1



### INTRODUCTION

The purpose of the vehicle miles travelled (VMT) emissions offset demonstration for the

1

- hour and 8

- hour ozone standards is to respond to U.S. EPA’s final action entitled “Disapproval of Implementation Plan Revisions; State of California; South Coast VMT Emissions Offset Demonstrations” published on March 28, 2013 (78 Fed.Reg. 18849). In that final action, U.S. EPA withdrew its approval of, and then disapproved, the VMT

emissions offset demonstrations in the 2003 1

- hour ozone State Implementation Plan (SI P or plan) and the 2007 8

- hour ozone plan. U.S. EPA’s action is in response to a decision of the Ninth Circuit Court of Appeals in Association of Irritated Residents v U.S. EPA, (9th Cir., reprinted as amended on January 27, 2012, 686 F. 3d 668).



### BACKGROUND

In 1979, U.S. EPA established a primary health

- based national ambient air quality standard (NAAQS) for ozone at 0.12 parts per million (ppm) averaged over a 1

- hour period. See 44 Fed.Reg. 8220 (February 9, 1979). The Clean Air Act (CAA), as

am ended in 1990, classified areas that had not yet attained that standard, based on the severity of their ozone problem, ranging from Marginal to Extreme. Extreme areas were provided the most time to attain, until November 15, 2010, but were also subject to the most stringent requirements. In particular, Severe and Extreme areas were subject to CAA Section 182(d)(1)(A), which requires state implementation plans to adopt “specific enforceable transportation control strategies and transportation control measur es to offset any growth in vehicle miles traveled or numbers of vehicle trips in such area....” U.S. EPA designated the South Coast Air Basin as “Extreme” on November 6, 1991 (56 Fed.Reg. 56694). Thus the South Coast Air Basin was subject to this requirem ent. The U.S. EPA has historically interpreted this provision of the CAA (now called “VMT emissions offset requirement”) to allow areas to meet the requirement by demonstrating that emissions from motor vehicles decline each year through the attainment ye ar. See, e.g., 57Fed.Reg. 13498, at 13521

- 13523 (April 16, 1992).



### NEW OZONE STANDARD

In 1997, U.S. EPA replaced the 1

- hour ozone standard with an 8

- hour standard of 0.08 ppm [62 Fed.Reg. 38856 (July 18, 1997)]. The U.S. EPA promulgated rules implement ing the new standard. The “Phase 1” rule was issued on April 30, 2004 (69 Fed.Reg. 23951). That rule includes anti

- backsliding requirements that meant that many requirements remained applicable even after the revocation of the 1

- hour standard, which was effective June 2005. See 40 CFR §51.905(a)(1) and §51.900(f). In particular, an area that was classified as Extreme for the 1

- hour standard would remain subject to the VMT emissions offset requirement even if it would not otherwise have been subject to t hat requirement based on its classification under the new 8

- hour ozone standard [402

CFR §51.900(f)(11)]. The U.S. EPA’s Phase 2 rule, issued on November 29, 2005 (70 Fed. Reg. 71612) required that areas classified as Severe or Extreme under the new 8

- h our standard would also be subject to the VMT offset requirement.



### SOUTH COAST SIP SUBMISSIONS FOR VMT OFFSET REQUIREMENT

In 1994, the District, SCAG, and CARB submitted the South Coast 1

- hour ozone plan, as required by the 1990 Amendments to the Clean Ai r Act. The plan included transportation control measures (TCMs). In 1997, U.S. EPA approved this plan [62 Fed. Reg. 1150 (January 8, 1997)]. In 1997 and 1999, the District, SCAG, and CARB submitted revisions to the plan, which were approved as amended in 2000 [65 Fed. Reg.18903 (April 10, 2000)]. In 2004, the state agencies submitted the 2003 South

Coast 1

- hour ozone SIP. In 2008, the District submitted a VMT offset demonstration to comply with the VMT offset requirement by showing that there would be no increase in motor vehicle emissions between the area’s base year for the attainment demonstration and the area’s attainment year. The U.S. EPA approved the VMT offset demonstration [74 Fed. Reg. 10176 (March 10, 2009)]. At the same time, U.S. EPA disa pproved the

overall attainment demonstration which had relied on CARB measures that were subsequently withdrawn. (See 1

- hour ozone attainment demonstration Appendix).

