint of less than or equal to 41 square feet, the 

gram/mile CO2 target value shall be selected for the appropriate model year from the 

following table: 

Model Year CO2 Target 

Value 

(grams/mile) 

2012 294.0 

2013 284.0 

2014 275.0 

2015 261.0 

2016 and later 247.0 

(B) For light trucks with a footprint of greater than 66 square feet, the gram/mile 

CO2 target value shall be selected for the appropriate model year from the following 

table: 

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473 

Model Year CO2 Target 

Value 

(grams/mile) 

2012 395.0 

2013 385.0 

2014 376.0 

2015 362.0 

2016 and later 348.0 

(C) For light trucks with a footprint that is greater than 41 square feet and less 

than or equal to 66 square feet, the gram/mile CO2 target value shall be calculated using 

the following equation and rounded to the nearest 0.1 grams/mile: 

Target CO2 ( ) 04.4 +×= bf

Where: 

f is the footprint, as defined in §86.1803; and 

b is selected from the following table for the appropriate model year: 

Model Year b 

2012 128.6 

2013 118.7 

2014 109.4 

2015 95.1 

2016 and later 81.1 

(ii) Calculation of fleet average CO2 standards for light trucks. In each model 

year manufacturers must comply with the CO2 exhaust emission standard for their light 

truck fleet, calculated for that model year as follows: 

(A) A CO2 target value shall be determined according to paragraph (c)(3)(i) of 

this section for each unique combination of model type and footprint value. 

(B) Each CO2 target value, which represents a unique combination of model type 

and footprint value, shall be multiplied by the total production of that model 

type/footprint combination for the appropriate model year. 

(C) The resulting products shall be summed, and that sum shall be divided by the 

total production of light trucks in that model year. The result shall be rounded to the 

nearest whole gram per mile. This result shall be the applicable fleet average CO2

standard for the manufacturer’s light truck fleet. 

(d) In-use CO2 exhaust emission standards. The in-use exhaust CO2 emission 

standard shall be the combined city/highway carbon-related exhaust emission value 

calculated for the appropriate vehicle carline/subconfiguration according to the 

provisions of §600.113-08(g)(4) of this chapter multiplied by 1.1 and rounded to the 

nearest whole gram per mile. For in-use vehicle carlines/subconfigurations for which a 

combined city/highway carbon-related exhaust emission value was not determined under 

§600.113(g)(4) of this chapter, the in-use exhaust CO2 emission standard shall be the 

combined city/highway carbon-related exhaust emission value calculated according to the 

provisions of §600.208-12 of this chapter for the vehicle model type (except that total 

model year production data shall be used instead of sales projections) multiplied by 1.1 

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474 

and rounded to the nearest whole gram per mile. For vehicles that are capable of 

operating on multiple fuels, including but not limited to alcohol dual fuel, natural gas 

dual fuel and plug-in hybrid electric vehicles, a separate in-use standard shall be 

determined for each fuel that the vehicle is capable of operating on. These standards 

apply to in-use testing performed by the manufacturer pursuant to regulations at 

§86.1845–04 and 86.1846–01 and to in-use testing performed by EPA. 

(e) Temporary Lead Time Allowance Alternative Standards. (1) The interim fleet 

average CO2 standards in this paragraph (e) are optionally applicable to each qualifying 

manufacturer, where the terms “sales” or “sold” as used in this paragraph (e) means 

vehicles produced and delivered for sale (or sold) in the states and territories of the 

United States.

(i) A qualifying manufacturer is a manufacturer with sales of 2009 model year 

combined passenger automobiles and light trucks of greater than zero and less than 

400,000 vehicles. 

(A) If a manufacturer sold less than 400,000 but more than zero 2009 model year 

combined passenger automobiles and light trucks while under the control of another 

manufacturer, where those 2009 model year passenger automobiles and light trucks bore 

the brand of the producing manufacturer, and where the producing manufacturer became 

independent no later than December 31, 2010, the producing manufacturer is a qualifying 

manufacturer.

(B) In the case where two or more qualifying manufacturers combine as the result 

of merger or the purchase of 50 percent or more of one or more companies by another 

company, and if the combined 2009 model year sales of the merged or combined 

companies is less than 400,000 but more than zero (combined passenger automobiles and 

light trucks), the corporate entity formed by the combination of two or more qualifying 

manufacturers shall continue to be a qualifying manufacturer. The total number of 

vehicles that the corporate entity is allowed to include under the Temporary Leadtime 

Allowance Alternative Standards shall be determined by paragraph (e)(2) or (e)(3) of this 

section where sales is the total combined 2009 model year sales of all of the merged or 

combined companies. Vehicles sold by the companies that combined by 

merger/acquisition to form the corporate entity that were subject to the Temporary 

Leadtime Allowance Alternative Standards in paragraph (e)(4) of this section prior to the 

merger/acquisition shall be combined to determine the remaining number of vehicles that 

the corporate entity may include under the Temporary Leadtime Allowance Alternative 

Standards in this paragraph (e). 

 (C) In the case where two or more manufacturers combine as the result of merger 

or the purchase of 50 percent or more of one or more companies by another company, 

and if the combined 2009 model year sales of the merged or combined companies is 

equal to or greater than 400,000 (combined passenger automobiles and light trucks), the 

new corporate entity formed by the combination of two or more manufacturers is not a 

qualifying manufacturer. Such a manufacturer shall meet the emission standards in 

paragraph (c) of this section beginning with the model year that is numerically two years 

greater than the calendar year in which the merger/acquisition(s) took place. 

(ii) For the purposes of making the determination in paragraph (e)(1)(i) of this 

section, “manufacturer” shall mean that term as defined at 49 CFR 531.4 and as that 

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475 

definition was applied to the 2009 model year for the purpose of determining compliance 

with the 2009 corporate average fuel economy standards at 49 CFR parts 531 and 533. 

(iii) A qualifying manufacturer may not use these Temporary Leadtime 

Allowance Alternative Standards until they have used all available banked credits and/or 

credits available for transfer accrued under §86.1865-12(k). A qualifying manufacturer 

with a net positive credit balance calculated under §86.1865-12(k) in any model year 

after considering all available credits either generated, carried forward from a prior model 

year, transferred from other averaging sets, or obtained from other manufacturers, may 

not use these Temporary Leadtime Allowance Alternative Standards in such model year. 

(2) Qualifying manufacturers may select any combination of 2012 through 2015 

model year passenger automobiles and/or light trucks to include under the Temporary 

Leadtime Allowance Alternative Standards determined in this paragraph (e) up to a 

cumulative total of 100,000 vehicles. Vehicles selected to comply with these standards 

shall not be included in the calculations of the manufacturer’s fleet average standards 

under paragraph (c) of this section. 

(3) Qualifying manufacturers with sales of 2009 model year combined passenger 

automobiles and light trucks in the United States of greater than zero and less than 50,000 

vehicles may select any combination of 2012 through 2015 model year passenger 

automobiles and/or light trucks to include under the Temporary Leadtime Allowance 

Alternative Standards determined in this paragraph (e) up to a cumulative total of 

200,000 vehicles, and additionally may select up to 50,000 2016 model year vehicles to 

include under the Temporary Leadtime Allowance Alternative Standards determined in 

this paragraph (e). To be eligible for the provisions of this paragraph (e)(3) qualifying 

manufacturers must provide annual documentation of good-faith efforts made by the 

manufacturer to purchase credits from other manufacturers. Without such documentation, 

the manufacturer may use the Temporary Leadtime Allowance Alternative Standards 

according to the provisions of paragraph (e)(2) of this section, and the provisions of this 

paragraph (e)(3) shall not apply. Vehicles selected to comply with these standards shall 

not be included in the calculations of the manufacturer’s fleet average standards under 

paragraph (c) of this section. 

(4) To calculate the applicable Temporary Leadtime Allowance Alternative 

Standards, qualifying manufacturers shall determine the fleet average standard separately 

for the passenger automobiles and light trucks selected by the manufacturer to be subject 

to the Temporary Leadtime Allowance Alternative Standards, subject to the limitations 

expressed in paragraphs (e)(1) through (3) of this section. 

(i) The Temporary Leadtime Allowance Alternative Standard applicable to 

qualified passenger automobiles as defined in §600.002-08 of this chapter shall be the 

standard calculated using the provisions of paragraph (c)(2)(ii) of this section for the 

appropriate model year multiplied by 1.25 and rounded to the nearest whole gram per 

mile. For the purposes of applying paragraph (c)(2)(ii) of this section to determine the 

standard, the passenger automobile fleet shall be limited to those passenger automobiles 

subject to the Temporary Leadtime Allowance Alternative Standard. 

(ii) The Temporary Leadtime Allowance Alternative Standard applicable to 

qualified light trucks (i.e. non-passenger automobiles as defined in §600.002-08 of this 

chapter) shall be the standard calculated using the provisions of paragraph (c)(3)(ii) of 

this section for the appropriate model year multiplied by 1.25 and rounded to the nearest 

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476 

whole gram per mile. For the purposes of applying paragraph (c)(3)(ii) of this section to 

determine the standard, the light truck fleet shall be limited to those light trucks subject to 

the Temporary Leadtime Allowance Alternative Standard. 

(5) Manufacturers choosing to optionally apply these standards are subject to the 

restrictions on credit banking and trading specified in §86.1865-12. 

(f) Nitrous oxide (N2O) and methane (CH4) exhaust emission standards for 

passenger automobiles and light trucks. Each manufacturer’s fleet of combined 

passenger automobile and light trucks must comply with N2O and CH4 standards using 

either the provisions of paragraph (f)(1) of this section or the provisions of paragraph 

(f)(2) of this section. The manufacturer may not use the provisions of both paragraphs 

(f)(1) and (f)(2) of this section in a model year. For example, a manufacturer may not use 

the provisions of paragraph (f)(1) of this section for their passenger automobile fleet and 

the provisions of paragraph (f)(2) for their light truck fleet in the same model year. 

(1) Standards applicable to each test group. 

(i) Exhaust emissions of nitrous oxide (N2O) shall not exceed 0.010 grams per 

mile at full useful life, as measured according to the Federal Test Procedure (FTP) 

described in subpart B of this part. 

(ii) Exhaust emissions of methane (CH4) shall not exceed 0.030 grams per mile at 

full useful life, as measured according to the Federal Test Procedure (FTP) described in 

subpart B of this part. 

(2) Fleet averaging option. Manufacturers may elect to not meet the emission 

standards in paragraph (f)(1) of this section. Manufacturers making this election shall 

include N2O and CH4 emissions in the determination of their fleet average carbon-related 

exhaust emissions, as calculated in subpart F of part 600 of this chapter. Manufacturers 

using this option must include both N2O and CH4 full useful life values in the fleet 

average calculations for passenger automobiles and light trucks. Use of this option will 

account for N2O and CH4 emissions within the carbon-related exhaust emission value 

determined for each model type according to the provisions part 600 of this chapter. This 

option requires the determination of full useful life emission values for both the Federal 

Test Procedure and the Highway Fuel Economy Test. 

20. Section 86.1823-08 is amended by adding paragraph (m) to read as follows: 

§86.1823-08 Durability demonstration procedures for exhaust emissions. 

* * * * * 

(m) Durability demonstration procedures for vehicles subject to the greenhouse 

gas exhaust emission standards specified in §86.1818-12. 

(1) CO2. (i) Unless otherwise specified under paragraph (m)(1)(ii) of this section, 

manufacturers may use a multiplicative CO2 deterioration factor of one or an additive 

deterioration factor of zero. 

(ii) Based on an analysis of industry-wide data, EPA may periodically establish 

and/or update the deterioration factor for CO2 emissions including air conditioning and 

other credit related emissions. Deterioration factors established and/or updated under this 

paragraph (m)(1)(ii) will provide adequate lead time for manufacturers to plan for the 

change. 

(iii) Alternatively, manufacturers may use the whole-vehicle mileage 

accumulation procedures in §86.1823-08 paragraphs (c) or (d)(1) to determine CO2

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Deleted: (h) Deferral of standards for 

qualifying small manufacturers. 

Qualifying small manufacturers as 

described in this paragraph (h) may 

optionally request deferral from 

compliance with the emission standards 

described in paragraphs (c) and (d) of this 

section. ¶

(1) Eligibility requirements. Eligibility as 

determined in this paragraph (h) shall be 

based on the total sales in the states and 

territories of the United States of 

combined passenger automobiles and 

light trucks. For the purpose of 

determining eligibility the sales of related 

companies shall be aggregated according 

to the provisions of §86.1838-01(b)(3).¶

(i) A manufacturer with 2008 or 2009 

model year sales of more than zero and 

fewer than 5,000 is eligible for optional 

deferral of the greenhouse gas emission 

standards described in paragraphs (c) and 

(d) of this section.¶

(ii) A manufacturer with 2008 or 2009 

model year sales of more than zero and 

fewer than 5,000 while under the control 

of another manufacturer, where those 

2008 or 2009 model year vehicles bore 

the brand of the producing manufacturer 

but were sold by or otherwise under the 

control of another manufacturer, and 

where the manufacturer producing the 

vehicles became independent no later 

than December 31, 2010, is eligible for 

optional deferral of the greenhouse gas 

emission standards described in 

paragraphs (c) and (d) of this section. ¶

(iii) If a manufacturer’s average sales for 

three consecutive model years exceeds 

4999, and if the increase in sales is the 

result of corporate acquisitions, mergers, 

or purchase by another manufacturer, the 

manufacturer shall comply with the 

emission standards described in 

paragraphs (c), (d), and (e) of this section, 

as applicable, beginning with the second 

model year after the last year of the three 

consecutive model years. ¶

(iv) If a manufacturer’s average sales for 

three consecutive model years exceeds 

4999 and is less than 50,000, and if the 

increase in sales is solely the result of the 

manufacturer’s expansion in vehicle 

production, the manufacturer shall 

comply with the emission standards 

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477 

deterioration factors. In this case, each FTP test performed on the durability data vehicle 

selected under §86.1822-01 of this part must also be accompanied by an HFET test, and 

combined FTP/HFET CO2 results determined by averaging the city (FTP) and highway 

(HFET) CO2 values, weighted 0.55 and 0.45 respectively. The deterioration factor will be 

determined for this combined CO2 value. Calculated multiplicative deterioration factors 

that are less than one shall be set to equal one, and calculated additive deterioration 

factors that are less than zero shall be set to zero. 

(iv) If, in the good engineering judgment of the manufacturer, the deterioration 

factors determined according to paragraphs (m)(1)(i), (m)(1)(ii), or (m)(1)(iii) of this 

section do not adequately account for the expected CO2 emission deterioration over the 

vehicle's useful life, the manufacturer may petition EPA to request a more appropriate 

deterioration factor. 

(2) N2O and CH4. (i) For manufacturers complying with the emission standards 

for N2O and CH4 specified in §86.1818-12(f)(1), deterioration factors for N2O and CH4

shall be determined according to the provisions of paragraphs (a) through (l) of this 

section. 

(ii) For manufacturers complying with the fleet averaging option for N2O and CH4

as allowed under §86.1818-12(f)(2), separate deterioration factors shall be determined for 

the FTP and HFET test cycles. Therefore each FTP test performed on the durability data 

vehicle selected under §86.1822-01 of this part must also be accompanied by an HFET 

test. 

(iii) For the 2012 through 2014 model years only, manufacturers may use 

alternative deterioration factors. For N2O, the alternative deterioration factor to be used to 

adjust FTP and HFET emissions is the deterioration factor determined for NOX emissions 

according to the provisions of this section. For CH4, the alternative deterioration factor to 

be used to adjust FTP and HFET emissions is the deterioration factor determined for 

NMOG or NMHC emissions according to the provisions of this section. 

(3) Other carbon-related exhaust emissions. Deterioration factors shall be 

determined according to the provisions of paragraphs (a) through (l) of this section. 

Optionally, in lieu of determining emission-specific FTP and HFET deterioration factors 

for CH3OH (methanol), HCHO (formaldehyde), C2H5OH (ethanol), and C2H4O 

(acetaldehyde), manufacturers may use the deterioration factor determined for NMOG or 

NMHC emissions according to the provisions of this section. 

(4) Air Conditioning leakage and efficiency or other emission credit requirements 

to comply with exhaust CO2 standards. Manufactures will attest to the durability of 

components and systems used to meet the CO2 standards. Manufacturers may submit 

engineering data to provide durability demonstration. 

21. Section 86.1827-01 is amended by revising paragraph (a)(5) and by adding paragraph 

(f) to read as follows: 

§86.1827-01 Test group determination. 

* * * * * 

(a) * * * 

(5) Subject to the same emission standards (except for CO2), or FEL in the case of 

cold temperature NMHC standards, except that a manufacturer may request to group 

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478 

vehicles into the same test group as vehicles subject to more stringent standards, so long 

as all the vehicles within the test group are certified to the most stringent standards 

applicable to any vehicle within that test group. Light-duty trucks and light-duty vehicles 

may be included in the same test group if all vehicles in the test group are subject to the 

same emission standards, with the exception of the CO2 standard and/or the total HC 

standard. 

* * * * * 

(f) Unless otherwise approved by the Administrator, a manufacturer of electric 

vehicles must create separate test groups based on the type of battery technology, the 

capacity and voltage of the battery, and the type and size of the electric motor. 

22. Section 86.1829-01 is amended by revising paragraph (b)(1)(i) and by adding 

paragraph (b)(1)(iii)(G) to read as follows: 

§86.1829-01 Durability and emission testing requirements; waivers. 

* * * * * 

(b) * * 

(1) * * * 

(i) Testing at low altitude. One EDV shall be tested in each test group for exhaust 

emissions using the FTP and SFTP test procedures of subpart B of this part and the HFET 

test procedure of subpart B of part 600 of this chapter. The configuration of the EDV will 

be determined under the provisions of §86.1828–01 of this subpart. 

* * * * * 

(iii) * * * 

(G) For the 2012 through 2014 model years only, in lieu of testing a vehicle for 

N2O emissions, a manufacturer may provide a statement in its application for certification 

that such vehicles comply with the applicable standards. Such a statement must be based 

on previous emission tests, development tests, or other appropriate information and good 

engineering judgment. 

* * * * * 

23. Section 86.1835-01 is amended as follows: 

a. By revising paragraph (a)(4). 

b. By revising paragraph (b)(1) introductory text. 

c. By adding paragraph (b)(1)(vi). 

d. By revising paragraph (b)(3). 

e. By revising paragraph (c)(1)(ii). 

§86.1835-01 Confirmatory certification testing. 

(a) * * *

(4) Retesting for fuel economy reasons or for compliance with greenhouse gas

exhaust emission standards in §86.181-12 may be conducted under the provisions of 

§600.008–08 of this chapter. 

(b) * * * 

(1) If the Administrator determines not to conduct a confirmatory test under the 

provisions of paragraph (a) of this section, manufacturers of light-duty vehicles, lightDeleted: 23

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479 

duty trucks, and/or medium-duty passenger vehicles will conduct a confirmatory test at 

their facility after submitting the original test data to the Administrator whenever any of 

the conditions listed in paragraphs (b)(1)(i) through (vi) of this section exist, and 

complete heavy-duty vehicles manufacturers will conduct a confirmatory test at their 

facility after submitting the original test data to the Administrator whenever the 

conditions listed in paragraph (b)(1)(i) or (b)(1)(ii) of this section exist, as follows: 

* * * * * 

(vi) The exhaust carbon-related exhaust emissions of the test as measured in 

accordance with the procedures in 40 CFR Part 600 are lower than expected based on 

procedures approved by the Administrator. 

* * * * * 

(3) For light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles 

the manufacturer shall conduct a retest of the FTP or highway test if the difference 

between the fuel economy of the confirmatory test and the original manufacturer's test 

equals or exceeds three percent (or such lower percentage to be applied consistently to all 

manufacturer conducted confirmatory testing as requested by the manufacturer and 

approved by the Administrator). 

(i) For use in the fuel economy and exhaust greenhouse gas fleet averaging 

program described in 40 CFR parts 86 and 600, the manufacturer may, in lieu of 

conducting a retest, accept as official the lower of the original and confirmatory test fuel 

economy results, and by doing so will also accept as official the calculated CREE value 

associated with the lower fuel economy test results. 

(ii) The manufacturer shall conduct a second retest of the FTP or highway test if 

the fuel economy difference between the second confirmatory test and the original 

manufacturer test equals or exceeds three percent (or such lower percentage as requested 

by the manufacturer and approved by the Administrator) and the fuel economy difference 

between the second confirmatory test and the first confirmatory test equals or exceeds 

three percent (or such lower percentage as requested by the manufacturer and approved 

by the Administrator). In lieu of conducting a second retest, the manufacturer may accept 

as official (for use in the fuel economy program and the exhaust greenhouse gas fleet 

averaging program) the lowest fuel economy of the original test, the first confirmatory 

test, and the second confirmatory test fuel economy results, and by doing so will also 

accept as official the calculated CREE value associated with the lower fuel economy test 

results. 

(c) * * * 

(1) * * * 

(ii) Official test results for fuel economy and exhaust CO2 emission purposes are 

determined in accordance with the provisions of §600.008–08 of this chapter. 

* * * * * 

24. Section 86.1841-01 is amended by adding paragraph (a)(3) and revising paragraph (b) 

to read as follows: 

§86.1841-01 Compliance with emission standards for the purpose of certification. 

(a) * * * 

Deleted: CO2

Deleted: CO2

Deleted: higher of

Deleted: original and confirmatory 

Deleted: CO2

Deleted: CO2

Deleted: and highest CO2 emissions 

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480 

(3) Compliance with CO2 exhaust emission standards shall be demonstrated at 

certification by the certification levels on the FTP and HFET tests for carbon-related 

exhaust emissions determined according to §600.113-08 of this chapter. 

* * * * * 

(b) To be considered in compliance with the standards for the purposes of 

certification, the certification levels for the test vehicle calculated in paragraph (a) of this 

section shall be less than or equal to the standards for all emission constituents to which 

the test group is subject, at both full and intermediate useful life as appropriate for that 

test group. 

* * * * * 

25. Section 86.1845-04 is amended as follows: 

a. By revising paragraph (a)(1). 

b. By revising paragraph (b)(5)(i). 

c. By revising paragraph (c)(5)(i). 

§86.1845-04 Manufacturer in-use verification testing requirements. 

(a) * * * 

(1) A manufacturer of LDVs, LDTs, MDPVs and/or complete HDVs must test, or 

cause to have tested, a specified number of LDVs, LDTs, MDPVs and complete HDVs. 

Such testing must be conducted in accordance with the provisions of this section. For 

purposes of this section, the term vehicle includes light-duty vehicles, light-duty trucks 

and medium-duty passenger vehicles. 

* * * * * 

(b) * * * 

(5) * * * 

(i) Each test vehicle of a test group shall be tested in accordance with the Federal 

Test Procedure and the US06 portion of the Supplemental Federal Test Procedure as 

described in subpart B of this part, when such test vehicle is tested for compliance with 

applicable exhaust emission standards under this subpart. Test vehicles subject to 

applicable exhaust CO2 emission standards under this subpart shall also be tested in 

accordance with the highway fuel economy test as described in part 600, subpart B of this 

chapter. 

* * * * * 

(c) * * * 

(5) * * * 

(i) Each test vehicle shall be tested in accordance with the Federal Test Procedure 

and the US06 portion of the Supplemental Federal Test Procedure as described in subpart 

B of this part when such test vehicle is tested for compliance with applicable exhaust 

emission standards under this subpart. Test vehicles subject to applicable exhaust CO2

emission standards under this subpart shall also be tested in accordance with the highway 

fuel economy test as described in part 600, subpart B of this chapter. The US06 portion of 

the SFTP is not required to be performed on vehicles certified in accordance with the 

National LEV provisions of subpart R of this part. One test vehicle from each test group 

shall receive a Federal Test Procedure at high altitude. The test vehicle tested at high 

altitude is not required to be one of the same test vehicles tested at low altitude. The test 

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481 

vehicle tested at high altitude is counted when determining the compliance with the 

requirements shown in Table S04–06 and Table S04–07 in paragraph (b)(3) of this 

section or the expanded sample size as provided for in this paragraph (c). 

* * * * * 

26. Section 86.1846-01 is amended by revising paragraphs (a)(1) and (b) introductory 

text to read as follows: 

§86.1846-01 Manufacturer in-use confirmatory testing requirements. 

(a) * * * 

(1) A manufacturer of LDVs, LDTs and/or MDPVs must test, or cause testing to 

be conducted, under this section when the emission levels shown by a test group sample 

from testing under §§86.1845–01 or 86.1845–04, as applicable, exceeds the criteria 

specified in paragraph (b) of this section. The testing required under this section applies 

separately to each test group and at each test point (low and high mileage) that meets the 

specified criteria. The testing requirements apply separately for each model year starting 

with model year 2001. These provisions do not apply to heavy-duty vehicles or heavyduty engines prior to the 2007 model year. These provisions do not apply to emissions of 

CO2, CH4, and N2O. 

