Vol. 78 Wednesday, 

No. 6 January 9, 2013 

Part VI 

Environmental Protection Agency 

California State Motor Vehicle Pollution Control Standards; Notice of 

Decision Granting a Waiver of Clean Air Act Preemption for California’s 

Advanced Clean Car Program and a Within the Scope Confirmation for 

California’s Zero Emission Vehicle Amendments for 2017 and Earlier Model 

Years; Notice 


srobinson on DSK4SPTVN1PROD with 
2112 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

1CARB waiver request at EPA–HQ–OAR–2012– 

0562–0004. The cover letter to CARB’s Waiver 

Request is at EPA–HQ–OAR–2012–0562–0004. 

2CARB supplemental request at EPA–HQ–OAR– 

2012–0562–0374. 

ENVIRONMENTAL PROTECTION 

AGENCY 

[FRL–9768–1] 

California State Motor Vehicle 

Pollution Control Standards; Notice of 

Decision Granting a Waiver of Clean 

Air Act Preemption for California’s 

Advanced Clean Car Program and a 

Within the Scope Confirmation for 

California’s Zero Emission Vehicle 

Amendments for 2017 and Earlier 

Model Years 

SUMMARY: The Environmental Protection 

Agency (EPA) is granting the California 

Air Resources Board’s (CARB’s) request 

for a waiver of Clean Air Act 

preemption to enforce its Advanced 

Clean Car (ACC) regulations. The ACC 

combines the control of smog and soot 

causing pollutants and greenhouse gas 

(GHG) emissions into a single 

coordinated package of requirements for 

passenger cars, light-duty trucks and 

medium-duty passenger vehicles (and 

limited requirements related to heavyduty vehicles). The ACC program 

includes revisions to California’s Low 

Emission Vehicle (LEV) program as well 

as its Zero Emission Vehicle (ZEV) 

program. By today’s decision, EPA has 

also determined that CARB’s 

amendments to the ZEV program as they 

affect 2017 and prior model years (MYs) 

are within the scope of previous waivers 

of preemption granted to California for 

its ZEV regulations. In the alternative, 

EPA’s waiver of preemption for CARB’s 

ACC regulations includes a waiver of 

preemption for CARB’s ZEV 

amendments as they affect all MYs, 

including 2017 and prior MYs. In 

addition, EPA is including CARB’s 

recently adopted ‘‘deemed to comply’’ 

rule for GHG emissions in today’s 

waiver decision. This decision is issued 

under section 209(b) of the Clean Air 

Act (the ‘‘Act’’), as amended. 

DATES: Petitions for review must be filed 

March 11, 2013. 

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. EPA–HQ–OAR–2012–0562. All 

documents and public comments in the 

docket are listed on the 

www.regulations.gov Web site. Publicly 

available docket materials are available 

either electronically through 

www.regulations.gov or in hard copy at 

the Air and Radiation Docket in the EPA 

Headquarters Library, EPA West 

Building, 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 holidays. The telephone 

number for the Reading Room is (202) 

566–1744. The Air and Radiation 

Docket and Information Center’s Web 

site is http://www.epa.gov/oar/ 

docket.html. The electronic mail (email) 

address for the Air and Radiation 

Docket is: a-and-r-Docket@epa.gov, the 

telephone number is (202) 566–1742 

and the fax number is (202) 566–9744. 

FOR FURTHER INFORMATION CONTACT: 

Specific questions may be addressed to 

David Dickinson, Office of 

Transportation and Air Quality, 

Compliance Division (6405J–NLD), EPA, 

1200 Pennsylvania Ave. NW., 

Washington, DC 20460, telephone: (202) 

343–9256, email: 

Dickinson.David@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Executive Summary 

II. Background 

A. California’s Advanced Clean Cars 

Program for New Motor Vehicles 

B. EPA’s Consideration of CARB’s Request 

III. Analysis of Preemption Under Section 

209 of the Clean Air Act 

A. Clean Air Act Preemption Provisions 

B. Deference to California 

C. Burden of Proof 

D. Comments Received on EPA’s 

Application of the Section 209(b) Criteria 

IV. California’s Within the Scope Request for 

Its Zero Emission Vehicle Amendments 

A. Chronology 

B. CARB’s ZEV Amendments 

C. EPA’s Determination Regarding the 

Appropriateness of CARB’s Within the 

Scope Request for the 2012 ZEV 

Amendments 

D. Application of the Within the Scope 

Waiver Criteria to CARB’s 2012 ZEV 

Amendments Regarding 2017 and Earlier 

MYs 

1. Public Health and Welfare 

2. Consistency With Section 202(a) 

3. New Issues 

V. Consideration of the Advance Clean Car 

Regulations Under the Full Waiver 

Criteria 

A. California’s Protectiveness 

Determination 

1. Comments on CARB’s Protectiveness 

Determination 

2. Is California’s protectiveness 

determination arbitrary and capricious? 

3. Section 209(b)(1)(A) Conclusion 

B. Does California need its standards to 

meet compelling and extraordinary 

conditions? 

1. EPA’s March 6, 2008 GHG Waiver Denial 

2. EPA’s July 9, 2009 GHG Waiver 

3. Response to Comments Received 

4. CARB’s GHG Emission Standards 

5. CARB’s ZEV Emission Standards 

6. CARB’s PM Emission Standards 

7. Section 209(b)(1)(B) Conclusion 

C. Are the California ACC standards 

consistent with section 202(a) of the 

Clean Air Act? 

1. Historical Approach 

2. LEV III Criteria Pollutant Standards 

a. Particulate Matter Standards 

b. EPA’s Response to Comments 

3. LEV III Greenhouse Gas Emission 

Standards 

a. Comments on CARB’s 2017 Through 

2025 GHG Emission Standards 

b. EPA’s Response to Comments 

4. California’s ZEV Amendments as They 

Affect 2018 Through 2025 Model Years 

a. Comments on CARB’s ZEV Amendments 

b. EPA’s Response to Comments 

c. Conclusion on Technological Feasibility 

5. Consistency of Certification Test 

Procedures 

6. Relevance of the Energy Policy and 

Conservation Act (EPCA) to the Waiver 

Decision 

VI. Decision 

VII. Statutory and Executive Order Reviews 

I. Executive Summary 

Today, as Assistant Administrator of 

the EPA’s Office of Air and Radiation, 

I am granting California’s request for a 

waiver of Clean Air Act preemption for 

California’s ACC that combines the 

control of smog and soot causing 

pollutants and GHG emissions into a 

single coordinated package of 

requirements for MY 2015 through 2025 

passenger cars (PCs), light-duty trucks 

(LDTs), medium-duty passenger 

vehicles (MDPVs), and limited 

requirements related to heavy-duty 

vehicles (HDVs). The ACC program 

regulations include revisions to both 

California’s LEV and ZEV programs. By 

letter dated June 27, 2012, CARB 

submitted a request (CARB waiver 

request) that EPA grant a waiver of 

preemption under section 209(b) of the 

Clean Air Act (CAA), 42 U.S.C. 7543(b) 

for the revisions to the LEV program 

(LEV III).1 CARB also sought 

confirmation that the amendments to 

the ZEV program are within the scope 

of prior waiver decisions issued by EPA, 

or in the alternative requested a waiver 

for these revisions (the LEV III and ZEV 

amendments, together known as the 

ACC, are considered as CARB’s waiver 

request). By letter dated December 7, 

2012, CARB submitted additional 

information (CARB supplemental 

request) to EPA requesting that EPA 

consider as part of CARB’s pending ACC 

waiver request the CARB’s Executive 

Officer adopted ‘‘deemed to comply’’ 

regulation.2 CARB’s ‘‘deemed to 

comply’’ regulation, adopted by CARB’s 

Board on November 15, 2012 and final 

action taken by CARB’s Executive 

Officer on December 6, 2012, allows 

automobile manufacturers to 

demonstrate compliance with CARB’s 

GHG standards by complying with 


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Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2113 

3 Motor and Equipment Manufacturers Ass’n v. 

EPA (MEMA I), 627 F.2d 1095, 1120–1121 (D.C. Cir. 

1979). 

4 Decision Documents accompanying within the 

scope of waiver determinations in 66 FR 7751 

(January 25, 2001) at p. 5 and 51 FR 12391 (April 

10, 1986) at p. 2, see also, e.g., 46 FR 36742 (July 

15, 1981). 

5EPA’s LEV waiver decisions are found at 58 FR 

4166 (January 13, 1993); 64 FR 42689 (August 5, 

1999); 68 FR 19811 (April 22, 2003); 70 FR 22034 

(April 28, 2005); and 75 FR 44951 (July 30, 2010). 

EPA’s GHG waiver decisions are found at 73 FR 

12156 (March 6, 2008) (GHG waiver denial); 74 FR 

32744 (July 8, 2009) (GHG waiver); and 76 FR 34693 

(June 14, 2011) (This prior within the scope 

decision included CARB’s prior ‘‘deemed to 

comply’’ regulation for the 2012–2016 MYs). EPA’s 

most recent ZEV waiver decisions are found at 71 

FR 78190 (December 28, 2006); and 76 FR 61095 

(October 3, 2011). 

6EPA received support for CARB’s waiver 

request, in the form of oral testimony and/or written 

comment (all docket references are to EPA–HQ– 

OAR–2012–0562–XXXX, with the last four numbers 

associated with each comment) from: 

Environmental Defense Fund (EDF)—0025 and 

0353, the National Association of Clean Air 

Agencies (NACAA)—0028, American Lung 

Association—0029, Advanced Engine Systems 

Institute—0030, Environment America—0031, 

Consumer Federation of America (CFA)—0032, 

Manufacturers of Emission Control (MECA)—0033, 

Natural Resources Defense Council (NRDC)—0347, 

South Coast Air Quality Management District 

(SCAQMD)—0346, Sierra Club—0348, Northeast 

States for Coordinated Air Uses Management 

(NESCAUM)—0350, New York State Department of 

Environmental Conservation—0351, Consumers 

Union—0354, and Union of Concerned Scientists— 

0355. EPA also received similar comment at the 

waiver public hearing, transcript found at EPA– 

HQ–OAR–2012–0562–0026. 

7EPA–HQ–OAR–2012–0562–0349. EPA also 

received written comment from Toyota Motor North 

America (Toyota) at EPA–HQ–OAR–2012–0562– 

0372 which notes that ‘‘Toyota could be forced to 

employ a variety of costly marketing programs to 

ensure compliance if the market does not accept 

ZEV technology in the volumes anticipated by 

California.’’ Toyota notes that its further concerns 

are expressed in detail in the Manufacturers 

comments. 

8EPA–HQ–OAR–2012–0562–0352. 

EPA’s GHG standards which were 

published for those MYs. 

By today’s decision we are confirming 

that CARB’s ZEV amendments, as they 

affect 2017 and prior MYs are within the 

scope of previous ZEV waivers. EPA 

also finds that the entire ACC program 

meets the criteria for a waiver of Clean 

Air Act preemption and thus we are 

granting a waiver for CARB’s ACC 

program. Included in EPA’s full waiver 

are CARB’s ‘‘deemed to comply’’ 

regulations, and the ZEV regulations as 

they affect 2017 and prior MYs. 

The legal framework for this decision 

stems from the waiver provision first 

adopted by Congress in 1967, and later 

modified in 1977. Congress established 

that there would be only two programs 

for control of emissions from new motor 

vehicles—EPA emission standards 

adopted under the Clean Air Act, and 

California emission standards adopted 

under state law. Congress accomplished 

this by preempting all state and local 

governments from adopting or enforcing 

emission standards for new motor 

vehicles, while at the same time 

providing that California could receive 

a waiver of preemption for its emission 

standards and enforcement procedures. 

Other states can only adopt standards 

that are identical to California’s 

standards. This struck an important 

balance that protected manufacturers 

from multiple and different state 

emission standards, and preserved a 

pivotal role for California in the control 

of emissions from new motor vehicles. 

Congress recognized that California 

could serve as a pioneer and a 

laboratory for the nation in setting new 

motor vehicle emission standards. 

Congress intentionally structured this 

waiver provision to restrict and limit 

EPA’s ability to deny a waiver. The 

provision was designed to ensure 

California’s broad discretion to 

determine the best means to protect the 

health and welfare of its citizens. 

Section 209(b) specifies that EPA 

must grant California a waiver if 

California determines that its standards 

are, in the aggregate, at least as 

protective of the public health and 

welfare as applicable federal standards. 

EPA may deny a waiver only if it makes 

at least one of three findings specified 

under the Clean Air Act (including 

whether California’s ‘‘protectiveness 

finding’’ noted above is arbitrary and 

capricious). Therefore, EPA’s role upon 

receiving a request for waiver of 

preemption from California is to 

determine whether it is appropriate to 

make any of the three findings specified 

by the Clean Air Act and if the Agency 

cannot make at least one of the three 

findings then the waiver must be 

granted. The three waiver criteria are 

properly seen as criteria for a denial— 

EPA must grant the waiver unless at 

least one of three criteria for a denial is 

met. This is different from most waiver 

situations before the Agency, where 

EPA typically determines whether it is 

appropriate to make certain findings 

necessary for granting a waiver, and if 

the findings are not made then a waiver 

is denied. This reversal of the normal 

statutory structure embodies and is 

consistent with the congressional intent 

of providing deference to California to 

maintain its own new motor vehicle 

emissions program. 

The three criteria for denial of a 

waiver are: first, whether California’s 

determination that its standards are, in 

the aggregate, at least as protective as 

applicable federal standards is arbitrary 

and capricious (Section 209(b)(1)(A)); 

second, whether California has a need 

for such standards to meet compelling 

and extraordinary conditions (Section 

209(b)(1)(B)); and third, whether 

California’s standards are consistent 

with Section 202(a) of the Clean Air Act 

(Section 209(b)(1)(C)). EPA and the 

Court of Appeals for the District of 

Columbia Circuit have consistently 

interpreted section 209(b) as placing the 

burden on the opponents of a waiver to 

demonstrate that one of the criteria for 

a denial has been met.3

If California acts to amend a 

previously waived standard or 

accompanying enforcement procedure, 

the amendment may be considered 

within the scope of a previously granted 

waiver provided that it does not 

undermine California’s determination 

that its standards in the aggregate are as 

protective of public health and welfare 

as applicable federal standards, does not 

affect its consistency with section 202(a) 

of the Clean Air Act, and raises no new 

issues affecting EPA’s previous waiver 

decisions.4

In this case, California is combining 

three sets of motor vehicle emission 

standards into a single ACC waiver 

request. The standards are 

complimentary in the way they address 

interrelated ambient air quality needs 

and climate change. EPA has previously 

granted a series of waiver and within 

the scope decisions regarding CARB’s 

LEV, ZEV and GHG emission programs.5

As part of EPA’s public comment 

process for CARB’s ACC waiver request, 

we have received comments from: 

several states and organizations 

representing states; health and 

environmental organizations; industry; 

and other stakeholders.6 The vast 

majority of comments EPA received 

were in support of the waiver. EPA 

received opposition to certain elements 

of the waiver, including a joint 

comment submitted by the Association 

of Global Automakers and the Alliance 

of Automobile Manufacturers 

(Manufacturers or Manufacturers 

comment).7 We also received opposition 

to the ACC waiver request from the 

National Automobile Dealers 

Association (NADA or Dealers, or 

NADA comment).8

After a thorough evaluation of the 

record, we have determined that the 

waiver opponents have not met their 

burden of proof in order for us to deny 

the CARB’s waiver request under any of 

the three criteria in section 209(b)(1). 

EPA also confirms that CARB’s ZEV 

amendments, as they affect the 2017 and 

earlier MYs are within the scope of 

previous waivers of preemption. In the 

alternative, EPA’s waiver of preemption 

for CARB’s ACC regulations includes a 


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2114 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

9Medium-duty vehicles (MDVs) are vehicles in 

California’s regulations between 8,500 and 114,000 

lbs GVWR that are also called Class 2b/Class 3 

vehicles. These vehicles are generally termed 

Heavy-duty vehicles under EPA’s regulations. 

10CARB’s Clean Fuel Outlet Regulation is not 

subject to preemption under section 209 of the 

Clean Air Act. 

waiver of preemption for CARB’s ZEV 

amendments as they affect all MYs, 

including 2017 and prior MYs. 

II. Background 

A. California’s Advanced Clean Car 

Program for New Motor Vehicles 

As further explained below, CARB 

has adopted amendments to title 13, 

California Code of Regulations (CCR), 

and has established a single coordinated 

package that includes amendments to 

three sets of regulations regulating 

emissions from new PCs, LDTs, MDPVs, 

and certain HDVs: 9 the LEV regulation 

which includes two components— 

standards relating to criteria pollutants 

and standards to regulate GHG 

emissions, and the ZEV program. 

