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**TABLE OF CONTENTS EXECUTIVE SUMMARY**  **ES -**  **1 0**  **CHAPTER 1: INDUSTRY CHARACTERIZ** **ATION 1.1**  **Introduction 1**  **- 1**  **1.2 Trailers**  **1 -**  **9 CHAPTER 2:**  **TECHNOLOGY AND COST 2.1**  **Overview of Technologies**  **2 -**  **1 2.2**  **Technology Principles**

**– SI Engines**  **2 -**  **2 2.3**  **Technology Principles**

**– CI Engines**  **2 -**  **7 2.4**  **Technology Principles -**  **Vehicles 2**  **- 1**  **5 2.5**  **Technology Application and Estimated Costs**

**– HD Pickups and Vans**  **2 -**  **4 8**  **2.6 Technology Application** 

**– SI**  **Engines 2**  **- 6**  **4 2.7**  **Technology Application and Estimated Costs**

**– CI Engines**  **2 -**  **70 2.8**  **Technology Application and Estimated Costs**

**– Tractors**  **2 -**  **80 2.9**  **Technology Application and Estimated Costs**

**– Vocational Vehicles**  **2 -**  **10 9**  **2.10 Technology Application and**  **Estimated Costs**

**– Trailers**  **2 -**  **152 2.11**  **Natural Gas 2**  **- 190**  **2.12 Technology Costs**  **2 -**  **191 2.13**  **Package Costs 2**  **- 272**  **CHAPTER 3: TEST PROCEDURES**  **3.1 Heavy**  **- Duty Engine Test Procedure**  **3 -**  **1 3.2**  **Aerodynamic Assessment 3**  **- 4**  **3.3 Tire Rolling Resistance**  **3 -**  **5 5**  **3.4 Duty Cycle**  **3 -**  **5 7**  **3.5 Tare Weights and Payload**  **3 -**  **6 3**  **3.6 Powertrain Test Procedures**  **3 -**  **6 6**  **3.7 Hybrid Powertrain Test Procedures**  **3 -**  **7 3**  **3.8 Rear Axle Efficiency Test**  **3 -**  **7 6** ******* **E.O. 12866 Review** 

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**3.9 HD Pickup Truck and Van Chassis Test Procedure**  **3 -**  **7 6**  **3.10 Alternative**  **Certification Approach 3**  **- 79**  **CHAPTER 4: VEHICLE SIMULATION M**  **ODEL 4.1**  **Purpose and Scope 4**  **- 1**  **4.2 Model Code Description**  **4 -**  **2 4.3**  **Validation of Phase 2 GEM Simulations 4**  **- 11**  **4.4 EPA and NHTSA HD Vehicle Compliance Model**  **4 -**  **22 4.5**  **Technology Improvements that Are Recognized in GEM without Simulation**  **4 -**  **34 CHAPTER 5:**  **IMPACTS ON EMISSIONS AND FUEL CONSUMPTION**  **5.1 Executive Summary**  **5 -**  **1 5.2**  **Introduction 5**  **- 8**  **5.3 Program Analysis and Modeling Methods**  **5 -**  **9 5.4**  **Greenhouse Gas Emission and Fuel Consumption Impacts**  **5 -**  **28 5.5**  **Non -**  **Greenhouse Gas Emission Impacts 5**  **- 48**  **CHAPTER 6: HEALTH AND ENVIRONME**  **NTAL IMPACTS 6.1**  **Health and Environmental Effects of Non -**  **GHG Pollutants 6**  **- 1**  **6.2 Air Quality Impacts of Non**  **- GHG Pollutants**  **6 -**  **32 6.3**  **Changes in Atmospheric CO 2**  **Concentrations, Global Mean Temperature, Sea Level Rise, and Ocean pH Associated with the Program’s GHG Emissions Reductions**  **6 -**  **40 CHAPTER 7:**  **VEHICLE -**  **RELATED COSTS, FUEL SAVINGS &**  **MAINTENANCE COSTS 7.1**  **Vehicle Costs, Fuel Savings and Maintenance Costs vs. the**  **Dynamic Baseline and Using**  **Method A**  **7 -**  **1 7.2**  **Vehicle Costs, Fuel Savings and Maintenance Costs vs. the Less**  **Dynamic Baseline and Using Method**  **B 7**  **- 1**  **8 7.3**  **Key Parameters Used in the Estimation of Costs and Fuel Savings 7**  **- 49** ******* **E.O. 12866 Review** 

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**CHAPTER 8. ECONOMIC AND OTHER I**  **MPACTS 8.1**  **Framework for Benefits and Costs 8**  **- 1**  **8.2 Conceptual Framework for Evaluating Impacts**  **8 -**  **3 8.3**  **Analysis of the Rebound Effect 8**  **- 10**  **8.4 Impact on Class Shifting, Fleet Turnover, and Sales**  **8 -**  **30 8.5**  **Monetized GHG Impacts 8**  **- 3**  **4 8.6**  **Quantified and Monetized Non -**  **GHG Health and Environmental Impacts 8**  **- 4**  **8 8.7**  **Additional Impacts 8**  **- 60**  **8.8 The Effect of Safety Standards and Voluntary Safety Improvements on Vehicle Weight**  **8 -**  **6 8**  **8.9 Petroleum, Energy and National Security**  **Impact 8**  **- 7**  **2 8.10**  **Summary of Benefits and Costs 8**  **- 8**  **7 8.11**  **Employment Impacts 8**  **- 9**  **4 8.12**  **Oil Price Sensitivity Analysis 8**  **- 10**  **5 CHAPTER 9.**  **SAFETY IMPACTS**  **9.1 Summary of Supporting HD Vehicle Safety Research**  **9 -**  **1 9.2**  **National Academy of Sciences HD Phase 1 and Phase 2 Reports 9**  **- 1**  **9.3 DOT CAFE Model HD Pickup and Van Safety Analysis**  **9 -**  **2 9.4**  **Volpe Research on MD/HD Fuel Efficiency Technologies 9**  **- 3**  **9.5 Oak Ridge National Laboratory (ORNL) Research on Low Rolling Resistance T**  **ruck Tires**  **9 -**  **9 9.6**  **Additional Safety Consideration 9**  **- 9**  **9.7 The Agencies’ Assessment of Potential Safety**  **Impacts 9**  **- 10**  **CHAPTER 10: CAFE MODEL**  **10.1 HD Pickup and Van Fleet**  **10 -**  **1 10.2**  **CAFE Model Analysis of Regulatory Alternatives for HD Pickups and Vans**  **10 -**  **12********* **E.O. 12866 Review** 