* * * * * 

(b) Criteria for additional testing. A manufacturer shall test a test group or a 

subset of a test group as described in paragraph (j) of this section when the results from 

testing conducted under §§86.1845–01 and 86.1845–04, as applicable, show mean 

emissions for that test group of any pollutant(s) (except CO2, CH4, and N2O) to be equal 

to or greater than 1.30 times the applicable in-use standard and a failure rate, among the 

test group vehicles, for the corresponding pollutant(s) of fifty percent or greater. 

* * * * * 

27. Section 86.1848-10 is amended by adding paragraph (c)(9) to read as follows: 

§86.1848-10 Certification. 

* * * * * 

(c) * * * 

(9) For 2012 and later model year LDVs, LDTs, and MDPVs, all certificates of 

conformity issued are conditional upon compliance with all provisions of §86.1818–12 

and §86.1865–12 both during and after model year production. The manufacturer bears 

the burden of establishing to the satisfaction of the Administrator that the terms and 

conditions upon which the certificate(s) was (were) issued were satisfied. For recall and 

warranty purposes, vehicles not covered by a certificate of conformity will continue to be 

held to the standards stated or referenced in the certificate that otherwise would have 

applied to the vehicles. 

(i) Failure to meet the fleet average CO2 requirements will be considered a failure 

to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the 

vehicles sold in violation of the fleet average CO2 standard will not be covered by the 

certificate(s). The vehicles sold in violation will be determined according to §86.1865-

12(k)(7). 

Deleted: §
482 

(ii) Failure to comply fully with the prohibition against selling credits that are not 

generated or that are not available, as specified in §86.1865–12, will be considered a 

failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued 

and the vehicles sold in violation of this prohibition will not be covered by the 

certificate(s). 

* * * * * 

28. A new §86.1854-12 is added to read as follows: 

§86.1854-12 Prohibited acts. 

(a) The following acts and the causing thereof are prohibited: 

(1) In the case of a manufacturer, as defined by §86.1803, of new motor vehicles 

or new motor vehicle engines for distribution in commerce, the sale, or the offering for 

sale, or the introduction, or delivery for introduction, into commerce, or (in the case of 

any person, except as provided by regulation of the Administrator), the importation into 

the United States of any new motor vehicle or new motor vehicle engine subject to this 

subpart, unless such vehicle or engine is covered by a certificate of conformity issued 

(and in effect) under regulations found in this subpart (except as provided in Section 

203(b) of the Clean Air Act (42 U.S.C. 7522(b)) or regulations promulgated thereunder). 

(2)(i) For any person to fail or refuse to permit access to or copying of records or 

to fail to make reports or provide information required under Section 208 of the Clean 

Air Act (42 U.S.C. 7542) with regard to vehicles. 

(ii) For a person to fail or refuse to permit entry, testing, or inspection authorized 

under Section 206(c) (42 U.S.C. 7525(c)) or Section 208 of the Clean Air Act (42 U.S.C. 

7542) with regard to vehicles. 

(iii) For a person to fail or refuse to perform tests, or to have tests performed as 

required under Section 208 of the Clean Air Act (42 U.S.C. 7542) with regard to 

vehicles. 

(iv) For a person to fail to establish or maintain records as required under 

§§86.1844, 86.1862, 86.1864, and 86.1865 with regard to vehicles. 

(v) For any manufacturer to fail to make information available as provided by 

regulation under Section 202(m)(5) of the Clean Air Act (42 U.S.C. 7521(m)(5)) with 

regard to vehicles. 

(3)(i) For any person to remove or render inoperative any device or element of 

design installed on or in a vehicle or engine in compliance with regulations under this 

subpart prior to its sale and delivery to the ultimate purchaser, or for any person 

knowingly to remove or render inoperative any such device or element of design after 

such sale and delivery to the ultimate purchaser. 

(ii) For any person to manufacture, sell or offer to sell, or install, any part or 

component intended for use with, or as part of, any vehicle or engine, where a principal 

effect of the part or component is to bypass, defeat, or render inoperative any device or 

element of design installed on or in a vehicle or engine in compliance with regulations 

issued under this subpart, and where the person knows or should know that the part or 

component is being offered for sale or installed for this use or put to such use. 

(4) For any manufacturer of a vehicle or engine subject to standards prescribed 

under this subpart: 

Deleted: 29
483 

(i) To sell, offer for sale, introduce or deliver into commerce, or lease any such 

vehicle or engine unless the manufacturer has complied with the requirements of Section 

207 (a) and (b) of the Clean Air Act (42 U.S.C. 7541 (a), (b)) with respect to such vehicle 

or engine, and unless a label or tag is affixed to such vehicle or engine in accordance with 

Section 207(c)(3) of the Clean Air Act (42 U.S.C. 7541(c)(3)). 

(ii) To fail or refuse to comply with the requirements of Section 207 (c) or (e) of 

the Clean Air Act (42 U.S.C. 7541 (c) or (e)). 

(iii) Except as provided in Section 207(c)(3) of the Clean Air Act (42 U.S.C. 

7541(c)(3)), to provide directly or indirectly in any communication to the ultimate 

purchaser or any subsequent purchaser that the coverage of a warranty under the Clean 

Air Act is conditioned upon use of any part, component, or system manufactured by the 

manufacturer or a person acting for the manufacturer or under its control, or conditioned 

upon service performed by such persons. 

(iv) To fail or refuse to comply with the terms and conditions of the warranty 

under Section 207 (a) or (b) of the Clean Air Act (42 U.S.C. 7541 (a) or (b)). 

(b) For the purposes of enforcement of this subpart, the following apply: 

(1) No action with respect to any element of design referred to in paragraph (a)(3) 

of this section (including any adjustment or alteration of such element) shall be treated as 

a prohibited act under paragraph (a)(3) of this section if such action is in accordance with 

Section 215 of the Clean Air Act (42 U.S.C. 7549); 

(2) Nothing in paragraph (a)(3) of this section is to be construed to require the use 

of manufacturer parts in maintaining or repairing a vehicle or engine. For the purposes of 

the preceding sentence, the term “manufacturer parts” means, with respect to a motor 

vehicle engine, parts produced or sold by the manufacturer of the motor vehicle or motor 

vehicle engine; 

(3) Actions for the purpose of repair or replacement of a device or element of 

design or any other item are not considered prohibited acts under paragraph (a)(3) of this 

section if the action is a necessary and temporary procedure, the device or element is 

replaced upon completion of the procedure, and the action results in the proper 

functioning of the device or element of design; 

(4) Actions for the purpose of a conversion of a motor vehicle or motor vehicle 

engine for use of a clean alternative fuel (as defined in title II of the Clean Air Act) are 

not considered prohibited acts under paragraph (a) of this section if: 

(i) The vehicle complies with the applicable standard when operating on the 

alternative fuel; and 

(ii) In the case of engines converted to dual fuel or flexible use, the device or 

element is replaced upon completion of the conversion procedure, and the action results 

in proper functioning of the device or element when the motor vehicle operates on 

conventional fuel. 

29. A new §86.1865-12 is added to subpart S to read as follows: 

§86.1865-12 How to comply with the fleet average CO2 standards. 

(a) Applicability. (1) Unless otherwise exempted under the provisions of 

§86.1801-12(j), CO2 fleet average exhaust emission standards apply to: 

(i) 2012 and later model year passenger automobiles and light trucks. 

Deleted: 30
484 

(ii) Aftermarket conversion systems as defined in 40 CFR 85.502. 

(iii) Vehicles imported by ICIs as defined in 40 CFR 85.1502. 

(2) The terms “passenger automobile” and “light truck” as used in this section 

have the meanings as defined in §86.1818–12. 

(b) Useful life requirements. Full useful life requirements for CO2 standards are 

defined in §86.1818–12. There is not an intermediate useful life standard for CO2

emissions. 

(c) Altitude. Altitude requirements for CO2 standards are provided in §86.1810–

09(f). 

(d) Small volume manufacturer certification procedures. Certification procedures 

for small volume manufacturers are provided in §86.1838–01. Small businesses meeting 

certain criteria may be exempted from the greenhouse gas emission standards in 

§86.1818-12 according to the provisions of §86.1801-12(j). 

(e) CO2 fleet average exhaust emission standards. The fleet average standards 

referred to in this section are the corporate fleet average CO2 standards for passenger 

automobiles and light trucks set forth in §86.1818-12(c) and (e). The fleet average CO2

standards applicable in a given model year are calculated separately for passenger 

automobiles and light trucks for each manufacturer and each model year according to the 

provisions in §86.1818–12. Each manufacturer must comply with the applicable CO2

fleet average standard on a production-weighted average basis, for each separate 

averaging set, at the end of each model year, using the procedure described in paragraph 

(j) of this section. 

(f) In-use CO2 standards. In-use CO2 exhaust emission standards applicable to 

each model type are provided in §86.1818–12(d). 

(g) Durability procedures and method of determining deterioration factors (DFs). 

Deterioration factors for CO2 exhaust emission standards are provided in §86.1823–

08(m). 

(h) Vehicle test procedures. (1) The test procedures for demonstrating compliance 

with CO2 exhaust emission standards are contained in subpart B of this part and subpart 

B of part 600 of this chapter. 

(2) Testing of all passenger automobiles and light trucks to determine compliance 

with CO2 exhaust emission standards set forth in this section must be on a loaded vehicle 

weight (LVW) basis, as defined in §86.1803–01. 

(3) Testing for the purpose of providing certification data is required only at low 

altitude conditions. If hardware and software emission control strategies used during low 

altitude condition testing are not used similarly across all altitudes for in-use operation, 

the manufacturer must include a statement in the application for certification, in 

accordance with §86.1844–01(d)(11) and §86.1810–09(f), stating what the different 

strategies are and why they are used. 

(i) Calculating the fleet average carbon-related exhaust emissions. (1)

Manufacturers must compute separate production-weighted fleet average carbon-related 

exhaust emissions at the end of the model year for passenger automobiles and light 

trucks, using actual production, where production means vehicles produced and delivered 

for sale, and certifying model types to standards as defined in §86.1818–12. The model 

type carbon-related exhaust emission results determined according to 40 CFR 600 

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485 

subpart F (in units of grams per mile rounded to the nearest whole number) become the 

certification standard for each model type. 

(2) Manufacturers must separately calculate production-weighted fleet average 

carbon-related exhaust emissions levels for the following averaging sets according to the 

provisions of part 600 subpart F of this chapter: 

(i) Passenger automobiles subject to the fleet average CO2 standards specified in 

§86.1818-12(c)(2); 

(ii) Light trucks subject to the fleet average CO2 standards specified in §86.1818-

12(c)(3); 

(iii) Passenger automobiles subject to the Temporary Leadtime Allowance 

Alternative Standards specified in §86.1818-12(e), if applicable; and 

(iv) Light trucks subject to the Temporary Leadtime Allowance Alternative 

Standards specified in §86.1818-12(e), if applicable. 

(j) Certification compliance and enforcement requirements for CO2 exhaust 

emission standards. (1) Compliance and enforcement requirements are provided in 

§86.1864–10 and §86.1848–10(c)(9). 

(2) The certificate issued for each test group requires all model types within that 

test group to meet the in-use emission standards to which each model type is certified as 

outlined in §86.1818-12(d). 

(3) Each manufacturer must comply with the applicable CO2 fleet average 

standard on a production-weighted average basis, at the end of each model year, using the 

procedure described in paragraph (i) of this section. 

(4) Each manufacturer must comply on an annual basis with the fleet average 

standards as follows: 

(i) Manufacturers must report in their annual reports to the Agency that they met 

the relevant corporate average standard by showing that their production-weighted 

average CO2 emissions levels of passenger automobiles and light trucks, as applicable, 

are at or below the applicable fleet average standard; or 

(ii) If the production-weighted average is above the applicable fleet average 

standard, manufacturers must obtain and apply sufficient CO2 credits as authorized under 

paragraph (k)(8) of this section. A manufacturer must show that they have offset any 

exceedence of the corporate average standard via the use of credits. Manufacturers must 

also include their credit balances or deficits in their annual report to the Agency. 

(iii) If a manufacturer fails to meet the corporate average CO2 standard for four 

consecutive years, the vehicles causing the corporate average exceedence will be 

considered not covered by the certificate of conformity (see paragraph (k)(8) of this 

section). A manufacturer will be subject to penalties on an individual-vehicle basis for 

sale of vehicles not covered by a certificate. 

(iv) EPA will review each manufacturer's production to designate the vehicles that 

caused the exceedence of the corporate average standard. EPA will designate as 

nonconforming those vehicles in test groups with the highest certification emission 

values first, continuing until reaching a number of vehicles equal to the calculated 

number of noncomplying vehicles as determined in paragraph (k)(8) of this section. In a 

group where only a portion of vehicles would be deemed nonconforming, EPA will 

determine the actual nonconforming vehicles by counting backwards from the last 

Deleted: standard
486 

vehicle produced in that test group. Manufacturers will be liable for penalties for each 

vehicle sold that is not covered by a certificate. 

(k) Requirements for the CO2 averaging, banking and trading (ABT) program. (1) 

A manufacturer whose CO2 fleet average emissions exceed the applicable standard must 

complete the calculation in paragraph (k)(4) of this section to determine the size of its 

CO2 deficit. A manufacturer whose CO2 fleet average emissions are less than the 

applicable standard must complete the calculation in paragraph (k)(4) of this section to 

generate CO2 credits. In either case, the number of credits or debits must be rounded to 

the nearest whole number. 

(2) 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. 

(3) Each manufacturer must comply with the reporting and recordkeeping 

requirements of paragraph (l) of this section for CO2 credits, including early credits. The 

averaging, banking and trading program is enforceable through the certificate of 

conformity that allows the manufacturer to introduce any regulated vehicles into 

commerce. 

(4) Credits are earned on the last day of the model year. Manufacturers must 

calculate, for a given model year and separately for passenger automobiles and light 

trucks, the number of credits or debits it has generated according to the following 

equation, rounded to the nearest megagram: 

CO2 Credits or Debits (Mg) = [(CO2 Standard - Manufacturer's ProductionWeighted Fleet Average CO2 Emissions) × (Total Number of Vehicles Produced) × 

(Vehicle Lifetime Miles)] ÷ 1,000,000 

Where: 

CO2 Standard = the applicable standard for the model year as determined by 

§86.1818-12; 

Manufacturer's Production-Weighted Fleet Average CO2 Emissions = average 

calculated according to paragraph (i) of this section; 

Total Number of Vehicles Produced = The number of vehicles domestically 

produced plus those imported as defined in §600.511-80 of this chapter; and 

Vehicle Lifetime Miles is 195,264 for passenger automobiles and 225,865 for 

light trucks. 

(5) Total credits or debits generated in a model year, maintained and reported 

separately for passenger automobiles and light trucks, shall be the sum of the credits or 

debits calculated in paragraph (k)(4) of this section and any of the following credits, if 

applicable: 

(i) Air conditioning leakage credits earned according to the provisions of 

§86.1866-12(b); 

(ii) Air conditioning efficiency credits earned according to the provisions of 

§86.1866-12(c); 

(iii) Off-cycle technology credits earned according to the provisions of §86.1866-

12(d). 

Deleted: 40 CFR 
487 

(6) Unused CO2 credits shall retain their full value through the five subsequent 

model years after the model year in which they were generated. Credits available at the 

end of the fifth model year after the year in which they were generated shall expire. 

(7) Credits may be used as follows: 

(i) Credits generated and calculated according to the method in paragraph (k)(4) 

of this section may not be used to offset deficits other than those deficits accrued with 

respect to the standard in §86.1818–12. Credits may be banked and used in a future 

model year in which a manufacturer's average CO2 level exceeds the applicable standard. 

Credits may be exchanged between the passenger automobile and light truck fleets of a 

given manufacturer. Credits may also be traded to another manufacturer according to the 

provisions in paragraph (k)(8) of this section. 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. 

(ii) The use of credits shall not change Selective Enforcement Auditing or in-use 

testing failures from a failure to a non-failure. The enforcement of the averaging standard 

occurs through the vehicle's certificate of conformity. A manufacturer's certificate of 

conformity is conditioned upon compliance with the averaging provisions. The certificate 

will be void ab initio if a manufacturer fails to meet the corporate average standard and 

does not obtain appropriate credits to cover its shortfalls in that model year or subsequent 

model years (see deficit carry-forward provisions in paragraph (k)(8) of this section). 

(iii) Special provisions for manufacturers using the Temporary Leadtime 

Allowance Alternative Standards. (A) Credits generated by vehicles subject to the fleet 

average CO2 standards specified in §86.1818-12(c) may only be used to offset a deficit 

generated by vehicles subject to the Temporary Leadtime Allowance Alternative 

Standards specified in §86.1818-12(e). 

(B) Credits generated by a passenger automobile or light truck averaging set 

subject to the Temporary Leadtime Allowance Alternative Standards specified in 

§86.1818-12(e)(4)(i) or (ii) of this section may be used to offset a deficit generated by an 

averaging set subject to the Temporary Leadtime Allowance Alternative Standards 

through the 2015 model year, except that manufacturers qualifying under the provisions 

of §86.1818-12(e)(3) may use such credits to offset a deficit generated by an averaging 

set subject to the Temporary Leadtime Allowance Alternative Standards through the 

2016 model year . 

(C) Credits generated by an averaging set subject to the Temporary Leadtime 

Allowance Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) of this section 

may not be used to offset a deficit generated by an averaging set subject to the fleet 

average CO2 standards specified in §86.1818-12(c)(2) or (3) or otherwise transferred to 

an averaging set subject to the fleet average CO2 standards specified in §86.1818-12(c)(2) 

or (3). 

(D) Credits generated by vehicles subject to the Temporary Leadtime Allowance 

Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) may be banked for use in a 

future model year (to offset a deficit generated by an averaging set subject to the 

Temporary Leadtime Allowance Alternative Standards). All such credits shall expire at 

the end of the 2015 model year, except that manufacturers qualifying under the 

provisions of §86.1818-12(e)(3) may use such credits to offset a deficit generated by an 

Deleted: 

Deleted: ), except that all
488 

averaging set subject to the Temporary Leadtime Allowance Alternative Standards 

through the 2016 model year. 

(E) A manufacturer with any vehicles subject to the Temporary Leadtime 

Allowance Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) of this section 

in a model year in which that manufacturer also generates credits with vehicles subject to 

the fleet average CO2 standards specified in §86.1818-12(c) may not trade or bank credits 

earned against the fleet average standards in §86.1818-12(c) for use in a future model 

year. 

(8) The following provisions apply if debits are accrued: 

(i) If a manufacturer calculates that it has negative credits (also called “debits” or 

a “credit deficit”) for a given model year, it may carry that deficit forward into the next 

three model years. Such a carry-forward may only occur after the manufacturer exhausts 

any supply of banked credits. At the end of the third model year, the deficit must be 

covered with an appropriate number of credits that the manufacturer generates or 

purchases. Any remaining deficit is subject to a voiding of the certificate ab initio, as 

described in this paragraph (k)(8). Manufacturers are not permitted to have a credit deficit 

for four consecutive years. 

(ii) If debits are not offset within the specified time period, the number of vehicles 

not meeting the fleet average CO2 standards (and therefore not covered by the certificate) 

must be calculated. 

(A) Determine the gram per mile quantity of debits for the noncompliant vehicle 

category by multiplying the total megagram deficit by 1,000,000 and then dividing by the 

vehicle lifetime miles for the vehicle category (passenger automobile or light truck) 

specified in paragraph (k)(4) of this section. 

(B) Divide the result by the fleet average standard applicable to the model year in 

which the debits were first incurred and round to the nearest whole number to determine 

the number of vehicles not meeting the fleet average CO2 standards. 

(iii) EPA will determine the vehicles not covered by a certificate because the 

condition on the certificate was not satisfied by designating vehicles in those test groups 

with the highest CO2 emission values first and continuing until reaching a number of 

vehicles equal to the calculated number of noncomplying vehicles as determined in 

paragraph (k)(7) of this section. If this calculation determines that only a portion of 

vehicles in a test group contribute to the debit situation, then EPA will designate actual 

vehicles in that test group as not covered by the certificate, starting with the last vehicle 

produced and counting backwards. 

(iv)(A) If a manufacturer ceases production of passenger cars and light trucks, the 

manufacturer continues to be responsible for offsetting any debits outstanding within the 

required time period. Any failure to offset the debits will be considered a violation of 

paragraph (k)(7)(i) of this section and may subject the manufacturer to an enforcement 

action for sale of vehicles not covered by a certificate, pursuant to paragraphs (k)(7)(ii) 

and (iii) of this section. 

(B) If a manufacturer is purchased by, merges with, or otherwise combines with 

another manufacturer, the controlling entity is responsible for offsetting any debits 

outstanding within the required time period. Any failure to offset the debits will be 

considered a violation of paragraph (k)(7)(i) of this section and may subject the 

Deleted: 

Deleted: 
489 

manufacturer to an enforcement action for sale of vehicles not covered by a certificate, 

pursuant to paragraphs (k)(7)(ii) and (iii) of this section. 

(v) For purposes of calculating the statute of limitations, a violation of the 

requirements of paragraph (k)(7)(i) of this section, a failure to satisfy the conditions upon 

which a certificate(s) was issued and hence a sale of vehicles not covered by the 

certificate, all occur upon the expiration of the deadline for offsetting debits specified in 

paragraph (k)(7)(i) of this section. 

(9) The following provisions apply to CO2 credit trading: 

(i) EPA may reject CO2 credit trades if the involved manufacturers fail to submit 

the credit trade notification in the annual report. 

(ii) A manufacturer may not sell credits that are not available for sale pursuant to 

the provisions in paragraph (k)(6) of this section. 

(iii) In the event of a negative credit balance resulting from a transaction, both the 

buyer and seller are liable. EPA may void ab initio the certificates of conformity of all 

test groups participating in such a trade. 

(iv) (A) If a manufacturer trades a credit that it has not generated pursuant to 

paragraph (k) of this section or acquired from another party, the manufacturer will be 

considered to have generated a debit in the model year that the manufacturer traded the 

credit. The manufacturer must offset such debits by the deadline for the annual report for 

that same model year. 

(B) Failure to offset the debits within the required time period will be considered 

a failure to satisfy the conditions upon which the certificate(s) was issued and will be 

addressed pursuant to paragraph (k)(7) of this section. 

(v) A manufacturer may only trade credits that it has generated pursuant to 

paragraph (k)(4) of this section or acquired from another party. 

(l) Maintenance of records and submittal of information relevant to compliance 

with fleet average CO2 standards —(1) Maintenance of records. (i) Manufacturers 

producing any light-duty vehicles, light-duty trucks, or medium-duty passenger vehicles 

subject to the provisions in this subpart must establish, maintain, and retain all the 

following information in adequately organized records for each model year: 

(A) Model year. 

(B) Applicable fleet average CO2 standards for each averaging set as defined in 

paragraph (i) of this section. 

(C) The calculated fleet average CO2 value for each averaging set as defined in 

paragraph (i) of this section. 

(D) All values used in calculating the fleet average CO2 values. 

(ii) Manufacturers producing any passenger cars or light trucks subject to the 

provisions in this subpart must establish, maintain, and retain all the following 

information in adequately organized records for each passenger car or light truck subject 

to this subpart: 

(A) Model year. 

(B) Applicable fleet average CO2 standard. 

(C) EPA test group. 

(D) Assembly plant. 

(E) Vehicle identification number. 
490 

(F) Carbon-related exhaust emission standard to which the passenger car or light 

truck is certified. 

(G) In-use carbon-related exhaust emission standard. 

(H) Information on the point of first sale, including the purchaser, city, and state. 

(iii) Manufacturers must retain all required records for a period of eight years 

from the due date for the annual report. Records may be stored in any format and on any 

media, as long as manufacturers can promptly send EPA organized written records in 

English if requested by the Administrator. Manufacturers must keep records readily 

available as EPA may review them at any time. 

(iv) The Administrator may require the manufacturer to retain additional records 

or submit information not specifically required by this section. 

(v) Pursuant to a request made by the Administrator, the manufacturer must 

submit to the Administrator the information that the manufacturer is required to retain. 

(vi) EPA may void ab initio a certificate of conformity for vehicles certified to 

emission standards as set forth or otherwise referenced in this subpart for which the 

manufacturer fails to retain the records required in this section or to provide such 

information to the Administrator upon request, or to submit the reports required in this 

section in the specified time period. 

(2) Reporting. (i) Each manufacturer must submit an annual report. The annual 

report must contain for each applicable CO2 standard, the calculated fleet average CO2

value, all values required to calculate the CO2 emissions value, the number of credits 

generated or debits incurred, all the values required to calculate the credits or debits, and 

the resulting balance of credits or debits. 

(ii) For each applicable fleet average CO2 standard, the annual report must also 

include documentation on all credit transactions the manufacturer has engaged in since 

those included in the last report. Information for each transaction must include all of the 

following: 

(A) Name of credit provider. 

(B) Name of credit recipient. 

(C) Date the trade occurred. 

(D) Quantity of credits traded in megagrams. 

(E) Model year in which the credits were earned. 