This single ACC program combines 

the control of smog-causing pollutants 

and GHG emissions into a coordinated 

package of amendments and 

requirements for MY 2015 through 2025 

in order to address near and long term 

smog issues within California and 

identified GHG emission reduction 

goals. The program also includes 

amended ZEV regulations and a Clean 

Fuels Outlet regulation. These 

additional program elements are 

designed to address these goals as 

well.10 The ACC program, together, 

provides the regulated manufacturers 

with the ability to plan and integrate 

their product designs in order to meet 

applicable CARB emission 

requirements. 

In order to achieve further emission 

reductions from the light- and mediumduty fleet, CARB adopted several 

amendments that represent a 

strengthening of its ongoing LEV 

regulations, including: a reduction of 

fleet average emissions of new PCs, 

LDTs, and MDPVs to super ultra-lowemission vehicle (SULEV) levels by 

2025; replacement of separate nonmethane organic gas (NMOG) and 

oxides of nitrogen (NOX) standards with 

combined NMOG plus NOX standards, 

which provides automobile 

manufacturers with additional 

flexibility in meeting the new stringent 

standards; an increase of full useful life 

durability requirements from 120,000 

miles to 150,000 miles, which 

guarantees vehicles sustain these 

extremely low emission levels longer; a 

backstop to assure continued 

production of super-ultra-low-emission 

vehicles after partial-zero-emission 

vehicles (PZEVs) as a category are 

moved from the ZEV regulations to the 

LEV regulations in 2018; more stringent 

particulate matter (PM) standards for 

light- and medium-duty vehicles, which 

will reduce the health effects and 

premature deaths associated with these 

emissions; zero fuel evaporative 

emission standards for PCs and LDTs, 

and more stringent standards for 

medium- and heavy-duty vehicles 

(MDVs); and, more stringent 

supplemental federal test procedure 

(SFTP) standards for PC and LDTs, 

which reflect more aggressive real world 

driving and, for the first time, require 

MDVs to meet SFTP standards. 

The second component of CARB’s 

LEV III regulations includes 

amendments to its GHG emission 

standards. CARB’s GHG standards for 

the 2017 through 2025 MYs are 

designed to respond to California’s 

identified goals of reducing GHG 

emissions to 80 percent below 1990 

levels by 2050 and in the near term to 

reduce GHG levels to 1990 levels by 

2020. As such, CARB’s GHG 

amendments: reduce new light-duty 

CO2 emissions from new light-duty 

regulatory MY 2016 levels by 

approximately 34 percent by MY 2025, 

and from about 251 grams of CO2 per 

mile to 166 grams, based on the 

projected mix of vehicles sold in 

California; set emission standards for 

CO2, CH4, and N2O; establish footprint 

based CO2 emission standards, as 

distinguished from the current 

California GHG requirement of a fleet 

average GHG standard (this will allow 

manufacturers’ new vehicle fleet CO2

emissions to fluctuate according to their 

car-truck composition and sales 

according to vehicle footprint and will 

align the requirement with current 

federal GHG requirements); provide 

credits toward the CO2 standard if a 

manufacturer reduces refrigerant 

emissions from the vehicle’s air 

conditioning system; provide credits 

toward the ZEV standards if a 

manufacturer over complies with the 

LEV III GHG fleet requirement; provide 

credits towards the CO2 standards if a 

manufacturer produces full size pickups 

with high efficiency drive trains; 

provide credits for deployment of 

technologies that reduce off-cycle CO2

emissions; and require upstream 

emissions from zero-emission vehicles 

to be counted towards a manufacturer’s 

light-duty vehicle GHG emissions. 

CARB’s GHG emission regulations also 

include an optional compliance path 

whereby manufacturers may 

demonstrate compliance with CARB’s 

GHG emission regulations by complying 

with applicable EPA GHG emission 

requirements. 

Lastly, CARB’s ACC regulations 

include amendments to its ZEV 

regulations that can be described within 

two timeframes: (1) MY 2012 through 

2017; and (2) MY 2018 and beyond. 

CARB’s stated goal for amendments to 

the current ZEV regulation through MY 

2017 is to make corrections and 

clarifications to its regulations and to 

enable manufacturers to successfully 

meet the 2018 and later MY 

requirements. These amendments 

include: A provision of compliance 

flexibility whereby carry forward credit 

limitations for ZEVs were removed, 

allowing manufacturers to bank ZEV 

credits indefinitely for use in later years 

(the flexibility also included slightly 

reducing the 2015 through 2017 credit 

requirement for intermediate volume 

manufacturers (IVM, less than 60,000 

vehicles produced each year), to allow 

them to better prepare for requirements 

in 2018, and included a provision that 

allows ZEVs placed in any state that has 

adopted the California ZEV regulation to 

count towards the ZEV requirement 

through 2017 (i.e. extending the ‘‘travel 

provision’’ for BEVs through 2017); an 

adjustment of credits and allowances; 

and an addition of a new vehicle 

category (collectively ‘‘BEVx’’ vehicles) 

as a compliance option for 

manufacturers to meet up to half of their 

minimum ZEV requirement. 

CARB’s stated goal for its 

amendments affecting 2018 and 

subsequent MYs is the 

commercialization of ZEVs and 

‘‘transitional zero-emission vehicles 

(TZEV; commonly a plug-in hybrid 

electric vehicle—PHEV). California 

would achieve this objective by 

simplifying its regulation and pushing 

higher production volumes which in 

turn would achieve cost reductions. 

These amendments include: an 

increased ZEV requirement for 2018 and 

subsequent MYs that pushes ZEVs and 

TZEVs to more than 15 percent of new 

sales by 2025; the removal of PZEV 

(near-zero emitting conventional 

technologies) and advanced technology 

PZEV (AT PZEV, typically non-plug-in 

HEVs) credits as compliance options for 

manufacturers; an allowance for 

manufacturers to use banked PZEV and 

AT PZEV credits earned in 2017 and 

previous MYs, but discount the credits, 

and place a cap on usage in 2018 and 

subsequent MYs; amended 

manufacturer size definitions that bring 

all but the smallest manufacturers under 

the full ZEV requirements by MY 2018; 

a modified credit system that bases 

credits for ZEVs on range, with 50 mile 


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11EPA–HQ–OAR–2012–0562–0004. 

12 77 FR 53199 (August 31, 2012). 

13Clean Air Act (CAA) section 209(a), 42 U.S.C. 

§ 7543(a). 

14CAA section 209(b), 42 U.S.C. § 7543(b). 

California is the only State which meets section 

209(b)(1)’s requirement for obtaining a waiver. See 

S. Rep. No. 90–403 at 632 (1967). 

15 36 FR 17458 (Aug. 31, 1971). Note that the 

more stringent standard expressed here, in 1971, 

was superseded by the 1977 amendments to section 

209, which established that California must 

determine that its standards are, in the aggregate, 

at least as protective of public health and welfare 

as applicable Federal standards. 

16 40 FR 23103–23104; see also LEV I (58 FR 

4166), January 13, 1993)Decision Document at 64. 

BEVs earning 1 credit each and 350 Mile 

FCVs earning 4 credits each (the range 

of credit reflects the utility of the 

vehicle (i.e. the zero emitting miles it 

may travel) and its expected timing for 

commercialization) along with a 

simplified and streamlined TZEV 

credits system; a modified ‘‘travel’’ 

provision that ends the travel provision 

for BEVs after MY 2017and extends the 

travel provision for FCVs; and 

provisions allowing manufacturers who 

systematically over comply with the 

LEV III GHG fleet standard to offset a 

portion of their ZEV requirement in 

2018 through 2021 MYs only. 

B. EPA’s Consideration of CARB’s 

Request 

By letter dated June 27, 2012, CARB 

submitted a request (CARB waiver 

request) seeking a waiver of Section 

209(a)’s prohibition for its ACC 

standards.11 On August 31, 2012, a 

Federal Register notice (FR Notice) was 

published announcing an opportunity 

for hearing and comment on CARB’s 

request.12 EPA held a public hearing in 

Washington, DC on September 19, 2012. 

The written comment period closed on 

October 19, 2012. 

EPA’s FR Notice on CARB’s waiver 

request asked for comment on several 

matters. Since CARB had submitted a 

within the scope request for its ZEV 

amendments as they affect both the 

2012–2017 MYs and 2018 and 

subsequent MYs, EPA invited comment 

on the following issues: first, should 

California’s ZEV amendments, as they 

affect the 2012–2017 MYs and/or the 

2018 and later MYs, be considered 

under the within the scope criteria or 

should they be considered under the 

full waiver criteria?; second, to the 

extent part or all of those ZEV 

amendments should be considered as a 

within the scope request, do such 

amendments meet the criteria for EPA to 

confirm that they are within the scope 

of prior waivers? EPA also solicited 

comment in the event that EPA cannot 

confirm that some or all of CARB’s ZEV 

amendments are within the scope of 

previous waivers. We also requested 

comment on all aspects of the full 

waiver analysis with regard to the ACC 

program (the LEV III criteria pollutant 

and GHG regulations, and the ZEV 

amendments to the extent EPA does not 

consider them under the within the 

scope analysis noted above). Therefore, 

we asked commenters to consider the 

following three criteria: whether (a) 

California’s determination that its motor 

vehicle emission standards are, in the 

aggregate, at least as protective of public 

health and welfare as applicable Federal 

standards is arbitrary and capricious, (b) 

California needs such standards to meet 

compelling and extraordinary 

conditions, and (c) California’s 

standards and accompanying 

enforcement procedures are consistent 

with section 202(a) of the Clean Air Act. 

Because CARB noted (in its waiver 

request and in its incorporated Board 

Resolution 12–11) its commitment to 

propose a ‘‘deemed to comply’’ rule for 

its GHG standards shortly after EPA 

finalized its light-duty vehicle GHG 

emission standards, EPA specifically 

invited comment on CARB’s waiver 

request in light of CARB’s explicit plans 

concerning adoption of a ‘‘deemed to 

comply’’ provision into its LEV III GHG 

standards. 

III. Analysis of Preemption Under 

Section 209 of the Clean Air Act 

A. Clean Air Act Preemption Provisions 

Section 209(a) of the Act provides: 

No State or any political subdivision 

thereof shall adopt or attempt to enforce any 

standard relating to the control of emissions 

from new motor vehicles or new motor 

vehicle engines subject to this part. No State 

shall require certification, inspection or any 

other approval relating to the control of 

emissions from any new motor vehicle or 

new motor vehicle engine as condition 

precedent to the initial retail sale, titling (if 

any), or registration of such motor vehicle, 

motor vehicle engine, or equipment.13

Section 209(b)(1) of the Clean Air Act 

requires the Administrator, after an 

opportunity for public hearing, to waive 

application of the prohibitions of 

section 209(a) for any State that has 

adopted standards (other than crankcase 

emission standards) for the control of 

emissions from new motor vehicles or 

new motor engines prior to March 30, 

1966, if the State determines that its 

State standards will be, in the aggregate, 

at least as protective of public health 

and welfare as applicable Federal 

standards.14 However, no such waiver 

shall be granted by the Administrator if 

she finds that: (A) The protectiveness 

determination of the State is arbitrary 

and capricious; (B) the State does not 

need such State standards to meet 

compelling and extraordinary 

conditions; or (C) such State standards 

and accompanying enforcement 

procedures are not consistent with 

section 202(a) of the Act. In previous 

waiver decisions, EPA has stated that 

Congress intended EPA’s review of 

California’s decision-making be narrow. 

This has led EPA to reject arguments 

that are not specified in the statute as 

grounds for denying a waiver: 

The law makes it clear that the waiver 

requests cannot be denied unless the specific 

findings designated in the statute can 

properly be made. The issue of whether a 

proposed California requirement is likely to 

result in only marginal improvement in air 

quality not commensurate with its cost or is 

otherwise an arguably unwise exercise of 

regulatory power is not legally pertinent to 

my decision under section 209, so long as the 

California requirement is consistent with 

section 202(a) and is more stringent than 

applicable Federal requirements in the sense 

that it may result in some further reduction 

in air pollution in California.15

Thus, my consideration of all the 

evidence submitted concerning a waiver 

decision is circumscribed by its 

relevance to those questions that I may 

consider under section 209(b). 

B. Deference to California 

In previous waiver decisions, EPA has 

recognized that the intent of Congress in 

creating a limited review based on the 

section 209(b)(1) criteria was to ensure 

that the federal government did not 

second-guess state policy choices. This 

has led EPA to state: 

It is worth noting * * * I would feel 

constrained to approve a California approach 

to the problem which I might also feel unable 

to adopt at the federal level in my own 

capacity as a regulator. The whole approach 

of the Clean Air Act is to force the 

development of new types of emission 

control technology where that is needed by 

compelling the industry to ‘‘catch up’’ to 

some degree with newly promulgated 

standards. Such an approach * * * may be 

attended with costs, in the shaped of reduced 

product offering, or price or fuel economy 

penalties, and by risks that a wider number 

of vehicle classes may not be able to 

complete their development work in time. 

Since a balancing of these risks and costs 

against the potential benefits from reduced 

emissions is a central policy decision for any 

regulatory agency under the statutory scheme 

outlined above, I believe I am required to 

give very substantial deference to California’s 

judgments on this score.16

EPA has stated that the text, structure, 

and history of the California waiver 

provision clearly indicate both a 

congressional intent and appropriate 

EPA practice of leaving the decision on 

‘‘ambiguous and controversial matters of 


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17 40 FR 23104; 58 FR 4166. 

18 MEMA I, 627 F.2d at 1110 (citing H.R.Rep. No 

294, 95 Cong., 1st Sess. 301–02 (1977). 

19 MEMA I, 627 F.2d at 1122. 

20 Id. 

21 Id. 

22 Id. 

23 74 FR 32748 

24See, e.g., 40 FR 21102–103 (May 28, 1975). 

25 MEMA I, 627 F.2d at 1121. 

26 Id. at 1126. 

27 Id. 

28NADA does not address the application of the 

three waiver criteria to CARB’s LEV III criteria 

pollutant regulations . 

29NADA comment at 3. 

30 Id. 

31 74 FR 32748. EPA notes that the language 

following this statement, in the same paragraph of 

the GHG waiver decision, states ‘‘EPA’s past waiver 

decisions have consistently made clear that: ‘‘[E]ven 

in the two area concededly reserved for Federal 

judgment by this legislation—the existence of 

compelling and extraordinary conditions and 

whether the standards are technologically feasible— 

Congress intended that the standards of EPA review 

of the State decision to be a narrow one.’’ 

public policy’’ to California’s 

judgment.17

The House Committee Report 

explained as part of the 1977 

amendments to the Clean Air Act, 

where Congress had the opportunity to 

restrict the waiver provision, it elected 

instead to explain California’s flexibility 

to adopt a complete program of motor 

vehicle emission controls. The 

amendment is intended to ratify and 

strengthen the California waiver 

provision and to affirm the underlying 

intent of that provision, i.e., to afford 

California the broadest possible 

discretion in selecting the best means to 

protect the health of its citizens and the 

public welfare.18

C. Burden of Proof 

In Motor and Equip. Mfrs Assoc. v. 

EPA, 627 F.2d 1095 (D.C. Cir. 1979) 

(MEMA I), the U.S. Court of Appeals 

stated that the Administrator’s role in a 

section 209 proceeding is to: 

consider all evidence that passes the 

threshold test of materiality and * * * 

thereafter assess such material evidence 

against a standard of proof to determine 

whether the parties favoring a denial of the 

waiver have shown that the factual 

circumstances exist in which Congress 

intended a denial of the waiver.19

The court in MEMA I considered the 

standards of proof under section 209 for 

the two findings necessary to grant a 

waiver for an ‘‘accompanying 

enforcement procedure’’ (as opposed to 

the standards themselves): (1) 

Protectiveness in the aggregate and (2) 

consistency with section 202(a) 

findings. The court instructed that ‘‘the 

standard of proof must take account of 

the nature of the risk of error involved 

in any given decision, and it therefore 

varies with the finding involved. We 

need not decide how this standard 

operates in every waiver decision.’’ 20

The court upheld the Administrator’s 

position that, to deny a waiver, there 

must be ‘clear and compelling evidence’ 

to show that proposed procedures 

undermine the protectiveness of 

California’s standards.21 The court 

noted that this standard of proof also 

accords with the congressional intent to 

provide California with the broadest 

possible discretion in setting regulations 

it finds protective of the public health 

and welfare.22

With respect to the consistency 

finding, the court did not articulate a 

standard of proof applicable to all 

proceedings, but found that the 

opponents of the waiver were unable to 

meet their burden of proof even if the 

standard were a mere preponderance of 

the evidence. As we explained in the 

GHG waiver decision, although MEMA 

I did not explicitly consider the 

standards of proof under section 209 

concerning a waiver request for 

‘‘standards,’’ as compared to 

accompanying enforcement procedures, 

there is nothing in the opinion to 

suggest that the court’s analysis would 

not apply with equal force to such 

determinations. 23 EPA’s past waiver 

decisions have consistently made clear 

that: ‘‘[E]ven in the two areas 

concededly reserved for Federal 

judgment by this legislation—the 

existence of compelling and 

extraordinary’ conditions and whether 

the standards are technologically 

feasible—Congress intended that the 

standards of EPA review of the State 

decision to be a narrow one.’’24

Finally, opponents of the waiver bear 

the burden of showing that the criteria 

for a denial of California’s waiver 

request has been met. As found in 

MEMA I, this obligation rests firmly 

with opponents of the waiver in a 

section 209 proceeding, holding that: 

‘‘[t]he language of the statute and it’s 

legislative history indicate that 

California’s regulations, and California’s 

determinations that they must comply 

with the statute, when presented to the 

Administrator are presumed to satisfy 

the waiver requirements and that the 

burden of proving otherwise is on 

whoever attacks them. California must 

present its regulations and findings at 

the hearing and thereafter the parties 

opposing the waiver request bear the 

burden of persuading the Administrator 

that the waiver request should be 

denied.’’ 25

The Administrator’s burden, on the 

other hand, is to make a reasonable 

evaluation of the information in the 

record in coming to the waiver decision. 