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**CHAPTER 11: RESULTS OF**  **THE PREFERRED AND ALTERN** **ATIVE STANDARDS**  **11.1 What Are the Alternatives that the Agencies Considered?**  **11 -**  **1 11.2**  **How Do These Alternatives Compare in Overall GHG Emissions Reductions and Fuel Efficiency and Cost?**  **11 -**  **20 11.3**  **Detailed Technology Projections for Each Category 11**  **- 3**  **6 11.4**  **Numerical Standards**  **Corresponding to Alternative Technology Scenarios 11**  **- 73**  **CHAPTER 12: INITIAL REGULATORY F**  **LEXIBILITY ANALYSIS 12.1**  **Overview of the Regulatory Flexibility Act 12**  **- 1**  **12.2 Need for Rulemaking and Rulemaking Objectives**  **12 -**  **2 12.3**  **Definition and Description of Small Businesses 12**  **- 2**  **12.4 Summary of Small Entities to which the Rulemaking will Apply**  **12 -**  **3 12.5**  **Related Federal Rules 12**  **- 4**  **12.6 Projected Reporting, Recordkeeping,**  **and Other Compliance Requirements 12**  **- 4**  **12.7 Regulatory Flexibilities**  **12 -**  **4 12.8**  **Projected Economic Effects of the Proposed Rulemaking 12**  **- 9**  **CHAPTER 13: NATURAL GAS VEHICLES**  **AND ENGINES 13.1**  **Detailed Life -**  **Cycle Analysis 13**  **- 1**  **13.2 Projecting Natural Gas use**  **in HD Trucks 13**  **- 23**  **13.3 Natural Gas Emission Control Measures**  **13 -**  **35********* **E.O. 12866 Review** 

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This Page Intentionally Left Blank**Table of Contents, Acronym List, and Executive Summary**

ES
- 1 **List of Acronyms** μg Microgram μm Micrometers 2002$ U.S. Dollars in calendar year 2002 2009$ U.S. Dollars in calendar year 2009 A/C Air Conditioning ABS Antilock Brake Sy stems ABT Averaging, Banking and Trading AC Alternating Current ACES Advanced Collaborative Emission Study ALVW Adjusted L oaded Vehicle Weight AEO Annual Energy Outlook AES Automatic Engine Shutdown AHS American Housing Survey AMOC Atlantic Meridional Overturning Circulation AMT Automated M anual T ransmission ANL Argonne National Laboratory APU Auxiliary Power Unit AQ Air Quality AQCD Air Quality Criteria Document AR4 Fourth Assessment Report ARB California Air Resources Board ASL Aggressive Shift Logic ASPEN Assessment Sy stem for Population Exposure Nationwide AT Automatic Transmissions ATA American Trucking Association ATI S Automated Tire Inflation Sy stem ATRI Alliance for Transportation Research Institute ATSDR Agency

for Toxic Substances and Disease Registry ATUS American Time Use Survey Avg Average BAC Battery

Air Conditioning BenMAP Benefits Mapping and Analy sis Program bhp Brake Horsepower bhp
- hrs Brake Horsepower Hours BL S Bureau of Labor Statistics BSFC Brake Specific Fuel Consumption BTS Bureau of Transportation Statistics BTS Bureau of Labor Statistics BTU British Thermal Unit CAA Clean Air Act******* **E.O. 12866 Review** 

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- 2 CAAA Clean Air Act Amendments CAD/CAE Computer Aided Design And Engineering CAE Computer Aided Engineering CAFE Corporate Average Fuel Economy CARB California Air Resources Board CBI Confidential Business Information CCP Coupled Cam Phasing CCSP Climate Change Science Program Cd Coefficient of Drag C d A Drag Area CDC Centers for Disease Control CFD Computational Fluid Dynamics CFR Code of Federal Regulations CH4 Methane CI LCC Combined International Local and Commuter C ycle CI TT Chemical Industry Institute of Toxicology CMAQ Community Multiscale Air Quality CO Carbon Monoxide CO 2 Carbon Dioxide CO 2 eq CO2 Equivalent COFC Container
- on - Flatcar COI Cost of I llness COPD Chronic Obstructive Pulmonary Disease CoV Coefficient of Variation CPS Cam Profile Switching CRC Coordinating Research Council CRGNSA Columbia River Gorge National Scenic Area CRR Rolling Resistance Coefficient CS Climate Sensitivity CSI Cambridge S ys tematics Inc. CSS Coastal Sage Scrub CSV Comma
- separated Values CVD Cardiovascular Disease CVT Continuously
- Variable Transmission CW Curb Weight D/UAF Downward and Upward Adjustment Factor DCP Dual Cam Phasing DCT Dual Clutch Transmission DE Diesel Exhaust DEAC Cylinder Deactivation DEER Diesel Engine
- Efficiency and Emissions Research DEF Diesel Exhaust Fluid DHHS U.S. Department of Health and Human Services******* **E.O. 12866 Review** 