(iii) Manufacturers calculating early air conditioning leakage and/or efficiency 

credits under paragraph §86.1867-12(b) of this section shall include in the 2012 report,

the following information for each model year separately for passenger automobiles and 

light trucks and for each air conditioning system used to generate credits: 

(A) A description of the air conditioning system. 

(B) The leakage credit value and all the information required to determine this 

value. 

(C) The total credits earned for each averaging set, model year, and region, as 

applicable. 

(iv) Manufacturers calculating early advanced technology vehicle credits under 

paragraph §86.1867-12(c) shall include in the 2012 report, separately for each model year 

and separately for passenger automobiles and light trucks, the following information: 

(A) The number of each model type of eligible vehicle sold. 

Deleted: we ask for them

Deleted: of this section 
491 

(B) The cumulative model year production of eligible vehicles starting with the 

2009 model year. 

(C) The carbon-related exhaust emission value by model type and model year. 

(v) Manufacturers calculating early off-cycle technology credits under paragraph 

§86.1867-12(d) shall include in the 2012 report, for each model year and separately for 

passenger automobiles and light trucks, all test results and data required for calculating 

such credits. 

(vi) Unless a manufacturer reports the data required by this section in the annual 

production report required under §86.1844–01(e) or the annual report required under 

§600.512-12 of this chapter, a manufacturer must submit an annual report for each model 

year after production ends for all affected vehicles produced by the manufacturer subject 

to the provisions of this subpart and no later than May 1 of the calendar year following 

the given model year. Annual reports must be submitted to: Director, Compliance and 

Innovative Strategies Division, U.S. Environmental Protection Agency, 2000 

Traverwood, Ann Arbor, Michigan 48105. 

(vii) Failure by a manufacturer to submit the annual report in the specified time 

period for all vehicles subject to the provisions in this section is a violation of section 

203(a)(1) of the Clean Air Act (42 U.S.C. 7522 (a)(1)) for each applicable vehicle 

produced by that manufacturer. 

(viii) If EPA or the manufacturer determines that a reporting error occurred on an 

annual report previously submitted to EPA, the manufacturer's credit or debit calculations 

will be recalculated. EPA may void erroneous credits, unless traded, and will adjust 

erroneous debits. In the case of traded erroneous credits, EPA must adjust the selling 

manufacturer's credit balance to reflect the sale of such credits and any resulting credit 

deficit. 

(3) Notice of opportunity for hearing. Any voiding of the certificate under 

paragraph (l)(1)(vi) of this section will be made only after EPA has offered the affected 

manufacturer an opportunity for a hearing conducted in accordance with §86.614–84 for 

light-duty vehicles or §86.1014–84 for light-duty trucks and, if a manufacturer requests 

such a hearing, will be made only after an initial decision by the Presiding Officer. 

30. A new §86.1866-12 is added to subpart S to read as follows: 

§86.1866-12 CO2 fleet average credit programs. 

(a) Incentive for certification of advanced technology vehicles. Electric vehicles, 

plug-in hybrid electric vehicles, and fuel cell electric vehicles, as those terms are defined 

in §86.1803-01, that are certified and produced in the 2012 through 2016 model years 

may be eligible for a reduced CO2 emission value under the provisions of this paragraph 

(a) and under the provisions of part 600 of this chapter. 

(1) Electric vehicles, fuel cell electric vehicles, and plug-in hybrid electric 

vehicles may use a value of zero (0) grams/mile of CO2 to represent the proportion of 

electric operation of a vehicle that is derived from electricity that is generated from 

sources that are not onboard the vehicle. 

(2) The use of zero (0) grams/mile CO2 is limited to the first 200,000 combined 

electric vehicles, plug-in hybrid electric vehicles, and fuel cell electric vehicles produced 

and delivered for sale by a manufacturer in the 2012 through 2016 model years, except 

Deleted: 2012

Deleted: of this section 

Deleted: 

Deleted: 31

Deleted: section 

Deleted: 
492 

that a manufacturer that produces and delivers for sale 25,000 or more such vehicles in 

the 2012 model year shall be subject to a limitation on the use of zero (0) grams/mile CO2

to the first 300,000 combined electric vehicles, plug-in hybrid electric vehicles, and fuel 

cell electric vehicles produced and delivered for sale by a manufacturer in the 2012 

through 2016 model years. 

(b) Credits for reduction of air conditioning refrigerant leakage. Manufacturers 

may generate credits applicable to the CO2 fleet average program described in §86.1865-

12 by implementing specific air conditioning system technologies designed to reduce air 

conditioning refrigerant leakage over the useful life of their passenger cars and/or light 

trucks. Credits shall be calculated according to this paragraph (b) for each air 

conditioning system that the manufacturer is using to generate CO2 credits. 

Manufacturers may also generate early air conditioning refrigerant leakage credits under 

this paragraph (b) for the 2009 through 2011 model years according to the provisions of 

§86.1867-12(b). 

(1) The manufacturer shall calculate an annual rate of refrigerant leakage from an 

air conditioning system in grams per year according to the provisions of §86.166-12. 

(2) The CO2-equivalent gram per mile leakage reduction to be used to calculate 

the total credits generated by the air conditioning system shall be determined according to 

the following formulae, rounded to the nearest tenth of a gram per mile: 

(i) Passenger automobiles: 

⎥

⎦

⎤ ⎢

⎣

⎡

⎟

⎟

⎠

⎞

⎜

⎜

⎝

⎛ ⎟×

⎠

⎞ ⎜

⎝

⎛ = −×

aHFC

REF

GWP

Leakage GWP L MaxCredit

134 6.16 credit eakage 1

Where: 

MaxCredit is 12.6 (grams CO2-equivalent/mile)for air conditioning systems using 

HFC-134a, and 13.8 (grams CO2-equivalent/mile) for air conditioning systems using a 

refrigerant with a lower global warming potential. 

Leakage means the annual refrigerant leakage rate determined according to the 

provisions of §86.166-12(a), except if the calculated rate is less than 8.3 grams/year (4.1 

grams/year for systems using electric compressors) the rate for the purpose of this 

formula shall be 8.3 grams/year (4.1 grams/year for systems using electric compressors); 

The constant 16.6 is the average passenger car impact of air conditioning leakage 

in units of grams/year; 

GWPREF means the global warming potential of the refrigerant as indicated in 

paragraph (b)(5) of this section or as otherwise determined by the Administrator; 

GWPHFC134a means the global warming potential of HFC-134a as indicated in 

paragraph (b)(5) of this section or as otherwise determined by the Administrator. 

(ii) Light trucks: 

⎥

⎦

⎤ ⎢

⎣

⎡

⎟

⎟

⎠

⎞

⎜

⎜

⎝

⎛ ⎟×

⎠

⎞ ⎜

⎝

⎛ = −×

aHFC

REF

GWP

Leakage GWP L MaxCredit

134 7.20 credit eakage 1

Where: 

MaxCredit is 15.6 (grams CO2-equivalent/mile) for air conditioning systems using 

HFC-134a, and 17.2 (grams CO2-equivalent/mile) for air conditioning systems using a 

refrigerant with a lower global warming potential. 

Deleted: combined 

Deleted: 

Deleted: 

Deleted: L credit eakage = Max

Deleted: 

Deleted: GWPNEW

Deleted: , if such refrigerant is not 

R134a,

Deleted: 

Deleted: , which shall be equal to 1430 

unless

Deleted: otherwise 

Deleted: L credit eakage = Max

Deleted: 
493 

Leakage means the annual refrigerant leakage rate determined according to the 

provisions of §86.166-12(a), except if the calculated rate is less than 10.4 grams/year (5.2 

grams/year for systems using electric compressors) the rate for the purpose of this 

formula shall be 10.4 grams/year (5.2 grams/year for systems using electric 

compressors); 

The constant 20.7 is the average passenger car impact of air conditioning leakage 

in units of grams/year; 

GWPREF means the global warming potential of the refrigerant as indicated in 

paragraph (b)(5) of this section or as otherwise determined by the Administrator; 

GWPR134a means the global warming potential of HFC-134a as indicated in 

paragraph (b)(5) of this section or as otherwise determined by the Administrator. 

(3) The total leakage reduction credits generated by the air conditioning system 

shall be calculated separately for passenger cars and light trucks according to the 

following formula: 

Total Credits (megagrams) = (Leakage x Production x VLM) ÷ 1,000,000 

Where: 

Leakage = the CO2-equivalent leakage credit value in grams per mile determined 

in paragraph (b)(2) of this section. 

Production = The total number of passenger cars or light trucks, whichever is 

applicable, produced with the air conditioning system to which to the leakage credit value 

from paragraph (b)(2) of this section applies. 

VLM = vehicle lifetime miles, which for passenger cars shall be 195,264 and for 

light trucks shall be 225,865. 

(4) The results of paragraph (b)(3) of this section, rounded to the nearest whole 

number, shall be included in the manufacturer’s credit/debit totals calculated in 

§86.1865-12(k)(5). 

(5) The following values for refrigerant global warming potential (GWPREF), or 

alternative values as determined by the Administrator, shall be used in the calculations of 

this paragraph (b). The Administrator will determine values for refrigerants not included 

in this paragraph (b)(5) upon request by a manufacturer. 

(i) For HFC-134a, GWPREF =1430;

(ii) For HFC-152a, GWPREF =124;

(iii) For HFO-1234yf,: GWPREF =4;

(iv) For CO2, GWPREF= 1.

(c) Credits for improving air conditioning system efficiency. Manufacturers may 

generate credits applicable to the CO2 fleet average program described in §86.1865-12 by 

implementing specific air conditioning system technologies designed to reduce air 

conditioning-related CO2 emissions over the useful life of their passenger cars and/or 

light trucks. Credits shall be calculated according to this paragraph (c) for each air 

conditioning system that the manufacturer is using to generate CO2 credits. 

Manufacturers may also generate early air conditioning efficiency credits under this 

paragraph (c) for the 2009 through 2011 model years according to the provisions of 

§86.1867-12(b). For model years 2012 and 2013 the manufacturer may determine air 

conditioning efficiency credits using the requirements in paragraphs (c)(1) through (4) of 

this section. For model years 2014 and later the eligibility requirements specified in 

Deleted: GWPNEW

Deleted: , if such refrigerant is not HFC 

134a,

Deleted: 134a, which shall be equal to 

1430 unless

Deleted: otherwise 

Deleted: 

Deleted: 
494 

paragraph (c)(5) of this section must be met before an air conditioning system is allowed 

to generate credits. 

(1) Air conditioning efficiency credits are available for the following technologies 

in the gram per mile amounts indicated: 

(i) Reduced reheat, with externally-controlled, variable-displacement compressor

(e.g. a compressor that controls displacement based on temperature setpoint and/or 

cooling demand of the air conditioning system control settings inside the passenger 

compartment): 1.7 g/mi. 

(ii) Reduced reheat, with externally-controlled, fixed-displacement or pneumatic 

variable displacement compressor (e.g. a compressor that controls displacement based on 

conditions within, or internal to, the air conditioning system, such has head pressure, 

suction pressure, or evaporator outlet temperature): 1.1 g/mi. 

(iii) Default to recirculated air with closed-loop control of the air supply (sensor 

feedback to control interior air quality) whenever the ambient temperature is 75 °F or 

higher: 1.7 g/mi. Air conditioning systems that operated with closed-loop control of the 

air supply at different temperatures may receive credits by submitting an engineering 

analysis to the Administrator for approval. 

(iv) Default to recirculated air with open-loop control air supply (no sensor 

feedback) whenever the ambient temperature is 75 °F or higher: 1.1 g/mi. Air 

conditioning systems that operate with open-loop control of the air supply at different 

temperatures may receive credits by submitting an engineering analysis to the 

Administrator for approval. 

(v) Blower motor controls which limit wasted electrical energy (e.g. pulse width 

modulated power controller): 0.9 g/mi. 

(vi) Internal heat exchanger (e.g. a device that transfers heat from the highpressure, liquid-phase refrigerant entering the evaporator to the low-pressure, gas-phase 

refrigerant exiting the evaporator): 1.1 g/mi. 

(vii) Improved condensers and/or evaporators with system analysis on the 

component(s) indicating a coefficient of performance improvement for the system of 

greater than 10% when compared to previous industry standard designs): 1.1 g/mi. 

(viii) Oil separator: 0.6 g/mi. The manufacturer must submit an engineering 

analysis demonstrating the increased improvement of the system relative to the baseline 

design, where the baseline component for comparison is the version which a 

manufacturer most recently had in production on the same vehicle design or in a similar 

or related vehicle model. The characteristics of the baseline component shall be 

compared to the new component to demonstrate the improvement. 

(2) Air conditioning efficiency credits are determined on an air conditioning 

system basis. For each air conditioning system that is eligible for a credit based on the 

use of one or more of the items listed in paragraph (c)(1) of this section, the total credit 

value is the sum of the gram per mile values listed in paragraph (c)(1) of this section for 

each item that applies to the air conditioning system. If the sum of those values for an air 

conditioning system is greater than 5.7 grams per mile, the total credit value is deemed to 

be 5.7 grams per mile. 

(3) The total efficiency credits generated by an air conditioning system shall be 

calculated separately for passenger cars and light trucks according to the following 

formula: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 
495 

Total Credits (Megagrams) = (Credit x Production x VLM) ÷ 1,000,000 

Where: 

Credit = the CO2 efficiency credit value in grams per mile determined in 

paragraph (c)(2) or (c)(5) of this section, whichever is applicable. 

Production = The total number of passenger cars or light trucks, whichever is 

applicable, produced with the air conditioning system to which to the efficiency credit 

value from paragraph (c)(2) of this section applies. 

VLM = vehicle lifetime miles, which for passenger cars shall be 195,264 and for 

light trucks shall be 225,865. 

(4) The results of paragraph (c)(3) of this section, rounded to the nearest whole 

number, shall be included in the manufacturer’s credit/debit totals calculated in 

§86.1865-12(k)(5). 

(5) Use of the Air Conditioning Idle Test Procedure is required after the 2013 

model year as specified in this paragraph (c)(5). 

(i) After the 2013 model year, for each air conditioning system selected by the 

manufacturer to generate air conditioning efficiency credits, the manufacturer shall 

perform the Air Conditioning Idle Test Procedure specified in §86.165-14 of this part. 

(ii) Using good engineering judgment, the manufacturer must select the vehicle 

configuration to be tested that is expected to result in the greatest increased CO2

emissions as a result of the operation of the air conditioning system for which efficiency 

credits are being sought. If the air conditioning system is being installed in passenger 

automobiles and light trucks, a separate determination of the quantity of credits for 

passenger automobiles and light trucks must be made, but only one test vehicle is 

required to represent the air conditioning system, provided it represents the worst-case 

impact of the system on CO2 emissions. 

(iii) For an air conditioning system to be eligible to generate credits in the 2014 

and later model years, the increased CO2 emissions as a result of the operation of that air 

conditioning system determined according to the Idle Test Procedure in §86.165-14 must 

be less than 21.3 grams per minute. 

(A) If the increased CO2 emissions determined from the Idle Test Procedure in 

§86.165-14 is less than or equal to 14.9 grams/minute, the total credit value for use in 

paragraph (c)(3) of this section shall be as determined in paragraph (c)(2) of this section. 

(B) If the increased CO2 emissions determined from the Idle Test Procedure in 

§86.165-14 is greater than 14.9 grams/minute and less than 21.3 grams/minute, the total 

credit value for use in paragraph (c)(3) of this section shall be as determined according to 

the following formula: 

⎥

⎦

⎤ ⎢

⎣

⎡ ⎟

⎠

⎞ ⎜

⎝

⎛ − −×= 4.6

9.14 1 1

ITP TCVTCV

Where: 

TCV=The total credit value for use in paragraph (c)(3) of this section; 

TCV1=The total credit value determined according to paragraph (c)(2) of this 

section; and 

ITP= the increased CO2 emissions determined from the Idle Test Procedure in 

§86.165-14. 

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(iv) Air conditioning systems with compressors that are solely powered by 

electricity shall submit Air Conditioning Idle Test Procedure data to be eligible to 

generate credits in the 2014 and later model years, but such systems are not required to 

meet a specific threshold to be eligible to generate such credits, as long as the engine 

remains off for a period of at least 2 minutes during the air conditioning on portion of the 

Idle Test Procedure in §86.165-12 (d). 

(6) The following definitions apply to this paragraph (c): 

(i) Reduced reheat, with externally-controlled, variable displacement compressor

means a system in which compressor displacement is controlled via an electronic signal, 

based on input from sensors (e.g. position or setpoint of interior temperature control, 

interior temperature, evaporator outlet air temperature, or refrigerant temperature) and air 

temperature at the outlet of the evaporator can be controlled to a level at 41 °F, or higher. 

(ii) Reduced reheat, with externally-controlled, fixed-displacement or pneumatic 

variable displacement compressor means a system in which the output of either 

compressor is controlled by cycling the compressor clutch off-and-on via an electronic 

signal, based on input from sensors (e.g. position or setpoint of interior temperature 

control, interior temperature, evaporator outlet air temperature, or refrigerant 

temperature) and air temperature at the outlet of the evaporator can be controlled to a 

level at 41 °F, or higher. 

(iii) Default to recirculated air mode means that the default position of the 

mechanism which controls the source of air supplied to the air conditioning system shall 

change from outside air to recirculated air when the operator or the automatic climate 

control system has engaged the air conditioning system (i.e. evaporator is removing heat), 

except under those conditions where dehumidification is required for visibility (i.e. 

defogger mode). In vehicles equipped with interior air quality sensors (e.g. humidity 

sensor, or carbon dioxide sensor), the controls may determine proper blend of air supply 

sources to maintain freshness of the cabin air and prevent fogging of windows while 

continuing to maximize the use of recirculated air. At any time, the vehicle operator may 

manually select the non-recirculated air setting during vehicle operation but the system 

must default to recirculated air mode on subsequent vehicle operations (i.e. next vehicle 

start). The climate control system may delay switching to recirculation mode until the 

interior air temperature is less than the outside air temperature, at which time the system 

must switch to recirculated air mode. 

(iv) Blower motor controls which limit waste energy means a method of 

controlling fan and blower speeds which does not use resistive elements to decrease the 

voltage supplied to the motor. 

 (v) Improved condensers and/or evaporators means that the coefficient of 

performance (COP) of air conditioning system using improved evaporator and condenser 

designs is 10 percent higher, as determined using the bench test procedures described in 

SAE J2765 “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. The 

manufacturer must submit an engineering analysis demonstrating the increased 

improvement of the system relative to the baseline design, where the baseline 

component(s) for comparison is the version which a manufacturer most recently had in 

production on the same vehicle design or in a similar or related vehicle model. The 

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dimensional characteristics (e.g., tube configuration/thickness/spacing, and fin density) of 

the baseline component(s) shall be compared to the new component(s) to demonstrate the 

improvement in coefficient of performance. 

(vi) Oil separator means a mechanism which removes at least 50 percent of the 

oil entrained in the oil/refrigerant mixture exiting the compressor and returns it to the 

compressor housing or compressor inlet, or a compressor design which does not rely on 

the circulation of an oil/refrigerant mixture for lubrication. 

(d) Credits for CO2-reducing technologies where the CO2 reduction is not 

captured on the Federal Test Procedure or the Highway Fuel Economy Test. With prior 

EPA approval, manufacturers may optionally generate credits applicable to the CO2 fleet 

average program described in §86.1865-12 by implementing innovative technologies that 

have a measurable, demonstrable, and verifiable real-world CO2 reduction. These 

optional credits are referred to as “off-cycle” credits and may be earned through the 2016 

model year. 

(1) Qualification criteria. To qualify for this credit, the following must be true: 

(i) The technology must be an innovative and novel vehicle- or engine-based 

approach to reducing greenhouse gas emissions, and not in widespread use. 

(ii) The CO2 -reducing impact of the technology must not be significantly 

measurable over the Federal Test Procedure and the Highway Fuel Economy Test. The 

technology must improve CO2 emissions beyond the driving conditions of those tests. 

(iii) The technology must be able to be demonstrated to be effective for the full 

useful life of the vehicle. Unless the manufacturer demonstrates that the technology is not 

subject to in-use deterioration, the manufacturer must account for the deterioration in 

their analysis. 

(2) Quantifying the CO2 reductions of an off-cycle technology. The manufacturer 

may use one of the two options specified in this paragraph (d)(2) to measure the CO2-

reducing potential of an innovative off-cycle technology. The option described in 

paragraph (d)(2)(ii) of this section may be used only with EPA approval, and to use that 

option the manufacturer must be able to justify to the Administrator why the 5-cycle 

option described in paragraph (d)(2)(i) of this section insufficiently characterizes the 

effectiveness of the off-cycle technology. The manufacturer should notify EPA in their 

pre-model year report of their intention to generate any credits under paragraph (d) of this 

section. 

(i) Technology demonstration using EPA 5-cycle methodology. To demonstrate an 

off-cycle technology and to determine a CO2 credit using the EPA 5-cycle methodology, 

the manufacturer shall determine 5-cycle city/highway combined carbon-related exhaust 

emissions both with the technology installed and operating and without the technology 

installed and/or operating. The manufacturer shall conduct the following steps, both with 

the off-cycle technology installed and operating and without the technology operating or 

installed. 

(A) Determine carbon-related exhaust emissions over the FTP, the HFET, the 

US06, the SC03, and the cold temperature FTP test procedures according to the test 

procedure provisions specified in 40 CFR part 600 subpart B and using the calculation 

procedures specified in §600.113-08 of this chapter. 

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(B) Calculate 5-cycle city and highway carbon-related exhaust emissions using 

data determined in paragraph (d)(2)(i)(A) of this section according to the calculation 

procedures in paragraphs (d) through (f) of §600.114-08 of this chapter. 

(C) Calculate a 5-cycle city/highway combined carbon-related exhaust emission 

value using the city and highway values determined in paragraph (d)(2)(i)(B) of this 

section. 

(D) Subtract the 5-cycle city/highway combined carbon-related exhaust emission 

value determined with the off-cycle technology operating from the 5-cycle city/highway 

combined carbon-related exhaust emission value determined with the off-cycle 

technology not operating. The result is the gram per mile credit amount assigned to the 

technology. 

(ii) Technology demonstration using alternative EPA-approved methodology. In 

cases where the EPA 5-cycle methodology described in paragraph (d)(2)(i) of this section 

cannot adequately measure the emission reduction attributable to an innovative off-cycle 

technology, the manufacturer may develop an alternative approach. Prior to a model year 

in which a manufacturer intends to seek these credits, the manufacturer must submit a 

detailed analytical plan to EPA. EPA will work with the manufacturer to ensure that an 

analytical plan will result in appropriate data for the purposes of generating these credits. 

The alternative demonstration program must be approved in advance by the 

Administrator and should: 

(A) Use modeling, on-road testing, on-road data collection, or other approved 

analytical or engineering methods; 

(B) Be robust, verifiable, and capable of demonstrating the real-world emissions 

benefit with strong statistical significance; 

(C) Result in a demonstration of baseline and controlled emissions over a wide 

range of driving conditions and number of vehicles such that issues of data uncertainty 

are minimized; 

(D) Result in data on a model type basis unless the manufacturer demonstrates 

that another basis is appropriate and adequate. 

(iii) Calculation of total off-cycle credits. Total off-cycle credits in Megagrams of 

CO2 (rounded to the nearest whole number) shall be calculated separately for passenger 

automobiles and light trucks according to the following formula: 

Total Credits (Megagrams) = (Credit x Production x VLM) ÷ 1,000,000 

Where: 

Credit = the 5-cycle credit value in grams per mile determined in paragraph 

(d)(2)(i)(D) or (d)(2)(ii) of this section. 

Production = The total number of passenger cars or light trucks, whichever is 

applicable, produced with the off-cycle technology to which to the credit value 

determined in paragraph (d)(2)(i)(D) or (d)(2)(ii) of this section applies. 

VLM = vehicle lifetime miles, which for passenger cars shall be 195,264 and for 

light trucks shall be 225,865. 

(3) Notice and opportunity for public comment. The Administrator will publish a 

notice of availability in the Federal Register notifying the public of a manufacturer’s 

proposed alternative off-cycle credit calculation methodology. The notice will include 

details regarding the proposed methodology, but will not include any Confidential 

Business Information. The notice will include instructions on how to comment on the 

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methodology. The Administrator will take public comments into consideration in the 

final determination, and will notify the public of the final determination. Credits may not 

be accrued using an approved methodology until the model year following the final 

approval. 

31. A new §86.1867-12 is added to subpart S to read as follows: 

§86.1867-12 Optional early CO2 credit programs. 

Manufacturers may optionally generate CO2 credits in the 2009 through 2011 

model years for use in the 2012 and later model years subject to EPA approval and to the 

provisions of this section. Manufacturers may generate early fleet average credits, air 

conditioning leakage credits, air conditioning efficiency credits, early advanced 

technology credits, and early off-cycle technology credits. Manufacturers generating any 

credits under this section must submit an early credits report to the Administrator as 

required in this section. The terms “sales” and “sold” as used in this section shall mean 

vehicles produced and delivered for sale in the states and territories of the United States.