As the court in MEMA I stated, Ahere, 

too, if the Administrator ignores 

evidence demonstrating that the waiver 

should not be granted, or if he seeks to 

overcome that evidence with 

unsupported assumptions of his own, 

he runs the risk of having his waiver 

decision set aside as ‘arbitrary and 

capricious.’’ 26 Therefore, the 

Administrator’s burden is to act 

‘‘reasonably.’’27

D. Comments Received on EPA’s 

Application of the Section 209(b) 

Criteria 

The Dealers provided a series of 

suggestions on several threshold issues 

for how EPA should evaluate CARB’s 

ACC waiver request. While the ACC 

regulatory components are interrelated, 

the Dealers state that EPA should 

evaluate them separately by applying 

each of the three waiver criteria under 

section 209(b).28

This commenter also suggests that it 

is CARB’s burden to make a 

determination that its standards are at 

least as protective of the public health 

and welfare as any applicable federal 

standards, and to determine that the 

standards are technologically feasible.29

This commenter also suggests that 

Congress allowed for a limited waiver 

only if California is able to show that its 

standards are necessary to address ‘‘the 

unique problems facing [the state] as a 

result of its climate and topography.’’ 30

In addition, the Dealers suggest that a 

decision to deny a CARB waiver request 

only need meet a ‘‘preponderance of the 

evidence’’ standard. This commenter 

maintains that such a standard would 

preserve the traditional presumption in 

favor of CARB’s protectiveness 

determination while affording EPA or 

those opposed to the waiver the ability 

to uphold section 209’s general 

preemption. The commenter suggests 

that EPA mischaracterizes the MEMA 

decision within its prior GHG waiver 

decision when EPA stated ‘‘there is 

nothing in the opinion to suggest that 

the court’s analysis would not apply 

with equal force to such 

determinations.’’ 31 The commenter 

states that because the Court opined that 

the ‘‘preponderance of the evidence 

standard governs the inquiry into 

technological feasibility,’’ and the Court 

determined that the appropriate 

standard of proof ‘‘must take into 

account the nature of risk of error 

involved in any given decision’’ it is 

therefore appropriate that EPA must use 

its discretion to determine the 

appropriate standard when evaluating a 

waiver request under each element of 


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Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2117 

32H.R. Rep No. 294, 95 Cong., 1st sess. 301–02 

(1977). 

33CARB waiver request and supporting 

attachments. 34 MEMA I, 627 F.2d at 1121. 

Section 209(b). To settle the question of 

the appropriate burden of proof the 

commenter cites International Harvester 

v. Ruckelshaus wherein the decision 

over burden of proof is informed by an 

analysis that balances the cost of a 

wrong decision on feasibility against the 

gains of a correct one: ‘‘These costs 

include the risk of grave maladjustments 

* * * and the impact on jobs and the 

economy from a decision which is only 

partially accurate * * * against the 

environmental savings.’’ 

With regard to the Dealers’ first 

suggestion that EPA should separately 

apply the waiver criteria to each of the 

ACC regulatory components (e.g., GHG 

emission standards and ZEV), EPA 

notes that each part of CARB’s 

regulations are subject to EPA waiver 

review. As such, by today’s decision we 

address any adverse comments in that 

regard. However (and as explained in 

further detail under EPA’s analysis of 

each waiver criteria below), we believe 

the Dealers fundamentally 

misunderstand the specific language of 

the section 209(b), its congressional 

history, and EPA’s past administrative 

waiver practice. For example, although 

EPA would typically examine whether 

CARB’s regulation of each pollutant is 

as stringent as any applicable federal 

standard, we nevertheless recognize 

both the statutory language and 

legislative history that requires EPA to 

consider the protectiveness of a CARB 

standard ‘‘in the aggregate’’ of all 

emission standards covering that 

particular industry category (e.g., lightduty vehicles, etc). Furthermore, under 

the second waiver criterion of section 

209(b), EPA continues to evaluate 

whether those opposed to a waiver have 

demonstrated that CARB no longer 

experiences compelling and 

extraordinary conditions. As such, for 

any standard or set of standards 

presented to EPA for waiver 

consideration, EPA’s evaluation 

continues to be whether CARB has a 

need for its motor vehicle emission 

program to address the underlying 

compelling and extraordinary 

conditions. This is further explained in 

our discussion of this waiver criterion. 

Similarly, although the Dealers might 

suggest that EPA only be obligated to 

determine whether each of CARB’s ACC 

regulatory components, in isolation, is 

consistent with section 202(a) we 

believe the better approach is to 

determine the technological feasibility 

of each standard in the context of the 

entire regulatory program for the 

particular industry category. In this 

case, we believe CARB has in fact 

recognized the interrelated, integrated 

approach the industry must take in 

order to address the regulatory 

components of the ACC program. As 

noted above, the House Committee 

Report explained as part of the 1977 

amendments to the Clean Air Act that 

California was to be afforded flexibility 

to adopt a complete program of motor 

vehicle emission controls (emphasis 

added). As such, EPA believes that 

Congress intended EPA to afford 

California the broadest possible 

discretion in selecting the best means to 

protect the health of its citizens and the 

public welfare.32 EPA believes this 

intent extends to CARB’s flexibility in 

designing its motor vehicle emission 

program and evaluating the aggregate 

effect of regulations within the program. 

With regard to CARB’s initial burden 

in submitting a waiver request to EPA, 

we believe this commenter misreads 

both section 209(b) along with the case 

law and legislative history it cites. 

California is only required to make a 

protectiveness finding as a threshold 

matter before submitting its waiver 

request to EPA. Section 209(b) of the 

Clean Air Act plainly states that ‘‘The 

Administrator shall, * * *, waive 

application of this section* * *., if the 

State determines that the State 

standards will be, in the aggregate, at 

least as protective of public health and 

welfare as applicable Federal standards. 

No such waiver shall be granted if the 

Administrator finds that * * *.’’ 

Nothing on the face of section 209(b) 

requires California to make affirmative 

findings or showings under section 

209(b)(1)(B) or (C). The MEMA I 

decision cited to by the commenter does 

not support the suggestion that CARB 

must initially make an affirmative 

determination or showing beyond the 

protectiveness determination. Of course, 

whether or not CARB has such a 

burden, CARB has clearly provided in 

its initial waiver request considerable 

support for its view that its waiver 

request meets the requirements of 

section 209(b)(1)(B) and (C).33

EPA continues to believe that the 

burden of proof for each waiver criteria 

lies on the opposing party. As earlier 

explained, this is inherent in the 

statutory provision that requires EPA to 

grant a waiver unless it makes one of the 

specific negative findings listed in 

section 209(b)(1). 

The language of the statute and its legislative 

history indicate that California’s regulations, 

and California’s determination that they 

comply with the statute, when presented to 

the Administrator are presumed to satisfy the 

waiver requirements and that the burden of 

proving otherwise is on whoever attacks 

them. California must present its regulations 

and findings at the hearing, and thereafter the 

parties opposing the waiver request bear the 

burden of persuading the Administrator that 

the waiver request should be denied.34

Further, pertinent legislative history 

evinces Congressional intent to place 

the burden of proof on the party 

opposing a waiver. This appears most 

dramatically from the debates on the 

floor of the House over two alternative 

versions of the statutory language. One, 

sponsored by the relevant legislative 

committee, would have permitted the 

federal government, upon application 

showing by California, to set special 

California standards if certain 

conditions were met. The second, which 

was sponsored by the entire California 

delegation, see 113 Cong. Rec. H 14428 

(Cong. Moss) (daily ed. Nov. 2, 1967), 

and eventually adopted on the floor, 

would have required the federal 

government to waive preemption of 

standards promulgated by California 

unless certain findings were made. 

Despite the understandable efforts of 

some sponsors of the committee 

language to portray the differences 

between the two versions as purely 

verbal the majority of the House clearly 

disagreed. 113 Cong. Rec. H 14404 

(Cong. Herlong); H 14432 (Cong. Rogers) 

(daily ed. Nov. 2, 1967). Sponsors of the 

language eventually adopted (the 

language sponsored by the California 

delegation) referred repeatedly to their 

intent to make sure that no ‘‘Federal 

bureaucrat’’ would be able to tell the 

people of California what auto emission 

standards were good for them, as long 

as they were stricter than Federal 

standards. 113 Cong. Rec. H 14393 

(Cong. Sess); H 14395 (Cong. Smith); H 

14396 (Cong. Holffield); H 14399 (Cong. 

Hosmer); H 14408 (Cong. Roybal); H 

14409 (Cong. Reinicke); H 14429 (Cong. 

Wlson) (daily ed. Nov. 2, 1967). Thus, 

at the close of the debate, the House 

rejected language that would have 

imposed the burden of proof on 

California and instead accepted 

language that which places the burden 

on those who allege, in effect, that 

EPA’s GHG emission standards are 

adequate to California’s needs. They 

also viewed the change as necessary to 

their intent to preserve the California 

state auto emission control program in 

its original form, see HR. Rep. No. 728, 

90th Cong. 1st Se. 96–97 (1967) 

(separate views of Congressmen Moss 

and Van Deerlin), 113 Cong. Rec. H 

14415 (daily ed. Nov. 2, 1967) (Cong. 


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2118 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

35 Id. 36 Id. 37 International Harvester v. Ruckelshaus, 478 F 

2d 615, 643 (D.C. Cir.) (International Harvester). 38 MEMA I, 627 F. 2d at 1122. 39 40 FR 23103–104. 40 MEMA I, 627 F.2d at 1122. 41 Id. 

42 58 FR 4166 (January 13, 1993). 

43 66 FR 7751 (January 25, 2001). 

44 71 FR 78190 (December 28, 2006). 

Van Deerlin) and to continuing the 

national benefits that might flow from 

allowing California to continue to act as 

a pioneer in this field. 113 Cong. Rec. 

H 14407 (Cong. Moss) (daily ed. Nov. 2, 

1967); S 16395 (daily ed. Nov. 14, 1967) 

(Senator Murphy). These points had 

also previously been made by the Senate 

Public Works Committee in reporting 

out waiver language identical to that 

eventually adopted by the House. S. 

Rep. No. 403, 90th Cong. 1st Sess. 32– 

33 (1967). 

As also explained in MEMA I: 

Legislative history makes clear that the 

burden of proof lies with the parties favoring 

denial of the waiver. Petitioners lost the 

battle they now wage twelve years ago when 

Congress specifically declined to adopt a 

provision which would have imposed on 

California the burden to demonstrate that it 

met the waiver requirements. As noted, the 

Senate version of the Air Quality Act of 1967 

contained the language which was ultimately 

adopted by Congress. It vested the power to 

make the protectiveness determination in 

California and sharply restricted the 

Secretary’s role in a waiver proceeding. The 

Senate Report explained that under the 

proposal the ‘‘Secretary is required to waive 

application unless he finds’’ one of the 

factual circumstances set out in section 

209(b)(1)(A)–(C). S. Rep. No. 403, 90th Cong., 

1st Sess. 33 (1967). 

Finally, with regard to the Dealers’ 

arguments about the burden of proof, we 

believe it necessary to differentiate 

between two separate questions: 1) who 

has the burden of proof; and 2) what is 

the appropriate level of proof? A 

discussion of who holds the burden of 

proof is addressed above. Below is a 

discussion regarding the appropriate 

‘‘level’’ of proof. EPA agrees with the 

Dealers that EPA has the discretion to 

determine the appropriate level of proof, 

and we are guided by the language of 

the statute, relevant case law, and our 

prior administrative practice. 

With regard to the standard of proof 

applicable to CARB’s protectiveness 

determination, EPA rejects any 

contention that the standard should be 

anything other than ‘‘clear and 

compelling evidence.’’ The language of 

section 209(b)(1)(A) requires that the 

Administrator find that CARB’s 

protectiveness determination is 

‘‘arbitrary and capricious’’ suggesting 

that EPA or others that may oppose the 

waiver must demonstrate that CARB’s 

factual findings lacked any acceptable 

reasoning. As noted above, the MEMA I 

court upheld the Administrator’s 

position that, to deny a waiver, there 

must be ‘clear and compelling evidence’ 

to show that proposed procedures 

undermine the protectiveness of 

California’s standards.35 The court 

noted that this standard of proof also 

accords with the congressional intent to 

provide California with the broadest 

possible discretion in setting regulations 

it finds protective of the public health 

and welfare.36 EPA believes there is no 

reason to jettison the precedent along 

with its past administrative waiver 

practice merely because CARB seeks a 

waiver for ‘‘standards’’ as opposed to 

‘‘accompanying enforcement 

procedures.’’ 

With respect to the second and third 

waiver criteria of section 209(b); 

however, EPA is also guided by the 

principles of deference noted above and 

by case law, as explained below in 

EPA’s examination of technological 

feasibility. As the commenter notes, in 

the GHG waiver EPA reasoned that 

MEMA I’s holding on the applicable 

standard of proof should be extended to 

waiver of standards. EPA continues to 

believe that it is appropriate to impose 

a standard of preponderance of evidence 

on the proponent of denial of a waiver 

of standards, for the second and third 

waiver criteria. This standard would 

also be similar to the standard in civil 

matters. ‘‘This view of the standard of 

proof dictates the standard normally 

adopted in civil matters, a 

preponderance of the evidence.’’ 37 EPA 

also believes that it should apply such 

a standard in a way that accords with 

congressional intent to provide 

California with the broadest possible 

discretion in setting regulations that it 

finds protective of the public health and 

welfare 38 while limiting EPA’s review 

to a narrow role that provides 

substantial deference to the State.39

Further, EPA agrees with the 

commenter that in making its 

determination, EPA should be mindful 

of the risk of error involved.40 But this 

does not change the burden of proof. 

‘‘The Administrator is not entitled to 

ignore the evidence adduced at the 

hearing. He must consider all evidence 

that passes the threshold test of 

materiality and he must thereafter assess 

such material evidence against a 

standard of proof to determine whether 

the parties favoring a denial of the 

waiver have shown that the factual 

circumstances exist in which Congress 

intended denial of the waiver.’’ 41

In sum, based on the statutory 

structure of section 209(b)(1) and 

legislative history, the burden of proof 

falls on those who wish EPA to deny the 

waiver. 

IV. California’s Within the Scope 

Request for its Zero Emission Vehicle 

Amendments 

CARB’s waiver request sought 

confirmation from EPA that the ZEV 

amendments (2012 ZEV Amendments), 

as they relate to 2017 and prior MYs are 

within the scope of existing waivers. 

The ACC waiver request also sought 

confirmation that the 2012 ZEV 

amendments as they relate to 2018 and 

later MYs are within the scope of 

existing waivers, or, in the alternative, 

meets the criteria for a full waiver. 

A. Chronology 

California’s initial ZEV program was 

included as part of its first low-emission 

vehicle program known as LEV I. The 

ZEV component of this program had a 

ZEV sales requirement starting with the 

1998 MY and phasing in to a 10 percent 

sales requirement by the 2003 MY. EPA 

issued a waiver of preemption for these 

regulations on January 13, 1993.42

CARB subsequently amended the ZEV 

regulations in March, 1996, by 

eliminating the ZEV sales requirement 

for the 1998–2002 MYs and retaining 

the 10 percent sales requirement for the 

2003 and later MYs. EPA issued a 

within the scope determination for these 

amendments on January 5, 2001.43

CARB again amended the ZEV 

regulations in 1999, 2001, and 2003 and 

on December 21, 2006, EPA waived 

preemption for these amendments 

through the 2011 MY.44 The 2006 EPA 

action included a within the scope 

decision for certain components of the 

regulations and a full waiver 

authorization for other components. 