The U.S. EPA initially designated the South Coast Air Basin as Severe

- 17 for the 8

- hour ozone standard, but later granted the State’s request to reclassify the area as “Extreme” [69 Fed.Reg. 23858 (April 30, 2004)] and [75 Fed.Reg. 24409 (May 5, 2010)]. In 2007,

the state submitted a SIP revision to address the 8

- hour ozone requirements, in cluding a VMT offset demonstration in accordance with U.S. EPA’s prior guidance. In March 2012, U.S. EPA approved the 2007 South Coast 8

- hour ozone SIP, including the VMT emission offset demonstration [77 Fed.Reg. 12674 (March 1, 2012)].



### LITIGATION OVER VMT OFFSET REQUIREMENT

In approving the 2003 VMT offset demonstration, U.S. EPA used its longstanding interpretation that no additional TCMs are necessary if aggregate motor vehicle emissions are projected to decline each year from the base year of the pl an to the attainment year [74 Fed. Reg. 10176, 10179

- 80 (March 10, 2009)]. Several environmental and community groups challenged this approval. In February 2011, the Ninth Circuit Court of Appeals ruled against U.S. EPA, holding that additional
transport ation control strategies and transportation control measures are required whenever vehicle emissions are projected to be higher than they would have been had vehicle miles traveled not increased, even where aggregate vehicle emissions are actually decreasi ng [Association of Irritated Residents v U.S. EPA, 632 F. 3d 584, at

596

- 597, 686 F. 3d. 668 (reprinted as amended on January 27, 2012, and further amended February 13, 2012)]. The U.S. EPA had filed a petition for panel rehearing in May 2011, which was d enied on January 27, 2012.3

When the U.S. EPA signed its final approval of the 2007 South Coast 8

- hour ozone SIP on December 15, 2011, the Court had not yet ruled on U.S. EPA’s petition for rehearing. Therefore, U.S EPA took final action and approved the VMT offset requirement demonstration based on its long

- standing interpretation. The final approval was ultimately published on March 1, 2012 (77 Fed.Reg. 12674). Several environmental and community groups filed a lawsuit challenging that approval (Commu nities for a Better Environment, et al. v. U.S. EPA, Ninth Circuit No. 12

- 71340).



### U.S. EPA’S WITHDRAWAL OF APPROVAL AND DISAPPROVAL OF
2003 AND 2007 VMT OFFSET REQUIREMENT DEMONSTRATIONS

In response to the decision in Association of Irritated Residents, U.S. EPA proposed to withdraw its approval of, and to disapprove the VMT offset demonstrations in the 2003

and 2007 South Coast 1

- hour and 8

- hour ozone SIPs (77 Fed, Reg. 58067, September 19, 2012). In the proposed action U.S. EPA explains that the demon strations “are not consistent with the court’s ruling ...because they fail to identify, compared to a baseline assuming no VMT growth, the level of increased emissions resulting solely from VMT growth and to show how such increased emissions have been offset through adoption and implementation of transportation control strategies and transportation control

measures.”

On March 28, 2013, U.S. EPA finalized its proposed action (See 78 Fed. Reg. 18849). As a result of the final withdrawal and disapproval, the offset sanction in CAA Section 179(b)(2) applies in the South Coast Air Basin 18 months after the effective date of the final disapproval, and highway funding sanctions six months after that. In o rder to stop the sanctions from taking effect, U.S. EPA must take final approval action on a SIP submission that corrects the deficiency before the effective dates of the sanctions. A federal implementation plan (FIP) would also be required 24 months afte r the effective date of the final disapproval unless the deficiency has been corrected.



### U.S. EPA GUIDANCE ON VMT OFFSET REQUIREMENT

In August 2012, U.S. EPA issued guidance entitled “Implementing Clean Air Act Section 182(d)(1)(A): Transportation Control Measures and Transportation Control Strategies to Offset Growth in Emissions Due to Growth in Vehicle Miles Travelled”. Among other things, U.S. EPA’s guidance points out that the Court in Association of Irritated Residents omitted any reference to “tran sportation control strategies” which are not defined in the CAA or U.S. EPA regulation, but which are eligible to offset growth in emissions due to growth in VMT. The U.S. EPA’s new guidance indicates that technology improvements such as vehicle technolog y improvements, motor vehicle fuels, and other control strategies that are transportation

- related could be used to offset increases in emissions due to VMT. EPA’s revised guidance sets forth a method of calculating the actual growth in emissions due to gr owth in VMT. Essentially, the state would compare projected attainment year emissions assuming no new control measures and no VMT growth with projected actual attainment year emissions4

(including new control measures and VMT growth). If the latter number is smaller than the former, no additional transportation control measures or strategies would be required. If additional transportation control measures and transportation control strategies are required, they should be clearly identified and distinguish ed from the measures included in the initial calculations for the base year and the three scenarios identified for the attainment year.