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- 3 Diesel HAD Diesel Health Assessment Document DMC Direct Manufacturing Costs DO Dissolved Ox ygen DOC Diesel Oxidation Catalyst DOD Department of Defense DOE Department of Energy DOHC Dual Overhead Camshaft Engines DOT Department of Transportation DPF Diesel Particulate Filter DPM Diesel Particulate Matter DR Discount Rate DRIA Draft Regulatory Impact Analy sis DVVL Discrete Variable Valve Lift EC European Commission EC Elemental Carbon ECU Electronic Control Unit ED Emergency Department EERA Energy

and Environmental Research Associates EFR Engine Friction Reduction EGR Exhaust Gas Recirculation EHPS Electroh ydraulic Power Steering EIA Energy

Information Administration (part of the U.S. Department of Energy) EI SA Energy

Independence and Security Act EMS
- HAP Emissions Modeling Sy stem for Hazardous Air Pollution EO Executive Order EPA Environmental Protection Agency EPS Electric Power Steering ERG Eastern Research Group ESC Electronic Stability Control EV Electric Vehicle F Frequency FEL Family

Emission Limit FET Federal Excise Tax FEV1 Functional Expiratory Volume FHWA Federal Highway Administration FIA Forest Inventory and Analy sis FMCSA Federal Motor Carrier Safety Administration FOH Fuel Operated Heater FR Federal Register FTP Federal Test Procedure FVC Forced Vital Capacity g Gram******* **E.O. 12866 Review** 

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- 4 g/s Gram
- per - second g/ton
- mile Grams emitted to move one ton (2000 pounds) of freight over one mile gal Gallon gal/1000 ton
mile Gallons of fuel used to move one ton of payload (2,000 pounds) over

1000 miles GCAM Global Change Assessment Model GCW Gross Combined Weight GDP Gross Domestic Product GEM Greenhouse gas Emissions Model GEOS Goddard Earth Observing S ys tem GHG Greenhouse Gases GIFT Geospatial Intermodal Freight Transportation GREET Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation GSF1 Generic Speed Form one GUI Graphical User Interface GVWR Gross Vehicle Weight Rating GWP Global Warming Potential HABs Harmful Algal Blooms HAD Diesel Health Assessment Document HC Hydrocarbon HD Heav y- Duty HDUDDS Heav y Duty Urban D yn amometer Driving Cycle HEG High Efficiency Gearbox HEI Health Effects Institute HES Health Effects Subcommittee HEV Hy

brid Electric Vehicle HFC Hydrofluorocarbon HFET Highway Fuel Econom y Dy

namometer Procedure HHD Heav y Heav y- Duty HHDDT Highway Heavy
- Duty Diesel Transient hp Horsepower hrs Hours HRV Heart Rate Variability HSC High Speed Cruise Duty Cycle HTUF Hy

brid Truck User Forum hz Hertz IARC International Agency for Research on Cancer IA TC Improved Automatic Transmission Control IC Indirect C osts ICCT International Council on Clean Transport ICD International Classification of Diseases IC F IC F International******* **E.O. 12866 Review** 

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- 5 ICM Indirect Cost Multiplier ICP Intake Cam Phasing IMAC Improved Mobile Air Conditioning IMPROVE Interagency Monitoring of Protected Visual Environments IPCC Intergovernmental Panel on Climate Change IRFA Initial Regulatory Flexibility

Anal ys is IRIS Integrated Risk Information Sy stem ISA Integrated Science Assessment JAMA Journal of the American Medical Association k Thousand kg Kilogram KI kinetic intensity km Kilometer km/h Kilometers per Hour kW Kilowatt L Liter lb Pound LD Li ght
- Duty LHD Li ght Heav y- Duty LLNL Lawrence Livermore National L aboratory ’s LRR Lower Rolling Resistance LSC Low Speed Cruise Duty Cycle LT Li ght Trucks LTCCS Large Truck Crash Causation Study LUB Low Friction Lubes LUC Land Use Change m 2 Square Meters m 3 Cubic Meters MAGI CC Model for the Assessment of Greenhouse
- gas Induced Climate Change MCF Mixed Conifer Forest MD Medium
- Duty MDPV Medium
- Duty Passenger Vehicles mg Milligram MHD Medium Heav y- Duty MHEV Mild Hy brid mi mile min Minute MM Million MMBD Million Barrels per Day MMT Million Metric Tons MOVES Motor Vehicle Emissions Simulator mpg Miles per Gallon mph Miles per Hour******* **E.O. 12866 Review** 