Specifically, EPA determined that 

certain provisions of the 1999–2003 

amendments to the ZEV regulations 

affecting 2006 and prior MYs were 

within the scope of previous waivers of 

preemption. EPA’s 2006 decision 

concurrently granted California’s 

request for a waiver of preemption to 

enforce certain provisions of the ZEV 

regulations as they affected 2007 

through 2011 MY vehicles. EPA also 

stated that that although we believed it 

appropriate to grant a full waiver of 

preemption for the 2007 MY, we also 

believed it appropriate to consider the 

2007 MY regulations (with one 

exception noted) as within the scope of 

previous waivers of preemption, as they 

applied to certain vehicles that were 


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45 76 FR 61095 (October 3, 2011). 

already subject to the pre-existing ZEV 

regulations. The 2006 waiver decision 

did not make any findings or 

determinations with regard to CARB’s 

ZEV regulations as they pertained to the 

2012 and later MYs. On October 3, 2011, 

EPA determined that additional CARB 

amendments to the ZEV regulations, as 

they affected 2011 and prior MYs, were 

within the scope of previous waivers for 

the ZEV regulations (or in the 

alternative qualified for a new waiver). 

At that time EPA also granted a waiver 

allowing California to enforce the ZEV 

amendments as they affected 2012 and 

later MYs.45

B. CARB’s ZEV Amendments 

CARB’s stated goal for the 2012 ZEV 

amendments, as they affect the ZEV 

regulation through MY 2017, was to 

make minor corrections and 

clarifications and to enable 

manufacturers to successfully meet the 

2018 and later MY ZEV requirements. 

As such, the 2012 ZEV amendments 

included compliance flexibility 

provisions, adjustment of credits and 

allowances, and the addition of a new 

vehicle category that can earn credits to 

help manufacturers satisfy their sales 

requirement. 

The compliance flexibility provisions 

include several modifications to the 

ZEV program credit and travel 

provisions. The limitations on carry 

forward credits for ZEVs are removed, 

allowing for indefinite banking of ZEV 

credits. The travel provision for credits 

from ZEV sales in Section 177 states is 

extended through 2017. Travel 

provision credits limit the credits 

manufacturers need to generate to those 

necessary for California, no matter how 

many states adopt the ZEV program 

under Section 177. Vehicles sold in 

section 177 states generate credits for 

California and vice versa under the 

travel provisions. The travel provision 

amendments allow for the continued 

travel of ZEV credits through MY 2017. 

Carry forward credits for ZEVs were 

previously limited to two additional 

model years. This limitation is removed 

by the 2012 amendments, allowing 

manufacturers to bank credits for all 

future model years. This modification is 

a flexibility to enable automakers to 

comply with the 2018 and later 

provisions. 

In addition, the 2012 ZEV 

amendments provide for an adjustment 

of credits and allowances to incentivize 

longer-term technology. For example, 

the credits for Type V ZEVs (fuel cell 

vehicles with range of 300 miles or 

greater) are increased. Finally, the 2012 

ZEV amendments create the addition of 

a new vehicle category that includes 

two new near-ZEV vehicle types: Type 

I.5x and Type IIx. These vehicles are 

plug-in hybrid electric vehicles (PHEVs) 

with more capable electric drive 

systems, but smaller engines that are not 

expected to be used often and have 

diminished performance. These vehicles 

can be used to meet up to one half of 

a manufacturer’s minimum ZEV credit 

requirement. These vehicles will be 

eligible for the same credits as current 

Type I.5 (2.5 credits) and Type II (3 

credits) and will qualify for travel 

provision credits through 2017. 

Separately, CARB’s stated goal for its 

2012 ZEV amendments, as they affect 

2018 and later MYs, is to achieve the 

commercialization of ZEVs and nearZEVs such as PHEVs (with sales of 

approximately 15 percent of the new car 

market in California by 2025) by 

simplifying the regulation and pushing 

technology to higher volume production 

in order to achieve cost reductions. The 

amendments cover six major areas: 

increased ZEV requirements phased-in 

through 2025; the removal of 

‘‘commercialized’’ technology from the 

ZEV program; amended manufacturer 

size definitions, ownership 

requirements and transitions; a 

modified credit system, a modified 

travel provision; and a new opportunity 

for manufacturers to generate additional 

ZEV credits via over compliance with 

applicable GHG emission standards 

during this time period. 

The increased ZEV credit 

requirements are equivalent to 

approximately 15 percent ZEV and nearZEV sales by 2025. This sales level is 

deemed by CARB to be the threshold at 

which costs will decrease due to volume 

effects. The credit requirement is being 

ramped up from the current program’s 

static level of 16 percent total, which 

includes PZEVs and AT PZEVs. The 

new requirement consists of a 2 percent 

minimum ZEV and 2.5 percent 

minimum TZEV (4.5 percent total) 

requirement, ramping up to 16 percent 

minimum ZEV and 6 percent minimum 

TZEV (22 percent total) requirement in 

2025 and beyond. The 2012 ZEV 

amendment revisions to credit 

calculations for ZEVs and TZEVs result 

in a projected market share of 15.4 

percent of new sales in 2025. 

Under the previous ZEV mandate, 

credits were allowed for PZEV-certified 

vehicles and HEVs which are not 

plugged in. CARB is removing these 

vehicle types from the credit scheme in 

MY 2018 and later. Remaining credits 

that are banked can continue to be used, 

but with discounts and caps applied. 

Manufacturer size definitions have 

been amended to apply full ZEV 

mandate to all but the smallest 

manufacturers. Manufacturer sales 

volumes will be combined if joint 

ownership exceeds 33.4 percent and the 

transition period for manufacturers 

changing size categories has been 

modified. Under this system, 97 percent 

of the light-duty market will be covered 

by the ZEV mandate. 

Currently, manufacturers with sales 

volumes exceeding 60,000 units in 

California are classified as large volume 

manufacturers (LVM). This modification 

reduces the threshold to 20,000 units, 

which will bring most manufacturers 

under the full ZEV mandate. This 

modification is being made because 

many of these current intermediate 

vehicle manufactures (IVMs) have a 

large market presence outside 

California. Remaining IVMs will be 

allowed to comply with the ZEV 

mandate with no restrictions on ZEV 

technology type, meaning an IVM can 

fully comply with TZEVs, but not 

PZEVs or AT PZEVs. 

Additionally, ownership thresholds 

for treatment of automakers as one 

entity are being modified to more 

closely align them with GHG fleet 

regulations and changes are being made 

to the lead time provisions as 

manufacturers move between size 

classes. 

CARB also modified its credit system. 

ZEV credits are based on range and 

technology reflecting utility of the 

vehicle and expected timing for 

commercialization. BEVs with a 50-mile 

range earn one credit and FCVs with 

350 miles of range earn four credits 

each. Up to half a manufacturer’s credit 

requirement may be met with more 

capable PHEVs which are meant to 

operate mainly as EVs, but are equipped 

with a small range-extending engine. 

TZEVs, which are essentially PHEVs 

of the type available today such as the 

Chevrolet Volt have simplified credits 

based on electric range and a minimum 

requirement of 10 miles all-electric on 

the US06 test cycle. The TZEV credit 

ranges from a minimum of 0.2 to a 

maximum of 1.3 with a greater than 80 

mile range. 

Excess credits earned and banked 

from PZEVs and AT PZEVs will be 

discounted in 2018 and later years. 

Their use will then be limited to 25 

percent of a manufacturer’s TZEV 

requirement. No portion of the ZEV 

requirement may be met with banked 

credits. Smaller manufacturers (IVMs) 

will not have their credits capped for 

2018 or 2019. In 2020 and later, the IVM 

cap will be 25 percent, but applied to 

their combined ZEV/TZEV requirement. 


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46 Decision Document accompanying waiver 

determination in 71 FR 78190 (December 28, 2006). 

47CARB Resolution 12–11 at EPA–HQ–OAR– 

2012–0562–0005. 

CARB has also modified the credit 

levels for various ZEV types. The 

current tiered CARB system, which 

encouraged manufacturers to design 

vehicles to meet a given range threshold 

is replaced with an equation that 

calculates credits based on the UDDS 

electric driving range. 

In addition, CARB has modified its 

‘‘travel provisions.’’ The travel 

provision, which allows for the sale of 

a qualifying vehicle in a Section 177 

state to count towards a manufacturer’s 

credit requirement in California, ends 

for BEVs after 2017. Since FCVs are far 

behind BEVs in development and 

market penetration, travel credits are 

extended for FCVs. California intends to 

extend travel credits until sufficient 

refueling infrastructure exists to support 

FCVs in the market. 

Lastly, the 2012 ZEV amendments 

provide that automakers who over 

comply with the LEVIII GHG standard 

may use the extra GHG reductions to 

offset a portion of their ZEV 

requirement in MYs 2018 through 2021. 

Manufacturers may offset 50 percent of 

their ZEV mandate in 2018, ramping 

down to 30 percent in 2021, subject to 

certain requirements. 

C. EPA’s Determination Regarding the 

Appropriateness of CARB’s Within the 

Scope Request for the 2012 ZEV 

Amendments 

CARB primarily relies upon EPA’s 

prior waiver and within the scope 

findings to demonstrate the 

appropriateness of applying the within 

the scope criteria to its 2012 ZEV 

amendments. In EPA’s 2006 waiver 

determination, EPA stated that it will 

conduct a two-part inquiry when 

considering whether CARB amendments 

to a previously waived regulation fall 

within the scope of the previously 

granted waiver or whether the 

amendments require a new waiver: 

EPA believes it is important to distinguish 

between the threshold issue of whether 

CARB’s amendments should be subjected to 

either the within-the-scope criteria or the full 

waiver, and separately determining whether 

the same amendments actually meet the 

applicable criteria for actually confirming the 

within-the-scope request or granting a full 

waiver of federal preemption. 

In determining the threshold question, EPA 

will consider whether the amendments make 

minor technical revisions or provide 

compliance flexibility on the one hand or 

whether the amendments add new or more 

stringent pollutant standards or new motor 

vehicle categories on the other.46

With regard to the 2017 and earlier 

MYs, following the precedent noted 

above, CARB maintains that the 2012 

ZEV amendments create no new issues 

affecting the previous waiver 

determinations concerning the ZEV 

program and that the 2012 ZEV 

amendments do not undermine CARB’s 

original protectiveness determination 

and the ZEV regulations remain 

consistent with section 202(a). With 

regard to the 2018 and later MYs, CARB 

maintains that the within the scope 

criteria are appropriate since the overall 

ZEV credit requirement for MYs 2018 

through 2022 is less burdensome than 

the currently waived program. 

EPA received comment from the 

Manufacturers stating agreement that 

the amendments to the MYs 2009 

through 2017 ZEV regulations qualify 

for a within the scope determination 

since the amendments increase the 

flexibility available to manufacturers to 

comply with those standards and 

otherwise lessen the burdens placed on 

manufacturers. However, the 

Manufacturers did not agree that the 

amendments to the ZEV regulation for 

2018 and later MYs properly fall under 

the within the scope review. The 

commenter notes that in addition to the 

increase in the minimum ZEV credit 

requirements in 2018 MY and beyond, 

the CARB amendments also eliminate 

certain vehicle types (e.g., PZEVs and 

AT PZEVs) that were previously 

accepted towards compliance with the 

ZEV requirements during this time 

period. In addition, the Manufacturer 

notes that the changes to CARB’s travel 

provisions are significant and raise 

serious compliance concerns. 

The Dealers commented generally that 

the ZEV waiver should be denied, but 

raised no specific concerns about a 

within-the-scope determination for MYs 

2012–2017. 

Therefore, EPA has received no 

explicit comment suggesting that EPA 

reject CARB’s request for confirmation 

that EPA evaluate the 2012 ZEV 

amendments as they affect the 2017 MY 

and earlier. EPA believes that it is 

appropriate to evaluate such 

amendments (which provide 

compliance flexibilities) under the 

within the scope criteria and applies 

such criteria below. However, with 

respect to the 2018 and later MYs, EPA 

agrees with the commenters that CARB’s 

2012 ZEV amendments have, in total, 

added to the level of stringency and 

compliance obligations. Therefore, EPA 

does not believe it is appropriate to 

apply within the scope analysis to the 

ZEV amendments as they apply in the 

2018 and later MYs. As explained 

below, because EPA is applying the full 

waiver criteria for the 2012 ZEV 

amendments as they pertain to the 2018 

and later MYS, EPA will in the 

alternative also examine the revisions 

for the 2017 and earlier MYs using the 

full waiver criteria. 

D. Application of the Within the Scope 

Waiver Criteria to CARB’s 2012 ZEV 

Amendments Regarding 2017 and 

Earlier MYs 

1. Public Health and Welfare 

Under section 209(b)(1)(A) of the Act, 

EPA cannot grant a waiver if the Agency 

finds that CARB was arbitrary and 

capricious in its determination that its 

State standards are, in the aggregate, at 

least as protective of public health and 

welfare as applicable federal standards. 

Similarly, under the criteria for a within 

the scope determination, the CARB 

amendments to an existing program may 

be considered within-the-scope of a 

previously granted waiver provided that 

the amendments do not undermine 

California’s determination that its 

standards in the aggregate are as 

protective of public health and welfare 

as applicable Federal standards. Thus, 

in the within the scope context CARB 

may rely on the ‘‘protectiveness 

determination’’ that the Board made at 

the time of the initial regulations (the 

regulations which subsequently 

received a waiver of federal preemption 

from EPA) and then CARB must only 

demonstrate why the protectiveness 

determination has not been undermined 

by CARB’s amendments or any other 

intervening events such as the adoption 

of EPA regulations since the initial 

waiver of federal preemption. 

CARB asserts that its 2012 ZEV 

amendments as applied to MYs 2009 to 

2017 are a critical component of the 

ACC package that will result in fleet 

standards that are at least as protective 

as would exist under federal standards. 

The Board resolved ‘‘that the Board 

hereby determines that the proposed 

regulations approved for adoption 

herein will not cause the California 

motor vehicle emission standards, in the 

aggregate, to be less protective of public 

health and welfare than applicable 

federal standards.’’ 47

EPA received no comments suggesting 

that CARB’s request should be denied 

on the basis of CARB failing to meet its 

burden associated with the 

protectiveness findings under section 

209(b)(1)(A) of the Clean Air Act. 

Therefore, based on the record before 

us, we cannot find that CARB’s 2012 

ZEV amendments, as the affect 2017 and 

earlier MYs, would undermine CARB’s 

prior protectiveness determinations nor 

would it cause the California motor 


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48See MEMA I, at 1126. 

49CARB waiver request at 29, citing 40 CFR 

86.1811–04(n). 

50 In situations where there are no Federal 

standards directly comparable to the specific 

California standards under review, the analysis then 

occurs against the backdrop of previous waivers 

which determined that the California program was 

at least as protective of the federal program ((LEV 

II + ZEV) + GHG). See 71 FR 78190 (December 28, 

2006), Decision Document for Waiver of Federal 

Preemption for California Zero Emission Vehicle 

(ZEV) Standards (December 21, 2006). 

51 36 FR 17458 (Aug. 31, 1971). (‘‘The law makes 

it clear that the waiver requests cannot be denied 

unless the specific finding designated in the statute 

can properly be made. The issue of whether a 

proposed California requirement is likely to result 

in only marginal improvement in air quality not 

commensurate with its cost or is otherwise an 

arguably unwise exercise of regulatory power is not 

legally pertinent to my decision under section 209, 

so long as the California requirement is consistent 

with section 202(a) and is more stringent than 

applicable Federal requirements in the sense that it 

may result in some further reduction in air 

pollution in California.’’). The ‘‘more stringent’’ 

standard expressed here in 1971 was superseded by 

the 1977 amendments to section 209, which 

established that California’s standards must be, in 

the aggregate, at least as protective of public health 

and welfare as applicable Federal standards. The 

stringency standard remains, though, in section 

209(b)(2). 

vehicle emission standards, in the 

aggregate, to be less protective of public 

health and welfare than applicable 

federal standards. 

2. Consistency With Section 202(a) 

Under section 209(b)(1)(C), EPA 

cannot grant California its waiver 

request if the Agency finds that 

California standards and accompanying 

enforcement procedures are not 

consistent with section 202(a) of the 

Clean Air Act. Previous waivers of 

federal preemption have stated that 

California’s standards are not consistent 

with section 202(a) if there is 

inadequate lead time to permit the 

development of technology necessary to 

meet those requirements, given 

appropriate consideration to the cost of 

compliance within that time. 

California’s accompanying enforcement 

procedures would also be inconsistent 

with section 202(a) if the federal and 

California test procedures were 

inconsistent. 