(a) Early fleet average CO2 reduction credits. Manufacturers may optionally 

generate credits for reductions in their fleet average CO2 emissions achieved in the 2009 

through 2011 model years. To generate early fleet average CO2 reduction credits, 

manufacturers must select one of the four pathways described in paragraphs (a)(1) 

through (4) of this section. The manufacturer may select only one pathway, and that 

pathway must remain in effect for the 2009 through 2011 model years. Fleet average 

credits (or debits) must be calculated and reported to EPA for each model year under 

each selected pathway. Early credits are subject to five year carry-forward restrictions 

based on the model year in which the credits are generated. 

(1) Pathway 1. To earn credits under this pathway, the manufacturer shall 

calculate an average carbon-related exhaust emission value to the nearest one gram per 

mile for the classes of motor vehicles identified in this paragraph (a)(1), and the results of 

such calculations will be reported to the Administrator for use in determining compliance 

with the applicable CO2 early credit threshold values. 

(i) An average carbon-related exhaust emission value calculation will be made for 

the combined LDV/LDT1 averaging set. 

(ii) An average carbon-related exhaust emission value calculation will be made 

for the combined LDT2/HLDT/MDPV averaging set. 

(iii) Average carbon-related exhaust emission values shall be determined 

according to the provisions of §600.510-12 of this chapter, except that: 

(A) Total U.S. model year sales data will be used, instead of production data; 

(B) The average carbon-related exhaust emissions for alcohol fueled model types 

shall be calculated according to the provisions of §600.510-12(j)(2)(ii)(B) of this chapter, 

without the use of the 0.15 multiplicative factor. 

(C) The average carbon-related exhaust emissions for natural gas fueled model 

types shall be calculated according to the provisions of §600.510-12(j)(2)(iii)(B) of this 

chapter, without the use of the 0.15 multiplicative factor. 

(D) The average carbon-related exhaust emissions for alcohol dual fueled model 

types shall be the value measured using gasoline or diesel fuel, as applicable, and shall be 

calculated according to the provisions of §600.510-12(j)(2)(vi) of this chapter, without 

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the use of the 0.15 multiplicative factor and with F=0. For the 2010 and 2011 model 

years only, if the California Air Resources Board has approved a manufacturer’s request 

to use a non-zero value of F, the manufacturer may use such an approved value. 

(E) The average carbon-related exhaust emissions for natural gas dual fueled 

model types shall be the value measured using gasoline or diesel fuel, as applicable, and 

shall be calculated according to the provisions of §600.510-12(j)(2)(vii) of this chapter, 

without the use of the 0.15 multiplicative factor and with F=0. For the 2010 and 2011 

model years only, if the California Air Resources Board has approved a manufacturer’s 

request to use a non-zero value of F, the manufacturer may use such an approved value. 

(F) Carbon-related exhaust emission values for electric, fuel cell electric, and 

plug-in hybrid electric model types shall be included in the fleet average determined 

under paragraph (a)(1) of this section only to the extent that such vehicles are not being 

used to generate early advanced technology vehicle credits under paragraph (c) of this 

section. 

 (iv) Fleet average CO2 credit threshold values. 

Model year LDV/LDT1 LDT2/HLDT/MDPV 

2009 323 439

2010 301 420

2011 267 390

(v) Credits are earned on the last day of the model year. Manufacturers must 

calculate, for a given model year, the number of credits or debits it has generated 

according to the following equation, rounded to the nearest megagram: 

CO2 Credits or Debits (Mg) = [(CO2 Credit Threshold - Manufacturer's Sales 

Weighted Fleet Average CO2 Emissions) × (Total Number of Vehicles Sold) × (Vehicle 

Lifetime Miles)] ÷ 1,000,000 

Where: 

CO2 Credit Threshold = the applicable credit threshold value for the model year 

and vehicle averaging set as determined by paragraph (a)(1)(iv) of this section; 

Manufacturer's Sales Weighted Fleet Average CO2 Emissions = average 

calculated according to paragraph (a)(1)(iii) of this section; 

Total Number of Vehicles Sold = The number of vehicles domestically sold as 

defined in §600.511-80 of this chapter; and 

Vehicle Lifetime Miles is 195,264 for the LDV/LDT1 averaging set and 225,865 

for the LDT2/HLDT/MDPV averaging set. 

(vi) Deficits generated against the applicable CO2 credit threshold values in 

paragraph (a)(1)(iv) of this section in any averaging set for any of the 2009-2011 model 

years must be offset using credits accumulated by any averaging set in any of the 2009-

2011 model years before determining the number of credits that may be carried forward 

to the 2012. Deficit carry forward and credit banking provisions of §86.1865-12 apply to 

early credits earned under this paragraph (a)(1), except that deficits may not be carried 

forward from any of the 2009-2011 model years into the 2012 model year, and credits 

earned in the 2009 model year may not be traded to other manufacturers. 

(2) Pathway 2. To earn credits under this pathway, manufacturers shall calculate 

an average carbon-related exhaust emission value to the nearest one gram per mile for the 

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501 

classes of motor vehicles identified in paragraph (a)(1) of this section, and the results of 

such calculations will be reported to the Administrator for use in determining compliance 

with the applicable CO2 early credit threshold values. 

(i) Credits under this pathway shall be calculated according to the provisions of 

paragraph (a)(1) of this section, except credits may only be generated by vehicles sold in 

a model year in California and in states with a section 177 program in effect in that model 

year. For the purposes of this section, “section 177 program” means State regulations or 

other laws that apply to vehicle emissions from any of the following categories of motor 

vehicles: Passenger cars, light-duty trucks up through 6,000 pounds GVWR, and 

medium-duty vehicles from 6,001 to 14,000 pounds GVWR, as these categories of motor 

vehicles are defined in the California Code of Regulations, Title 13, Division 3, Chapter 

1, Article 1, Section 1900. 

(ii) A deficit in any averaging set for any of the 2009-2011 model years must be 

offset using credits accumulated by any averaging set in any of the 2009-2011 model 

years before determining the number of credits that may be carried forward to the 2012 

model year. Deficit carry forward and credit banking provisions of §86.1865-12 apply to 

early credits earned under this paragraph (a)(1), except that deficits may not be carried 

forward from any of the 2009-2011 model years into the 2012 model year, and credits 

earned in the 2009 model year may not be traded to other manufacturers. 

(3) Pathway 3. Pathway 3 credits are those credits earned under Pathway 2 as 

described in paragraph (a)(2) of this section in California and in the section 177 states 

determined in paragraph (a)(2)(i) of this section, combined with additional credits earned 

in the set of states that does not include California and the section 177 states determined 

in paragraph (a)(2)(i) of this section and calculated according to this paragraph (a)(3). 

(i) Manufacturers shall earn additional credits under Pathway 3 by calculating an 

average carbon-related exhaust emission value to the nearest one gram per mile for the 

classes of motor vehicles identified in this paragraph (a)(3). The results of such 

calculations will be reported to the Administrator for use in determining compliance with 

the applicable CO2 early credit threshold values. 

 (ii) An average carbon-related exhaust emission value calculation will be made 

for the passenger automobile averaging set. The term “passenger automobile” shall have 

the meaning given by the Department of Transportation at 49 CFR 523.4 for the specific 

model year for which the calculation is being made. 

(iii) An average carbon-related exhaust emission value calculation will be made 

for the light truck averaging set. The term “light truck” shall have the meaning given by 

the Department of Transportation at 49 CFR 523.5 for the specific model year for which 

the calculation is being made. 

(iv) Average carbon-related exhaust emission values shall be determined 

according to the provisions of §600.510-12 of this chapter, except that: 

(A) Total model year sales data will be used, instead of production data, except 

that vehicles sold in the section 177 states determined in paragraph (a)(2)(i) of this 

section shall not be included; 

(B) The average carbon-related exhaust emissions for alcohol fueled model types 

shall be calculated according to the provisions of §600.510-12(j)(2)(ii)(B) of this chapter, 

without the use of the 0.15 multiplicative factor. 

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(C) The average carbon-related exhaust emissions for natural gas fueled model 

types shall be calculated according to the provisions of §600.510-12(j)(2)(iii)(B) of this 

chapter, without the use of the 0.15 multiplicative factor. 

(D) The average carbon-related exhaust emissions for alcohol dual fueled model 

types shall be calculated according to the provisions of §600.510-12(j)(2)(vi) of this 

chapter, without the use of the 0.15 multiplicative factor and with F=0. 

(E) The average carbon-related exhaust emissions for natural gas dual fueled 

model types shall be calculated according to the provisions of §600.510-12(j)(2)(vii) of 

this chapter, without the use of the 0.15 multiplicative factor and with F=0. 

(F) Section 600.510-12(j)(3) of this chapter shall not apply. Electric, fuel cell 

electric, and plug-in hybrid electric model type carbon-related exhaust emission values 

shall be included in the fleet average determined under paragraph (a)(1) of this section 

only to the extent that such vehicles are not being used to generate early advanced 

technology vehicle credits under paragraph (c) of this section. 

(v) Pathway 3 fleet average CO2 credit threshold values. 

(A) For 2009 and 2010 model year passenger automobiles, the fleet average CO2

credit threshold value is 323 grams/mile. 

(B) For 2009 model year light trucks the fleet average CO2 credit threshold value 

is 381 grams/mile, or, if the manufacturer chose to optionally meet an alternative 

manufacturer-specific light truck fuel economy standard calculated under 49 CFR 533.5 

for the 2009 model year, the gram per mile fleet average CO2 credit threshold shall be the 

CO2 value determined by dividing 8887 by that alternative manufacturer-specific fuel 

economy standard and rounding to the nearest whole gram per mile. 

(C) For 2010 model year light trucks the fleet average CO2 credit threshold value 

is 376 grams/mile, or, if the manufacturer chose to optionally meet an alternative 

manufacturer-specific light truck fuel economy standard calculated under 49 CFR 533.5 

for the 2010 model year, the gram per mile fleet average CO2 credit threshold shall be the 

CO2 value determined by dividing 8887 by that alternative manufacturer-specific fuel 

economy standard and rounding to the nearest whole gram per mile. 

(D) For 2011 model year passenger automobiles the fleet average CO2 credit 

threshold value is the value determined by dividing 8887 by the manufacturer-specific 

passenger automobile fuel economy standard for the 2011 model year determined under 

49 CFR 531.5 and rounding to the nearest whole gram per mile. 

(E) For 2011 model year light trucks the fleet average CO2 credit threshold value 

is the value determined by dividing 8887 by the manufacturer-specific light truck fuel 

economy standard for the 2011 model year determined under 49 CFR 533.5 and rounding 

to the nearest whole gram per mile. 

(vi) Credits are earned on the last day of the model year. Manufacturers must 

calculate, for a given model year, the number of credits or debits it has generated 

according to the following equation, rounded to the nearest megagram: 

CO2 Credits or Debits (Mg) = [(CO2 Credit Threshold - Manufacturer's Sales 

Weighted Fleet Average CO2 Emissions) × (Total Number of Vehicles Sold) × (Vehicle 

Lifetime Miles)] ÷ 1,000,000 

Where: 

CO2 Credit Threshold = the applicable credit threshold value for the model year 

and vehicle averaging set as determined by paragraph (a)(3)(vii) of this section; 

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Manufacturer's Sales Weighted Fleet Average CO2 Emissions = average 

calculated according to paragraph (a)(3)(vi) of this section; 

Total Number of Vehicles Sold = The number of vehicles domestically sold as 

defined in §600.511-80 of this chapter except that vehicles sold in the section 177 states 

determined in paragraph (a)(2)(i) of this section shall not be included; and 

Vehicle Lifetime Miles is 195,264 for the LDV/LDT1 averaging set and 225,865 

for the LDT2/HLDT/MDPV averaging set. 

(vii) Deficits in any averaging set for any of the 2009-2011 model years must be 

offset using credits accumulated by any averaging set in any of the 2009-2011 model 

years before determining the number of credits that may be carried forward to the 2012. 

Deficit carry forward and credit banking provisions of §86.1865-12 apply to early credits 

earned under this paragraph (a)(3), except that deficits may not be carried forward from 

any of the 2009-2011 model years into the 2012 model year, and credits earned in the 

2009 model year may not be traded to other manufacturers. 

(4) Pathway 4. Pathway 4 credits are those credits earned under Pathway 3 as 

described in paragraph (a)(3) of this section in the set of states that does not include 

California and the section 177 states determined in paragraph (a)(2)(i) of this section and 

calculated according to paragraph (a)(3) of this section. Credits may only be generated by 

vehicles sold in the set of states that does not include the section 177 states determined in 

paragraph (a)(2)(i) of this section. 

(b) Early air conditioning leakage and efficiency credits. (1) Manufacturers may 

optionally generate air conditioning refrigerant leakage credits according to the 

provisions of §86.1866-12(b) and/or air conditioning efficiency credits according to the 

provisions of §86.1866-12(c) in model years 2009 through 2011. The early credits are 

subject to five year carry forward limits based on the model year in which the credits are 

generated. Credits must be tracked by model type and model year. 

(2) Manufacturers that are required to comply with California greenhouse gas 

requirements in model years 2009-2011 (for California and section 177 states) may not 

generate early air conditioning credits for vehicles sold in California and the section 177 

states as determined in paragraph (a)(2)(i) of this section. 

(c) Early advanced technology vehicle incentive. Vehicles eligible for this 

incentive are electric vehicles, fuel cell electric vehicles, and plug-in hybrid electric 

vehicles, as those terms are defined in §86.1803-01. If a manufacturer chooses to not 

include electric vehicles, fuel cell electric vehicles, and plug-in hybrid electric vehicles in 

their fleet averages calculated under any of the early credit pathways described in 

paragraph (a) of this section, the manufacturer may generate early advanced technology 

vehicle credits pursuant to this paragraph (c). 

(1) The manufacturer shall record the sales and carbon-related exhaust emission 

values of eligible vehicles by model type and model year for model years 2009 through 

2011 and report these values to the Administrator under paragraph (e) of this section. 

(2) Manufacturers may use the 2009 through 2011 eligible vehicles in their fleet 

average calculations starting with the 2012 model year, subject to a five-year carryforward limitation. 

(i) Eligible 2009 model year vehicles may be used in the calculation of a 

manufacturer’s fleet average carbon-related exhaust emissions in the 2012 through 2014 

model years. 

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(ii) Eligible 2010 model year vehicles may be used in the calculation of a 

manufacturer’s fleet average carbon-related exhaust emissions in the 2012 through 2015 

model years. 

(iii) Eligible 2011 model year vehicles may be used in the calculation of a 

manufacturer’s fleet average carbon-related exhaust emissions in the 2012 through 2016 

model years. 

(3)(i) To use the advanced technology vehicle incentive, the manufacturer will 

apply the 2009, 2010, and/or 2011 model type sales volumes and their model type 

emission levels to the manufacturer’s fleet average calculation. 

(ii) The early advanced technology vehicle incentive must be used to offset a 

deficit in one of the 2012 through 2016 model years, as appropriate under paragraph 

(c)(2) of this section. 

(iii) The advanced technology vehicle sales and emission values may be included 

in a fleet average calculation for passenger automobiles or light trucks, but may not be 

used to generate credits in the model year in which they are included or in the averaging 

set in which they are used. Use of early advanced technology vehicle credits is limited to 

offsetting a deficit that would otherwise be generated without the use of those credits. 

Manufacturers shall report the use of such credits in their model year report for the model 

year in which the credits are used. 

(4) Manufacturers may use zero grams/mile to represent the carbon-related 

exhaust emission values for the electric operation of 2009 through 2011 model year 

electric vehicles, fuel cell electric vehicles, and plug-in hybrid electric vehicles subject to 

the limitations in §86.1866-12(a). The 2009 through 2011 model year vehicles using zero 

grams per mile shall count against the 200,000 or 300,000 caps on use of this credit 

value, whichever is applicable under §86.1866-12(a). 

(d) Early off-cycle technology credits. Manufacturers may optionally generate 

credits for the implementation of certain CO2-reducing technologies according to the 

provisions of §86.1866-12(d) in model years 2009 through 2011. The early credits are 

subject to five year carry forward limits based on the model year in which the credits are 

generated. Credits must be tracked by model type and model year. 

(e) Early credit reporting requirements. Each manufacturer shall submit a report 

to the Administrator, known as the early credits report, that reports the credits earned in 

the 2009 through 2011 model years under this section. 

(1) The report shall contain all information necessary for the calculation of the 

manufacturer’s early credits in each of the 2009 through 2011 model years. 

(2) The early credits report shall be in writing, signed by the authorized 

representative of the manufacturer and shall be submitted no later than 90 days after the 

end of the 2011 model year. 

(3) Manufacturers using one of the optional early fleet average CO2 reduction 

credit pathways described in paragraph (a) of this section shall report the following 

information separately for the appropriate averaging sets (e.g. LDV/LDT1 and 

LDT2/HLDT/MDPV averaging sets for pathways 1 and 2; LDV, LDT/2011 MDPV, 

LDV/LDT1 and LDT2/HLDT/MDPV averaging sets for Pathway 3; LDV and LDT/2011 

MDPV averaging sets for Pathway 4): 

(i) The pathway that they have selected (1, 2, 3, or 4). 

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(ii) A carbon-related exhaust emission value for each model type of the 

manufacturer’s product line calculated according to paragraph (a) of this section. 

(iii) The manufacturer’s average carbon-related exhaust emission value calculated 

according to paragraph (a) of this section for the applicable averaging set and region and 

all data required to complete this calculation. 

(iv) The credits earned for each averaging set, model year, and region, as 

applicable. 

(4) Manufacturers calculating early air conditioning leakage and/or efficiency 

credits under paragraph (b) of this section shall report the following information for each 

model year separately for passenger automobiles and light trucks and for each air 

conditioning system used to generate credits: 

(i) A description of the air conditioning system. 

(ii) The leakage credit value and all the information required to determine this 

value. 

(iii) The total credits earned for each averaging set, model year, and region, as 

applicable. 

(5) Manufacturers calculating early advanced technology vehicle credits under 

paragraph (c) of this section shall report, for each model year and separately for 

passenger automobiles and light trucks, the following information: 

(i) The number of each model type of eligible vehicle sold. 

(ii) The carbon-related exhaust emission value by model type and model year. 

(6) Manufacturers calculating early off-cycle technology credits under paragraph 

(d) of this section shall report, for each model year and separately for passenger 

automobiles and light trucks, all test results and data required for calculating such credits. 

PART 600—FUEL ECONOMY AND CARBON-RELATED EXHAUST 

EMISSIONS OF MOTOR VEHICLES 

32. The authority citation for part 600 continues to read as follows: 

Authority: 49 U.S.C. 32901—23919q, Pub. L. 109–58. 

33. The heading for Part 600 is revised as set forth above. 

Subpart A—Fuel Economy and Carbon-related Exhaust Emission Regulations for 

1977 and Later Model Year Automobiles—General Provisions 

34. The heading for subpart A is revised as set forth above. 

35. A new §600.001-12 is added to subpart A to read as follows: 

§600.001-12 General applicability. 

(a) The provisions of this subpart are applicable to 2012 and later model year 

automobiles and to the manufacturers of 2012 and later model year automobiles. 

(b) Fuel economy and related emissions data. Unless stated otherwise, references 

to fuel economy or fuel economy data in this subpart shall also be interpreted to mean the 

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related exhaust emissions of CO2, HC, and CO, and where applicable for alternative fuel 

vehicles, CH3OH, C2H5OH, C2H4O, HCHO, NMHC and CH4. References to average fuel 

economy shall be interpreted to also mean average carbon-related exhaust emissions. 

References to fuel economy data vehicles shall also be meant to refer to vehicles tested 

for carbon-related exhaust emissions for the purpose of demonstrating compliance with 

fleet average CO2 standards in §86.1818-12 of this chapter. 

36. Section 600.002-08 is amended as follows: 

a. By adding the definition for “Base tire.” 

b. By adding the definition for “Carbon-related exhaust emissions.” 

c. By adding the definition for “Electric vehicle.” 

d. By adding the definition for “Footprint.” 

e. By adding the definition for “Fuel cell.” 

f. By adding the definition for “Fuel cell electric vehicle.” 

g. By adding the definition for “Hybrid electric vehicle.” 

h. By revising the definition for “Non-passenger automobile.” 

i. By revising the definition for “Passenger automobile.” 

j. By adding the definition for “Plug-in hybrid electric vehicle.” 

k. By adding the definition for “Track width.” 

l. By adding the definition for “Wheelbase.” 

§600.002-08 Definitions. 

* * * * * 

Base tire means the tire specified as standard equipment by the manufacturer. 

* * * * * 

Carbon-related exhaust emissions (CREE) means the summation of the carboncontaining constituents of the exhaust emissions, with each constituent adjusted by a 

coefficient representing the carbon weight fraction of each constituent relative to the CO2

carbon weight fractoin, 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) of this 

chapter.

* * * * * 

Electric vehicle has the meaning given in §86.1803-01 of this chapter. 

* * * * * 

Footprint has the meaning given in §86.1803-01 of this chapter. 

* * * * * 

Fuel cell has the meaning given in §86.1803-01 of this chapter. 

Fuel cell electric vehicle has the meaning given in §86.1803-01 of this chapter. 

* * * * * 

Hybrid electric vehicle (HEV) has the meaning given in §86.1803-01 of this 

chapter. 

* * * * * 

Non-passenger automobile has the meaning given by the Department of 

Transportation at 49 CFR 523.5. This term is synonymous with “light truck.” 

* * * * * 

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Passenger automobile has the meaning given by the Department of 

Transportation at 49 CFR 523.4. 

* * * * * 

Plug-in hybrid electric vehicle (PHEV) has the meaning given in §86.1803-01 of 

this chapter. 

* * * * * 

Track width has the meaning given in §86.1803-01 of this chapter. 

* * * * * 

Wheelbase has the meaning given in §86.1803-01 of this chapter. 

* * * * * 

37. Section 600.006-08 is amended as follows: 

a. By revising the section heading. 

b. By revising paragraph (b)(2)(ii). 

c. By revising paragraph (b)(2)(iv). 

d. By revising paragraph (c) introductory text. 

e. By adding paragraph (c)(5). 

f. By revising paragraph (e). 

g. By revising paragraph (g)(3). 

§600.006-08 Data and information requirements for fuel economy data vehicles. 

* * * * * 

(b) * * * 

(2) * * * 

(ii) In the case of electric vehicles, plug-in hybrid electric vehicles, and hybrid 

electric vehicles, a description of all maintenance to electric motor, motor controller, 

battery configuration, or other components performed within 2,000 miles prior to fuel 

economy testing. 

* * * * * 

(iv) In the case of electric vehicles, plug-in hybrid electric vehicles, and hybrid 

electric vehicles, a copy of calibrations for the electric motor, motor controller, battery 

configuration, or other components on the test vehicle as well as the design tolerances. 

 * * * * * 

(c) The manufacturer shall submit the following fuel economy data: 

* * * * * 

(5) Starting with the 2012 model year, the data submitted according to paragraphs 

(c)(1) through (c)(4) of this section shall include total HC, CO, CO2, and, where 

applicable for alternative fuel vehicles, CH3OH, C2H5OH, C2H4O, HCHO, NMHC and 

CH4. Manufacturers incorporating N2O and CH4 emissions in their fleet average carbonrelated exhaust emissions as allowed under §86.1818(f)(2) of this chapter shall also 

submit N2O and CH4 emission data where applicable. The fuel economy and CO2

emission test results shall be adjusted in accordance with paragraph (g) of this section. 

* * * * * 

(e) In lieu of submitting actual data from a test vehicle, a manufacturer may 

provide fuel economy values derived from a previously tested vehicle, where the fuel 

economy and carbon-related exhaust emissions are expected to be equivalent (or less 

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fuel-efficient and with higher carbon-related exhaust emissions). Additionally, in lieu of 

submitting actual data from a test vehicle, a manufacturer may provide fuel economy and 

carbon-related exhaust emission values derived from an analytical expression, e.g., 

regression analysis. In order for fuel economy values derived from analytical methods to 

be accepted, the expression (form and coefficients) must have been approved by the 

Administrator. 

* * * * * 

(g) * * * 

(3)(i) The manufacturer shall adjust all fuel economy test data generated by 

vehicles with engine-drive system combinations with more than 6,200 miles by using the 

following equation: 

FE4,000mi= FET[0.979 + 5.25×10−6

(mi)]−1

Where: 

FE4,000mi= Fuel economy data adjusted to 4,000-mile test point rounded to the 

nearest 0.1 mpg. 

FET= Tested fuel economy value rounded to the nearest 0.1 mpg. 

mi = System miles accumulated at the start of the test rounded to the nearest 

whole mile. 

(ii)(A) The manufacturer shall adjust all carbon-related exhaust emission (CREE) 

test data generated by vehicles with engine-drive system combinations with more than 

6,200 miles by using the following equation: 

CREE4,000mi= CREET[0.979 + 5.25×10−6

(mi)] 

Where: 

CREE4,000mi= CREE emission data adjusted to 4,000-mile test point. 