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- 6 MSAT Mobile Source Air Toxic MRL Minimal Risk L evel MT Manual Transmission MY Model Year N2O Nitrous Oxide NA Not Applicable NAAQS National Ambient Air Quality Standards NAFA National Association of Fleet Administrators NAI CS North American Industry Classification System NAS National Academ y of Sciences NATA National Air Toxic Assessment NCAR National Center for Atmospheric Research NCI National Cancer Institute NCLAN National Crop L oss Assessment Network NEC Net Energy Change Tolerance NEI National Emissions Inventory NEMS National Energy Modeling S ys tem NEPA National Environmental Policy Act NESCAUM Northeastern States for Coordinated Air Use Management NESCCAF Northeast States Center for a Clean Air Future NESHAP National Emissions Standards for Hazardous Air Pollutants NHS National Highway S ys tem NHTSA National Highway Traffic Safety Administration NiMH Nickel Metal
- Hydride NI OSH National Institute of Occupational Safety and Health Nm Newton
- meters NMHC Nonmethane Hydrocarbons NMMAPS National Morbidity , Mortality , and Air Pollution Study NO X Nitrogen Oxide NO 2 Nitrogen Dioxide NOAA National Oceanic and Atmospheric Administration NOx Oxides of Nitrogen NPRM Notice of Proposed Rulemaking NPV Net Present Value NRC National Research Council NRC
- CAN National Research Council of Canada NREL National Renewable Energy L aboratory NTP National Toxicology Program NVH Noise Vibration and Harshness O&M Operating and maintenance O 3 Ozone OAQPS Office of Air Quality Planning and Standards OC Organic Carbon******* **E.O. 12866 Review** 

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- 7 OE Original Equipment OEHHA Office of Environmental Health Hazard Assessment OEM Original Equipment Manufacturer OHV Overhead Valve OMB Office of Management and Budget OPEC Organization of Petroleum Exporting Countries ORD EPA's Office of Research and Development ORNL Oak Ridge National Laboratory OTAQ Office of Transportation and Air Quality Pa Pascal PAH Polycyclic Aromatic Hydrocarbons PEF Peak Expiratory Flow PEMS Portable Emissions Monitoring S ys tem PGM Platinum Group Metal PHEV Plug
- in Hy brid Electric Vehicles PM Particulate Matter PM 10 Coarse Particulate Matter (diameter of 10 μm or less) PM 2.5 Fine Particulate Matter (diameter of 2.5 μm or less) POM Polycyclic Organic Matter Ppb Parts per Billion Ppm Parts per Million Psi Pounds per Square Inch PTO Power Take Off R&D Research and Development RBM Resisting Bending Moment REL Reference Exposure Level RESS Rechargeable Energy Storage S ys tem RFA Regulatory Flexibility

Act RfC Reference Concentration RFS2 Renewable Fuel Standard 2 RIA Regulatory Impact Analysis RPE Retail Price Equivalent Rpm Revolutions per Minute RSWT Reduced
- Scale Wind Tunnel S Second SAB Science Advisory Board SAB
- HES Science Advisory Board
- Health Effects Subcommittee SAE Society

of Automotive Engineers SAR Second Assessment Report SAV Submerged Aquatic Vegetation SBA Small Business Administration SBAR Small Business Advocacy Review SBREFA Small Business Regulatory Enforcement Fairness Act******* **E.O. 12866 Review** 

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- 8 SCC Social Cost of Carbon SCR Selective Catal ys t Reduction SER Small Entity Representation SET Supplemental Emission Test SGDI Stoichiometric Gasoline Direct Injection SHEV Strong Hy brid Vehicles SI Spark
- Ignition SIDI Spark Ignition Direct Injection SO 2 Sulfur Dioxide SO x Sulfur O xides SOA Secondary Organic Aerosol SOC State of Charge SOHC Single Overhead Cam SO X Oxides of Sulfur SPR Strategic Petroleum Reserve STB Surface Transportation Board Std. Standard STP Scaled Tractive Power SUV Sport Utility Vehicle SVOC Semi
- Volatile Organic Compound SwRI Southwest Research Institute TAR Technical Assessment Report TC Total Costs TCp Total Cost package TDS Turbocharging And Downsizing THC Total Hydrocarbon TIAX TIAX LLC TMC Technology & Maintenance Council TOFC Trailer
- on - Flatcar Ton
- mile One ton (2000 pounds) of payload over one mile TPM Tire Pressure Monitoring TRBDS Turbocharging and Downsizing TRU Trailer Refrigeration Unit TSD Technical Support Document TSS Thermal Storage TTMA Truck Trailer Manufacturers Association TW Test Weight U/DAF Upward and Downward Adjustment Factor UCT Urban Creep and Transient Duty C ycle UFP Ultra Fine Particles URE Unit Risk Estimate USDA United States Department of Agriculture USGCRP United States Global Change Research Program******* **E.O. 12866 Review** 

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- 9 UV Ultraviolet UV
- b Ultraviolet
- b VHHD Vocational Heav y Heav y - Duty VI N Vehicle Identification Number VIUS Vehicle Inventory Use Survey VLHD Vocational Light Heav y- Duty VMHD Vocational Medium Heavy
- Duty VMT Vehicle Miles Traveled VOC Volatile Organic Compound VSL Vehicle Speed Limiter VTRI S Vehicle Travel Information Sy stem VVL Variable Valve Lift VVT Variable Valve Timing WACAP Western Airborne Contaminants Assessment Project WBS Wide Base Singles WHR Waste Heat Recovery WHTC World Harmonized Transient Cycle WHVC World Harmonized Vehicle Cycle WRF Weather Research Forecasting WTP Willingness
- to - Pay WTVC World Wide Transient Vehicle Cycle WVU West Virginia University******* **E.O. 12866 Review** 