The scope of EPA’s review of whether 

California’s action is consistent with 

section 202(a) is narrow. EPA has 

previously found that the determination 

is limited to whether those opposed to 

the waiver have met their burden of 

establishing that California’s standards 

are technologically infeasible, or that 

California’s test procedures impose 

requirements inconsistent with the 

federal test procedure.48

As previously noted, CARB maintains 

that the 2012 ZEV amendments, as they 

pertain to the 2017 and previous MYs, 

provide manufacturers with additional 

flexibility without increasing on balance 

the overall stringency of the preexisting 

ZEV requirements. EPA has received no 

comments explicitly questioning the 

feasibility of the amendments as they 

apply to these MYs. In the discussion 

below, EPA addresses the limited 

comments regarding the technological 

feasibility concerns with regard to 2018 

and later MYs and EPA provides further 

analysis of the general technological 

feasibility concerns in the full waiver 

discussion. With regard to whether test 

procedures are consistent, CARB notes 

that the federal Tier 2 regulations 

require manufacturers to measure 

emissions from ZEVs in accordance 

with the California test procedures.49 In 

addition, EPA has not received 

comment suggesting the test procedures 

are inconsistent. Therefore, based on the 

record before us, we cannot deny 

CARB’s within the scope request for 

2017 and prior MYs based on an 

inconsistency with section 202(a). 

3. New Issues 

As noted above, included in the 

within the scope criteria, is a 

determination of whether the 

amendments raise new issues affecting 

the previous waiver decisions. As 

previously noted, EPA examines any 

new information when reviewing 

whether CARB’s amendments affect the 

ZEV program’s consistency with section 

202(a). If the amendments had increased 

the stringency of the standards upon the 

manufacturers (for the specific model 

years being reviewed in the within the 

scope analysis), or if the amendments 

had regulated or subjected new types of 

vehicles to be included in the ZEV 

program (or in this instance regulated 

the same vehicle types but for model 

years not previously waived by EPA), or 

added additional pollutants to the 

program, then likely new issues would 

have been created. However, in this 

instance no party has presented 

evidence that new issues exist for MYs 

2017 and earlier as a result of the 2012 

ZEV amendments. Therefore, EPA 

cannot deny CARB’s request for a 

within the scope determination for MYs 

2017 and earlier based on this criterion. 

Therefore, based on the record before 

us, we cannot deny CARB’s request for 

confirmation that its 2012 ZEV 

amendments, as they affect the 2017 and 

earlier MYs, are within the scope of 

previous waiver determinations. As 

such, we confirm CARB’s request 

regarding the 2012 ZEV amendments as 

they affect 2017 and earlier MYs. 

V. Consideration of Advanced Clean 

Car Regulations Under the Full Waiver 

Criteria 

CARB’s ACC program regulations 

include revisions to both California’s 

LEV and ZEV programs. CARB’s request 

seeks a waiver of preemption under 

section 209(b) of the Clean Air Act 

(CAA), 42 U.S.C. 7543(b) for the 

revisions to the LEV III program. 

CARB’s request also seeks a waiver for 

the ZEV amendments included in the 

ACC program regulations. Subsequent to 

CARB’s initial ACC waiver request, 

CARB’s Executive Officer took action to 

formally adopt a ‘‘deemed to comply’’ 

regulation affecting the GHG component 

of the ACC package. CARB submitted 

this additional information to EPA and 

requested that EPA consider the 

‘‘deemed to comply’’ regulation as part 

of CARB’s pending ACC waiver request. 

EPA’s application of the section 209(b) 

waiver request, including the ‘‘deemed 

to comply’’ regulation, is set forth 

below. 

A. California’s Protectiveness 

Determination 

Section 209(b)(1)(A) of the Clean Air 

Act requires EPA to deny a waiver if the 

Administrator finds that California was 

arbitrary and capricious in its 

determination that its State standards 

will be, in the aggregate, at least as 

protective of public health and welfare 

as applicable Federal standards. EPA 

recognizes that the phrase ‘‘States 

standards’’ means the entire California 

new motor vehicle emissions program. 

Therefore, as explained below, when 

evaluating California’s protectiveness 

determination, EPA compares the 

California-to-Federal standards. That 

comparison is undertaken within the 

broader context of the previously 

waived California program, which relies 

upon protectiveness determinations that 

EPA have previously found were not 

arbitrary and capricious.50

Traditionally, EPA has evaluated the 

stringency of California’s standards 

relative to comparable EPA emission 

standards.51 That evaluation follows the 

instruction of section 209(b)(2), which 

states: ‘‘If each State standard is at least 

as stringent as the comparable 

applicable Federal standard, such State 

standard shall be deemed to be at least 

as protective of health and welfare as 

such Federal standards for purposes of 

[209(b)(1)].’’ 

To review California’s protectiveness 

determination in light of section 

209(b)(2), EPA conducts its own 

analysis of the newly adopted California 

standards to comparable applicable 

Federal standards. The comparison 

quantitatively answers whether the new 


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52 In situations where there are no Federal 

standards directly comparable to the specific 

California standards under review, the analysis then 

occurs against the backdrop of previous waivers 

which determined that the California program was 

at least as protective of the federal program ((LEV 

II + ZEV) + GHG). See 71 FR 78190 (December 28, 

2006), Decision Document for Waiver of Federal 

Preemption for California Zero Emission Vehicle 

(ZEV) Standards (December 21, 2006). 

53 MEMA I, 627 F.2d at 1122. 54 ‘‘Once California has come forward with a 

finding that the procedures it seeks to adopt will 

not undermine the protectiveness of its standards, 

parties opposing the waiver request must show that 

this finding is unreasonable.’’ MEMA I, 627 F.2d at 

1124. 55See CARB’s Resolution 12–11, EPA–HQ–OAR– 

2012–0562–0006 at 22. EPA notes that the CARB 

Board also resolved that it found that separate 

California standards and test procedures are 

necessary to meet compelling and extraordinary 

conditions. Id. at 23. 56CARBS’s waiver request at 13, citing 76 FR 

61095 (October 3, 2011), 68 FR 19811 (April 22, 

2003), and 74 FR 32744 (July 8, 2009), respectively. 

57CARB Resolution 12–21 at 7. 

58 Id. at 10. 

59See CARB’s Resolution 12–35; EPA–HQ–OAR– 

2012–0562–0374. 

60 Id. at p. 9. 

61EPA–HQ–OAR–2012–0562–0374 at 3. CARB 

also notes that to the extent a manufacturer chooses 

not to exercise their National Program compliance 

option in California this would actually provide 

additional GHG benefits in California, so 

compliance in California can never yield fewer 

cumulative greenhouse gas reductions from the 

industry wide fleet certified in California. 

standards are more or less protective 

than the Federal standards. That 

comparison of the newly adopted 

California standards to the applicable 

Federal standards is conducted in light 

of prior waiver determinations. That is, 

the California-to-Federal analysis is 

undertaken within the broader context 

of the previously waived California 

program, which relies upon 

protectiveness determinations that EPA 

has not found arbitrary and 

capricious.52

A finding that California’s 

determination was arbitrary and 

capricious under section 209(b)(1)(A) 

must be based upon ‘‘‘clear and 

compelling evidence’ to show that 

proposed [standards] undermine the 

protectiveness of California’s 

standards.’’ 53 Even if EPA’s own 

analysis of comparable protectiveness or 

that suggested by a commenter might 

diverge from California’s protectiveness 

finding, that is not a sufficient basis on 

its own for EPA to make a section 

209(b)(1)(A) finding that California’s 

protectiveness finding is arbitrary and 

capricious.54

CARB has made a series of 

protectiveness determinations with 

regard to its ACC program. California 

made a protectiveness determination 

with regard to the 2012 ZEV and LEV 

amendments in CARB’s Resolution 12– 

11, finding that the amendments would 

not cause the California motor vehicle 

emission standards, in the aggregate, to 

be less protective of public health and 

welfare than applicable federal 

standards.55 CARB noted that this 

protectiveness determination is the 

logical extension of the comparable 

findings that were found to be sufficient 

in the analyses of California’s previous 

protectiveness determinations for its 

ZEV, LEV, and GHG regulations.56 As 

explained in CARB’s waiver request, the 

ACC program will result in reductions 

of both criteria pollutants and GHG 

emissions that, in the aggregate, are 

more protective than the pre-existing 

federal standards. CARB’s Resolution 

12–11 also sets forth the Board finding 

that ‘‘It is appropriate to accept 

compliance with the 2017 through 2025 

MY National Program as compliance 

with California’s GHG emission 

standards up through the 2017 through 

2025 MYs, once U.S. EPA issues their 

Final Rule on or after its current July 

2012 planned release, provided that the 

GHG reductions set forth in U.S. EPA’s 

December 1, 2011 Notice of Proposed 

Rulemaking for 2017 through 2025 

model year passenger vehicles are 

maintained, except that California shall 

maintain its own reporting 

requirements.’’ Further, CARB’s 

Resolution 12–21 sets forth that the 

CARB staff ‘‘prepared three separate 

Regulatory Notices * * * for these 

amendments [LEV III/GHG and ZEV] 

and presented them to the Board with 

a single coordinated analysis of 

emissions, costs, and associated 

environmental impacts and benefits.57

CARB’s Resolution 12–21 also resolves 

that the ‘‘recitals and findings contained 

in Resolution 12–11, are incorporated 

by reference herein.’’ 58

In addition, at the time CARB adopted 

the ‘‘deemed to comply’’ regulation, the 

CARB Board found that such 

amendments do not undermine the 

Board’s previous determination that the 

regulation’s emission standards, other 

emission related requirements, and 

associated enforcement procedures are, 

in the aggregate, at least as protective of 

public health and welfare as applicable 

federal standards and are consistent 

with section 209 of the Clean Air Act.59

Therefore, subsequent to the finalization 

of EPA’s GHG regulation (August 31, 

2012), and as part of the CARB Board’s 

adoption of the ‘‘deemed to comply’’ 

rule on November 15, 2012, the Board 

resolved and determined ‘‘that the 

proposed regulations approved for 

adoption herein will not cause 

California motor vehicle emission 

standards, in the aggregate, to be less 

protective of public health and welfare 

than applicable federal standards.’’ 60

With regard to criteria pollutants, 

CARB notes that the primary fleet 

average emission requirement, 

beginning in 2015, declines every year 

to a fleet average NMOG plus NOX

emission standard of 0.030 g/mi in 

2025. CARB notes that this is clearly 

more stringent than the current federal 

Tier 2 fleet average NOX emission 

requirement with its implied fleet 

average NMOG and plus NOX

requirement. In addition, the LEV III PM 

standards 3 mg/mi and 1 mg/mi are also 

significantly more stringent than the 

federal Tier 2 p.m. standards. CARB also 

notes that while there is no criteria 

emissions benefit with its ZEV 

requirements in terms of vehicle (tankto-wheel—TTW) emissions since the 

LEV III criteria pollutant fleet standard 

is responsible for the emission 

reductions, but CARB notes that in 

terms of upstream emission impacts 

(well-to-wheel—WTW) there are 

emission reductions achieved from the 

ZEV requirements. There are no 

comparable federal standards. 

CARB also notes that with regard to 

GHG emissions, the ACC program as a 

whole would provide major reductions 

in GHG emissions (e.g., by 2025 CO2

emissions would be reduced by almost 

14 million metric tonnes (MMT) per 

year, which is 12 percent from baseline 

levels). CARB’s ACC waiver request, 

notes that the federal GHG standards do 

not become more stringent in the 2017– 

2025 MYs, as CARB’s do. However, 

CARB states that it understands more 

stringent standards will ‘‘soon be 

finalized.’’ 

At the time the Board adopted the 

‘‘deemed to comply’’ amendments it 

had before it the ‘‘Staff Report: Initial 

Statement of Reasons demonstrating 

that if a National Program standard was 

theoretically applied only to California 

new vehicle sales alone, it might create 

a GHG deficit of roughly two million 

tons compared to the California 

standards.61 CARB notes that there 

might be a GHG emission deficit if the 

National Program applied in California, 

and thus CARB’s GHG emission 

standards are at least as stringent as the 

EPA GHG emission standards. 

1. Comments on CARB’s Protectiveness 

Determination 

The Dealers commented on CARB’s 

protectiveness determinations for both 

its GHG emission standards and its ZEV 

regulations. At the outset, NADA claims 

that EPA must conduct a separate 

preemption waiver evaluation for each 

set of standards in the ACC program 


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62CARB submitted comment on November 14, 

2012 (CARB supplemental comment). EPA–HQ– 

OAR–2012–0562–0373. 

63CARB’s supplemental comments at 3–4. CARB 

also references table 6.2 of its Initial Statement of 

Reasons (ISOR) that details the well to wheel 

emissions benefits of the ZEV program compared to 

the LEV III program. EPA–HQ–OAR–2012–0562– 

0008. 

(e.g., LEV III criteria pollutants, GHG, 

and ZEV). EPA notes that NADA did not 

address the preemption waiver request 

for the CARB LEV III standards. 

In the context of considering the ACC 

standards individually, NADA states 

that EPA must reject CARB’s GHG 

preemption waiver request because 

CARB’s finding is premature. NADA 

maintains that CARB has not conducted 

the necessary investigation to support is 

protectiveness determination because 

EPA has now finalized its GHG 

emission standards. NADA claims that 

CARB’s determination should measure 

the standards that exist at the time EPA 

makes its waiver decision. NADA 

contends that rather than allowing 

CARB to look at the program as a whole, 

CARB must be required to examine each 

standard before the Agency, including 

the GHG standards at issue. In the 

alternative, the commenter suggests that 

CARB’s protectiveness determination is 

arbitrary and capricious since CARB 

itself cites the absence of the federal 

GHG standards as reason for its 

protectiveness determination. Finally, 

the commenter argues that CARB’s 

conclusions are not backed by facts or 

analysis and contradict the actuality 

that emissions from other parts of the 

world and the United States affect 

global concentrations, and therefore 

concentrations in California. The 

Dealers state that it therefore follows 

that GHG concentrations in California 

will be reduced by a greater amount if 

reductions occur on a nationwide basis, 

rather than just statewide. Thus by 

definition, CARB standards for limiting 

GHG emissions from California cars are 

less protective than the applicable 

federal standards. 

CARB’s supplemental comments, in 

response to NADA’s claims, note that 

California demonstrated that it was 

reasonable for the Board to determine 

that the California standards ‘‘as 

submitted’’ are, in the aggregate, as or 

more stringent than the applicable 

federal standards.62 CARB suggests this 

was a relatively simple determination at 

the time of CARB’s June 2012 waiver 

request because: (1) EPA’s proposed 

2017–2025 MY GHG standards were not 

finalized; (2) EPA had not proposed or 

finalized a 1 mg/mile PM standard and 

other criteria pollutant improvements 

for 2015 and later MYs; and (3) EPA has 

no ZEV program that may achieve an 

additional incremental wells-to-wheels 

criteria pollutant reduction. CARB states 

that this prior and timely Board 

determination remains sound despite 

the now finalized EPA GHG standards 

because (2) and (3) remain true and 

because EPA GHG standards: (1) do not 

account for upstream GHG emissions as 

does California’s GHG program; (2) 

include vehicle multipliers for natural 

gas vehicles, effectively diluting federal 

standards vis a vis California’s; and (3) 

contains relaxed criteria for GHG credits 

for mild hybrid-electric vehicle trucks, 

which also dilutes the federal standard. 

CARB also notes that to the extent 

manufacturers choose the EPA GHG 

standard compliance path to 

demonstrate compliance with California 

standards that results in essentially 

equal reductions (as stringent) of GHG 

emissions in California. Separately, 

CARB states that NADA’s attempt to 

exclude CARB’s LEV III standards from 

the ‘‘in the aggregate’’ protectiveness 

determination cannot be countenanced 

since this would render the phrase ‘‘in 

the aggregate’’ superfluous. 

In addition, within CARB’s 

Resolution 12–35, adopted on 

November 15, 2012, CARB addresses 

two issues raised by NADA’s comments 

to EPA. CARB’s Resolution 12–35 notes 

the question of whether the CARB Board 

failed to make a finding that California’s 

passenger vehicle program remains as 

protective as applicable federal 

standards given the proposed ‘‘deemed 

to comply’’ rule on September 14, 2012 

and also notes the question whether 

California’s program is no longer as 

protective given the 2017 through 2025 

MY National Program. First, it states 

that it sufficiently addressed NADA’s 

protectiveness issues in its November 

14, 2012 supplemental submittal to 

EPA. Within this submission, CARB 

noted that it was reasonable for the 

Board to determine that the California 

standards as submitted are, in the 

aggregate, as or more stringent that the 

applicable federal standards. CARB 

maintains that at the time of its June 

2012 waiver submittal its protectiveness 

determination was a fairly simple one 

since EPA’s 2017–2025 GHG standards 

were not finalized, EPA had not 

proposed nor finalized a 1 mg/mile PM 

standard and other criteria pollutant 

improvements for 2015 and later MYs, 

and EPA has no ZEV program that may 

achieve an additional incremental 

wells-to-wheels criteria pollutant 

reduction. CARB notes that the Board’s 

determination remains solid despite the 

now finalized National Program rule 

because EPA still has no LEV III criteria 

pollutant/PM equivalent requirements 

and because EPA’s GHG standards do 

not account for upstream GHG 

emissions as do California’s, and 

because the National Program includes 

vehicle multipliers for natural gas 

vehicles and relax criteria for GHG 

credits for mild hybrid electric vehicle 

trucks. 

