Alliance ofAutomobile Manufacturers Testimony on the Proposed Rulemaking to Change Listing Status for Certain Substitutes Underthe SignificantNew Alternatives·Policy Program August27,2014 Good morning. My name is Julie Becker, and I am the Vice President ofEnvironmental Affairs for the Alliance ofAutomobile Manufacturers (Alliance), a trade association oftwelve carand light truck manufacturers comprised ofBMW Group, Chrysler Group LLC, Ford Motor Company, General Motors Company, JaguarLand Rover, Mazda, Mercedes-BenzUSA, Mitsubishi Motors, Porsche Cars, Toyota, Volkswagen Group and Volvo Cars. Together, Alliance members accountfor 75%ofthe newvehicles sold in the U.S. each year. Automakers supported the development ofthe groundbreaking SingleNational Program governing light-duty vehicle greenhouse gas emissions and fuel economy. Ourindustry was the first to commit to significant greenhouse gas reductions, andhas investedbillions to achieve the goals ofthe SingleNational Program. One measure ofthis effort is the introduction ofnewmodels achievinghigherfuel economy. In 2006, 69 models oflight-duty vehicles achieved 30 MPG orbetterhighway fuel economy. Today-justeight years later- consumers nowcan choose from 450 vehiclesthat offer this level offuel economy, an increase ofover552%. In addition, consumers can choose from diverse technologies to improvetheirfuel economy, including 51 hybrids, 35 clean diesels, 7 plug

-in hybrids and 11 battery electric vehicles, according to www.fueleconomy.gov. And the latest reports demonstrate that fuel economy is improving for all types oflight-duty vehicles. As part oftheir commitmentto improve fuel economy and reduce greenhouse gases, automakers support transitioning as quickly aspossible to refrigerants witha lower GWP. To do this, current models will need to beredesigned and a reliable supply ofthe new refrigerants established. Inaddition to investing heavily into research on alternative refrigerants, automakers have worked to improve the efficiency ofrefrigeration systems to prevent leakage. EPA projected that automakers will achieve a net-zero greenhouse gas impact from leakage by 2021. 1 And reports on refrigerant systemperformance, such as the Minnesotarefrigerant leakage reports, demonstrate that leakage rates ofrefrigerants are beingreduced. Byreducing leakage, we reduce the emissions oftoday'srefrigerants and save consumersthe cost ofexpensive refills. Going forward

- as EPA notes inthe NPRM

- these improvements will reduce the motivation to improperly refill with HFC-134aanA/C system designed for HF0-1234yf. Thekey question today is notwhetherto transition to low-GWP refrigerants; it's when the SNAP rule should take effect and how it should be structured. As to when, we would proposetherule take effect at the end of2025. Simply put, doing sowouldpreservethe integrity ofthe Single National Program for GHG emissions and fuel economy withoutthreatening the program's greenhouse gas reductions.

177 Fed.Reg. 62624, 62806 (Oct. 15, 2012) ("EPA believes that a total phase-in ofalternative refrigerants is likely to begin in the near future and becompleted by no later than MY 2021...")An integral part of that program is the earning of credits for transitioning to the new refrigerants , and we appreciate that EPA is not proposing to change those credits. However, a second key element of the Sing l e National Program is that each manufacturer be able to determ ine , modelby-model , when to transition to low - GWP refrigerants. There is no " drop in" solution here; the transition to low-GWP refrigerants will only occur as models undergo major redesign or new models are introduced. This i s why, when it set the GHG standards , EPA predicted that manufacturers would transition to low-GWP refrigerants by 2021 but allowed any manufacturer that fails to do so to make up the difference by finding other ways to achieve t he equal G H G reductions. EPA now proposes to take away that valuable flexibility. Given that there is no measurable environmental impact at stake, we think that the best way to preserve the integrity of the Single National Program i s to allow the use of HFC 1 34a until the end of 2025 . Our second major concern is how exports are addressed. Auto manufacturing is a cornerstone of th e U . S. economy, supporti n g eight million jobs across the country. Exports

- a bright spo t in the U.S. economy- represent about one-fourth of U.S. auto manufacturing. That's two million job s! U.S. assembly plants export to over 130 countries around the world / including many that have

not begun creating the infrastructure for servicing and refilling mobile air conditioning systems with the new refrigerants , let alone updating their regulations governing transport and handling

of new refrigerants. If the U.S. is any example, this process could take up to a decade. We understand that EPA is reluctant to make an export exception , but this is an exceptional situation. For appliances like refrigerators, manufacturers could unilaterally produce and export products that met all the EPA Use Conditions for safe operation , without the need for significant supporting actions by foreign governments and extensive new service support programs by independent overseas companies and industries. In this instance , however, satisfying the necessary Use Conditions in export markets cannot be unilaterally achieved by the automobile manufacturers. Automobi l es are different than other appliances considered in past SNAP decisions on exports, since automobile air conditioners have much higher lifetime service and maintenance needs. Absent changes in the SNAP rule, both the lack of infrastructure and the fact that alternative refrigerants may not be approved for use in some nations would effectively prevent manufacturers in the US. from exporting vehicles to some markets. The Alliance therefore recomme nd s that EPA adopt provisions consistent with what the EU has done , that limit the SNAP rule to vehicles in t ended for the U.S. market. In conclusion , we urge EPA to adopt the fo llo wing in the final rule: • The change of listing status should take effect no earlier the end of 2025. • The change oflisting status should apply to vehicles intended for the U.S. market. • EPA should state clearly and unequivocally in the Final Rule that EPA is committed to continuing the A/C credits through MY 2025 and beyond. Thank you for this opportunity to testify. Of course , we also plan to provide in-depth written comments on a variety of issues raised by the NPRM. 2 http :// www . autoalliance.org/index.cfm?objectid = 44A096CO-B3F5-ll El-A8A9000 C 296BA 163