CREET= Tested emissions value of CREE in grams per mile. 

mi = System miles accumulated at the start of the test rounded to the nearest 

whole mile. 

(B) Emissions test values and results used and determined in the calculations in 

paragraph (g)(3)(ii) of this section shall be rounded in accordance with §86.1837-01 of 

this chapter as applicable. CREE values shall be rounded to the nearest gram per mile. 

* * * * * 

38. Section 600.007-08 is amended as follows: 

a. By revising paragraph (b)(4) through (6). 

b. By revising paragraph (c). 

c. By revising paragraph (f) introductory text. 

§600.007-08 Vehicle acceptability. 

* * * * * 

(b) * * * 

(4) Each fuel economy data vehicle must meet the same exhaust emission 

standards as certification vehicles of the respective engine-system combination during the 

test in which the city fuel economy test results are generated. This may be demonstrated 

using one of the following methods: 

(i) The deterioration factors established for the respective engine-system 

combination per §86.1841–01 of this chapter as applicable will be used; or 

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(ii) The fuel economy data vehicle will be equipped with aged emission control 

components according to the provisions of §86.1823-08 of this chapter. 

(5) The calibration information submitted under §600.006(b) must be 

representative of the vehicle configuration for which the fuel economy and carbon-related 

exhaust emissions data were submitted. 

(6) Any vehicle tested for fuel economy or carbon-related exhaust emissions 

purposes must be representative of a vehicle which the manufacturer intends to produce 

under the provisions of a certificate of conformity. 

* * * * * 

(c) If, based on review of the information submitted under §600.006(b), the 

Administrator determines that a fuel economy data vehicle meets the requirements of this 

section, the fuel economy data vehicle will be judged to be acceptable and fuel economy 

and carbon-related exhaust emissions data from that fuel economy data vehicle will be 

reviewed pursuant to §600.008. 

* * * * * 

(f) All vehicles used to generate fuel economy and carbon-related exhaust 

emissions data, and for which emission standards apply, must be covered by a certificate 

of conformity under part 86 of this chapter before: 

* * * * * 

39. Section 600.008-08 is amended by revising the section heading and paragraph (a)(1) 

to read as follows: 

§600.008-08 Review of fuel economy and carbon-related exhaust emission data, 

testing by the Administrator. 

(a) Testing by the Administrator. (1)(i) The Administrator may require that any 

one or more of the test vehicles be submitted to the Agency, at such place or places as the 

Agency may designate, for the purposes of conducting fuel economy tests. The 

Administrator may specify that such testing be conducted at the manufacturer's facility, in 

which case instrumentation and equipment specified by the Administrator shall be made 

available by the manufacturer for test operations. The tests to be performed may comprise 

the FTP, highway fuel economy test, US06, SC03, or Cold temperature FTP or any 

combination of those tests. Any testing conducted at a manufacturer's facility pursuant to 

this paragraph shall be scheduled by the manufacturer as promptly as possible. 

(ii) Starting with the 2012 model year, evaluations, testing, and test data described 

in this section pertaining to fuel economy shall also be performed for carbon-related 

exhaust emissions, except that carbon-related exhaust emissions shall be arithmetically 

averaged instead of harmonically averaged, and in cases where the manufacturer selects 

the lowest of several fuel economy results to represent the vehicle, the manufacturer shall 

select the carbon-related exhaust emissions value from the test results associated with the 

lowest fuel economy results to represent the vehicle. 

* * * * * 

40. Section 600.010-08 is amended by revising paragraph (d) to read as follows: 

§600.010-08 Vehicle test requirements and minimum data requirements. 

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* * * * * 

(d) Minimum data requirements for the manufacturer's average fuel economy and 

average carbon-related exhaust emissions For the purpose of calculating the 

manufacturer's average fuel economy and average carbon-related exhaust emissions 

under §600.510, the manufacturer shall submit FTP (city) and HFET (highway) test data 

representing at least 90 percent of the manufacturer's actual model year production, by 

configuration, for each category identified for calculation under §600.510–08(a). 

Subpart B—FUEL ECONOMY AND CARBON-RELATED EXHAUST 

EMISSION REGULATIONS FOR 1978 AND LATER MODEL YEAR 

AUTOMOBILES--TEST PROCEDURES 

41. The heading for subpart B is revised as set forth above.

42. A new §600.101-12 is added to subpart B to read as follows: 

§600.101-12 General applicability. 

(a) The provisions of this subpart are applicable to 2012 and later model year 

automobiles and to the manufacturers of 2012 and later model year automobiles. 

(b) Fuel economy and carbon-related emissions data. Unless stated otherwise, 

references to fuel economy or fuel economy data in this subpart shall also be interpreted 

to mean the related exhaust emissions of CO2, HC, and CO, and where applicable for 

alternative fuel vehicles, CH3OH, C2H5OH, C2H4O, HCHO, NMHC and CH4. References 

to average fuel economy shall be interpreted to also mean average carbon-related exhaust 

emissions. 

43. Section 600.111-08 is amended by revising paragraph (f) to read as follows:

§600.111-08 Test procedures.

* * * * *

(f) Special Test Procedures. The Administrator may prescribe test procedures, 

other than those set forth in this Subpart B, for any vehicle which is not susceptible to 

satisfactory testing and/or testing results by the procedures set forth in this part. For 

example, special test procedures may be used for advanced technology vehicles, 

including, but not limited to battery electric vehicles, fuel cell vehicles, plug-in hybrid 

electric vehicles and vehicles equipped with hydrogen internal combustion engines. 

Additionally, the Administrator may conduct fuel economy and carbon-related exhaust 

emission testing using the special test procedures approved for a specific vehicle.

44. A new §600.113-12 is added to subpart B to read as follows:

 

§600.113-12 Fuel economy and carbon-related exhaust emission calculations for 

FTP, HFET, US06, SC03 and cold temperature FTP tests. 

The Administrator will use the calculation procedure set forth in this paragraph 

for all official EPA testing of vehicles fueled with gasoline, diesel, alcohol-based or 

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42. Section 600.011-93 is amended by 

revising paragraph the table in paragraph 

(b)(3) by adding two new rows to the 

bottom of the table to read as follows: ¶

¶

§ 600.011-93 Reference materials.¶

* * * * *¶

Document No. and name

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b. By

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d. By revising paragraph (c)(1).¶

e. By revising paragraph (d)(1) and (2).¶

f. By revising paragraph (e).¶

g. By revising paragraphs (f)(1)(i) 

through (iii).¶

h. By revising paragraphs (f)(2)(i) 

through (iii).¶

i. By revising paragraphs (f)(3)(i) 

through (iii).¶

g. By adding paragraph (f)(4).¶

h. By revising paragraphs (g) through (l).¶

i. By adding paragraphs (m) and (n). ¶

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§ 

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511 

natural gas fuel. The calculations of the weighted fuel economy and carbon-related 

exhaust emission values require input of the weighted grams/mile values for total 

hydrocarbons (HC), carbon monoxide (CO), and carbon dioxide (CO2); and, additionally 

for methanol-fueled automobiles, methanol (CH3OH) and formaldehyde (HCHO); and, 

additionally for ethanol-fueled automobiles, methanol (CH3OH), ethanol (C2H5OH), 

acetaldehyde (C2H4O), and formaldehyde (HCHO); and additionally for natural gasfueled vehicles, non-methane hydrocarbons (NMHC) and methane (CH4). For 

manufacturers selecting the fleet averaging option for N2O and CH4 as allowed under 

§86.1818-12(f)(2) of this chapter the calculations of the carbon-related exhaust emissions 

require the input of grams/mile values for nitrous oxide (N2O) and methane (CH4).

Emissions shall be determined for the FTP, HFET, US06, SC03 and cold temperature 

FTP tests. Additionally, the specific gravity, carbon weight fraction and net heating value 

of the test fuel must be determined. The FTP, HFET, US06, SC03 and cold temperature 

FTP fuel economy and carbon-related exhaust emission values shall be calculated as 

specified in this section. An example fuel economy calculation appears in Appendix II of 

this part. 

(a) Calculate the FTP fuel economy.

(1) Calculate the weighted grams/mile values for the FTP test for CO2, HC, and 

CO, and where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O and CH4 as 

specified in §86.144(b) of this chapter. Measure and record the test fuel's properties as 

specified in paragraph (f) of this section. 

(2) Calculate separately the grams/mile values for the cold transient phase, 

stabilized phase and hot transient phase of the FTP test. For vehicles with more than one 

source of propulsion energy, one of which is a rechargeable energy storage system, or 

vehicles with special features that the Administrator determines may have a rechargeable 

energy source, whose charge can vary during the test, calculate separately the grams/mile 

values for the cold transient phase, stabilized phase, hot transient phase and hot stabilized 

phase of the FTP test.

(b) Calculate the HFET fuel economy.

(1) Calculate the mass values for the highway fuel economy test for HC, CO and 

CO2, and where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O and CH4 as 

specified in §86.144(b) of this chapter. Measure and record the test fuel's properties as 

specified in paragraph (f) of this section. 

(2) Calculate the grams/mile values for the highway fuel economy test for HC, 

CO and CO2, and where applicable CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O and 

CH4 by dividing the mass values obtained in paragraph (b)(1) of this section, by the 

actual distance traveled, measured in miles, as specified in §86.135(h) of this chapter. 

(c) Calculate the cold temperature FTP fuel economy.

(1) Calculate the weighted grams/mile values for the cold temperature FTP test 

for HC, CO and CO2, and where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, 

N2O and CH4 as specified in §86.144(b) of this chapter. For 2008 through 2010 dieselfueled vehicles, HC measurement is optional. 

(2) Calculate separately the grams/mile values for the cold transient phase, 

stabilized phase and hot transient phase of the cold temperature FTP test in §86.244 of 

this chapter.

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512 

(3) Measure and record the test fuel's properties as specified in paragraph (f) of 

this section.

(d) Calculate the US06 fuel economy.

(1) Calculate the total grams/mile values for the US06 test for HC, CO and CO2, 

and where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O and CH4 as 

specified in §86.144(b) of this chapter. 

(2) Calculate separately the grams/mile values for HC, CO and CO2, and where 

applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O and CH4, for both the US06 

City phase and the US06 Highway phase of the US06 test as specified in §86.164 of this 

chapter. In lieu of directly measuring the emissions of the separate city and highway 

phases of the US06 test according to the provisions of §86.159 of this chapter, the 

manufacturer may, with the advance approval of the Administrator and using good 

engineering judgment, optionally analytically determine the grams/mile values for the 

city and highway phases of the US06 test. To analytically determine US06 City and 

US06 Highway phase emission results, the manufacturer shall multiply the US06 total 

grams/mile values determined in paragraph (d)(1) of this section by the estimated 

proportion of fuel use for the city and highway phases relative to the total US06 fuel use. 

The manufacturer may estimate the proportion of fuel use for the US06 City and US06 

Highway phases by using modal CO2, HC, and CO emissions data, or by using 

appropriate OBD data (e.g., fuel flow rate in grams of fuel per second), or another 

method approved by the Administrator. 

(3) Measure and record the test fuel's properties as specified in paragraph (f) of 

this section.

(e) Calculate the SC03 fuel economy. 

(1) Calculate the grams/mile values for the SC03 test for HC, CO and CO2, and 

where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O and CH4 as specified 

in §86.144(b) of this chapter. 

(2) Measure and record the test fuel's properties as specified in paragraph (f) of 

this section. 

(f) Fuel property determination and analysis.

(1) Gasoline test fuel properties shall be determined by analysis of a fuel sample 

taken from the fuel supply. A sample shall be taken after each addition of fresh fuel to the 

fuel supply. Additionally, the fuel shall be resampled once a month to account for any 

fuel property changes during storage. Less frequent resampling may be permitted if EPA 

concludes, on the basis of manufacturer-supplied data, that the properties of test fuel in 

the manufacturer's storage facility will remain stable for a period longer than one month. 

The fuel samples shall be analyzed to determine the following fuel properties:

(i) Specific gravity measured using ASTM D 1298–85 (Reapproved 1990) 

“Standard Practice for Density, Relative Density (Specific Gravity), or API Gravity of 

Crude Petroleum and Liquid Petroleum Products by Hydrometer Method” (incorporated 

by reference at §600.011-93). 

(ii) Carbon weight fraction measured using ASTM D 3343–90 “Standard Test 

Method for Estimation of Hydrogen Content of Aviation Fuels” (incorporated by 

reference at §600.011-93). 

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513 

(iii) Net heating value (Btu/lb) determined using ASTM D 3338–92 “Standard 

Test Method for Estimation of Net Heat of Combustion of Aviation Fuels” (incorporated 

by reference at §600.011-93). 

(2) Methanol test fuel shall be analyzed to determine the following fuel 

properties: 

(i) Specific gravity using either: 

(A) ASTM D 1298–85 (Reapproved 1990) “Standard Practice for Density, 

Relative Density (Specific Gravity), or API Gravity of Crude Petroleum and Liquid 

Petroleum Products by Hydrometer Method” (incorporated by reference at §600.011-93) 

for the blend, or: 

(B) ASTM D 1298–85 (Reapproved 1990) “Standard Practice for Density, 

Relative Density (Specific Gravity), or API Gravity of Crude Petroleum and Liquid 

Petroleum Products by Hydrometer Method” (incorporated by reference at §600.011-93) 

for the gasoline fuel component and also for the methanol fuel component and combining 

as follows. 

SG = SGg × volume fraction gasoline + SGm × volume fraction methanol. 

(ii)(A) Carbon weight fraction using the following equation: 

CWF = CWFg × MFg+ 0.375 × MFm 

Where: 

CWFg= Carbon weight fraction of gasoline portion of blend measured using 

ASTM D 3343–90 “Standard Test Method for Estimation of Hydrogen Content of 

Aviation Fuels” (incorporated by reference at §600.011-93). 

MFg=Mass fraction gasoline=(G × SGg)/(G × SGg + M × SGm) 

MFm=Mass fraction methanol=(M × SGm)/(G × SGg + M × SGm) 

Where: 

G=Volume fraction gasoline. 

M=Volume fraction methanol. 

SGg=Specific gravity of gasoline as measured using ASTM D 1298–85 

(Reapproved 1990) “Standard Practice for Density, Relative Density (Specific Gravity), 

or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer 

Method” (incorporated by reference at §600.011-93). 

SGm=Specific gravity of methanol as measured using ASTM D 1298–85 

(Reapproved 1990) “Standard Practice for Density, Relative Density (Specific Gravity), 

or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer 

Method” (incorporated by reference at §600.011-93). 

(B) Upon the approval of the Administrator, other procedures to measure the 

carbon weight fraction of the fuel blend may be used if the manufacturer can show that 

the procedures are superior to or equally as accurate as those specified in this paragraph 

(f)(2)(ii). 

(3) Natural gas test fuel shall be analyzed to determine the following fuel 

properties:

(i) Fuel composition measured using ASTM D 1945–91 “Standard Test Method 

for Analysis of Natural Gas By Gas Chromatography” (incorporated by reference at 

§600.011-93). 

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(BTU/lb) measured using ASTM D 240–

92 “Standard Test Method for Heat of 

Combustion of Liquid Hydrocarbon Fuels 

by Bomb Calorimeter” (incorporated by 

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(ii) Specific gravity measured as based on fuel composition per ASTM D 1945–

91 “Standard Test Method for Analysis of Natural Gas by Gas Chromatography” 

(incorporated by reference at §600.011-93). 

(iii) Carbon weight fraction, based on the carbon contained only in the 

hydrocarbon constituents of the fuel. This equals the weight of carbon in the hydrocarbon 

constituents divided by the total weight of fuel. 

(iv) Carbon weight fraction of the fuel, which equals the total weight of carbon in 

the fuel (i.e , includes carbon contained in hydrocarbons and in CO2) divided by the total 

weight of fuel. 

(4) Ethanol test fuel shall be analyzed to determine the following fuel properties: 

(i) Specific gravity using either: 

(A) ASTM D 1298–85 (Reapproved 1990) “Standard Practice for Density, 

Relative Density (Specific Gravity), or API Gravity of Crude Petroleum and Liquid 

Petroleum Products by Hydrometer Method” (incorporated by reference at §600.011-93) 

for the blend. or: 

(B) ASTM D 1298–85 (Reapproved 1990) “Standard Practice for Density, 

Relative Density (Specific Gravity), or API Gravity of Crude Petroleum and Liquid 

Petroleum Products by Hydrometer Method” (incorporated by reference at §600.011-93) 

for the gasoline fuel component and also for the methanol fuel component and combining 

as follows. 

SG = SGg × volume fraction gasoline + SGm × volume fraction ethanol. 

(ii)(A) Carbon weight fraction using the following equation: 

CWF = CWFg × MFg+ 0.521 × MFe 

Where: 

CWFg= Carbon weight fraction of gasoline portion of blend measured using 

ASTM D 3343–90 “Standard Test Method for Estimation of Hydrogen Content of 

Aviation Fuels” (incorporated by reference at §600.011-93). 

MFg=Mass fraction gasoline=(G × SGg)/(G × SGg+ E × SGm) 

MFe=Mass fraction ethanol=(E × SGm)/(G × SGg+ E × SGm) 

Where: 

G=Volume fraction gasoline. 

E=Volume fraction ethanol. 

SGg=Specific gravity of gasoline as measured using ASTM D 1298–85 

(Reapproved 1990) “Standard Practice for Density, Relative Density (Specific Gravity), 

or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer 

Method” (incorporated by reference at §600.011-93). 

SGm=Specific gravity of ethanol as measured using ASTM D 1298–85 

(Reapproved 1990) “Standard Practice for Density, Relative Density (Specific Gravity), 

or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer 

Method” (incorporated by reference at §600.011-93). 

(B) Upon the approval of the Administrator, other procedures to measure the 

carbon weight fraction of the fuel blend may be used if the manufacturer can show that 

the procedures are superior to or equally as accurate as those specified in this paragraph 

(f)(2)(ii). 

(g) Calculate separate FTP, highway, US06, SC03 and Cold temperature FTP fuel 

economy and carbon-related exhaust emissions from the grams/mile values for total HC, 

Deleted: 

Deleted: 375

Deleted: 

Deleted: m

Deleted: m

Deleted: 

Deleted: (iii) Net heating value 

(BTU/lb) measured using ASTM D 240–

92 “Standard Test Method for Heat of 

Combustion of Liquid Hydrocarbon Fuels 

by Bomb Calorimeter” (incorporated by 

reference at §600.011-93). ¶

* * * * *¶
515 

CO, CO2 and, where applicable, CH3OH, C2H5OH, C2H4O, HCHO, NMHC, N2O, 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) Emission values for fuel economy calculations. The emission values (obtained 

per paragraph (a) through (e) of this section, as applicable) used in the calculations of fuel 

economy in this section shall be rounded in accordance with §§86.094–26(a)(6)(iii) or 

86.1837–01 of this chapter as applicable. The CO2 values (obtained per this section, as 

applicable) used in each calculation of fuel economy in this section shall be rounded to 

the nearest gram/mile. 

(2) Emission values for carbon-related exhaust emission calculations. 

(i) 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 §86.1823-08 of this chapter, then these test values shall be used in the 

calculations of carbon-related exhaust emissions in this section. 

(ii) 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 §86.1823-08 of this chapter, then these test values shall be 

adjusted by the appropriate deterioration factor determined according to §86.1823-08 of 

this chapter before being used in the calculations of carbon-related exhaust emissions in 

this section. For vehicles within a test group, the appropriate NMOG deterioration factor 

may be used in lieu of the deterioration factors for CH3OH, C2H5OH, and/or C2H4O 

emissions. 

(iii) The emission values determined in paragraph (g)(2)(A) or (B) of this section 

shall be rounded in accordance with §86.094–26(a)(6)(iii) or §86.1837–01 of this chapter 

as applicable. The CO2 values (obtained per this section, as applicable) used in each 

calculation of carbon-related exhaust emissions in this section shall be rounded to the 

nearest gram/mile. 

(iv) For manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter, N2O and CH4 emission values 

for use in the calculation of carbon-related exhaust emissions in this section shall be the 

values determined according to paragraph (g)(2)(iv)(A), (B), or (C) of this section. 

(A) The FTP and HFET test values as determined for the emission data vehicle 

according to the provisions of §86.1835-01 of this chapter. These values shall apply to all 

vehicles tested under this section that are included in the test group represented by the 

emission data vehicle and shall be adjusted by the appropriate deterioration factor 

determined according to §86.1823-08 of this chapter before being used in the calculations 

of carbon-related exhaust emissions in this section. 

(B) The FTP and HFET test values as determined according to testing conducted 

under the provisions of this subpart. These values shall be adjusted by the appropriate 

deterioration factor determined according to §86.1823-08 of this chapter before being 

used in the calculations of carbon-related exhaust emissions in this section.

(C) For the 2012 through 2014 model years only, manufacturers may use an 

assigned value of 0.010 g/mi for N2O FTP and HFET test values. This value is not 

required to be adjusted by a deterioration factor. 

(3) The specific gravity and the carbon weight fraction (obtained per paragraph (f) 

of this section) shall be recorded using three places to the right of the decimal point. The 

Deleted: §

Deleted: selecting

Deleted: 40 CFR 

Deleted: , and for the 2012 through 

2014 model years only, manufacturers 

may use one

Deleted: the two options in 

Deleted: paragraph (g)(2)(D) for 

determining

Deleted: .

Deleted: manufacturer may use 

Deleted: 01

Deleted: 

Deleted: (B) The manufacturer may use 
516 

net heating value (obtained per paragraph (f) of this section) shall be recorded to the 

nearest whole Btu/lb. 

(4) For the purpose of determining the applicable in-use emission standard under 

§86.1818-12(d) of this chapter, the combined city/highway carbon-related exhaust 

emission value for a vehicle subconfiguration is calculated by arithmetically averaging 

the FTP-based city and HFET-based highway carbon-related exhaust emission values, as 

determined in §600.113(a) and (b) of this section for the subconfiguration, weighted 0.55 

and 0.45 respectively, and rounded to the nearest tenth of a gram per mile. 

(h)(1) For gasoline-fueled automobiles tested on test fuel specified in §86.113–

04(a) of this chapter, the fuel economy in miles per gallon is to be calculated using the 

following equation and rounded to the nearest 0.1 miles per gallon: 

mpg = (5174 × 104

 × CWF × SG)/[((CWF × HC) + (0.429 × CO) + (0.273 × 

CO2)) × ((0.6 × SG × NHV) + 5471)] 

Where: 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CWF = Carbon weight fraction of test fuel as obtained in paragraph (g) of this 

section. 

NHV = Net heating value by mass of test fuel as obtained in paragraph (g) of this 

section. 

SG = Specific gravity of test fuel as obtained in paragraph (g) of this section. 

(2)(A) For 2012 and later model year gasoline-fueled automobiles tested on test 

fuel specified in §86.113–04(a) of this chapter, the carbon-related exhaust emissions in 

grams per mile is to be calculated using the following equation and rounded to the nearest 

1 gram per mile: 

CREE = CWF/0.273×HC + 1.571×CO + CO2

Where: 

CREE means the carbon-related exhaust emissions as defined in §600.002-08. 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CWF = Carbon weight fraction of test fuel as obtained in paragraph (g) of this 

section. 

(B) For manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter, the carbon-related exhaust 

emissions in grams per mile for 2012 and later model year gasoline-fueled automobiles 

tested on test fuel specified in §86.113–04(a) of this chapter is to be calculated using the 

following equation and rounded to the nearest 1 gram per mile: 

CREE = [(CWF/0.273)×NMHC] + (1.571×CO) + CO2 + (298×N2O) + (25×CH4)

Where: 

CREE means the carbon-related exhaust emissions as defined in §600.002-08. 

NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

N2O= Grams/mile N2O as obtained in paragraph (g) of this section. 

Deleted: )

Deleted: )

Deleted: )

Deleted: *

Deleted: *

Deleted: 

Deleted: selecting

Deleted: 40 CFR 

Deleted: )

Deleted: CWFNMHC

Deleted: + 

Deleted: + 

Deleted: 
517 

CH4 = Grams/mile CH4 as obtained in paragraph (g) of this section. 

CWF = Carbon weight fraction of test fuel as obtained in paragraph (g) of this 

section. 

(i)(1) For diesel-fueled automobiles, calculate the fuel economy in miles per 

gallon of diesel fuel by dividing 2778 by the sum of three terms and rounding the 

quotient to the nearest 0.1 mile per gallon: 

(i)(A) 0.866 multiplied by HC (in grams/miles as obtained in paragraph (g) of this 

section), or 

(B) Zero, in the case of cold FTP diesel tests for which HC was not collected, as 

permitted in §600.113–08(c); 

(ii) 0.429 multiplied by CO (in grams/mile as obtained in paragraph (g) of this 

section); and 

(iii) 0.273 multiplied by CO2 (in grams/mile as obtained in paragraph (g) of this 

section). 