EPA also received comment regarding 

CARB’s protectiveness determination 

for its ZEV standards. The Dealers 

suggest that CARB failed to adequately 

provide a protectiveness determination, 

and such a determination is drawn into 

question given CARB’s stated 

conclusions that there is no TTW 

emission benefits from ZEV and that the 

ZEV regulation does not provide any 

additional GHG emission reductions 

beyond the GHG standards. The Dealers 

claim that CARB’s failure to make a 

protectiveness determination regarding 

its ZEV standard is inherently arbitrary 

and capricious. 

CARB states that contrary to NADA’s 

assertion that it must make an 

individual protectiveness determination 

regarding its ZEV amendments CARB 

believes that requiring California to 

show that each standard (including the 

ZEV standard) is at least as protective in 

the aggregate would in effect ignore the 

phrase ‘‘in the aggregate’’ in section 

209(b). CARB states that is why it made 

one protectiveness determination. CARB 

notes that purpose of the ZEV regulation 

is to commercialize the technologies 

needed to meet long term goals even 

beyond the emission reductions 

anticipated by the LEV III program.63

2. Is California’s protectiveness 

determination arbitrary and capricious? 

As described above, EPA’s traditional 

analysis has been to evaluate 

California’s protectiveness 

determination by comparing the new 

California standards, or amendments, to 

applicable EPA emission standards for 

the same pollutants. EPA notes that the 

‘‘more stringent’’ standard expressed in 

1971 was superseded by the 1977 

amendments to section 209, which 

established that California’s standards 

must be, in the aggregate, at least as 

protective of public health and welfare 

as applicable Federal standards. As 

noted above, this was intended to afford 

California the broadest possible 

discretion in designing is motor vehicle 

emission program. The comparison is 

undertaken within the broader context 

of the previously waived California 

program, which relies upon 

protectiveness determinations that EPA 

have previously found were not 

arbitrary and capricious. 


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64See 74 FR at 32750. 65EPA also notes that CARB has provided 

complete information and determinations that even 

in the context of comparing individual standards 

their standards are as protective of public health 

and welfare as applicable Federal standards. 

66 68 FR 19811 (April 22, 2003) and Decision 

Document for Waiver of Federal Preemption for 

Low Emission Vehicle Amendments (LEV II) (April 

11, 2003). 

EPA believes that the Dealers 

misapply our prior statement, made in 

EPA’s 2009 GHG waiver decision, that 

the most straightforward reading of the 

comparison called for by the statute, 

between California and Federal 

standards, is an ‘‘apples to apples’’ 

comparison.64 The stated purpose of the 

‘‘apples to apples’’ phrase was to 

determine what the ‘‘applicable’’ 

Federal standards are for purposes of 

evaluating a protectiveness 

determination, in response to comments 

that the federal CAFE standards adopted 

by NHTSA should be considered 

applicable federal standards for 

purposes of this wavier criterion. EPA 

explained in the GHG waiver decision 

that ‘‘The term ‘applicable’ has to refer 

to what Federal standards apply, and 

the most straightforward meaning is that 

they apply in the same way that the 

California standards apply, by setting 

limits on emissions of air pollutants.’’ 

Therefore, given the uniqueness of a 

CARB waiver request that includes 

interrelated standards applicable to the 

same vehicle category EPA believes 

CARB’s approach of making one 

protectiveness determination for its 

ACC program is a reasonable approach 

permitted under section 209(b).65

Although section 209(b)(2) informs EPA 

of the conclusion it must draw if each 

standard is at least as stringent as the 

comparable federal standard, EPA notes 

the protectiveness determination that 

CARB presents in a waiver request 

typically includes an implicit or explicit 

in the aggregate protectiveness 

determination since CARB typically 

examines whether its new standards 

(plural) undermine previous 

protectiveness determinations, which 

EPA evaluated in prior waiver 

decisions. In this context, once CARB 

presents an in the aggregate 

protectiveness determination EPA 

believes it appropriate to initially 

evaluate such standards in a side-byside comparison with applicable 

Federal standards and then determine 

whether such standards are, in the 

aggregate, as protective as applicable 

Federal standards. 

In the context of CARB’s ACC 

standards this side-by-side analysis is 

simple. EPA has already determined 

that California was not arbitrary and 

capricious in its determination that the 

pre-existing California standards for 

light-duty vehicles and trucks, known as 

LEV II, is at least as protective as 

comparable federal standards, known as 

the Tier II standards.66 In this instance, 

CARB has finalized new and more 

stringent criteria pollutant standards 

(LEV III) while the Tier II standards 

remain in place at the federal level. In 

the absence of newer EPA standards 

since the time of its prior waiver for 

CARB’s LEV II standards there is a clear 

rational basis for CARB’s determination 

that its standards will be at least as 

protective of human health and welfare 

as applicable federal standards. 

The Dealer’s comments assert that 

CARB’s protectiveness determination 

was premature because that assessment 

occurred before EPA finalized its own 

GHG emission standards. However, EPA 

believes that CARB’s initial 

protectiveness determination (submitted 

to EPA in CARB’s June 2012 waiver 

request) was not premature and was 

appropriate given the EPA standards in 

effect at that time. At the time CARB 

submitted its waiver request, EPA’s 

GHG emission standards for the 2017 

through 2025 MYs were the same for 

those MYs as for MY 2016, while 

CARB’s were becoming more and more 

stringent over that period; therefore, 

CARB’s protectiveness finding was 

reasonable at that time. 

Subsequent to EPA’s promulgation of 

its final GHG standards, in the context 

of CARB’s ‘‘deemed to comply’’ 

regulation, CARB has provided an 

updated protectiveness determination 

(see Resolution 12–35) regarding the 

California GHG emission standards, in 

terms of the underlying benefits of 

CARB’s program. EPA finds California 

to be correct in its determination that 

the ‘‘deemed to comply’’ regulation does 

not undermine CARB’s determination 

that its regulations are in the aggregate 

as protective as EPA’s standards. 

CARB’s regulation will achieve, in the 

aggregate, equal or even additional GHG 

emission reductions in California 

relative to federal GHG standards, even 

if manufacturers choose to comply with 

the California regulations by complying 

with EPA’s GHG emission standards. As 

noted above, EPA’s National Program 

standards do not account for upstream 

GHG emissions as do California’s and 

EPA’s GHG standards includes vehicle 

multipliers for natural gas vehicles and 

relax criteria for GHG credits for mild 

hybrid electric vehicle trucks. EPA also 

believes that CARB correctly notes that 

even with the ‘‘deemed to comply’’ 

amendments, one or more 

manufacturers could still choose to 

continue demonstrating compliance in 

California under the existing California 

regulations. To the extent manufacturers 

choose EPA’s GHG standards as the 

compliance path—in California—the 

California standard, by definition would 

yield at least, essentially equivalent 

GHG reductions, so California’s 

standards cannot be less stringent. 

The Dealers seem to suggest that with 

EPA’s GHG standards there will be a 

greater reduction of GHG emissions 

compared to the California GHG 

emission standards. California’s 

protectiveness determination applies 

only to the protectiveness of CARB’s 

emission standards, in California, 

compared to applicable federal 

standards. EPA believes that the Dealers 

ignore the obvious, that all stakeholders, 

including California, recognize the need 

for reductions of GHG emissions, as 

well as emissions of other pollutants, on 

a national basis. The federal GHG 

emission standards, applied in 50 states, 

will generally result in more emission 

reductions than CARB standards 

applied solely in California. If California 

were required to achieve equal emission 

results (with reductions counted only in 

California) to a federal program this 

would render 209(b) unusable. The 

relevant comparison is between the 

emission reductions achieved in 

California under the California program 

versus the emission reductions in 

California under the comparable federal 

program. Emissions reductions in other 

states are not considered, which is 

appropriate because the waiver decision 

affects only California’s emission 

standards, not the federal standards that 

exist regardless of EPA’s decision. EPA 

believes, and the record contains no 

evidence otherwise, that the reductions 

due to CARB’s GHG emission standards 

in California versus the reductions of 

the comparable federal GHG emission 

standards in California, demonstrates 

that CARB’s GHG emission standards 

are at least as protective as applicable 

federal standards. EPA notes that NADA 

raised similar arguments in the context 

of EPA’s within the scope waiver 

decision, issued on June 14, 2011, for 

CARB’s GHG emission amendments that 

included a ‘‘deemed to comply’’ 

provision for GHG emission standards 

during the 2012 through 2016 MYs. EPA 

noted ‘‘Thus, at the very least, 

compliance with California’s GHG 

standards under the revised regulations 

will result in the same, if not more, 

emission reductions than would occur 

in the absence of the California 

standards. NADA provides no evidence 

that CARB’s standards are less 

protective than the applicable Federal 


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67 76 FR 34693, 34696 (June 14, 2011). 

68 Decision Document for Waiver of Federal 

Preemption for California’s Zero Emission Vehicle 

(ZEV) Standards (December 21, 2006) and EPA’s 

August 13, 2008 Response to Petition for 

Administrative Reconsideration of EPA’s ZEV 

Waiver Decision (through the 2011 Model Year) 

published on December 28, 2006. 69See CARB supplemental comments at 3–4. 

70 74 FR 7040 (February 12, 2009). 

71 74 FR 32744 (July 9, 2009). 

72 49 FR 18887 (May 3, 1984). 

standards. As such, NADA fails to 

present any evidence or make any 

showing that the amendments 

undermine California’s previous 

determination that its standards, in the 

aggregate, are at least as protective of 

public health and welfare as applicable 

Federal standards.’’ 67

With regard to CARB’s ZEV 

amendments EPA believes that CARB 

has provided a reasoned basis for their 

determination that the ZEV regulations 

are as protective or public health and 

welfare as comparable federal 

requirements, which for ZEV are 

nonexistent. In EPA’s 2006 ZEV waiver 

proceeding, EPA conducted its 

traditional analysis to compare 

California’s newly enacted ZEV 

standards to a similar lack of applicable 

federal standards. At that time 

California found, and EPA deemed 

reasonable, that the addition of the ZEV 

standards did not render California’s 

LEV II program, for which a waiver had 

previously been granted, less protective 

than the federal Tier II program. In 

addressing the Alliance of Automobile 

Manufacturers’ petition for 

reconsideration with respect to this 

issue, EPA stated that ‘‘the words 

‘standards’ and ‘in the aggregate’ in 

section 209(b)(1)(A) * * *, at minimum, 

include all the standards relating to the 

control of emissions for a category of 

vehicles (e.g., passenger cars, etc.) 

subject to CARB regulation, particularly 

where the standards are designed to 

respond to the same type of 

pollution.’’ 68 California’s ZEV and GHG 

emission standards are an addition to its 

LEV program. EPA has not received any 

comment to suggest that the existence of 

either of these additional regulatory 

components undermines the 

protectiveness of CARB’s LEV III 

emission standards. Although the 

Dealers suggest that ‘‘consumers facing 

a CARB-constrained mix at their local 

dealership may elect to buy a CARBexempted brand, to purchase a latemodel used vehicle, or defer vehicle 

purchases altogether,’’ EPA believes that 

the Dealers have failed to present any 

legal argument as to why EPA should 

take this into consideration within the 

waiver criteria. We also find that the 

Dealers have failed to provide evidence, 

under any standard of proof, as to 

whether such outcomes would 

ultimately impair the protectiveness of 

CARB’s emission standards. EPA 

believes it is appropriate, and certainly 

reasonable, for CARB to evaluate its 

standards in the aggregate when the 

nature of its regulations are interrelated 

and the regulations are submitted to 

EPA as one ACC program. Although 

NADA suggests that CARB failed to 

make an individual protectiveness 

determination for its ZEV standards, 

EPA believes this is of no significance 

in light of the overall protectiveness of 

CARB’s emission standards and the lack 

of an applicable federal ZEV program. 

The Dealers mere contentions, which 

CARB reasonably refutes in its 

supplement comments,69 that there is 

no criteria emission benefit from the 

ZEV proposal in terms of TTW 

emissions, and that the ZEV regulation 

does not provide GHG emission 

reductions in addition to the LEV III 

GHG regulation, suggest no reason to 

find that CARB’s ACC program is any 

less protective of public health and 

welfare because of the existence of such 

ZEV standards. 

3. Section 209(b)(1)(A) Conclusion 

Based on the record before EPA, we 

cannot find that CARB was arbitrary and 

capricious in its finding that the 

California ACC program standards, 

including the LEV III criteria pollutant 

and GHG emission standards along with 

its ZEV amendments are, in the 

aggregate, at least as protective of public 

health and welfare as applicable federal 

standards. 

B. Does California need its standards to 

meet compelling and extraordinary 

conditions? 

Under section 209(b)(1)(B) of the Act, 

EPA cannot grant a waiver if EPA finds 

that California ‘‘does not need such 

State standards to meet compelling and 

extraordinary conditions.’’ EPA has 

traditionally interpreted this provision 

as requiring a consideration of whether 

California needs a separate motor 

vehicle program to meet compelling and 

extraordinary conditions. However in 

EPA’s March 6, 2008 denial of CARB’s 

GHG waiver request (GHG waiver 

denial), EPA limited this interpretation 

to California’s motor vehicle standards 

that are designed to address local or 

regional air pollution problems. EPA 

determined that the traditional 

interpretation was not appropriate for 

standards designed to address a global 

air pollution problem and its effects and 

that it was appropriate to address such 

standards separately from the remainder 

of the program. EPA then found that 

California did not need such standards 

to meet compelling and extraordinary 

conditions. The interpretation adopted 

in the March 6, 2008 waiver denial was 

before EPA for reconsideration when 

CARB resubmitted its GHG waiver 

request and EPA announced a new 

opportunity for hearing and public 

comment on February 12, 2009.70

Set forth below is a summary of EPA’s 

departure from the traditional 

interpretation of section 209(b)(1)(B) in 

the GHG waiver denial along with EPA’s 

return to the traditional interpretation 

(confirmed today) in EPA’s waiver of 

preemption of CARB’s GHG standards 

on July 8, 2009 (GHG waiver).71 Because 

EPA received comment suggesting that 

CARB’s GHG and ZEV standards do not 

meet the requirements of section 

209(b)(1)(B), EPA believes it useful to 

recount the interpretive history 

associated with both GHGs and 

traditional local and regional air 

pollutants to explain why EPA believes 

that section 209(b)(1)(B) should be 

applied in the same manner for all air 

pollutants. 

As explained below, EPA finds that 

the opponent of the ACC waiver has not 

met its burden of demonstrating why 

CARB no longer has a need for its motor 

vehicle emissions program under EPA’s 

interpretation of section 209(b)(1)(B). 

Although EPA is not adopting the 

Dealers suggested interpretation, EPA 

also finds that the opponent of the 

waiver has not met its burden of 

demonstrating that CARB does not have 

the need for either its GHG or ZEV 

standards. 

1. EPA’s March 6, 2008 GHG Waiver 

Denial 

In the March 6, 2008 waiver denial, 

EPA provided its reasoning for changing 

its long-standing interpretation of this 

provision, as it pertains to California 

standards designed to address global air 

pollution. EPA described its 

longstanding interpretation in some 

detail, stating that: 

Under this approach EPA does not look at 

whether the specific standards at issue are 

needed to meet compelling and extraordinary 

conditions related to that air pollutant. For 

example, EPA reviewed this issue in detail 

with regard to particulate matter in a 1984 

waiver decision.72 In that waiver proceeding, 

California argued that EPA is restricted to 

considering whether California needs its own 

motor vehicle program to meet compelling 

and extraordinary conditions, and not 

whether any given standard is necessary to 

meet such conditions. Opponents of the 

waiver in that proceeding argued that EPA 

was to consider whether California needed 


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2126 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

73 Id. at 18890. 

74 73 FR 12156, 12159–60. 

75 73 FR at 12159–60. 

76EPA recently reaffirmed that the traditional 

interpretation still applied for motor vehicle 

standards designed to address air pollution 

problems that are local or regional in nature. 71 FR 

78190, 78192 (December 28, 2008); see also 71 FR 

78190 and Decision Document for Waiver of 

Federal Preemption for California Zero Emission 

Vehicle Standards, at 34. 

77 73 FR at 12161. 