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- 10 

## Executive Summary The Environmental P rotection A gency (EPA) and the N ational H ighway T raffic Safety Admi ni stration (NHT SA ), on behalf of the Department of Transportation, are each proposing changes to our comprehensive H eav y- D uty N ational P rogram that would further reduce greenhouse gas emissions (GHG) and increase fuel efficiency for on
- ro ad heav y- duty vehicles , responding to the President’s directive on February 18 , 201 4 , to take coordinated steps to ward the production of even clean er vehicles
. NHTSA’s fuel consumption standards and EPA’s carbon dioxide ( CO 2 ) emissions standards would be tailored to each of the three current regulatory

categories of heav y- duty vehicles: ( 1 ) Combination Tractors ; (2 ) Heav y- duty Pickup Trucks and Vans; and (3) Vocational Vehicles, as well as gasoline and diesel heav y- duty engines
. In addition, the agenc ies would be adding new standards for combination trailers. EPA ’ s hydrofluorocarbon emissions standards that currentl y appl y to air conditioning sy stems in tractors, pickup trucks , and vans , would also be applied to vocational vehicles. Table 1 and Tabl e 2 present the rule
- related fuel savings, costs, benefits and net benefits in both present value terms and in annualized terms as calculated b y NHTSA and EPA , respectivel y. Table 3 presents the proposed rule’s fully phased
- in (MY 2027) numeric standards by vehicle (and engine) subcategory , along with the agencies’ projected per vehicle incremental cost and incremental improvement in fuel efficiency and CO 2 emissions. For HD pickups and vans , the agencies are proposing performance
- based stan dards under which, as for Phase 1, the average fuel consumption and CO 2 emission rates required of a manufacturer depend on the mix of vehicles produced b y the manufacturer for sale in the U.S. For each vehicle, the agencies are again proposing to define the work factor as the sum of (a) 75% of the vehicle’s maximum payload , 25% of the vehicles maximum towing capacity, and (c) 375 lbs
. if the vehicle has four
- wheel drive. The agencies are further proposing that fuel consumption and CO 2 emission rate targets will apply to each vehicle based on the vehicle’s work factor and fu el ty pe, and that the average fuel consumption and CO 2 emission rates required of the manufacturer will be defined as the production
- weighted average of these targets. The proposed fuel consumption targets are linear functions defined by the slopes and intercepts shown below in Figure 1, Figure 2, and Table 4.******* **E.O. 12866 Review** 

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- 11 **Table 1 NHTSA’s Estimated 2018**  **- 202**  **9 Model Year Lifetim**  **e Discounted Costs, Benefits, and Net Benefits**  **using Method A and Relative to the More Dynam ic Baseline and A**  **ssu ming the**  **3% Discount Rate SCC**  **Value a**  **( B**  **illions of 20 12**  **D ollars)**  Lifetime Present Value

– 3% Discount Rate Vehicle Program
- $25.2 Maintenance
- $1.1 Fuel Savings $170.1 Benefits $93.8 Net Benefits $238

Annualized Value

– 3% Discount Rate Vehicle Program
- $1.0 Maintenance
- $0.04 Fuel Savings $6.7 Benefits $3.7 Net Benefits $9.4

Lifetime Present Value
- 7% Discount Rate Vehicle Program
- $17 Maintenance
- $0.6 Fuel Savings $91.7 Benefits $66.1 Net Benefits $140

Annualized Value

– 7% Discount Rate Vehicle Program
- $1.2 Maintenance
- $0.04 Fuel Savings $6.7 Benefits $4.8 Net Benefits $10.2 Note s : a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1

**Table 2**  **EPA’s Estimated 2018 -**  **202 9**  **Model Year Lifetime Discounted Costs, Benefits, and Net Benefits**  **using Method B and Relative to the Less Dynamic Baseline and A**  **ssu ming the**  **3% D**  **iscount R**  **ate SCC Value a**  **( B**  **illions of 20**  **12 D**  **ollars)** Lifetime Present Value c

– 3% Discount Rate Vehicle Program
- $25 Maintenance
- $1.1 Fuel Savings $171 Benefits b $97******* **E.O. 12866 Review** 

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- 12 Net Benefits d $242

Annualized Value e

– 3% Discount Rate Vehicle Program
- $1.3 Maintenance
- $0.1 Fuel Savings $8.7 Benefits b $4.9 Net Benefits d $12.3

Lifetime Present Value c
- 7% Discount Rate Vehicle Program
- $17 Maintenance
- $0.6 Fuel Savings $90 Benefits b $65 Net Benefits d $138

Annualized Value e

– 7% Discount Rate Vehicle Program
- $1.3 Maintenance $0.0 Fuel Savings $7.3 Benefits b $4.2 Net Benefits d $10.1 Notes: a For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline , 1b, please see Preamble Section X.A.1 b EPA estimated the benefits associated with four different values of a one ton CO 2 reduction (model average at 2.5% discount rate, 3%, and 5%; 95 th percentile at 3%), which each increase over time. For the purposes of this overview presentation of estimated costs and benefits, however , the benefits shown here use the marginal value deemed to be central by the interagency working group on this topic: the model average at 3% discount rate, in 2012 dollars. Chapter 8.5 provides a complete lis t of values for the 4 estimates. Note that net present value of reduced CO 2 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 Chapter 8.5 for more detail. c Present value is the total, aggregated amount that a series of monetized costs or benefits that occur over time is worth now (in year 2012 doll ar terms), discounting future values to the present over the lifetime of each model year vehicle. d Net benefits reflect the fuel savings plus benefits minus costs. e The annualized value is the constant annual value through a 30 year lifetime whose summed present value equals the present value from which it was derived
. Annualized SCC values are calculated using the same rate as that used to determine the SCC value, while all other costs and benefits are annualized at either 3% or 7%.******* **E.O. 12866 Review** 