(2)(A) For 2012 and later model year diesel-fueled automobiles, the carbonrelated exhaust emissions in grams per mile is to be calculated using the following 

equation and rounded to the nearest 1 gram per mile: 

CREE = 0.866/0.273×HC + 1.571×CO + CO2

Where: 

CREE means the carbon-related exhaust emissions as defined in §600.002-08. 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2= Grams/mile CO2 as obtained in paragraph (g) of this section. 

(B) For manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter, the carbon-related exhaust 

emissions in grams per mile for 2012 and later model year diesel-fueled automobiles is to 

be calculated using the following equation and rounded to the nearest 1 gram per mile: 

CREE = (3.172×NMHC) + (1.571×CO) + CO2 + (298×N2O) + (25×CH4)

Where: 

CREE means the carbon-related exhaust emissions as defined in §600.002-08. 

NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

N2O= Grams/mile N2O as obtained in paragraph (g) of this section. 

CH4 = Grams/mile CH4 as obtained in paragraph (g) of this section. 

(j)(1) For methanol-fueled automobiles and automobiles designed to operate on 

mixtures of gasoline and methanol, the fuel economy in miles per gallon is to be 

calculated using the following equation: 

mpg = (CWF × SG × 3781.8)/((CWFexHC× HC) + (0.429 × CO) + (0.273 × CO2) 

+ (0.375 × CH3OH) + (0.400 × HCHO)) 

Where: 

CWF = Carbon weight fraction of the fuel as determined in paragraph (f)(2)(ii) of 

this section. 

SG = Specific gravity of the fuel as determined in paragraph (f)(2)(i) of this 

section. 

Deleted: CWFNMHC = carbon

Deleted: the non-methane HC 

constituents in the

Deleted: determined from the speciated 

fuel composition per 

Deleted: f)(3

Deleted: *

Deleted: *

Deleted: 

Deleted: selecting

Deleted: 40 CFR 

Deleted: )

Deleted: 0.866

Deleted: + 

Deleted: + 

Deleted: + 

Deleted: 
518 

CWFexHC = Carbon weight fraction of exhaust hydrocarbons = CWFg as 

determined in paragraph (f)(2)(ii) of this section (for M100 fuel, CWFexHC= 0.866). 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CH3OH = Grams/mile CH3OH (methanol) as obtained in paragraph (d) of this 

section. 

HCHO = Grams/mile HCHO (formaldehyde) as obtained in paragraph (g) of this 

section. 

(2)(A) For 2012 and later model year methanol-fueled automobiles and 

automobiles designed to operate on mixtures of gasoline and methanol, the carbon-related 

exhaust emissions in grams per mile is to be calculated using the following equation and 

rounded to the nearest 1 gram per mile: 

CREE = (CWFexHC/0.273×HC) + (1.571×CO) + (1.374×CH3OH) + 

(1.466×HCHO) + CO2

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CWFexHC = Carbon weight fraction of exhaust hydrocarbons = CWFg as 

determined in (f)(2)(ii) of this section (for M100 fuel, CWFexHC= 0.866). 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CH3OH = Grams/mile CH3OH (methanol) as obtained in paragraph (d) of this 

section. 

HCHO = Grams/mile HCHO (formaldehyde) as obtained in paragraph (g) of this 

section. 

(B) For manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter, the carbon-related exhaust 

emissions in grams per mile for 2012 and later model year methanol-fueled automobiles 

and automobiles designed to operate on mixtures of gasoline and methanol is to be 

calculated using the following equation and rounded to the nearest 1 gram per mile: 

CREE = [(CWFexHC/0.273)×NMHC] + (1.571×CO) + (1.374×CH3OH) + 

(1.466×HCHO) + CO2 + (298×N2O) + (25×CH4)

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CWFexHC = Carbon weight fraction of exhaust hydrocarbons = CWFg as 

determined in (f)(2)(ii) of this section (for M100 fuel, CWFexHC = 0.866). 

NMHC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CH3OH = Grams/mile CH3OH (methanol) as obtained in paragraph (d) of this 

section. 

HCHO = Grams/mile HCHO (formaldehyde) as obtained in paragraph (g) of this 

section. 

Deleted: CO2

Deleted: × 

Deleted: × 

Deleted: × 

Deleted: × 

Deleted: 

Deleted: CO2

Deleted: selecting

Deleted: 40 CFR 

Deleted: )

Deleted: × HC)

Deleted: × 

Deleted: × 

Deleted: × 

Deleted: + 

Deleted: 

Deleted: CO2
519 

N2O = Grams/mile N2O as obtained in paragraph (g) of this section. 

CH4 = Grams/mile CH4 as obtained in paragraph (g) of this section. 

(k)(1) For automobiles fueled with natural gas, the fuel economy in miles per 

gallon of natural gas is to be calculated using the following equation: 

( )( )( ) ( ) ( ) NMHC NG

NGHC NG

e CH CWF NMHC CO COCO

CWF D

mpg

4 2 2

/

749.0 429.0 273.0

5.121

+× −×+×+×

× × =

Where: 

mpge=miles per equivalent gallon of natural gas. 

CWFHC/NG=carbon weight fraction based on the hydrocarbon constituents in the 

natural gas fuel as obtained in paragraph (g) of this section. 

DNG=density of the natural gas fuel [grams/ft3

 at 68 °F (20 °C) and 760 mm Hg 

(101.3 kPa)] pressure as obtained in paragraph (g) of this section. 

CH4, NMHC, CO, and CO2 = weighted mass exhaust emissions [grams/mile] for 

methane, non-methane HC, carbon monoxide, and carbon dioxide as calculated in 

§600.113. 

CWFNMHC = carbon weight fraction of the non-methane HC constituents in the 

fuel as determined from the speciated fuel composition per paragraph (f)(3) of this 

section. 

CO2NG = grams of carbon dioxide in the natural gas fuel consumed per mile of 

travel. 

CO2NG = FCNG × DNG × WFCO2

Where: 

( )( ) ( ) ( )

NG NG

4 NMHC 2

NG DCWF

CH0.749 CWF NMHC CO0.429 CO0.273 FC ×

+× × + × + × =

= mileper consumed fuel gas natural offeet cubic

Where: 

CWFNG = the carbon weight fraction of the natural gas fuel as calculated in 

paragraph (f) of this section. 

WFCO2 = weight fraction carbon dioxide of the natural gas fuel calculated using 

the mole fractions and molecular weights of the natural gas fuel constituents per ASTM 

D 1945–91 “Standard Test Method for Analysis of Natural Gas by Gas Chromatography” 

(incorporated by reference at §600.011-93). 

(2)(A) For automobiles fueled with natural gas, the carbon-related exhaust 

emissions in grams per mile is to be calculated for 2012 and later model year vehicles 

using the following equation and rounded to the nearest 1 gram per mile: 

CREE = 2.743×CH4 + CWFNMHC/0.273×NMHC + 1.571×CO + CO2

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CH4 = Grams/mile CH4 as obtained in paragraph (g) of this section. 

NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

Deleted: ( e CH mpg

4 749.0 × =

Deleted: ( ) 4

NG

CH0.749 FC × =

Deleted: 

Deleted: 10.916 × 

Deleted: × 

Deleted: × 

Deleted: 
520 

CWFNMHC = carbon weight fraction of the non-methane HC constituents in the 

fuel as determined from the speciated fuel composition per paragraph (f)(3) of this 

section. 

(B) For manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter, the carbon-related exhaust 

emissions in grams per mile for 2012 and later model year automobiles fueled with 

natural gas is to be calculated using the following equation and rounded to the nearest 1 

gram per mile: 

CREE = (25×CH4)+ [(CWFNMHC/0.273)×NMHC] + (1.571×CO) + CO2 + 

(298×N2O)

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CH4 = Grams/mile CH4 as obtained in paragraph (g) of this section. 

NMHC = Grams/mile NMHC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CWFNMHC = carbon weight fraction of the non-methane HC constituents in the 

fuel as determined from the speciated fuel composition per paragraph (f)(3) of this 

section. 

N2O = Grams/mile N2O as obtained in paragraph (g) of this section. 

 (l)(1) For ethanol-fueled automobiles and automobiles designed to operate on 

mixtures of gasoline and ethanol, the fuel economy in miles per gallon is to be calculated 

using the following equation: 

mpg = (CWF × SG × 3781.8)/((CWFexHC× HC) + (0.429 × CO) + (0.273 × CO2) 

+ (0.375 × CH3OH) + (0.400 × HCHO) + (0.521 × C2H5OH) + (0.545 × C2H4O)) 

Where: 

CWF = Carbon weight fraction of the fuel as determined in paragraph (f)(4) of 

this section. 

SG = Specific gravity of the fuel as determined in paragraph (f)(4) of this section. 

CWFexHC= Carbon weight fraction of exhaust hydrocarbons = CWFg as 

determined in (f)(4) of this section. 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CH3OH = Grams/mile CH3OH (methanol) as obtained in paragraph (d) of this 

section. 

HCHO = Grams/mile HCHO (formaldehyde) as obtained in paragraph (g) of this 

section. 

C2H5OH = Grams/mile C2H5OH (ethanol) as obtained in paragraph (d) of this 

section. 

C2H4O = Grams/mile C2H4O (acetaldehyde) as obtained in paragraph (d) of this 

section. 

(2)(A) For 2012 and later model year ethanol-fueled automobiles and automobiles 

designed to operate on mixtures of gasoline and ethanol, the carbon-related exhaust 

Deleted: =

Deleted: selecting 

Deleted: 40 CFR 

Deleted: )

Deleted: 10.916 × 

Deleted: × 

Deleted: + 

Deleted: × 

Deleted: + 

Deleted: × 

Deleted: 

Deleted: =
521 

emissions in grams per mile is to be calculated using the following equation and rounded 

to the nearest 1 gram per mile: 

CREE = (CWFexHC/0.273×HC) + (1.571×CO) + (1.374×CH3OH) + 

(1.466×HCHO) + (1.911×C2H5OH) + (1.998×C2H4O) + CO2

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CWFexHC = Carbon weight fraction of exhaust hydrocarbons = CWFg as 

determined in (f)(4) of this section. 

HC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CH3OH = Grams/mile CH3OH (methanol) as obtained in paragraph (d) of this 

section. 

HCHO = Grams/mile HCHO (formaldehyde) as obtained in paragraph (g) of this 

section. 

C2H5OH = Grams/mile C2H5OH (ethanol) as obtained in paragraph (d) of this 

section. 

C2H4O = Grams/mile C2H4O (acetaldehyde) as obtained in paragraph (d) of this 

section. 

(B) For manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter, the carbon-related exhaust 

emissions in grams per mile for 2012 and later model year ethanol-fueled automobiles 

and automobiles designed to operate on mixtures of gasoline and ethanol is to be 

calculated using the following equation and rounded to the nearest 1 gram per mile: 

CREE = [(CWFexHC/0.273)×NMHC] + (1.571×CO) + (1.374×CH3OH) + 

(1.466×HCHO) + (1.911×C2H5OH) + (1.998×C2H4O) + CO2 + (298×N2O) + (25×CH4)

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CWFexHC = Carbon weight fraction of exhaust hydrocarbons = CWFg as 

determined in (f)(4) of this section. 

NMHC = Grams/mile HC as obtained in paragraph (g) of this section. 

CO = Grams/mile CO as obtained in paragraph (g) of this section. 

CO2 = Grams/mile CO2 as obtained in paragraph (g) of this section. 

CH3OH = Grams/mile CH3OH (methanol) as obtained in paragraph (d) of this 

section. 

HCHO = Grams/mile HCHO (formaldehyde) as obtained in paragraph (g) of this 

section. 

C2H5OH = Grams/mile C2H5OH (ethanol) as obtained in paragraph (d) of this 

section. 

C2H4O = Grams/mile C2H4O (acetaldehyde) as obtained in paragraph (d) of this 

section. 

N2O= Grams/mile N2O as obtained in paragraph (g) of this section. 

CH4= Grams/mile CH4 as obtained in paragraph (g) of this section. 

Deleted: × 

Deleted: × 

Deleted: × 

Deleted: × 

Deleted: 0.955 × 

Deleted: 0.999 × 

Deleted: 

Deleted: CO2

Deleted: selecting

Deleted: 40 CFR 

Deleted: )

Deleted: × HC)

Deleted: × 

Deleted: × 

Deleted: × 

Deleted: 0.955 × 

Deleted: 0.999 × 

Deleted: + 

Deleted: CO2
522 

(m) Carbon-related exhaust emissions for electric vehicles, fuel cell electric 

vehicles and plug-in hybrid electric vehicles. Manufacturers shall determine carbonrelated exhaust emissions for electric vehicles, fuel cell electric vehicles, and plug-in 

hybrid electric vehicles according to the provisions of this paragraph (m). Subject to the 

limitations described in §86.1866-12(a) of this chapter, the manufacturer may be allowed 

to use a value of 0 grams/mile to represent the emissions of fuel cell electric vehicles and 

the proportion of electric operation of a electric vehicles and plug-in hybrid electric 

vehicles that is derived from electricity that is generated from sources that are not 

onboard the vehicle, as described in paragraphs (m)(1) through (3) of this section. 

(1) For 2012 and later model year electric vehicles, but not including fuel cell 

electric vehicles, the carbon-related exhaust emissions in grams per mile is to be 

calculated using the following equation and rounded to the nearest one gram per mile: 

CREE = CREEUP - CREEGAS

Where: 

CREE means the carbon-related exhaust emission value as defined in §600.002-

08, which may be set equal to zero for eligible 2012 through 2016 model year electric 

vehicles as described in §86.1866-12(a) of this chapter. 

CREEUP = 0.7670 × EC, and 

CREEGAS = 0.2485 × TargetCO2, 

Where: 

EC = The vehicle energy consumption in watt-hours per mile, determined 

according to procedures established by the Administrator under §600.111-08(f). 

TargetCO2 = The CO2 Target Value determined according to §86.1818-12(c)(2) 

of this chapter for passenger automobiles and according to §86.1818-12(c)(3) of this 

chapter for light trucks. 

(2) For 2012 and later model year plug-in hybrid electric vehicles, the carbonrelated exhaust emissions in grams per mile is to be calculated using the following 

equation and rounded to the nearest one gram per mile:

CREE = CREECD + CREECS, 

Where:

CREE means the carbon-related exhaust emission value as defined in §600.002-

08. 

CREECS = The carbon-related exhaust emissions determined for charge-sustaining 

operation according to procedures established by the Administrator under §600.111-

08(f); and

CREECD = (ECF × CREECDEC) + [(1-ECF) × CREECDGAS]

Where:

CREECD = The carbon-related exhaust emissions determined for charge-depleting 

operation determined according to the provisions of this section for the applicable fuel 

and according to procedures established by the Administrator under §600.111-08(f);

CREECDEC = The carbon-related exhaust emissions determined for electricity 

consumption during charge-depleting operation, which shall be determined using the 

method specified in paragraph (m)(1) of this section and according to procedures 

established by the Administrator under §600.111-08(f), and which may be set equal to 

zero for eligible 2012 through 2016 model year vehicles as described in §86.1866-12(a) 

of this chapter;

Deleted: advanced technology vehicles.

Deleted: In lieu of the calculations 

described in paragraphs (m)(1) and (2) of 

this section, and subject

Deleted: )

Deleted: vehicle

Deleted: . 

Deleted: ¶

Deleted: ¶

Deleted: shall 

Deleted: ).

Deleted: × (0.642 / (0.93 × 0.90))

Deleted: / (2208/8887)

Deleted: ¶

Deleted: ¶
523 

CREECDGAS = The carbon-related exhaust emissions determined for chargedepleting operation determined according to the provisions of this section for the 

applicable fuel and according to procedures established by the Administrator under 

§600.111-08(f); and

ECF = Electricity consumption factor as determined by the Administrator under 

§600.111-08(f).

(3) For 2012 and later model year fuel cell electric vehicles, the carbon-related 

exhaust emissions in grams per mile shall be calculated using the method specified in 

paragraph (m)(1) of this section, except that CREEUP shall be determined according to 

procedures established by the Administrator under §600.111-08(f). As described in 

§86.1866-12(a) of this chapter the value of CREE may be set equal to zero for eligible 

2012 through 2016 model year fuel cell electric vehicles. 

(n) Equations for fuels other than those specified in paragraphs (h) through (l) of 

this section may be used with advance EPA approval. Alternate calculation methods for 

fuel economy and carbon-related exhaust emissions may be used in lieu of the methods 

described in this section if shown to yield equivalent or superior results and if approved 

in advance by the Administrator. 

45. Section 600.114-08 is amended as follows: 

a. By revising the section heading. 

b. By revising the introductory text. 

c. By adding paragraphs (d) through (f). 

§600.114-08 Vehicle-specific 5-cycle fuel economy and carbon-related exhaust 

emission calculations. 

Paragraphs (a) through (c) of this section apply to data used for fuel economy 

labeling under Subpart D of this part. Paragraphs (d) through (f) of this section are used 

to calculate 5-cycle carbon-related exhaust emissions values for the purpose of 

determining optional technology-based CO2 emissions credits under the provisions of 

paragraph (d) of §86.1866-12 of this chapter. 

* * * * * 

(d) City carbon-related exhaust emission value. For each vehicle tested, determine 

the 5-cycle city carbon-related exhaust emissions using the following equation: 

(1) CityCREE 0.905×= ( ) StartCREE + RunningCREE

Where: 

(i) StartCREE = 

( )⎟

⎠

⎞ ⎜

⎝

⎛ × ×+ × 4.1

0.76 StartCREE 0.24 StartCREE 0.33 75 20

Where: 

( ) CREEStart X ×= CREE1Bag3.6 X − CREE3Bag X

Where: 

Bag Y CREEX= the carbon-related exhaust emissions in grams per mile during 

the specified bag of the FTP test conducted at an ambient temperature of 75 °F or 20 °F.

(ii) Running CREE = 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: title
524 

[ ] ( ) ( ) ( )

[ ] ( ) ( )

0.144 [ ] CREESC03 ( ) ( ) Bag30.61 CREE ( ) Bag20.39 CREE

Bag20.50.18 CREE Bag30.5 CREE

Bag20.480.82 CREE Bag30.41 CREE CREECityUS060.11

75 75

20 20

75 75

× ×− ×+

×× ×+ +

×× + × + × +

Where: 

BagYXCREE =carbon-related exhaust emissions in grams per mile over Bag Y at 

temperature X. 

US06 City CREE = carbon-related exhaust emissions in grams per mile over the 

“city” portion of the US06 test. 

SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 

test. 

(e) Highway carbon-related exhaust emissions. (1) For each vehicle tested, 

determine the 5-cycle highway carbon-related exhaust emissions using the following 

equation: 

HighwayCRE 0.905E ×= ( ) StartCREE + RunningCREE

Where: 

(i) StartCREE = 

 

( )⎟

⎠

⎞ ⎜

⎝

⎛ × ×+ ×= 60

0.76 StartCREE 0.24 StartCREE 0.33 75 20

Where: 

( ) CREEStart X ×= CREE1Bag3.6 X − CREE3Bag X

(ii) Running CREE = 

[ ] ( ) ( )

[ ] CREESC ( ) ( ) Bag CREE ( ) Bag CREE

US HighwayCREE HFET CREE

75 75 03045.0 361.0 239.0

0679.0007.1 21.0

× ×− ×+

×× ×+ +

Where: 

BagYXCREE =carbon-related exhaust emissions in grams per mile over Bag Y at 

temperature X, 

US06 Highway CREE = carbon-related exhaust emissions in grams per mile over 

the highway portion of the US06 test, 

HFET CREE = carbon-related exhaust emissions in grams per mile over the 

HFET test, 

SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 

test. 

(f) Carbon-related exhaust emissions calculations for hybrid electric vehicles. 

Hybrid electric vehicles shall be tested according to California test methods which 

require FTP emission sampling for the 75 °F FTP test over four phases (bags) of the 

UDDS (cold-start, transient, warm-start, transient). Optionally, these four phases may be 

combined into two phases (phases 1 + 2 and phases 3 + 4). Calculations for these 

sampling methods follow. 

(1) Four-bag FTP equations. If the 4-bag sampling method is used, manufacturers 

may use the equations in paragraphs (a) and (b) of this section to determine city and 

highway carbon-related exhaust emissions values. If this method is chosen, it must be 

used to determine both city and highway carbon-related exhaust emissions. Optionally, 

the following calculations may be used, provided that they are used to determine both 

city and highway carbon-related exhaust emissions values: 

(i) City carbon-related exhaust emissions. 
525 

CityCREE 0.905×= ( ) StartCREE + RunningCREE

Where: 

(A) StartCREE = 

( )⎟

⎠

⎞ ⎜

⎝

⎛ × ×+ × 4.1

0.76 StartCREE 0.24 StartCREE 0.33 75 20

Where: 

(1) StartCREE75 = 

( ) ( ) × 16.3 CREEBag 75 − CREEBag ×+ 29.3753 CREEBag 75 − 4CREEBag 75

and 

(2) StartCREE20 = 

( ) 20 20 ×= 16.3 CREEBag − 3CREEBag

 (B) RunningCREE = 

[ ] ( ) ( ) ( )

[ ] ( ) ( )

[ ] CREESC ( ) ( ) Bag CREE ( ) Bag CREE

Bag CREE Bag CREE

Bag CREE Bag CREE CREECityUS

75 75

20 20

75 75

03144.0 361.0 439.0

25.018.0 35.0

448.082.0 341.0 0611.0

× ×− ×+

×× ×+ +

×× + × + × +

Where: 

US06 Highway CREE = carbon-related exhaust emissions in grams per mile over 

the city portion of the US06 test. 

US06 Highway CREE = carbon-related exhaust emissions in miles per gallon 

over the Highway portion of the US06 test. 

HFET CREE = carbon-related exhaust emissions in grams per mile over the 

HFET test. 

SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 

test. 

(ii) Highway carbon-related exhaust emissions. 

HighwayCRE 0.905E ×= ( ) StartCREE + RunningCREE

Where: 

(A) StartCREE = 

( )⎟

⎠

⎞ ⎜

⎝

⎛ × ×+ ×= 60

0.76 StartCREE 0.24 StartCREE 0.33 75 20

Where: 

( ) ( ) CREEStart 75 ×= CREE1Bag3.6 75 − CREE753Bag + × CREE2Bag3.9 75 − CREE4Bag 75

and

( ) CREEStart 20 ×= CREE1Bag3.6 20 − CREE3Bag 20

(B) RunningCREE = 

[ ] ( ) ( )

[ ] CREESC ( ) ( ) Bag CREE ( ) Bag CREE

US HighwayCREE HFET CREE

75 75 03045.0 361.0 439.0

0679.0007.1 21.0

× ×− ×+

×× ×+ +

Where: 

US06 Highway CREE = carbon-related exhaust emissions in grams per mile over 

the Highway portion of the US06 test, 

HFET CREE = carbon-related exhaust emissions in grams per mile over the 

HFET test, 
526 

SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 

test. 

(2) Two-bag FTP equations. If the 2-bag sampling method is used for the 75 °F 

FTP test, it must be used to determine both city and highway carbon-related exhaust 

emissions. The following calculations must be used to determine both city and highway 

carbon-related exhaust emissions: 

(i) City carbon-related exhaust emissions. 

CityCREE 0.905×= ( ) StartCREE + RunningCREE

Where: 

(A) StartCREE = 

( )⎟

⎠

⎞ ⎜

⎝

⎛ × ×+ ×= 4.1

0.76 StartCREE 0.24 StartCREE 0.33 75 20

Where: 

( ) CREEStart 75 ×= CREE1/2Bag3.6 75 − CREE3/4Bag 75

and 

( ) CREEStart 20 ×= CREE1Bag3.6 20 − CREE3Bag 20

Where: 

Bag Y FE20= the carbon-related exhaust emissions in grams per mile of fuel 

during Bag 1 or Bag 3 of the 20 °F FTP test, and 

Bag X/Y FE75= carbon-related exhaust emissions in grams per mile of fuel during 

combined phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient 

temperature of 75 °F. 

(B) RunningCREE = 

[ ] ( ) ( )

[ ] ( ) ( )

0.144 [ ] CREESC03 ( ) Bag3/4 CREE

Bag20.50.18 CREE Bag30.5 CREE

0.900.82 Bag3/4 CREE CREECityUS060.10

75

20 20

75

× −

×× ×+ +

×× + × +

Where: 

US06 City CREE = carbon-related exhaust emissions in grams per mile over the 

city portion of the US06 test, and 

SC03 CREE = carbon-related exhaust emissions in grams per mile over the SC03 

test, and 

Bag X/Y FE75= carbon-related exhaust emissions in grams per mile of fuel during 

combined phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient 

temperature of 75 °F. 

(ii) Highway carbon-related exhaust emissions. 