78The traditional interpretation of section 

209(b)(1)(B) is certainly not ‘‘unambiguous 

precluded’’ by the language of the statute. See 

Entergy Corp. v. Riverkeeper, Inc., 129 S.Ct. 1498 

(2009) (‘‘That view governs if it is a reasonable 

interpretation of the statute—not necessarily the 

only possible interpretation, nor even the 

interpretation deemed most reasonable by the 

these PM standards to meet compelling and 

extraordinary conditions related to PM air 

pollution. 

The Administrator agreed with California 

that it was appropriate to look at the program 

as a whole in determining compliance with 

section 209(b)(1)(B). One justification of the 

Administrator was that many of the concerns 

with regard to having separate state standards 

were based on the manufacturers’ worries 

about having to meet more than one motor 

vehicle program in the country, but that once 

a separate California program was permitted, 

it should not be a greater administrative 

hindrance to have to meet further standards 

in California. The Administrator also 

justified this decision by noting that the 

language of the statute referred to ‘‘such state 

standards,’’ which referred back to the use of 

the same phrase in the criterion looking at 

the protectiveness of the standards in the 

aggregate. He also noted that the phrase 

referred to standards in the plural, not 

individual standards. He considered this 

interpretation to be consistent with the 

ability of California to have some standards 

that are less stringent than the federal 

standards, as long as, per section 

209(b)(1)(A), in the aggregate its standards 

were at least as protective as the federal 

standards. 

The Administrator further stated that in the 

legislative history of section 209, the phrase 

‘‘compelling and extraordinary 

circumstances’’ refers to ‘‘certain general 

circumstances, unique to California, 

primarily responsible for causing its air 

pollution problem,’’ like the numerous 

thermal inversions caused by its local 

geography and wind patterns. The 

Administrator also noted that Congress 

recognized ‘‘the presence and growth of 

California’s vehicle population, whose 

emissions were thought to be responsible for 

ninety percent of the air pollution in certain 

parts of California.’’ 73 EPA reasoned that the 

term compelling and extraordinary 

conditions ‘‘do not refer to the levels of 

pollution directly.’’ Instead, the term refers 

primarily to the factors that tend to produce 

higher levels of pollution—‘‘geographical and 

climatic conditions (like thermal inversions) 

that, when combined with large numbers and 

high concentrations of automobiles, create 

serious air pollution problems.’’ 74

The Administrator summarized that 

under this interpretation the question to 

be addressed in the second criterion is 

whether these ‘‘fundamental 

conditions’’ (i.e. the geographical and 

climate conditions and large motor 

vehicle population) that cause air 

pollution continued to exist, not 

whether the air pollution levels for PM 

were compelling and extraordinary, or 

the extent to which these specific PM 

standards will address the PM air 

pollution problem.75

However in the GHG waiver denial, 

EPA limited this interpretation to 

California’s motor vehicle standards that 

are designed to address local or regional 

air pollution problems. EPA determined 

that the traditional interpretation was 

not appropriate for standards designed 

to address a global air pollution problem 

and its effects.76

With respect to a global air pollution 

problem like elevated concentrations of 

GHGs, EPA’s GHG waiver denial found 

that the text of section 209(b)(1)(B) was 

ambiguous and did not limit EPA to this 

prior interpretation. In addition, EPA 

noted that the legislative history 

supported a decision to ‘‘examine the 

second criterion specifically in the 

context of global climate change.’’ The 

legislative history: 

[I]ndicates that Congress was moved to 

allow waivers of preemption for California 

motor vehicle standards based on the 

particular effects of local conditions in 

California on the air pollution problems in 

California. Congress discussed ‘‘the unique 

problems faced in California as a result of its 

climate and topography.’’ H.R. Rep. No. 728, 

90th Cong. 1st Sess., at 21 (1967). See also 

Statement of Cong. Holifield (CA), 113 Cong. 

Rec. 30942–43 (1967). Congress also noted 

the large effect of local vehicle pollution on 

such local problems. See, e.g., Statement of 

Cong. Bell (CA) 113 Cong. Rec. 30946. In 

particular, Congress focused on California’s 

smog problem, which is especially affected 

by local conditions and local pollution. See 

Statement of Cong. Smith (CA) 113 Cong. 

Rec. 30940–41 (1967); Statement of Cong. 

Holifield (CA), id. at 30942. See also, MEMA 

I, 627 F. 2d 1095, 1109 (DC Cir., 1979) 

(noting the discussion of California’s 

‘‘peculiar local conditions’’ in the legislative 

history). Congress did not justify this 

provision based on pollution problems of a 

more national or global nature in justifying 

this provision.77

Relying on this, and without any 

further significant discussion of either 

congressional intent or how this new 

approach properly furthered the goals of 

section 209(b), EPA determined that it 

was appropriate to: 

[R]eview California’s GHG standards 

separately from the remainder of its motor 

vehicle emission control program for 

purposes of section 209(b)(1)(B). In this 

context it is appropriate to give meaning to 

this criterion by looking at whether the 

emissions from California motor vehicles, as 

well as the local climate and topography in 

California, are the fundamental causal factors 

for the air pollution problem—elevated 

concentrations of greenhouse gases—apart 

from the other parts of California’s motor 

vehicle program, which are intended to 

remediate different air pollution concerns. 

EPA then applied this interpretation 

to the GHG standards at issue in that 

waiver proceeding. Having limited the 

meaning of this provision to situations 

where the air pollution problem was 

local or regional in nature, EPA found 

that California’s GHG standards do not 

meet this criterion. EPA also found that 

the elevated concentrations of GHGs in 

California are similar to concentrations 

elsewhere in the world, and that local 

conditions in California such as the 

local topography and climate and the 

number of motor vehicles in California 

are not the determinant factors causing 

the elevated GHG concentrations found 

in California and elsewhere. Thus, EPA 

found that California did not need its 

GHG standards to meet compelling and 

extraordinary conditions, and denied 

the GHG waiver. 

EPA also considered an alternative 

interpretation, where EPA would 

consider ‘‘the effects in California of this 

global air pollution problem in 

California in comparison to the rest of 

the country, again addressing the GHG 

standards separately from the rest of 

California’s motor vehicle program.’’ 

Under this alternative interpretation, 

EPA considered whether the impacts of 

global climate change in California were 

significant enough and different enough 

from the rest of the country such that 

California could be considered to need 

its GHG standards to meet compelling 

and extraordinary conditions. EPA 

determined that the waiver should be 

denied under this alternative 

interpretation as well. 

2. EPA’s July 9, 2009 GHG Waiver 

In EPA’s July 9, 2009 GHG waiver, the 

Agency determined that the better 

approach was to review California’s 

need for its new motor vehicle 

emissions program as a whole to meet 

compelling and extraordinary 

conditions, and not to apply this 

criterion to specific standards, or to 

limit it to standards designed to address 

only local or regional air pollution 

problems. EPA reasoned that the 

traditional approach to interpreting this 

provision was the best approach for 

considering a waiver directed to GHG 

emission standards, as well as a waiver 

for standards directed to address local 

or regional air pollution problems.78


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Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2127 

courts. Chevron U.S.A. Inc. v. Natural Resources 

Defense Council, Inc., 467 U.S. 837, 843–844 

(1984).’’) (‘‘It seems to us, therefore, that the phrase 

‘‘best available,’’ even with the added specification 

‘‘for minimizing adverse environmental impact,’’ 

does not unambiguously preclude cost-benefit 

analysis.’’). Carrow v. Merit Systems Protection 

Board, 564 F.3d 1359 (Fed. Cir. 2009) (‘‘[W]e are 

obligated to give controlling effect to [agency’s] 

interpretation if it is reasonable and is not contrary 

to the unambiguously expressed intent of 

Congress’’, citing Entergy Corp.). 

79H.R. Rep. No. 294, 95th Cong., 1st Sess. 301– 

302 (1977). See MEMA I, 627 F. 2d at 1110–11. 

80 MEMA I, 627 F. 2d at 1111. 

81This broad interpretation of section 209(b) is 

similar to the broad reading the Court provided to 

section 302(g) of the Clean Air Act when it held that 

the term ‘‘air pollutant’’ included greenhouse gases, 

rejecting among other things the argument that 

Congress limited the term to apply only to certain 

kinds of air pollution. Massachusetts v. EPA, 549 

US 497, 532 (2007) (footnote 26). 

Therefore, EPA rejected the 

interpretation that was applied in the 

March 6, 2008 waiver denial and stated 

it should no longer be followed. 

EPA reasoned that the traditional 

interpretation was the most 

straightforward reading of the text and 

legislative history of section 209(b). 

Congress decided in 1977 to allow 

California to promulgate individual 

standards that are not as stringent as 

comparable federal standards, as long as 

the standards are ‘‘in the aggregate, at 

least as protective of public health and 

welfare as applicable federal standards.’’ 

This decision by Congress requires EPA 

to allow California to promulgate 

individual standards that, in and of 

themselves, might not be considered 

needed to meet compelling and 

extraordinary circumstances, but are 

part of California’s overall approach to 

reducing vehicle emissions to address 

air pollution problems. 

Further, we noted that EPA is to 

determine whether California’s 

protectiveness determination is arbitrary 

and capricious under section 

209(b)(1)(A), and whether California 

does not need ‘‘such State standards’’ to 

meet compelling and extraordinary 

conditions under section 209(b)(1)(B). 

The natural reading of these provisions 

led EPA to consider the same group of 

standards that California considered in 

making its protectiveness 

determination. While the words ‘‘in the 

aggregate’’ are not specifically 

mentioned in section 209(b)(1)(B), EPA 

explained that it does refer to the need 

for ‘‘such State standards,’’ rather than 

‘‘each State standard’’ or otherwise 

indicate a standard-by-standard 

analysis. 

We also noted that EPA’s GHG waiver 

denial had determined that this 

provision was appropriately interpreted 

to consider California’s standards as a 

group for standards designed to address 

local or regional air pollution problems, 

but should be interpreted in the 

opposite fashion for standards designed 

to address global air pollution problems. 

The text of the provision, however, 

draws no such distinction, and provides 

no indication other than Congress 

intended a single interpretation for this 

provision, not one that varied based on 

the kind of air pollution problem at 

issue. 

EPA also explained that the GHG 

waiver denial had considered the 

legislative history, and determined that 

Congress was motivated by concern over 

local conditions in California that led to 

local or regional air pollution problems, 

and from this EPA determined that 

Congress intended to allow California to 

address these kinds of local or regional 

air pollution problems, but no others. 

However, upon a reexamination of the 

legislative history EPA found that the 

determination noted above ignores the 

main thrust of the text and legislative 

history of section 209(b), and 

improperly reads too much into an 

absence of discussion of global air 

pollution problems in the legislative 

history. The structure of section 209, 

both as adopted in 1967 and as 

amended in 1977, is notable in its focus 

on limiting the ability of EPA to deny 

a waiver, and thereby preserves 

discretion for California to construct its 

motor vehicle program as it deems 

appropriate to protect the health and 

welfare of its citizens. The legislative 

history indicates Congress quite 

intentionally restricted and limited 

EPA’s review of California’s standards, 

and its express legislative intent was to 

‘‘provide the broadest possible 

discretion [to California] in selecting the 

best means to protect the health of its 

citizens and the public welfare.’’ 79 The 

DC Circuit recognized that ‘‘[t]he history 

of the congressional consideration of the 

California waiver provision, from its 

original enactment up through 1977, 

indicates that Congress intended the 

State to continue and expand its 

pioneering efforts at adopting and 

enforcing motor vehicle emission 

standards different from and in large 

measure more advanced than the 

corresponding federal program. In short, 

to act as a kind of laboratory for 

innovation. * * * For a court [to limit 

California’s authority] despite the 

absence of such an indication would 

only frustrate the congressional 

intent.’’ 80

EPA also determined that it was fully 

consistent with the expressed intention 

of Congress to interpret section 

209(b)(1)(B) the same way both for 

standards designed to address local and 

regional air pollution problems, and 

standards designed to address global air 

pollution problems. Congress intended 

to provide California the broadest 

possible discretion to develop its motor 

vehicle emissions program. Neither the 

text nor the legislative history of section 

209(b) indicates that Congress intended 

to limit this broad discretion to a certain 

kind of air pollution problem, or to take 

away all discretion with respect to 

global air pollution problems.81 In 

addition, EPA reasoned that applying 

the traditional interpretation to GHG 

standards does not change the basic 

nature of the compromise established by 

Congress—California could act as the 

laboratory for the nation with respect to 

motor vehicle emission control, and 

manufacturers would continue to face 

just two sets of emissions standards— 

California’s and EPA’s. 

EPA further explained that this 

interpretation was consistent with 

Congressional purpose, as compared to 

the interpretation adopted in the GHG 

waiver denial relied on the discussion 

in the legislative history of local 

conditions in California leading to air 

pollution problems like ozone. While 

this was properly read to support the 

view that section 209(b) should be 

interpreted to address California’s need 

for a motor vehicle program as a whole, 

the GHG waiver denial went further and 

inferred that by discussing such local 

conditions, Congress also intended to 

limit California’s discretion to only 

these kinds of local or regional air 

pollution problems. The GHG waiver 

denial pointed to no particular language 

in the legislative history or the text of 

section 209(b) indicating such, instead, 

congressional intent to limit California’s 

discretion was inferred from the 

discussion of local conditions. However, 

basing a limitation on such an inference 

is not appropriate given the express 

indication that Congress intended to 

provide California the ‘‘broadest 

possible discretion’’ in selecting the best 

means to protect the health of its 

citizens and the public welfare. 

Additionally, EPA explained that the 

text of section 209(b) and the legislative 

history, when viewed as a whole, led to 

the conclusion that the interpretation 

adopted in the GHG waiver denial 

should be rejected. The better way to 

interpret this provision is to apply the 

traditional interpretation to the 

evaluation of California’s GHG 

standards for motor vehicles. If 

California needs a separate motor 

vehicle program to address the kinds of 

compelling and extraordinary 

conditions discussed in the traditional 


srobinson on DSK4SPTVN1PROD with 
2128 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

82NADA at 7–9, 12–14. 83H.R. Rep. No. 90–728 (1967), at 22. 

interpretation, then Congress intended 

that California could have such a 

program. Congress also intentionally 

provided California the broadest 

possible discretion in adopting the kind 

of standards in its motor vehicle 

program that California determines are 

appropriate to address air pollution 

problems that exist in California, 

whether or not those problems are local 

or regional in nature, and to protect the 

health and welfare of its citizens. The 

better interpretation of the text and 

legislative history of this provision is 

that Congress did not intend this 

criterion to limit California’s discretion 

to a certain category of air pollution 

problems, to the exclusion of others. In 

this context it is important to note that 

air pollution problems, including local 

or regional air pollution problems, do 

not occur in isolation. Ozone and PM air 

pollution, traditionally seen as local or 

regional air pollution problems, occur in 

a context that to some extent can 

involve long range transport of this air 

pollution or its precursors. This longrange or global aspect of ozone and PM 

can have an impact on local or regional 

levels, as part of the background in 

which the local or regional air pollution 

problem occurs. 

EPA further stated that this approach 

does not make section 209(b)(1)(B) a 

nullity, as some had suggested. EPA 

must still determine whether California 

does not need its motor vehicle program 

to meet the compelling and 

extraordinary conditions discussed in 

the legislative history. If that is the case, 

then a waiver would be denied on those 

grounds, but that was not the case at 

that point. EPA observed that conditions 

in California may one day improve such 

that it no longer had the need for a 

separate motor vehicle program and that 

the statute contemplates that such 

improvement is possible. In addition, 

we noted that the opponents of a waiver 

always have the ability to raise their 

legal, policy, and other concerns in the 

State administrative process, or through 

judicial review in State courts. We 

concluded, however, that Congress 

provided EPA a much more limited role 

under section 209(b) in considering 

objections raised by opponents of a 

waiver. 

3. Response to Comments Received 

CARB states in its Waiver Support 

Document that the relevant inquiry 

under section 209(b)(1)(B) is whether 

California needs it own motor vehicle 

pollution control program to meet 

compelling and extraordinary 

conditions and not whether any 

particular standard is needed to meet 

such conditions. CARB notes that EPA 

has consistently determined that the 

phrase ‘‘compelling and extraordinary 

conditions’’ refers to: 

* * * Certain general circumstances, unique 

to California, primarily responsible for 

causing its air pollution [including] * * * 

geographical and climate factors [as well as] 

* * * the presence and growth of 

California’s vehicle population, whose 

emissions were thought to be responsible for 

ninety percent of the air pollution problem 

in certain parts of California. 