In addition, the guidance recommends that the base year to be used in the demonstration be the base year used in the at tainment demonstration for the ozone ambient air quality standard. This Appendix includes VMT offset demonstrations in accordance with U.S. EPA’s new guidance for both the 8

- hour and 1

- hour ozone requirements. To address U.S. EPA’s guidance on the base y ear, two base years are

used: 2002 for the 1997 8

- hour standard and 1990 for the 1

- hour ozone standard.



### TRANSPORTATION CONTROL STRATEGIES AND TRANSPORTATION

CONTROL MEASURES

By listing them separately, the Clean Air Act [CAA §182(d)(1)(A)] differentiat es between transportation control strategies (TCS) and transportation control measures (TCM), and thus provides for a wide range of strategies and measures as options to offset growth in emissions from vehicle miles traveled (VMT) growth. In addition, the example TCMs listed in Section 108(f)(1)(A) of the CAA include measures that reduce emissions by reducing VMT, reducing tailpipe emissions, and removing dirtier vehicles from the fleet. California’s motor vehicle control program includes a variety of str ategies and measures including new engine standards and in

- use programs (e.g., smog check, vehicle scrap, fleet rules, idling restrictions). TCMs developed by SCAG provide additional reductions. In addition, SCAG prepares a report every two years that rep orts on the status of implementation of TCMs.

Based on the provisions in Section 182(d)(1)(A) and the clarifications provided in the U.S. EPA guidance, any combination of transportation control strategies and TCMs may be used to meet the requirement to of fset growth in emissions resulting from VMT growth. Since 1990 when this requirement was established, California has adopted more than sufficient enforceable transportation strategies and measures to meet the requirement to offset the growth in emissions from VMT growth. For the 1997 8

- hour standard offset demonstration, 2002 controls are used as the base case control level since 2002 is the base year of the SIP. For the 1

- hour ozone standard demonstration, 1990 level controls are used as the base year c ontrol level since 1990 is the base year

for the 1

- hour SIP.

A list of the state’s mobile source control program adopted since 1990 is provided in Attachment 1. In addition, a list of TCMs implemented in the South Coast Air Basin is provided in Attachme nt 2.5



### EMISSIONS DUE TO VMT GROWTH

As discussed above, the U.S. EPA guidance does provide a recommended calculation methodology that could be done to determine if sufficient transportation control strategies and TCMs have been adopted and implemented to offset the growth in emissions due solely to growth in VMT. As such, any increase in emissions solely from VMT increases in the future attainment year from the base year (assuming that there are no further motor vehicle control programs implemented after the base year) would need to be offset. In addition, a calculation is needed to show the emissions levels if VMT had remained constant from the base year to the future attainment year. As discussed earlier, a comparison of the projected attainment year e missions assuming no new control measures and no VMT growth with projected actual attainment year emissions (including new control measures and VMT growth) would be made. If the latter number is smaller than the former, no additional transportation contro l measures or strategies would be required.



### METHODOLOGY

The following calculations are based on the U.S. EPA guidance recommended calculation methodology. As provided in the 2007 SIP for the 8

- hour ozone standard, 2002 is the base year used for the atta inment demonstration and 2023 is the attainment year. For the 1

- hour ozone national ambient air quality standard demonstration, 1990 serves as the base year and 2022 is the projected attainment year.

Analysis Tool

This analysis uses California’s approved motor vehicle emissions model, EMFAC. The EMFAC model estimates the emissions from two combustion processes: running exhaust and start exhaust, and four evaporative processes: hot soak, running losses, diurnal, an d resting losses.

Emissions from running exhaust, start exhaust, hot soak, and running losses are a function of how much a vehicle is driven. Emissions from these processes are directly related to VMT, trips, and starts. These processes are included in the calculation of the emissions levels used in the VMT offset demonstration. Emissions from resting loss and diurnal loss processes are not related to VMT, trips or vehicle starts and are not included in the analysis because these emissions occur regardl ess if the vehicle makes a trip (i.e. a start) or not.

EMFAC combines trip

- based VMT from the regional transportation planning agencies, starts data based on household travel surveys, and vehicle population data from the Department of Motor Vehicles with corresponding emission rates to calculate

emissions. 1

1 More information on data sources can be found i n the EMFAC technical document which is located on

the web at: http://www.arb.ca.gov/msei/emfac2011

- technical

- documentation

- final

- updated

- 0712

- v03.pdf6

With the EMFAC model, the calculation of emissions growth and whether it is offset is simplified to a comparison of future year emissions with “no growth” in VMT or new control strategies to future emissions with VMT growth and new control strategies. This follows EPA’s 2012 guidance and is consistent wit h the Ninth Circuit’s interpretation of CAA section 182(d)(1)(A).