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- 13 TABLE 3 SUM MARY OF PROPOSED 2027 STANDARDS INCLUDING AVERAGE PER VEHICLE COSTS AND PROJECTED IMPROVEMENT REGULATORY SUBCATEGORY CO 2 GRAMS PER TON
- MILE (FOR ENGINES , CO 2 GRAMS PER BRAKE HORSEPOWER
HOUR ; FOR HD PUV, GRAMS PER MILE ) FUEL

CONSUMPTION GALLON PER 1,000 TON
- MILE (FOR ENGINES , GALLONS PER 100 BRAKE HORSEPOWER
HOUR ; FOR HD PUV, GALLONS PER 100 MILES) AVERAGE

INCREMENTAL COST PER VEHICLE OR ENGINE RELATIVE TO PHASE 1 COSTS IN MODEL YEAR 2027 a AVERAGE

PERCENT FUEL CONSUMPTION AND CO 2 IMPROVEMENT IN MY 2027 RELATIVE TO MY 201 7
**Tractors** Class 7 Low Roof Day Cab 87 8.5462 $10,140 19% Class 7 Mid Roof Day Cab 96 9.4303 $10,140 19% Class 7 High Roof Day Cab 96 9.4303 $10,099 21% Class 8 Low Roof Day Cab 70 6.8762 $10,204 19% Class 8 Mid Roof Day Cab 76 7.4656 $10,204 18% Class 8 High Roof Day Cab 76 7.4656 $10,209 20% Class 8 Low Roof Sleeper Cab 62 6.0904 $12,744 22% Class 8 Mid Roof Sleeper Cab 69 6.7780 $12,744 21% Class 8 High Roof Sleeper Cab 67 6.5815 $12,842 24% **Trailers** Long Dry Box Trailer 77 7.5639 $1,409 8 % Short Dry Box Trailer 140 13.7525 $1,280 7 % Long Refrigerated Box Trailer 80 7.8585 $1,253 5 % Short Refrigerated Box Trailer 144 14.1454 $1,253 5 % Note s : a Engine costs are included in average vehicle costs
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- 14 **Table 3 (cont.) Summ**  **ary of Proposed 2027 Standards Including Average Per Vehicle Costs and Projected Improvement**  REGULATORY SUBCATEGORY CO 2 GRAMS PER TON
- MILE (FOR ENGINES , CO 2 GRAMS PER BRAKE HORSEPOWER
HOUR ; FOR HD PUV, GRAMS PER MILE ) FUEL CONSUMPTION GALLON PER 1,000 TON
- MILE (FOR ENGINES , GALLONS PER 100 BRAKE HORSEPOWER
HOUR ; FOR HD PUV, GALLONS PER 100 MILES) AVERAGE INCREMENTAL COST PER VEHICLE OR ENGINE RELATIVE TO PHASE 1 COSTS IN MODEL YEAR 2027 a AVERAGE

PERCENT FUEL CONSUMPTION AND CO 2 IMPROVEMENT IN MY 2027 RELATIVE TO MY 201 7

**Vocational Diesel** LHD Urban 272 26.7191 $3,489 16 % LHD Multi
- Purpose 280 27.5049 $3,490 16 % LHD Regional 292 28.6837 $1,407 16 % MHD Urban 172 16.8959 $4,696 16 % MHD Multi
- Purpose 174 17.0923 $4,696 16 % MHD Regional 170 16.6994 $1,395 16 % HHD Urban 182 17.8782 $7,422 16 % HHD Multi
- Purpose 183 17.9764 $7,422 16 % HHD Regional 174 17.0923 $4,682 16 % **Vocational Gasoline** LHD Urban 299 33.6446 $3,086 12 % LHD Multi
- Purpose 308 34.6574 $3,087 12 % LHD Regional 321 36.1202 $1,004 12 % MHD Urban 189 21.2670 $4,327 13 % MHD Multi
- Purpose 191 21.4921 $4,327 13 % MHD Regional 187 21.0420 $1,026 13 % HHD Urban 196 22.0547 $7,053 12 % HHD Multi
- Purpose 198 22.2797 $7,053 12 % HHD Regional 188 21.1545 $4,313 12 % **Diesel Engines** a LHD Vocational 553 5.4322 $ 471 4 % MHD Vocational 553 5.4322 $ 437 4 % HHD Vocational 533 5.2358 $437 4 % MHD Tractor 466 4.5776 $1,698 4 % HHD Tractor 441 4.3320 $1,698 4 % **Class 2b and 3 HD Pickups and Vans** b **HD Pickup and Van** 458 4.8608 $1,357 18% Note s: a Engine costs are included in average vehicle costs
. Costs shown for diesel engines are not additive to vehicle costs. b For HD pickups and vans, Table 3 shows results for MY2029 , assuming continuation of proposed MY2027 standard.******* **E.O. 12866 Review** 

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- 15 **Figure 1**  **EPA Proposed CO 2**  **Target Standards and NHTSA Proposed**  **Fuel Consumption Target Standards for**  **Diesel HD Pickups and Vans** 

**Figure 2**  **EPA Proposed CO 2**  **Target Standards and NHTSA Proposed**  **Fuel Consumption Target Standards for Gasoline HD Pickups and Vans**  3. 44 3. 94 4. 44 4. 94 5. 44 5. 94 6. 44 6. 94

350 400 450 500 550 600 650 700 750

3000 3500 4000 4500 5000 5500 6000 6500 7000 Work Factor Die sel S tandardsCO2(gramspermile)