HighwayCRE 0.905E ×= ( ) StartCREE + RunningCREE

Where: 

(A) StartCREE = 

( )⎟

⎠

⎞ ⎜

⎝

⎛ × ×+ × 60

0.76 StartCREE 0.24 StartCREE 0.33 75 20

Where: 

( ) 75 ×= CREE1/2Bag5.7CREEStart 75 − CREE3/4Bag 75

and 

( ) CREEStart 20 ×= CREE1Bag3.6 20 − CREE3Bag 20
527 

(B) RunningCREE = 

[ ] ( ) ( )

0.045 [ ] CREESC03 Bag3/4 CREE

1.007 US060.79 HighwayCREE HFET0.21 CREE

× − 75

×× ×+ +

Where: 

US06 Highway CREE = carbon-related exhaust emissions in grams per mile over 

the city portion of the US06 test, and 

SC03 CREE = carbon-related exhaust emissions in gram per mile over the SC03 

test, and 

Bag Y FE20= the carbon-related exhaust emissions in grams per mile of fuel 

during Bag 1 or Bag 3 of the 20 °F FTP test, and 

Bag X/Y FE75= carbon-related exhaust emissions in grams per mile of fuel during 

phases 1 and 2 or phases 3 and 4 of the FTP test conducted at an ambient temperature of 

75 °F.

Subpart C—Procedures for Calculating Fuel Economy and Carbon-related Exhaust 

Emission Values for 1977 and Later Model Year Automobiles 

46. The heading for subpart C is revised as set forth above. 

47. A new §600.201-12 is added to subpart C to read as follows: 

§600.201-12 General applicability. 

The provisions of this subpart are applicable to 2012 and later model year 

automobiles and to the manufacturers of 2012 and later model year automobiles. 

48. A new §600.206-12 is added to subpart C to read as follows: 

§600.206-12 Calculation and use of FTP-based and HFET-based fuel economy and 

carbon-related exhaust emission values for vehicle configurations. 

(a) Fuel economy and carbon-related exhaust emissions values determined for 

each vehicle under §600.113(a) and (b) and as approved in §600.008–08 (c), are used to 

determine FTP-based city, HFET-based highway, and combined FTP/Highway-based 

fuel economy and carbon-related exhaust emission values for each vehicle configuration 

for which data are available. 

(1) If only one set of FTP-based city and HFET-based highway fuel economy 

values is accepted for a vehicle configuration, these values, rounded to the nearest tenth 

of a mile per gallon, comprise the city and highway fuel economy values for that 

configuration. If only one set of FTP-based city and HFET-based highway carbon-related 

exhaust emission values is accepted for a vehicle configuration, these values, rounded to 

the nearest gram per mile, comprise the city and highway carbon-related exhaust 

emission values for that configuration. 

(2) If more than one set of FTP-based city and HFET-based highway fuel 

economy and/or carbon-related exhaust emission values are accepted for a vehicle 

configuration: 

(i) All data shall be grouped according to the subconfiguration for which the data 

were generated using sales projections supplied in accordance with §600.208-12(a)(3). 
528 

(ii) Within each group of data, all fuel economy values are harmonically averaged 

and rounded to the nearest 0.0001 of a mile per gallon and all carbon-related exhaust 

emission values are arithmetically averaged and rounded to the nearest tenth of a gram 

per mile in order to determine FTP-based city and HFET-based highway fuel economy 

and carbon-related exhaust emission values for each subconfiguration at which the 

vehicle configuration was tested. 

(iii) All FTP-based city fuel economy and carbon-related exhaust emission values 

and all HFET-based highway fuel economy and carbon-related exhaust emission values 

calculated in paragraph (a)(2)(ii) of this section are (separately for city and highway) 

averaged in proportion to the sales fraction (rounded to the nearest 0.0001) within the 

vehicle configuration (as provided to the Administrator by the manufacturer) of vehicles 

of each tested subconfiguration. Fuel economy values shall be harmonically averaged and 

carbon-related exhaust emission values shall be arithmetically averaged. The resultant 

fuel economy values, rounded to the nearest 0.0001 mile per gallon, are the FTP-based 

city and HFET-based highway fuel economy values for the vehicle configuration. The 

resultant carbon-related exhaust emission values, rounded to the nearest tenth of a gram 

per mile, are the FTP-based city and HFET-based highway carbon-related exhaust 

emission values for the vehicle configuration. 

(3)(i) For the purpose of determining average fuel economy under §600.510–08, 

the combined fuel economy value for a vehicle configuration is calculated by 

harmonically averaging the FTP-based city and HFET-based highway fuel economy 

values, as determined in §600.206(a)(1) or (2) of this section, weighted 0.55 and 0.45 

respectively, and rounded to the nearest 0.0001 mile per gallon. A sample of this 

calculation appears in Appendix II of this part. 

(ii) For the purpose of determining average carbon-related exhaust emissions 

under §600.510–08, the combined carbon-related exhaust emission value for a vehicle 

configuration is calculated by arithmetically averaging the FTP-based city and HFETbased highway carbon-related exhaust emission values, as determined in §600.206(a)(1) 

or (2) of this section, weighted 0.55 and 0.45 respectively, and rounded to the nearest 

tenth of gram per mile. 

(4) For alcohol dual fuel automobiles and natural gas dual fuel automobiles the 

procedures of paragraphs (a)(1) or (2) of this section, as applicable, shall be used to 

calculate two separate sets of FTP-based city, HFET-based highway, and combined fuel 

economy and carbon-related exhaust emission values for each configuration. 

(i) Calculate the city, highway, and combined fuel economy and carbon-related 

exhaust emission values from the tests performed using gasoline or diesel test fuel. 

(ii) Calculate the city, highway, and combined fuel economy and carbon-related 

exhaust emission values from the tests performed using alcohol or natural gas test fuel. 

(b) If only one equivalent petroleum-based fuel economy value exists for an 

electric vehicle configuration, that value, rounded to the nearest tenth of a mile per 

gallon, will comprise the petroleum-based fuel economy for that configuration. 

(c) If more than one equivalent petroleum-based fuel economy value exists for an 

electric vehicle configuration, all values for that vehicle configuration are harmonically 

averaged and rounded to the nearest 0.0001 mile per gallon for that configuration. 

49. A new §600.208-12 is added to subpart C to read as follows: 
529 

§600.208-12 Calculation of FTP-based and HFET-based fuel economy and carbonrelated exhaust emission values for a model type. 

(a) Fuel economy and carbon-related exhaust emission values for a base level are 

calculated from vehicle configuration fuel economy and carbon-related exhaust emission 

values as determined in §600.206–12(a), (b), or (c) as applicable, for low-altitude tests. 

(1) If the Administrator determines that automobiles intended for sale in the State 

of California are likely to exhibit significant differences in fuel economy and carbonrelated exhaust emission values from those intended for sale in other states, she will 

calculate fuel economy and carbon-related exhaust emission values for each base level 

for vehicles intended for sale in California and for each base level for vehicles intended 

for sale in the rest of the states. 

(2) In order to highlight the fuel efficiency and carbon-related exhaust emission 

values of certain designs otherwise included within a model type, a manufacturer may 

wish to subdivide a model type into one or more additional model types. This is 

accomplished by separating subconfigurations from an existing base level and placing 

them into a new base level. The new base level is identical to the existing base level 

except that it shall be considered, for the purposes of this paragraph, as containing a new 

basic engine. The manufacturer will be permitted to designate such new basic engines 

and base level(s) if: 

(i) Each additional model type resulting from division of another model type has a 

unique car line name and that name appears on the label and on the vehicle bearing that 

label; 

(ii) The subconfigurations included in the new base levels are not included in any 

other base level which differs only by basic engine (i.e., they are not included in the 

calculation of the original base level fuel economy values); and 

(iii) All subconfigurations within the new base level are represented by test data 

in accordance with §600.010–08(c)(1)(ii). 

(3) The manufacturer shall supply total model year sales projections for each car 

line/vehicle subconfiguration combination. 

(i) Sales projections must be supplied separately for each car line-vehicle 

subconfiguration intended for sale in California and each car line/vehicle 

subconfiguration intended for sale in the rest of the states if required by the Administrator 

under paragraph (a)(1) of this section. 

(ii) Manufacturers shall update sales projections at the time any model type value 

is calculated for a label value. 

(iii) The provisions of paragraph (a)(3) of this section may be satisfied by 

providing an amended application for certification, as described in §86.1844–01 of this 

chapter. 

(4) Vehicle configuration fuel economy and carbon-related exhaust emission 

values, as determined in §600.206–12 (a), (b) or (c), as applicable, are grouped according 

to base level. 

(i) If only one vehicle configuration within a base level has been tested, the fuel 

economy and carbon-related exhaust emission values from that vehicle configuration will 

constitute the fuel economy and carbon-related exhaust emission values for that base 

level. 

Deleted: 08

Deleted: 08
530 

(ii) If more than one vehicle configuration within a base level has been tested, the 

vehicle configuration fuel economy values are harmonically averaged in proportion to the 

respective sales fraction (rounded to the nearest 0.0001) of each vehicle configuration 

and the resultant fuel economy value rounded to the nearest 0.0001 mile per gallon; and 

the vehicle configuration carbon-related exhaust emission values are arithmetically 

averaged in proportion to the respective sales fraction (rounded to the nearest 0.0001) of 

each vehicle configuration and the resultant carbon-related exhaust emission value 

rounded to the nearest gram per mile. 

(5) The procedure specified in paragraph (a)(1) through (4) of this section will be 

repeated for each base level, thus establishing city, highway, and combined fuel economy 

and carbon-related exhaust emission values for each base level. 

(6) For the purposes of calculating a base level fuel economy or carbon-related 

exhaust emission value, if the only vehicle configuration(s) within the base level are 

vehicle configuration(s) which are intended for sale at high altitude, the Administrator 

may use fuel economy and carbon-related exhaust emission data from tests conducted on 

these vehicle configuration(s) at high altitude to calculate the fuel economy or carbonrelated exhaust emission value for the base level. 

(7) For alcohol dual fuel automobiles and natural gas dual fuel automobiles, the 

procedures of paragraphs (a)(1) through (6) of this section shall be used to calculate two 

separate sets of city, highway, and combined fuel economy and carbon-related exhaust 

emission values for each base level. 

(i) Calculate the city, highway, and combined fuel economy and carbon-related 

exhaust emission values from the tests performed using gasoline or diesel test fuel. 

(ii) Calculate the city, highway, and combined fuel economy and carbon-related 

exhaust emission values from the tests performed using alcohol or natural gas test fuel. 

(b) For each model type, as determined by the Administrator, a city, highway, and 

combined fuel economy value and a carbon-related exhaust emission value will be 

calculated by using the projected sales and fuel economy and carbon-related exhaust 

emission values for each base level within the model type. Separate model type 

calculations will be done based on the vehicle configuration fuel economy and carbonrelated exhaust emission values as determined in §600.206–12 (a), (b) or (c), as 

applicable. 

(1) If the Administrator determines that automobiles intended for sale in the State 

of California are likely to exhibit significant differences in fuel economy and carbonrelated exhaust emission values from those intended for sale in other states, she will 

calculate fuel economy and carbon-related exhaust emission values for each model type 

for vehicles intended for sale in California and for each model type for vehicles intended 

for sale in the rest of the states. 

(2) The sales fraction for each base level is calculated by dividing the projected 

sales of the base level within the model type by the projected sales of the model type and 

rounding the quotient to the nearest 0.0001. 

(3)(i) The FTP-based city fuel economy values of the model type (calculated to 

the nearest 0.0001 mpg) are determined by dividing one by a sum of terms, each of which 

corresponds to a base level and which is a fraction determined by dividing: 

(A) The sales fraction of a base level; by 

(B) The FTP-based city fuel economy value for the respective base level. 

Deleted: 

Deleted: 08
531 

(ii) The FTP-based city carbon-related exhaust emission value of the model type 

(calculated to the nearest gram per mile) are determined by a sum of terms, each of which 

corresponds to a base level and which is a product determined by multiplying: 

(A) The sales fraction of a base level; by 

(B) The FTP-based city carbon-related exhaust emission value for the respective 

base level. 

(4) The procedure specified in paragraph (b)(3) of this section is repeated in an 

analogous manner to determine the highway and combined fuel economy and carbonrelated exhaust emission values for the model type. 

(5) For alcohol dual fuel automobiles and natural gas dual fuel automobiles, the 

procedures of paragraphs (b)(1) through (4) of this section shall be used to calculate two 

separate sets of city, highway, and combined fuel economy values and two separate sets 

of city, highway, and combined carbon-related exhaust emission values for each model 

type. 

(i) Calculate the city, highway, and combined fuel economy and carbon-related 

exhaust emission values from the tests performed using gasoline or diesel test fuel. 

(ii) Calculate the city, highway, and combined fuel economy and carbon-related 

exhaust emission values from the tests performed using alcohol or natural gas test fuel. 

Subpart D—[Amended]

50. A new §600.301-12 is added to subpart D to read as follows: 

 

§600.301-12 General applicability. 

(a) Unless otherwise specified, the provisions of this subpart are applicable to 

2012 and later model year automobiles. 

(b) [Reserved] 

Subpart F—Fuel Economy Regulations for Model Year 1978 Passenger 

Automobiles and for 1979 and Later Model Year Automobiles (Light Trucks and 

Passenger Automobiles)—Procedures for Determining Manufacturer's Average 

Fuel Economy and Manufacturer’s Average Carbon-related Exhaust Emissions 

51. The heading for subpart F is revised as set forth above. 

52. A new §600.501-12 is added to subpart F to read as follows: 

§600.501-12 General applicability. 

The provisions of this subpart are applicable to 2012 and later model year 

passenger automobiles and light trucks and to the manufacturers of 2012 and later model 

year passenger automobiles and light trucks. The provisions of this subpart are applicable 

to medium-duty passenger vehicles and to manufacturers of such vehicles. 

53. A new §600.507-12 is added to subpart F to read as follows: 

§600.507-12 Running change data requirements. 

Deleted: Fuel Economy Regulations 

for 1977 and Later Model Year 

Automobiles—Labeling
532 

(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, 86.082–34, or 86.1842–01 of this chapter, 

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. 

(b)(1) The additional running change fuel economy and carbon-related exhaust 

emissions data requirement in paragraph (a) of this section will be determined based on 

the sales of the vehicle configurations in the created or affected base level(s) as updated 

at the time of running change approval. 

(2) Within each newly created base level as specified in paragraph (a)(1) of this 

section, the manufacturer shall submit data from the highest projected total model year 

sales subconfiguration within the highest projected total model year sales configuration in 

the base level. 

(3) Within each base level affected by a running change as specified in paragraph 

(a)(2) of this section, fuel economy and carbon-related exhaust emissions data shall be 

submitted for the vehicle configuration created or affected by the running change which 

has the highest total model year projected sales. The test vehicle shall be of the 

subconfiguration created by the running change which has the highest projected total 

model year sales within the applicable vehicle configuration. 

(c) The manufacturer shall submit the fuel economy data required by this section 

to the Administrator in accordance with §600.314(b). 

(d) For those model types created under §600.208–12(a)(2), the manufacturer 

shall submit fuel economy and carbon-related exhaust emissions data for each 

subconfiguration added by a running change. 

54. A new §600.509-12 is added to subpart F to read as follows: 

§600.509-12 Voluntary submission of additional data. 

Deleted: 082–34 or 86.

Deleted: 08
533 

(a) The manufacturer may optionally submit data in addition to the data required 

by the Administrator. 

(b) Additional fuel economy and carbon-related exhaust emissions data may be 

submitted by the manufacturer for any vehicle configuration which is to be tested as 

required in §600.507 or for which fuel economy and carbon-related exhaust emissions 

data were previously submitted under paragraph (c) of this section. 

(c) Within a base level, additional fuel economy and carbon-related exhaust 

emissions data may be submitted by the manufacturer for any vehicle configuration 

which is not required to be tested by §600.507. 

55. A new §600.510-12 is added to subpart F to read as follows: 

§600.510-12 Calculation of average fuel economy and average carbon-related 

exhaust emissions. 

(a)(1) Average fuel economy will be calculated to the nearest 0.1 mpg for the 

categories of automobiles identified in this section, and the results of such calculations 

will be reported to the Secretary of Transportation for use in determining compliance 

with the applicable fuel economy standards. 

(i) An average fuel economy calculation will be made for the category of 

passenger automobiles as determined by the Secretary of Transportation. For example, 

categories may include, but are not limited to domestically manufactured and/or nondomestically manufactured passenger automobiles as determined by the Secretary of 

Transportation. 

(ii) [Reserved] 

(iii) An average fuel economy calculation will be made for the category of trucks 

as determined by the Secretary of Transportation. For example, categories may include, 

but are not limited to domestically manufactured trucks, non-domestically manufactured 

trucks, light-duty trucks, medium-duty passenger vehicles, and/or heavy-duty trucks as 

determined by the Secretary of Transportation. 

(iv) [Reserved] 

(2) Average carbon-related exhaust emissions will be calculated to the nearest one 

gram per mile for the categories of automobiles identified in this section, and the results 

of such calculations will be reported to the Administrator for use in determining 

compliance with the applicable CO2 emission standards. 

(i) An average carbon-related exhaust emissions calculation will be made for 

passenger automobiles. 

(ii) An average carbon-related exhaust emissions calculation will be made for 

light trucks. 

(b) For the purpose of calculating average fuel economy under paragraph (c) of 

this section and for the purpose of calculating average carbon-related exhaust emissions 

under paragraph (j) of this section: 

(1) All fuel economy and carbon-related exhaust emissions data submitted in 

accordance with §600.006(e) or §600.512(c) shall be used. 

(2) The combined city/highway fuel economy and carbon-related exhaust 

emission values will be calculated for each model type in accordance with §600.208–12 

of this section except that: 
534 

(i) Separate fuel economy values will be calculated for model types and base 

levels associated with car lines for each category of passenger automobiles and light 

trucks as determined by the Secretary of Transportation pursuant to paragraph (a)(1) of 

this section. 

(ii) Total model year production data, as required by this subpart, will be used 

instead of sales projections; 

(iii) [Reserved] 

(iv) The fuel economy value will be rounded to the nearest 0.1 mpg; 

(v) The carbon-related exhaust emission value will be rounded to the nearest gram 

per mile; and 

(vi) At the manufacturer's option, those vehicle configurations that are selfcompensating to altitude changes may be separated by sales into high-altitude sales 

categories and low-altitude sales categories. These separate sales categories may then be 

treated (only for the purpose of this section) as separate configurations in accordance 

with the procedure of §600.208–12(a)(4)(ii). 

(3) The fuel economy and carbon-related exhaust emission values for each vehicle 

configuration are the combined fuel economy and carbon-related exhaust emissions 

calculated according to §600.206–08(a)(3) except that: 

(i) Separate fuel economy values will be calculated for vehicle configurations 

associated with car lines for each category of passenger automobiles and light trucks as 

determined by the Secretary of Transportation pursuant to paragraph (a)(1) of this 

section. 

(ii) Total model year production data, as required by this subpart will be used 

instead of sales projections; and 

(iii) The fuel economy value of diesel-powered model types will be multiplied by 

the factor 1.0 to convert gallons of diesel fuel to equivalent gallons of gasoline. 

(c) Except as permitted in paragraph (d) of this section, the average fuel economy 

will be calculated individually for each category identified in paragraph (a)(1) of this 

section as follows: 

(1) Divide the total production volume of that category of automobiles; by 

(2) A sum of terms, each of which corresponds to a model type within that 

category of automobiles and is a fraction determined by dividing the number of 

automobiles of that model type produced by the manufacturer in the model year; by 

(i) For gasoline-fueled and diesel-fueled model types, the fuel economy calculated 

for that model type in accordance with paragraph (b)(2) of this section; or 

(ii) For alcohol-fueled model types, the fuel economy value calculated for that 

model type in accordance with paragraph (b)(2) of this section divided by 0.15 and 

rounded to the nearest 0.1 mpg; or 

(iii) For natural gas-fueled model types, the fuel economy value calculated for 

that model type in accordance with paragraph (b)(2) of this section divided by 0.15 and 

rounded to the nearest 0.1 mpg; or 

(iv) For alcohol dual fuel model types, for model years 1993 through 2019, the 

harmonic average of the following two terms; the result rounded to the nearest 0.1 mpg: 

(A) The combined model type fuel economy value for operation on gasoline or 

diesel fuel as determined in §600.208-12(b)(5)(i); and 
535 

(B) The combined model type fuel economy value for operation on alcohol fuel as 

determined in §600.208-12(b)(5)(ii) divided by 0.15 provided the requirements of 

§600.510(g) are met; or 

(v) For natural gas dual fuel model types, for model years 1993 through 2019, the 

harmonic average of the following two terms; the result rounded to the nearest 0.1 mpg: 

(A) The combined model type fuel economy value for operation on gasoline or 

diesel as determined in §600.208-12(b)(5)(i); and 

(B) The combined model type fuel economy value for operation on natural gas as 

determined in §600.208-12(b)(5)(ii) divided by 0.15 provided the requirements of 

paragraph (g) of this section are met. 

(d) The Administrator may approve alternative calculation methods if they are 

part of an approved credit plan under the provisions of 15 U.S.C. 2003. 

(e) For passenger automobile categories identified in paragraph (a)(1) of this 

section, the average fuel economy calculated in accordance with paragraph (c) of this 

section shall be adjusted using the following equation: 

AFEadj= AFE[((0.55 × a × c) + (0.45 × c) + (0.5556 × a) + 0.4487) / ((0.55 × a) + 

0.45)] + IW 

Where: 

AFEadj= Adjusted average combined fuel economy, rounded to the nearest 0.1 

mpg; 

AFE = Average combined fuel economy as calculated in paragraph (c) of this 

section, rounded to the nearest 0.0001 mpg; 

a = Sales-weight average (rounded to the nearest 0.0001 mpg) of all model type 

highway fuel economy values (rounded to the nearest 0.1 mpg) divided by the salesweighted average (rounded to the nearest 0.0001 mpg) of all model type city fuel 

economy values (rounded to the nearest 0.1 mpg). The quotient shall be rounded to 4 

decimal places. These average fuel economies shall be determined using the methodology 

of paragraph (c) of this section. 

c = 0.0014; 

IW = (9.2917 × 10−3 × SF3IWC× FE3IWC) − (3.5123 × 10−3 × SF4ETW× FE4IWC).

Note: Any calculated value of IW less than zero shall be set equal to zero. 

SF3IWC= The 3000 lb. inertia weight class sales divided by total sales. The 

quotient shall be rounded to 4 decimal places. 

SF4ETW= The 4000 lb. equivalent test weight category sales divided by total sales. 

The quotient shall be rounded to 4 decimal places. 

FE4IWC= The sales-weighted average combined fuel economy of all 3000 lb. 

inertia weight class base levels in the compliance category. Round the result to the 

nearest 0.0001 mpg. 

FE4IWC= The sales-weighted average combined fuel economy of all 4000 lb. 

inertia weight class base levels in the compliance category. Round the result to the 

nearest 0.0001 mpg. 

(f) The Administrator shall calculate and apply additional average fuel economy 

adjustments if, after notice and opportunity for comment, the Administrator determines 

that, as a result of test procedure changes not previously considered, such correction is 

necessary to yield fuel economy test results that are comparable to those obtained under 

Deleted: paragraphs (

Deleted: and (2) 
536 

the 1975 test procedures. In making such determinations, the Administrator must find 

that: 

(1) A directional change in measured fuel economy of an average vehicle can be 

predicted from a revision to the test procedures; 

(2) The magnitude of the change in measured fuel economy for any vehicle or 

fleet of vehicles caused by a revision to the test procedures is quantifiable from 

theoretical calculations or best available test data; 

(3) The impact of a change on average fuel economy is not due to eliminating the 

ability of manufacturers to take advantage of flexibility within the existing test 

procedures to gain measured improvements in fuel economy which are not the result of 

actual improvements in the fuel economy of production vehicles; 

(4) The impact of a change on average fuel economy is not solely due to a greater 

ability of manufacturers to reflect in average fuel economy those design changes 

expected to have comparable effects on in-use fuel economy; 

(5) The test procedure change is required by EPA or is a change initiated by EPA 

in its laboratory and is not a change implemented solely by a manufacturer in its own 

laboratory. 

(g)(1) Alcohol dual fuel automobiles and natural gas dual fuel automobiles must 

provide equal or greater energy efficiency while operating on alcohol or natural gas as 

while operating on gasoline or diesel fuel to obtain the CAFE credit determined in 

paragraphs (c)(2)(iv) and (v) of this section or to obtain the carbon-related exhaust 

emissions credit determined in paragraphs (j)(2)(ii) and (iii). The following equation must 

hold true: 

Ealt/Epet> or = 1 

Where: 

Ealt= [FEalt/(NHValt× Dalt)] × 106

 = energy efficiency while operating on 

alternative fuel rounded to the nearest 0.01 miles/million BTU. 

Epet= [FEpet/(NHVpet× Dpet)] × 106

 = energy efficiency while operating on gasoline 

or diesel (petroleum) fuel rounded to the nearest 0.01 miles/million BTU. 

FEaltis the fuel economy [miles/gallon for liquid fuels or miles/100 standard cubic 

feet for gaseous fuels] while operated on the alternative fuel as determined in §600.113–

08(a) and (b); 

FEpetis the fuel economy [miles/gallon] while operated on petroleum fuel 

(gasoline or diesel) as determined in §600.113(a) and (b); 

NHValt is the net (lower) heating value [BTU/lb] of the alternative fuel; 

NHVpet is the net (lower) heating value [BTU/lb] of the petroleum fuel; 

Dalt is the density [lb/gallon for liquid fuels or lb/100 standard cubic feet for 

gaseous fuels] of the alternative fuel; 

Dpet is the density [lb/gallon] of the petroleum fuel. 