The Advanced Clean Cars (ACC) regulations adopted by ARB in 2012 are not included in EMFAC 2011. The output from EMFAC 2011 was adjusted off

- model to estimate the benefits of the ACC regul ations. No other off

- model adjustments were taken.

Analysis Using 2002 as the Base Year for the 1997 8

- hour Ozone Standard with

Attainment Year of 2023.

Step 1. Provide the emissions level for the base year.

The following table shows the VOC emissi ons, VMT, starts, and vehicle population for calendar year 2002 from the EMFAC2011 model.

Summary of 2002 Base Year

VMT

(thousand miles/day) Starts

(thousands / day) Vehicle

Population

(thousands) VOC

Emissions

(tons/day)

2002 Base Year 330,268 58,039 9,108 280

Step 2. Calculate three emissions levels in the attainment year.

For the attainment year,

(1) Calculate emissions level with the motor vehicle control program frozen at 2002 levels and with projected VMT, starts, and vehicle population for the attainment year. This represents what the emissions in the attainment year would have been if transportation control strategies and TCMs had not been implemented after 2002;

(2) Calculate emissions level with the motor vehicle control program fr ozen at 2002 levels and assuming VMT, starts, and vehicle population do not increase from 2002 levels; and

(3) Calculate an emissions level that represents emissions with full implementation of all transportation control strategies and TCMs since

2002 a nd which represents the projected future year baseline emissions7 inventory using the VMT, starts, and vehicle population for the attainment

year.

Calculation 1

. Calculate the emissions in the attainment year assuming no new measures since the base year, and including growth in VMT, starts, and vehicle population.

To perform this calculation, the California Air Resources Board (CARB) staff

identified the on

- road motor vehicle control programs adopted since 2002 and adjusted the EMFAC2011 to reflect the V OC emissions levels in 2023 without the benefits of the post

- 2002 control programs. The projected VOC emissions are 115 tons/day.

Calculation 2. Calculate the emissions with no growth in VMT, starts, or vehicle population

.

EMFAC2011 allows the user to input different VMT, starts, and vehicle population than default. As such, for this calculation, the EMFAC 2011 model was run without the benefit of the post 2002 control program for calendar year 2023 with the 2002 level of VMT of 330,267,528 miles per d ay, the 2002 level of starts at 58,039,006 per day, and the 2002 level of population at 9,108,417. The VOC emissions associated with 2002 VMT, starts, and vehicle population are 89 tons/day.

Calculation 3. Calculate emission reductions with full

I mpleme ntation of Transportation Control Strategies & TCMs

.

The VOC emission levels for 2023 assuming the benefits of the post

- 2002 motor vehicle control program and the projected VMT, starts, and vehicle population in 2023 are calculated using EMFAC2011. The p rojected VOC emissions level is 62 tons/day. VOC emissions for the three sets of calculations described above are provided in the following table.8

Summary of 2023 Attainment Year Emissions Levels

* CY 2023 V M T bas e d on S C A G 2 0 12 Re g i onal T r ansp o r t ati o n Plan
** Does not include diurnal or resting loss emissions.

As provided in the U.S. EPA guidance, to determine compliance with the provisions of

Section 182(d)(1)(A) of the federal Clean Air Act, the emissions levels calculated in

Calculation 3 should be less than the emissions levels in Calculation 2:

VOC: 62 < 89 tons/day Description VMT*

(miles/day,
thousands) Starts

(thousands/ day) Vehicle

Population

(thousands) VOC

Emissions**

(tons/day)

(1) Emissions with
Motor Vehicle Control Program

Frozen at 2002

Levels.

(VMT, starts and vehicle
population at 2023 levels.) 39 5

, 750 72,730 11,311 115

(2) Emissions with

Motor Vehicle Control Program

Frozen at 2002

Levels.

(VMT

, starts, and vehicle
population at 2002 l evels) 330,268 58,0 39 9,108 89

(3) Emissions with Full
Motor Vehicle Control Program in

Place

(VMT, starts and vehicle
population at 2023 l evels) 39 5

, 750 72,730 11,311 629

Analysis Using 1990 as the Base Year for the 1

- hour Ozone Standard with

Attainment Year of 2022

.

Step 1. Provide the emissions levels for the base year.

The following table shows the VOC emissions, VMT, starts, and vehicle population for calendar year 1990 from the EMFAC2011 model.

Summary of 1990 Base Year

VMT

(thousand miles/day) Starts

(thousands / day) Vehicle

Population

(thousands) VOC

Emissions

(tons/day)

1990 Base Year 257,490 46,060 7,335 873

Step 2. Calculate three emissions levels in the attainment year.