3. 94 4. 44 4. 94 5. 44 5. 94 6. 44 6. 94 7. 44 7. 94 8. 44

350 400 450 500 550 600 650 700 750

3000 3500 4000 4500 5000 5500 6000 6500 7000 Wo rk Factor Ga sol in e StandardsFuelConsumption(gallonsper100miles)CO2(gramspermile)******* **E.O. 12866 Review** 

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- 16 Described mathematically , EPA’s and NHTSA’s proposed target standards are defined by the following formulas: EPA CO **2** Target (g/mile) = [a x WF] + b NHTSA Fuel Consumption Target (gallons /100 miles) = [c x WF] + d Where: WF = Work Factor = [0.75 x (Payload Capacity + xwd)] + [0.25 x Towing Capacity] Payload Capacity = GVWR (lb)

– Curb Weight (lb) xwd = 500 lb if the vehicle is equipped with 4wd, otherwise equals 0 lb. Towing Capacity = GC WR (lb)

– GVWR (lb) Coefficients a, b, c, and d are taken from Table
. **Table 4.**  **Proposed Phase 2 Coefficients for HD Pickup and Van Target Standards**

**DIESEL VEHICLES** Model Year a b c d 2018
- 2020 a 0.0416 320 0.0004086 3.143 2021 0.0406 312 0.0003988 3.065 2022 0.0395 304 0.0003880 2.986 2023 0.0386 297 0.0003792 2.917 2024 0.0376 289 0.0003694 2.839 2025 0.0367 282 0.0003605 2.77 0 2026 0.0357 275 0.0003507 2.701 202 7 and later 0.0348 268 0.0003418 2.633 **Gasoline Vehicles** Model Year a b c d 2018
- 2020 a 0.044 339 0.0004951 3.815 2021 0.0429 331 0.0004827 3.725 2022 0.0418 322 0.0004703 3.623 2023 0.0408 314 0.0004591 3.533 2024 0.0398 306 0.0004478 3.443 2025 0.0388 299 0.0004366 3.364 2026 0.0378 291 0.0004253 3.274 202 7 and later 0.0369 284 0.0004152 3.196 Note : a Phase 1 primary phase
- in coefficients. Alternative phase
- in coefficients are different in MY2018 only.******* **E.O. 12866 Review** 

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- 17 This Draft Regulatory

Impact Anal ys is (RIA) provides detailed supporting documentation to EPA and NHTSA joint proposal under each of their respective statutory authorities. Because there are slightl y different requirements and flexibilities in the two authorizing statutes, this Draft RIA provides documentation for the primary joint provisions as well as for provisions specific to each agency
. This RIA is generall y organized to provide overall background information, methodologies, and data inputs, followed by results of the various technical and economic anal ys es. A summary

of each chapter of the RIA follows. **Chapter 1:** Industry

Characterization. Inorder to asses s the impacts of greenhouse gas (GHG) and fuel consumption regulations upon the affected industries, it is important to understand the nature of the industries imp acted by the regulations. The heavy
- duty vehicle industries include the manufacturers of Cla ss 2b through Class 8 trucks, engines, trailers and some other equipment. Of these categories, trailers are the onl y industry that would be newl y regulated under the proposed standards. This chapter provides market information for the trailer industry , as well as the variety of ownership patter n s, for background purposes. **Chapter 2:** Technology and Cost
. This chapter presents details of the vehicle and engine technolog ies and technolog y packages for reducing greenhouse gas emissions and fuel consumption. These technolog ies and technolog y packages represent potential way s that the industry could meet the CO 2 and fuel consumption stringenc y levels , and they provide the basis for the technology

costs and effectiveness anal ys es. **Chapter 3:** Test Procedures. Laboratory procedures to phy sically test engines , vehicles , and components are a crucial aspect of the heav y- duty vehicle GHG and fuel consumption program. The rulemaking would establish some new test procedures for both engine and vehicle co mpliance and would revise existing procedures . This chapter describe s the relevant test procedures, including methodologies for assessing engine emission performance , the effects of aerodynamics and tire rolling resistance, as well as procedures for chass is dy namometer testing and their associated drive cycles. **C hapter 4:**  Vehicle Simulation Model
. An important aspect of a regulatory program is its ability to accuratel y estimate the potential environmental benefits of heavy
- duty truck technologies through testing and anal ys is. Most large truck manufacturers employ various computer simulation methods to estimate truck efficiency for purposes of developing and refining their products . Each method has advantages and disadvantages. This section will focus o n the use of a type truck simulation modeling that the agencies have developed specifically for******* **E.O. 12866 Review** 

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- 18 assessing tailpipe GHG emissions and fuel consumption for purposes of this rulemaking . The agencies are proposing to revise the existing simulation model
-- th e “ Greenhouse gas Emissions Model (GEM) ”
-- as the primary tool to certify