(i) The equation must hold true for both the FTP city and HFET highway fuel 

economy values for each test of each test vehicle. 

(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.

(B) The density for alcohol fuels shall be premeasured using ASTM D 1298–85 

(Reapproved 1990) “Standard Practice for Density, Relative Density (Specific Gravity), 

Deleted: ASTM D 240–92 “Standard 

Test Method for Heat of Combustion of 

Liquid Hydrocarbon Fuels

Deleted: Bomb Calorimeter” 

(incorporated by reference at §600.011-

93). 
537 

or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer 

Method” (incorporated by reference at §600.011-93). 

(iii) The net heating value and density of gasoline are to be determined by the 

manufacturer in accordance with §600.113(f). 

(2) [Reserved] 

(3) Alcohol dual fuel passenger automobiles and natural gas dual fuel passenger 

automobiles manufactured during model years 1993 through 2019 must meet the 

minimum driving range requirements established by the Secretary of Transportation (49 

CFR part 538) to obtain the CAFE credit determined in paragraphs (c)(2)(iv) and (v) of 

this section. 

(h) For model years 1993 and later, and for each category of automobile identified 

in paragraph (a)(1) of this section, the maximum increase in average fuel economy 

determined in paragraph (c) of this section attributable to alcohol dual fuel automobiles 

and natural gas dual fuel automobiles shall be as follows: 

Model Year Maximum Increase (mpg) 

1993-2014 1.2 

2015 1.0 

2016 0.8 

2017 0.6 

2018 0.4 

2019 0.2 

2020 and later 0.0 

(1) The Administrator shall calculate the increase in average fuel economy to 

determine if the maximum increase provided in paragraph (h) of this section has been 

reached. The Administrator shall calculate the average fuel economy for each category of 

automobiles specified in paragraph (a)(1) of this section by subtracting the average fuel 

economy values calculated in accordance with this section by assuming all alcohol dual 

fuel and natural gas dual fuel automobiles are operated exclusively on gasoline (or diesel) 

fuel from the average fuel economy values determined in paragraph (c) of this section. 

The difference is limited to the maximum increase specified in paragraph (h) of this 

section. 

(2) [Reserved] 

(i) For model years 2012 through 2015, and for each category of automobile 

identified in paragraph (a)(1) of this section, the maximum decrease in average carbonrelated exhaust emissions determined in paragraph (j) of this section attributable to 

alcohol dual fuel automobiles and natural gas dual fuel automobiles shall be calculated 

using the following formula, and rounded to the nearest tenth of a gram per mile: 

Maximum Decrease = FltAvg

MPG

FltAvg MAX

−

⎥

⎦

⎤ ⎢

⎣

⎡ − 8887

8887

Where: 

Deleted: 

Deleted: paragraphs (b)(2)(vi), 

(b)(2)(vii), and (

Deleted: 

Deleted: 2
538 

FltAvg = The fleet average CREE value for passenger automobiles or light trucks 

determined for the applicable model year according to paragraph (j) of this section, 

except by assuming all alcohol dual fuel and natural gas dual fuel automobiles are 

operated exclusively on gasoline (or diesel) fuel. 

MPGMAX = The maximum increase in miles per gallon determined for the 

appropriate model year in paragraph (h) of this section. :(1) The Administrator shall 

calculate the decrease in average carbon-related exhaust emissions to determine if the 

maximum decrease provided in this paragraph (i) has been reached. The Administrator 

shall calculate the average carbon-related exhaust emissions for each category of 

automobiles specified in paragraph (a) of this section by subtracting the average carbonrelated exhaust emission values determined in paragraph (j) of this section from the 

average carbon-related exhaust emission values calculated in accordance with this section 

by assuming all alcohol dual fuel and natural gas dual fuel automobiles are operated 

exclusively on gasoline (or diesel) fuel. The difference is limited to the maximum 

decrease specified in paragraph (i) of this section. 

(2) [Reserved] 

(j) The average carbon-related exhaust emissions will be calculated individually 

for each category identified in paragraph (a)(1) of this section as follows: 

(1) Divide the total production volume of that category of automobiles into: 

(2) A sum of terms, each of which corresponds to a model type within that 

category of automobiles and is a product determined by multiplying the number of 

automobiles of that model type produced by the manufacturer in the model year by: 

(i) For gasoline-fueled and diesel-fueled model types, the carbon-related exhaust 

emissions value calculated for that model type in accordance with paragraph (b)(2) of this 

section; or 

(ii)(A) For alcohol-fueled model types, for model years 2012 through 2015, the 

carbon-related exhaust emissions value calculated for that model type in accordance with 

paragraph (b)(2) of this section multiplied by 0.15 and rounded to the nearest gram per 

mile, except that manufacturers complying with the fleet averaging option for N2O and 

CH4 as allowed under §86.1818-12(f)(2) of this chapter must perform this calculation 

such that N2O and CH4 values are not multiplied by 0.15; or 

(B) For alcohol-fueled model types, for model years 2016 and later, the carbonrelated exhaust emissions value calculated for that model type in accordance with 

paragraph (b)(2) of this section; or 

(iii)(A) For natural gas-fueled model types, for model years 2012 through 2015, 

the carbon-related exhaust emissions value calculated for that model type in accordance 

with paragraph (b)(2) of this section multiplied by 0.15 and rounded to the nearest gram 

per mile, except that manufacturers complying with the fleet averaging option for N2O 

and CH4 as allowed under §86.1818-12(f)(2) of this chapter must perform this calculation 

such that N2O and CH4 values are not multiplied by 0.15; or 

(B) For natural gas-fueled model types, for model years 2016 and later, the 

carbon-related exhaust emissions value calculated for that model type in accordance with 

paragraph (b)(2) of this section; or 

(iv) For alcohol dual fuel model types, for model years 2012 through 2015, the 

arithmetic average of the following two terms, the result rounded to the nearest gram per 

mile: 

Deleted: 

Deleted: 

Deleted: of this section 

Deleted: )(2

Deleted: 2
539 

(A) The combined model type carbon-related exhaust emissions value for 

operation on gasoline or diesel fuel as determined in §600.208-12(b)(5)(i); and 

(B) The combined model type carbon-related exhaust emissions value for 

operation on alcohol fuel as determined in §600.208-12(b)(5)(ii) multiplied by 0.15 

provided the requirements of paragraph (g) of this section are met, except that 

manufacturers complying with the fleet averaging option for N2O and CH4 as allowed 

under §86.1818-12(f)(2) of this chapter must perform this calculation such that N2O and 

CH4 values are not multiplied by 0.15; or 

(v) For natural gas dual fuel model types, for model years 2012 through 2015, the 

arithmetic average of the following two terms; the result rounded to the nearest gram per 

mile: 

(A) The combined model type carbon-related exhaust emissions value for 

operation on gasoline or diesel as determined in §600.208-12(b)(5)(i); and 

(B) The combined model type carbon-related exhaust emissions value for 

operation on natural gas as determined in §600.208-12(b)(5)(ii) multiplied by 0.15 

provided the requirements of paragraph (g) of this section are met, except that 

manufacturers complying with the fleet averaging option for N2O and CH4 as allowed 

under §86.1818-12(f)(2) of this chapter must perform this calculation such that N2O and 

CH4 values are not multiplied by 0.15. 

(vi) For alcohol dual fuel model types, for model years 2016 and later, the 

combined model type carbon-related exhaust emissions value determined according to 

the following formula and rounded to the nearest gram per mile: 

CREE = (F × CREEalt) + ( (1-F) × CREEgas ) 

Where: 

F = 0.00 unless otherwise approved by the Administrator according to the 

provisions of paragraph (k) of this section; 

CREEalt = The combined model type carbon-related exhaust emissions value for 

operation on alcohol fuel as determined in §600.208-12(b)(5)(ii); and 

CREEgas = The combined model type carbon-related exhaust emissions value for 

operation on gasoline or diesel fuel as determined in §600.208-12(b)(5)(i). 

(vii) For natural gas dual fuel model types, for model years 2016 and later, the 

combined model type carbon-related exhaust emissions value determined according to 

the following formula and rounded to the nearest gram per mile: 

CREE = (F × CREEalt) + ( (1-F) × CREEgas ) 

Where: 

F = 0.00 unless otherwise approved by the Administrator according to the 

provisions of paragraph (k) of this section; 

CREEalt = The combined model type carbon-related exhaust emissions value for 

operation on natural gas as determined in §600.208-12(b)(5)(ii); and 

CREEgas = The combined model type carbon-related exhaust emissions value for 

operation on gasoline or diesel fuel as determined in §600.208-12(b)(5)(i). 

 (k) Alternative in-use weighting factors for dual fuel model types. Using one of 

the methods in either paragraph (k)(1) or (2) of this section, manufacturers may request 

the use of alternative values for the weighting factor F in the equations in paragraphs 

(j)(2)(vi) and (vii) of this section. Unless otherwise approved by the Administrator, the 

Deleted: §600.510

Deleted: 
540 

manufacturer must use the value of F that is in effect in paragraphs (j)(2)(vi) and (vii) of 

this section. 

(1) Upon written request from a manufacturer, the Administrator will determine 

and publish by written guidance an appropriate value of F for each requested alternative 

fuel based on the Administrator’s assessment of real-world use of the alternative fuel. 

Such published values would be available for any manufacturer to use. The Administrator 

will periodically update these values upon written request from a manufacturer. 

(2) The manufacturer may optionally submit to the Administrator its own 

demonstration regarding the real-world use of the alternative fuel in their vehicles and its 

own estimate of the appropriate value of F in the equations in paragraphs (j)(2)(vi) and 

(vii) of this section. Depending on the nature of the analytical approach, the manufacturer 

could provide estimates of F that are model type specific or that are generally applicable 

to the manufacturer’s dual fuel fleet. The manufacturer’s analysis could include use of 

data gathered from on-board sensors and computers, from dual fuel vehicles in fleets that 

are centrally fueled, or from other sources. The analysis must be based on sound 

statistical methodology and must account for analytical uncertainty. Any approval by the 

Administrator will pertain to the use of values of F for the model types specified by the 

manufacturer. 

56. A new §600.512-12 is added to subpart F to read as follows: 

§600.512-12 Model year report. 

(a) For each model year, the manufacturer shall submit to the Administrator a 

report, known as the model year report, containing all information necessary for the 

calculation of the manufacturer's average fuel economy and all information necessary for 

the calculation of the manufacturer’s average carbon-related exhaust emissions. 

(1) The results of the manufacturer calculations and summary information of 

model type fuel economy values which are contained in the average fuel economy 

calculation shall also be submitted to the Secretary of the Department of Transportation, 

National Highway and Traffic Safety Administration. 

(2) The results of the manufacturer calculations and summary information of 

model type carbon-related exhaust emission values which are contained in the average 

calculation shall be submitted to the Administrator. 

(b)(1) The model year report shall be in writing, signed by the authorized 

representative of the manufacturer and shall be submitted no later than 90 days after the 

end of the model year. 

(2) The Administrator may waive the requirement that the model year report be 

submitted no later than 90 days after the end of the model year. Based upon a request by 

the manufacturer, if the Administrator determines that 90 days is insufficient time for the 

manufacturer to provide all additional data required as determined in §600.507, the 

Administrator shall establish an alternative date by which the model year report must be 

submitted. 

(3) Separate reports shall be submitted for passenger automobiles and light trucks 

(as identified in §600.510). 

(c) The model year report must include the following information: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 
541 

(1)(i) All fuel economy data used in the FTP/HFET-based model type calculations 

under §600.208–12, and subsequently required by the Administrator in accordance with 

§600.507; 

(ii) All carbon-related exhaust emission data used in the FTP/HFET-based model 

type calculations under §600.208–12, and subsequently required by the Administrator in 

accordance with §600.507; 

(2) (i) All fuel economy data for certification vehicles and for vehicles tested for 

running changes approved under §86.1842–01 of this chapter; 

(ii) All carbon-related exhaust emission data for certification vehicles and for 

vehicles tested for running changes approved under §86.1842–01 of this chapter; 

(3) Any additional fuel economy and carbon-related exhaust emission data 

submitted by the manufacturer under §600.509; 

(4)(i) A fuel economy value for each model type of the manufacturer's product 

line calculated according to §600.510(b)(2); 

(ii) A carbon-related exhaust emission value for each model type of the 

manufacturer's product line calculated according to §600.510(b)(2); 

(5)(i) The manufacturer's average fuel economy value calculated according to 

§600.510(c); 

(ii) The manufacturer's average carbon-related exhaust emission value calculated 

according to §600.510(j); 

(6) A listing of both domestically and nondomestically produced car lines as 

determined in §600.511 and the cost information upon which the determination was 

made; and 

(7) The authenticity and accuracy of production data must be attested to by the 

corporation, and shall bear the signature of an officer (a corporate executive of at least the 

rank of vice-president) designated by the corporation. Such attestation shall constitute a 

representation by the manufacturer that the manufacturer has established reasonable, 

prudent procedures to ascertain and provide production data that are accurate and 

authentic in all material respects and that these procedures have been followed by 

employees of the manufacturer involved in the reporting process. The signature of the 

designated officer shall constitute a representation by the required attestation. 

(8) For 2008–2010 light truck model year reports, the average fuel economy 

standard or the “required fuel economy level” pursuant to 49 CFR Part 533, as applicable. 

Model year reports for light trucks meeting required fuel economy levels pursuant to 49 

CFR 533.5(g) and (h) shall include information in sufficient detail to verify the accuracy 

of the calculated required fuel economy level. Such information is expected to include 

but is not limited to, production information for each unique footprint within each model 

type contained in the model year report and the formula used to calculate the required 

fuel economy level. Model year reports for required fuel economy levels shall include a 

statement that the method of measuring vehicle track width, measuring vehicle wheelbase 

and calculating vehicle footprint is accurate and complies with applicable Department of 

Transportation requirements. 

(9) For 2011 and later model year reports, the “required fuel economy level” 

pursuant to 49 CFR Parts 531 or 533, as applicable. Model year reports shall include 

information in sufficient detail to verify the accuracy of the calculated required fuel 

economy level, including but is not limited to, production information for each unique 
542 

footprint within each model type contained in the model year report and the formula used 

to calculate the required fuel economy level. Model year reports shall include a statement 

that the method of measuring vehicle track width, measuring vehicle wheelbase and 

calculating vehicle footprint is accurate and complies with applicable Department of 

Transportation requirements. 

(10) For 2012 and later model year reports, the “required fuel economy level” 

pursuant to 49 CFR Parts 531 or 533 as applicable, and the applicable fleet average CO2 

emission standards. Model year reports shall include information in sufficient detail to 

verify the accuracy of the calculated required fuel economy level and fleet average CO2 

emission standards, including but is not limited to, production information for each 

unique footprint within each model type contained in the model year report and the 

formula used to calculate the required fuel economy level and fleet average CO2 

emission standards. Model year reports shall include a statement that the method of 

measuring vehicle track width, measuring vehicle wheelbase and calculating vehicle 

footprint is accurate and complies with applicable Department of Transportation and EPA 

requirements. 

(11) For 2012 and later model year reports, a detailed (but easy to understand) list 

of vehicle models and the applicable in-use CREE emission standard. The list of models 

shall include the applicable carline/subconfiguration parameters (including carline, 

equivalent test weight, road-load horsepower, axle ratio, engine code, transmission class, 

transmission configuration and basic engine); the test parameters (ETW and a, b, c, 

dynamometer coefficients) and the associated CREE emission standard. The 

manufacturer shall provide the method of identifying EPA engine code for applicable inuse vehicles. 

57. A new §600.514-12 is added to subpart F to read as follows: 

§600.514-12 Reports to the Environmental Protection Agency. 

This section establishes requirements for automobile manufacturers to submit 

reports to the Environmental Protection Agency regarding their efforts to reduce 

automotive greenhouse gas emissions. 

(a) General Requirements. (1) For each model year, each manufacturer shall 

submit a pre-model year report. 

(2) The pre-model year report required by this section for each model year must 

be submitted before the model year begins and before the certification of any test group, 

no later than December 31 of the calendar year two years before the model year. For 

example the pre-model year report for the 2012 model year must be submitted no later 

than December 31, 2010). 

(3) Each report required by this section must: 

(i) Identify the report as a pre-model year report; 

(ii) Identify the manufacturer submitting the report; 

(iii) State the full name, title, and address of the official responsible for preparing 

the report;

(iv) Be submitted to: Director, Compliance and Innovative Strategies Division, 

U.S. Environmental Protection Agency, 2000 Traverwood, Ann Arbor, Michigan 48105; 

(v) Identify the current model year; 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: 

Deleted: current 

Deleted: )(i

Deleted: 

Deleted: 

Deleted: 
543 

(vi) Be written in the English language; and 

(vii) Be based upon all information and data available to the manufacturer 

approximately 30 days before the report is submitted to the Administrator. 

(b) Content of pre model year reports. (1) Each pre-model year report must 

include the following information for each compliance category for the applicable future 

model year and to the extent possible, two model years into the future: 

(i) The manufacturer’s estimate of it’s footprint-based fleet average CO2 standards 

(including temporary lead time allowance alternative standards, if applicable); 

(ii) Projected total and model-level production volumes for each applicable 

standard category; 

(iii) Projected fleet average CO2 compliance level for each applicable standard 

category; and the model-level CO2 emission values which form the basis of the 

projection; 

(iv) Projected fleet average CO2 credit/debit status for each applicable standard 

category; 

(v) A description of the various credit, transfer and trading options that will be 

used to comply with each applicable standard category, 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; 

(vi) A description of the method which will be used to calculate the carbonrelated exhaust emissions for any electric vehicles, fuel cell electric vehicles and plug-in 

hybrid vehicles;

(vii) A summary by model year (beginning with the 2009 model year) of the 

number of electric vehicles, fuel cell electric vehicles and plug-in hybrid vehicles using 

(or projected to use) the advanced technology vehicle incentives program;

(viii) The methodology which will be used to comply with N2O and CH4 emission 

standards; and

(ix) Other information requested by the Administrator.

(2) Manufacturers must submit, in the pre-model year report for each model year 

in which a credit deficit is generated (or projected to be generated), a compliance plan 

demonstrating how the manufacturer will comply with the fleet average CO2 standard by 

the end of the third year after the deficit occurred. 

Deleted: the

Deleted: 

Deleted: projected 

Deleted: projected

Deleted: projected

Deleted: a

Deleted: and

Deleted: .
544 

Final Rulemaking to Establish Light-Duty Vehicle Greenhouse Gas Emission 

Standards and Corporate Average Fuel Economy Standards

Page XXX/XXX 

Dated: April 1, 2010 

____________________ 

Ray LaHood, 

Secretary, Department of Transportation 

Dated: April 1, 2010 

____________________ 

Lisa P. Jackson, 

Administrator, Environmental Protection Agency 
Page 448: [1] Deleted Author 

For the reasons set forth in the preamble, the Environmental Protection Agency is 

amending parts 9, 85, 86, and 600 of title 40, Chapter I of the Code of Federal 

Regulations as follows: 

PART 9—[Amended] 

1. The authority citation for part 9 continues to read as follows: 

Authority: 7 U.S.C. 135 et seq ., 136–136y; 15 U.S.C. 2001, 2003, 2005, 2006, 2601–

2671; 21 U.S.C. 331j, 346a, 31 U.S.C. 9701; 33 U.S.C. 1251 et seq ., 1311, 1313d, 1314, 

1318, 1321, 1326, 1330, 1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 

CFR, 1971–1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g–1, 

300g–2, 300g–3, 300g–4, 300g–5, 300g–6, 300j–1, 300j–2, 300j–3, 300j–4, 300j–9, 1857 

et seq ., 6901–6992k, 7401–7671q, 7542, 9601–9657, 11023, 11048. 

2. The table in § 9.1 is amended by adding the following sections in numerical order 

under the undesignated center heading ‘‘Significant New Uses of Chemical Substances’’ 

to read as follows: 

§ 9.1 OMB approvals under the Paperwork Reduction Act. 

* * * * * 

40 CFR citation OMB control No. 

* * * * *

Control of Emissions From New and In-Use Highway Vehicles and Engines 

* * * * * 

86.165-12 

86.166-12 

86.1805-12 

86.1809-10 

86.1818-12 

86.1823-08 

86.1845-04 

86.1865-12 

86.1866-12 

86.1867-12 

2060-0104

* * * * * 

Page Break

Page 462: [2] Deleted Author 

2) For purposes of determining the number of employees or annual sales revenue 

for small entities, the entity shall include the employees or annual sales revenue of any 

subsidiary companies, any parent company, subsidiaries of the parent company in which 

the parent has a controlling interest, 

Page 462: [3] Deleted Author 
j) only if it has primary responsibility for (A) designing and assembling the 

vehicles, (B) converting the vehicles, or (C) modifying the vehicles 

Page 476: [4] Deleted Author 

 (h) Deferral of standards for qualifying small manufacturers. Qualifying small 

manufacturers as described in this paragraph (h) may optionally request deferral from 

compliance with the emission standards described in paragraphs (c) and (d) of this 

section. 

(1) Eligibility requirements. Eligibility as determined in this paragraph (h) shall 

be based on the total sales in the states and territories of the United States of combined 

passenger automobiles and light trucks. For the purpose of determining eligibility the 

sales of related companies shall be aggregated according to the provisions of §86.1838-

01(b)(3). 

(i) A manufacturer with 2008 or 2009 model year sales of more than zero and 

fewer than 5,000 is eligible for optional deferral of the greenhouse gas emission standards 

described in paragraphs (c) and (d) of this section. 

(ii) A manufacturer with 2008 or 2009 model year sales of more than zero and 

fewer than 5,000 while under the control of another manufacturer, where those 2008 or 

2009 model year vehicles bore the brand of the producing manufacturer but were sold by 

or otherwise under the control of another manufacturer, and where the manufacturer 

producing the vehicles became independent no later than December 31, 2010, is eligible 

for optional deferral of the greenhouse gas emission standards described in paragraphs (c) 

and (d) of this section. 

(iii) If a manufacturer’s average sales for three consecutive model years exceeds 

4999, and if the increase in sales is the result of corporate acquisitions, mergers, or 

purchase by another manufacturer, the manufacturer shall comply with the emission 

standards described in paragraphs (c), (d), and (e) of this section, as applicable, beginning 

with the second model year after the last year of the three consecutive model years. 

(iv) If a manufacturer’s average sales for three consecutive model years exceeds 

4999 and is less than 50,000, and if the increase in sales is solely the result of the 

manufacturer’s expansion in vehicle production, the manufacturer shall comply with the 

emission standards described in paragraphs (c), (d), and (e) of this section, as applicable 

beginning with the third model year after the last year of the three consecutive model 

years. 

(v) If a manufacturer’s average sales for three consecutive model years exceeds 

49,999, the manufacturer shall comply with the emission standards described in 

paragraphs (c), (d), and (e) of this section, as applicable, beginning with the second 

model year after the last year of the three consecutive model years. 

 (2) Requesting deferral from standards. To be deferred from the standards 

described in paragraphs (c) and (d) of this section, businesses must submit a declaration 

to EPA containing a detailed written description of how the business qualifies as a small 

volume manufacturer under the provisions of this paragraph (h). The declaration must 

describe eligibility information that includes the following: model year 2008 and 2009 

sales, sales volumes for each of the most recent three model years, detailed information 

regarding ownership relationships with other manufacturers, details regarding the 

application of the provisions of §86.1838-01(b)(3) regarding the aggregation of sales of 

related companies, and documentation of good-faith efforts made by the manufacturer to 
purchase credits from other manufacturers. This declaration must be signed by a chief 

officer of the company, and must be made prior to each model year for which the deferral 

is requested. The declaration must be submitted to EPA at least 30 days prior to the 

introduction into commerce of any vehicles for each model year for which the deferral is 

requested, but not later than December of the calendar year prior to the model year for 

which deferral is requested. Deferral will be granted when EPA approves the small 

volume manufacturer deferral declaration. The declaration must be sent to the 

Environmental Protection Agency at the following address: Director, Compliance and 

Innovative Strategies Division, U.S. Environmental Protection Agency, 2000 Traverwood 

Drive, Ann Arbor, Michigan 48105. 

21 

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* * * * * 

42. Section 600.011-93 is amended by revising paragraph the table in paragraph (b)(3) by 

adding two new rows to the bottom of the table to read as follows: 

§ 600.011-93 Reference materials. 

* * * * * 

Document No. and name 40 CFR part 600 reference 

* * * * * 

SAE J1634, May 1993, Electric Vehicle 

Energy Consumption and Range Test 

Procedure 

600.113-12 

SAE J2841, March 2009, Utility Factor 

Definitions for Plug-In Hybrid Electric 

Vehicles Using 2001 U.S. DOT National 

Household Travel Survey Data 

600.113-12