For the attainment year,

(1) Calculate emissions level with the motor vehicle control program frozen at 1990 levels and with projected VMT, starts, and vehicle population for the attainment year. This represents what the emissions in the attainment year would have been if transportation control strateg ies and TCMs had not been implemented after 1990;

(2) Calculate emissions level with the motor vehicle control program frozen at 1990 levels and assuming VMT, starts, and vehicle population do not increase from 1990 levels; and

(3) Calculate an emi ssions level that represents emissions with full implementation of all transportation control strategies and TCMs since 1990 and which represents the projected future year baseline emissions inventory using the VMT, starts, and vehicle population for the a ttainment

year.

Calculation 1. Calculate the emissions in the attainment year assuming no new measures since the base year, and including growth in VMT, starts, and vehicle population

.

To perform this calculation, staff identified the on

- road motor vehi cle control programs adopted since 1990 and adjusted the EMFAC2011 model to reflect the

VOC emissions10

levels in 2022 without the benefits of the post

- 1990 control programs. The projected VOC emissions are 488 tons per day.

Calculation 2. Calculate the emissions with no growth in VMT, starts, or vehicle population.

EMFAC2011 allows the user to input different VMT, starts, and vehicle population than default. As such, for this calculation, the EMFAC 2011 model was run without the benefit of the post 199 0 control program for calendar year 2022 with the 1990 level of VMT of 257,490,447 miles per day, the 1990 level of starts at 46,059,760 per day, and the 1990 level of population at 7,334,677. The VOC emissions associated with 1990 VMT, starts, and vehicl e population are 312 tons/day.

Calculation 3. Calculate emission reductions with full implementation of Transportation Control Strategies and TCMs.

The VOC emission levels for 2022 assuming the benefits of the post

- 1990 motor vehicle control program and the projected VMT, starts, and vehicle population in 2022 are calculated using EMFAC2011. The projected VOC emissions level is 65 tons/day. VOC emissions for the three sets of calculations described above are provided in the following table.11

Summar y of 202 2 Attainment Year Emissions Levels

* CY 202 2 VMT based on SCAG 2012 Regional Transportation Plan
** Does not include resting or diurnal loss emissions.

As provided in the U.S. EPA guidance, to determine compliance with the provisions of Section 182(d)(1)(A) of the federal Clean Air Act, the emissions

levels calculated in Calculation 3 should be less than the emissions levels in

Calculation 2:

VOC: 65 < 312 tons/day Description VMT*

(miles/day,
thousands) Starts

(thousands/ day) Vehicle

Population

(thousands) VOC

Emissions**

(tons/day)

(1) Emissions with
Motor Vehicle Control Program

Frozen at 1990

Levels.

(VMT, starts, and vehicle
population at 2022 levels.) 394,838 72,531 11,280 488

(2) Emissions with

Motor Vehicle Control Program

Frozen at 1990

Levels.

(VMT

, starts, and vehicle
population at 1990 Levels) 257,490 46,060 7,335 312

(3) Emissions with Full

Motor Vehicle Control Program in

Place

(VMT, starts, and vehicle
population at 2022 Levels) 394,838 72,531 11,280 6512



### SUMMARY

The previous sections provide an analysis to demonstrate compliance with the provisions of Section 182(d)(1)(A) of the federal Clean Air Act. To further illustrate the demonstration, Figures 1 and 2 below show graphically the emissions benefits of the

motor vehicle control programs in offsetting VOC emissions due to increased VMT, starts, and vehicle population in the South Coast Air Basin for both the 1997 8

- hour ozone standard (2002 base year) and the 1

- hour ozone standard (1990 base year). The left bar (i n purple) shows the emissions in the base year with base year controls. The three bars on the right in each figure show the emissions levels in the attainment year for the three calculations identified above: the red bar shows attainment year emissions

w ith base year controls and attainment year VMT, starts, and vehicle population, the green bar shows attainment year emissions with base year controls, VMT, starts, and vehicle population, and the blue bar shows attainment year emissions with attainment

yea r controls, VMT, starts, and vehicle population. Based on the U.S. EPA guidance, if the blue bar is lower than the green bar, then the identified transportation control strategies and TCMs are sufficient to offset the growth in emissions.13

F igure 1. VOC E m issions * f r om O n

- Road Mobile Sources in

the South C oast Air Basin (2002 Base Ye a r )

* Does not include resting or diurnal loss emissions14

F ig u re 2. VOC E m is s io n s * f r om O n

- Road Mob i le So u rces in t h e South Coast Air Basin for 1990 Base Year

* Does not include resting or diurnal loss emissions