vocational vehicles, combination tractor, and combination trailers, Class 2b through Class 8 heavy
- duty vehicles that are not heav y- duty pickups or vans) and discuss the model in th is chapter. **Chapter 5:** Impacts on Emissions and Fuel Consumption
. This program estimates anticipated impacts from the CO 2 emission and fuel efficiency standards. The agencies quantify fuel use and emissions from the GHGs carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O) and h ydrofluorocarbons (HFCs). In addition to reducing the emissions of greenhouse gases and fuel consumption , this program would also influence the emissions of “crit eria” air pollutants, including carbon monoxide (CO), fine particulate matter ( PM 2.5 ) and sulfur dioxide (SO X) and the ozone precursors hydrocarbons (VOC) and oxides of nitrogen (NO X) ; and several air toxics (including benzene, 1,3
- butadiene, formaldehyde, acetaldeh yd e, and acrolein) , a s described further in Chapter 5
. The agencies used EPA’s Motor Vehicle Emission Simulator (MOVES201 4 ) to estimate downstream (tailpipe) emission impacts for combination tractors and vocational vehicles , and a spreadsheet model based on emission factors th e “GREET” model to estimate u pstream (fuel production and distribution) emission changes resulting from the decreased fuel. For HD pickups and vans, the agencies used DOT’s CAFE model to estimate manufacturer responses to the proposed standards. NHTSA us ed the CAFE model to estimate emission impacts, and EPA used the CAFE model technology penetration outputs as an input to MOVES to calculate emission impacts. Based on these anal ys es, th e agencies estimate that th is program would lead to 183.4 million metric tons (MMT) of CO 2 equivalent (CO 2 EQ) of annual GHG reduction and 13.4 billion gallons of fuel savings in the ye ar 2050 , as discussed in more detail in Chapter 5
. **Chapter 6**  **:** Health and Environmental Impacts. This chapter discusses the health effects associated with non
- GHG pollutants, specificall y: particulate matter, ozone, nitrogen oxides (NO X), sulfur oxides (SO X), carbon monoxide and air toxics. These pollutants would not be directly regulated by

the standards, but the standar ds would affect emissions of these pollutants and precursors. Reductions in these pollutants are the co
- benefits of the rulemaking (that is, benefits in addition to the benefits of reduced GHGs). This chapter also discusses GHG
- related impacts, such as c hanges in atmospheric CO 2 concentrations, global mean temperature, sea level rise, and ocean pH associated with the p ro gram’s GHG emissions r eductions
. **Chapter 7**  **:** Vehicle
- Related Costs of the Program . In this chapter, the agencies present our estimate of the costs associated with the proposed program. The presentation summarizes the costs associated with new technology expected to be added to meet the GHG and fuel consumption standards, including hardware costs to comply with the air conditioning (A/C) l eakage program. The analy sis discussed in Chapter 7 provides our best estimates of incremental costs on a per truck basis and on an annual total basis. We also present the fuel savings and maintenance costs in this c hapter, along with a detailed pay back anal ys is for various vehicle segments.******* **E.O. 12866 Review** 

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- 19 **Chapter 8**  **:** EPA’s Economic and Other Impacts Analy sis
. This chapter provides EPA’s description of the net benefits of the proposed HD National Program
. To reach these conclusions, the chapter discusses each of the following aspects of the analy ses of benefits: Rebound Effect : The VMT rebound effect refers to the fraction of fuel savings expected to result from an increase in fuel efficiency that is offset by

additional vehicle use. Energy Security Impacts: A red uction of U.S. petroleum imports reduces both financial and strategic risks associated with a potential disruption in supply or a spike in cost of a particular energy

source. This reduction in risk is a measure of improved U.S. energy security
. Monetized CO2 Impacts : The agencies estimate the monetized benefits of GHG reductions b y assigning a dollar value to reductions in CO 2 emissions using recent estimates of the social cost of carbon (SCC). The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year. Other Impacts: There are other impacts associated with the GHG emissions and fuel efficiency standards. Lower fuel consumption would, presumably , result in fewer gallons being refilled and, thus, less time spent refueling . The i ncrease in vehicle
- miles driven due to a positive rebound effect may also increase the societal costs associated with traffic congestion, crashes, and noise. However, if drivers drive those additional rebound mil es, there must be a value to them which we estimate as the value of increased travel. The agencies also discuss the impacts of safety standards and voluntary safety improvements on vehicle weight. Chapter 8 also presents a summary of the total costs, total benefits, and net benefits expected under the pro gram . **Chapter 9**  **:** NHTSA and EPA considered the potential safety impact of technologies that improve HD vehicle fuel efficiency and GHG emissions as part of the assessment of regulatory alternatives. Th is chapter discusses the literature and research considered by the agencies, which included two N ational A cademies of S cience reports, an anal ys is of safety effects of HD pickups and vans using estimates from the DOT report on the effect of mass reduction and vehicle size on safety, and agency
- sponsored safety testing and research
. **Chapter 10:** NHT S A CAFE Model. This chapter describes NHTSA’s CAFE modeling sy stem. The agencies used DOT’s CAFE model to estimate manufacturer responses to the proposed standards for HD pickups and vans, and NHTSA also used the CAFE model to estimate emission impacts for this sector. **Chapter 11**  **:** Results of Preferred and Alternative Standards. The heavy
- duty truck segment is very

complex. The sector consists of a diverse group of impacted parties, including engine manufacturers, chassis manufacturers, truck manufacturers, trailer manufacturers, truck fleet owners and the public. The agencies have largel y designed this program to maximize the environmental and fuel savings benefits, taking into account the unique and varied nature of the regulated industries. In developing this program, we considered a number of alternatives that could have resulted in fewer or potentiall y greater GHG and fuel consumption reductions than the program we are proposing. Chapter 9 section summarizes the alternatives we considered.******* **E.O. 12866 Review** 

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- 20 **Chapter 1**  **2 :**  Small Business Flexibility Analy sis. This chapter describes the agencies’ anal ys is of the small business impacts du e to the joint pro gram . **Chapter 13:**  Natural Gas Vehicles and Engines . This chapter describes EPA’s lifecycle anal ys is for natural gas used by the heavy
- duty

truck sector.