CARB also submits that the 2012 ZEV 

and LEV amendments (the ACC 

program) meet the same compelling and 

extraordinary conditions justifying 

previous waivers (e.g., the South Coast 

and San Joaquin Air basins continue to 

experience some of the worst air quality 

in the nation and that California has an 

ongoing need for dramatic emission 

reductions generally and from passenger 

cars specifically). CARB also submits 

that as in 1967, EPA’s previous waivers 

have noted that California continued to 

have geographic and climatic conditions 

that, when combined with the large 

numbers and high concentrations of 

automobiles, created a serious air 

pollution problem. 

EPA received only one comment 

requesting a denial of the waiver for the 

GHG and ZEV standards based on the 

grounds of section 209(b)(1)(B)—that 

‘‘such State does not need such State 

standards to met compelling and 

extraordinary conditions.’’ This 

commenter raised specific objections to 

both the GHG and ZEV elements of 

CARB’s ACC program but none of them 

addressed whether California’s 

geographic, climactic and air quality 

conditions remain the same as they 

were under prior waiver 

determinations.82

4. CARB’s GHG Emission Standards 

With regard to CARB’s GHG 

standards, the Dealers state there is no 

need and no discernible environmental 

benefit from such standards because of 

EPA’s GHG regulations for motor 

vehicles that CARB has agreed to accept 

as compliance for its own program. 

According to the commenter, this 

amounts to a legal admission that CARB 

does not need its own GHG standards. 

In addition, because manufacturers are 

already under a legal obligation to 

comply with the NHTSA/EPA 2017– 

2025 GHG standards there is no 

environmental benefit associated with 

separate CARB GHG standards. This 

commenter cited 1967 legislative history 

as support that Congress decided that 

federal preemption of new vehicle 

emission standards would be available 

for California but only where California 

promulgated standards necessary to 

address ‘‘the unique problems facing the 

state.’’ 83 Had Congress intended to give 

California discretion to adopt whatever 

standards it liked, without any 

consideration as to whether these 

standard are ‘needed,’ Congress would 

have omitted Sec. 209(b)(1)(B) 

altogether.’’ This commenter also 

suggests that the ‘‘alternative 

arguments’’ in the 2009 GHG waiver 

decision, wherein California’s need for 

its GHG standards standing alone was 

evaluated, should also be applied here. 

As such, this commenter suggests that 

since CARB does not intend to rely on 

its own regulations to meet 

environmental goals there can be no 

‘‘rational connection’’ between the 

CARB’s regulation and the state’s air 

quality issues. Finally, the commenter 

notes that CARB’s statement that a 

waiver ‘‘will remain an important 

backstop in the event the national 

program is weakened or terminated’’ is 

an identified ‘‘political need’’ outside 

the scope of Section 209. 

CARB, in response to NADA’s 

comments referenced above, states that 

while there may not be binding 

precedent that requires EPA to treat 

California’s program as a whole in 

reviewing the need for specific 

standards, it previously has 

demonstrated that EPA’s longstanding 

administrative practice to review the 

need for separate standard standards in 

the context of the ongoing compelling 

and extraordinary conditions justifying 

California’s motor vehicle program 

remains sound. 

CARB also notes that its commitment 

to accept compliance with the federal 

GHG emission standards is no different 

from the numerous times that EPA has 

followed California’s lead—blazing a 

new trail as a laboratory for 

innovation—by catching up to or 

harmonizing with California’s 

standards. In addition, rather than 

viewing CARB’s actions an 

impermissible political backstop, CARB 

maintains that its actions are simply 

furthering the Congressional design of 

Section 209(b): to ensure that California 

can protect public health and welfare by 

ensuring its ability to separately 

implement and enforce necessary 

emission reductions through its own 

regulatory mechanisms. Therefore 

CARB can continue to set standards that 

in the first instance are more stringent, 

then may become as stringent and 

subsequently—under the NADA 

hypothetical—become more stringent 

should EPA lessen the stringency of the 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2129 

84 76 FR 40652, 40654 (July 11, 2011). 

85 74 FR 32744, 32764–7265. 

86EPA–HQ–OAR–2012–0562–0371. 

87 Id. 

88Our Changing Climate 2012 Vulnerability & 

Adaptation to the Increasing Risks from Climate 

Change in California. Publication # CEC–500–2012– 

007. Posted: July 31, 2012; available at http:// 

www.climatechange.ca.gov/adaptation/ 

third_assessment/. 

89See H.R. Rep. No. 294, 95th Cong., 1st Sess. 

301–302 (1977). 

federal GHG emission standards. In 

addition, CARB points to NADA’s 

concession by acknowledging that 

CARB’s standards must be as or more 

stringent—i.e., as protective as—the 

federal standards. 

As discussed above, EPA believes that 

the better interpretation of the section 

209(b)(1)(B) criterion is the traditional 

approach of evaluating California’s need 

for a separate motor vehicle emission 

program to meet compelling and 

extraordinary conditions. Applying this 

approach with the reasoning noted 

above, with due deference to California, 

I cannot deny the waiver. 

CARB has repeatedly demonstrated 

the need for its motor vehicle program 

to address compelling and extraordinary 

conditions in California. As discussed 

above, the term compelling and 

extraordinary conditions ‘‘does not refer 

to the levels of pollution directly.’’ 

Instead, the term refers primarily to the 

factors that tend to produce higher 

levels of pollution—geographical and 

climatic conditions (like thermal 

inversions) that, when combined with 

large numbers and high concentrations 

of automobiles, create serious air 

pollution problems. California still faces 

such conditions. For example, as stated 

in CARB’s waiver request and 

additional written comment, California 

and particularly the South Coast and 

San Joaquin Valley Air Basins continue 

to experience some of the worst air 

quality in the nation and continue to be 

in non-attainment with national 

ambient air quality standards (NAAQS) 

for PM2.5 and ozone.84 In its recent 

announcement of new PM2.5 ambient air 

quality standards, EPA projected that 

only seven of approximately 3,000 

counties in the country may require 

state or local action to reduce fine 

particle pollution in order to meet the 

new standards by 2020. All seven 

counties are in California. 

Further, EPA has not received any 

adverse comments suggesting that 

California no longer needs a separate 

motor vehicle emissions program to 

address the various conditions that lead 

to serious and unique air pollution 

problems in California. 

Based on the record, I am unable to 

identify any change in circumstances or 

any evidence to suggest that the 

conditions that Congress identified as 

giving rise to serious air quality 

problems in California no longer exist. 

Therefore, using the traditional 

approach of reviewing the need for a 

separate California program to meet 

compelling and extraordinary 

conditions, I cannot deny the ACC 

waiver request (including the GHG and 

ZEV components, along with LEV III 

criteria pollutants) based on this 

criterion. 

To the extent that it is appropriate to 

examine the need for CARB’s GHG 

standards to meet compelling and 

extraordinary conditions, as EPA 

discussed at length in its 2009 GHG 

waiver decision, California does have 

compelling and extraordinary 

conditions directly related to 

regulations of GHG. EPA’s prior GHG 

waiver contained extensive discussion 

regarding the impacts of climate change 

in California.85 In addition, CARB has 

submitted additional evidence in 

comment on the ACC waiver request 

that evidences sufficiently different 

circumstances in California.86 CARB 

notes that ‘‘Record-setting fires, deadly 

heat waves, destructive storm surges, 

loss of winter snowpack—California has 

experienced all of these in the past 

decade and will experience more in the 

coming decades. California’s climate— 

much of what makes the state so unique 

and prosperous—is already changing, 

and those changes will only accelerate 

and intensify in the future. Extreme 

weather will be increasingly common as 

a result of climate change. In California, 

extreme events such as floods, heat 

waves, droughts and severe storms will 

increase in frequency and intensity. 

Many of these extreme events have the 

potential to dramatically affect human 

health and well-being, critical 

infrastructure and natural systems.’’ 87

CARB provides a summary report on the 

third assessment from the California 

Climate Change Center (2012) 88 which 

describes dramatic sea level rises and 

increases in temperatures. The 

Commenter does not take issue with 

that analysis, but instead relies on the 

existence of the federal GHG standards 

and the ‘‘deemed to comply’’ language 

to claim that there is no need for 

CARB’s GHG standards. Separate from 

EPA’s stated interpretation and 

determinations noted above, EPA 

believes that the commenter does not 

appropriately appreciate the role that 

Congress envisioned California to play 

as an innovative laboratory that may set 

standards that EPA may ultimately 

harmonize with or that California or 

EPA may otherwise accept compliance 

with the others emission program as 

compliance with their own. EPA’s 

longstanding interpretation of section 

209(b)(1)(B) is that EPA does not look at 

whether the specific standards at issue 

are needed to meet compelling and 

extraordinary conditions related to that 

air pollutant. As explained above, EPA 

reviewed this issue in some detail in 

both EPA’s 2008 GHG waiver denial and 

subsequent 2009 GHG waiver decision 

and EPA continues to believe that our 

traditional interpretation is appropriate. 

The structure of section 209, both as 

adopted in 1967 and as amended in 

1977, is notable in its focus on limiting 

the ability of EPA to deny a waiver, and 

thereby preserves discretion for 

California to construct it motor vehicle 

program as it deems appropriate to 

protect the health and welfare of its 

citizens.89 EPA has previously 

considered NADA’s argument that 

CARB no longer has a need for its GHG 

emission standards once CARB adopts a 

‘‘deemed to comply’’ provision. In 

EPA’s within the scope decision in 

2011, where EPA considered CARB’s 

previous ‘‘deemed to comply’’ provision 

applicable to the 2012 through 2016 

MYs, EPA stated: 

NADA’s comments do not indicate that, as 

a result of the amendments, California no 

longer needs a separate motor vehicle 

emissions program to address compelling 

and extraordinary conditions in California, or 

provide any indication that EPA’s prior 

determination on this issue is undermined in 

any way. Therefore, its comments do not 

show that California’s amendments raise any 

new issues relevant to EPA’s initial waiver 

decision. 

Moreover, although NADA’s comments 

reference the words of the section 

209(b)(1)(B), ‘‘need * * * to meet compelling 

and extraordinary circumstances’’ criterion, 

they do not appear to be directed towards the 

geographical or climatological conditions 

that are being referred to by the words 

‘‘compelling and extraordinary 

circumstances.’’ Instead, NADA’s comments 

appear to be directed at the stringency of the 

greenhouse gas standards. The stringency of 

California’s standards is at issue in section 

209(b)(1)(A), where Congress addressed the 

comparison of California standards to federal 

standards, but it is not an issue under section 

209(b)(1)(B). As noted in EPA’s underlying 

waiver decision, section 209(b)(1)(A) calls for 

a review of California standards ‘‘in the 

aggregate,’’ and EPA can only deny a waiver 

if it finds that California was arbitrary and 

capricious in its finding that ‘‘its standards 

will be, in the aggregate, at least as protective 

of public health and welfare as applicable 

Federal standards.’’ EPA notes that the 

language of section 209(b)(1)(A) clearly 

indicates Congress’s determination that EPA 

review the effect of stringency on the 

protectiveness of California’s standards ‘‘in 


srobinson on DSK4SPTVN1PROD with 
2130 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

90 76 FR 34693, 34697–34698 (June 14, 2011). 

91NADA at 13. 

92 76 FR 40652, 40654 (July 11, 2011). CARB 

waiver request at 17–18. 

93 74 FR 32744, 32762 (July 8, 2009); 76 FR 

77515, 77518 (December 13, 2011). 

94EPA–HQ–OAR–2012–0562–0371. 95 76 FR 40652, 40654 (July 11, 2011). 

the aggregate,’’ and that EPA cannot deny a 

waiver on the grounds of protectiveness if 

California standards are at least equally 

protective as Federal standards. 

‘‘Redundancy’’ is not the criterion; it is 

whether California’s standards are, in the 

aggregate, at least as protective as applicable 

Federal standards. Furthermore, NADA does 

not address California’s standards ‘‘in the 

aggregate’’ and, as noted above, does not 

provide any evidence to suggest, even with 

regard to California’s greenhouse gas 

standards, that California was arbitrary and 

capricious in its finding that its standards are 

at least as protective as comparable federal 

standards. The stringency issue raised by 

NADA is not relevant under section 

209(b)(1)(B), and it would be inconsistent 

with the intent of Congress to deny a waiver 

or a within-the-scope determination based on 

section 209(b)(1)(B) for reasons Congress 

clearly addressed and clearly determined 

should not be the basis for a denial under 

section 209(b)(1)(A). NADA’s comments, 

therefore, do not raise any new issues 

regarding our preexisting waiver for 

California greenhouse gas emission 

standards.90

EPA believes this interpretation of 

section 209(b)(1)(B) continues to be 

appropriate and therefore finds that 

CARB’s GHG emission standards cannot 

be denied a waiver based on NADA’s 

argument that there is no need for such 

standards given the existence of EPA 

GHG emission standards. 

5. CARB’s ZEV Emission Standards 

The Dealers also requested that EPA 

deny a waiver of CARB’s ZEV standards 

for MY 2018 and beyond because they 

were not necessary to meet compelling 

and extraordinary circumstances, under 

the section 209(b)(1)(B) criterion.91

According to the commenter, the 

‘‘compelling and extraordinary 

conditions’’ in California today are 

nothing like they were when Congress 

first enacted section 209. In addition, 

the commenter notes that CARB claims 

no criteria emissions benefit from the 

ZEV standards in terms of vehicle TTW 

emissions and subsequently notes 

several problems with CARB’s upstream 

WTW emissions analysis and projected 

benefits. For example, the commenter 

disputes CARB’s assumptions that 

reductions of fuel production by 

refineries will result from reductions in 

fuel consumption by the vehicle fleet in 

California. According to the commenter, 

refineries in California could simply 

shift fuel production to address either 

off-shore or out-of state needs. The 

commenter further states that CARB has 

not and cannot show that its ZEV 

standards will achieve any reductions in 

criteria pollutants. With respect to the 

relationship between the GHG and ZEV 

programs, the commenter also states 

that the ZEV standards do not provide 

any additional GHG emission benefits 

beyond the underlying GHG standards 

and the ZEV standards are therefore not 

necessary to meet any potential 

compelling and extraordinary 

conditions associated with GHG 

emissions from new motor vehicles. In 

addition, the commenter suggests that 

because CARB is providing a variety of 

compliance flexibilities, including over 

compliance with GHG standards 

producing ZEV credits and other 

alternative compliance path options, 

confirms that the underlying ZEV 

mandates are not ‘‘necessary.’’ 

CARB notes in its written response 

that to the extent commenters question 

California’s need for additional criteria 

pollutant reductions from its new motor 

vehicle fleet, there remains no question 

that such reductions are essential to 

meet federal health-based ambient air 

quality standards. CARB notes that 

California and particularly the South 

Coast and San Joaquin Valley Air Basins 

continue to experience some of the 

worst air quality in the nation and 

continue to be in non-attainment with 

national ambient air quality standards 

(NAAQS) for PM2.5 and ozone.92

California’s unique geographical and 

climatic conditions, and the tremendous 

growth in its on- and off-road vehicle 

population, which moved Congress to 

authorize the state to establish separate 

on-road motor vehicle standards in 1967 

and off-road engine standards in 1990, 

still exist today.93 In addition, CARB 

provides extensive evidence of its 

current and serious air quality problems 

and the increasingly stringent healthbased air quality standards and federally 

required state planning efforts to meet 

those standards firmly in order to 

establish the need for the additional 

emission reductions from its motor 

vehicle emissions program.94

As stated above, EPA believes that the 

better interpretation of the section 

209(b)(1)(B) criterion is the traditional 

approach of evaluating California’s need 

for a separate motor vehicle emission 

program to meet compelling and 

extraordinary conditions. The issue of 

whether any particular standard 

provides comparable emission 

reductions is not a relevant criterion 

under section 209(b)(1)(B). Applying 

this approach with the reasoning noted 

above, with due deference to California, 

I cannot deny the waiver. 

As discussed in their written 

comments, CARB has repeatedly 

demonstrated the need for its motor 

vehicle program to address compelling 

and extraordinary conditions in 

California. As discussed above, the term 

compelling and extraordinary 

conditions ‘‘does not refer to the levels 

of pollution directly. Instead, the term 

refers primarily to the factors that tend 

to produce higher levels of pollution— 

geographical and climatic conditions 

(like thermal inversions) that, when 

combined with large numbers and high 

concentrations of automobiles, create 

serious air pollution problems. 

California still faces such conditions. 

For example, California and particularly 

the South Coast and San Joaquin Valley 

Air Basins continue to experience some 

of the worst air quality in the nation and 

continue to be in non-attainment with 

national ambient air quality standards 

(NAAQS) for PM2.5 and ozone.95 In 

addition, EPA believes, and the record 

does not otherwise indicate, the 

underlying geographical and climatic 

conditions continue to exist in 

California and continue to give rise to 

serious air quality problems. 

EPA has not received any adverse 

comments suggesting that California no 

longer needs a separate motor vehicle 

emissions program to address the 

various conditions that lead to serious 

and unique air pollution problems in 

California. 

Based on the record, I am unable to 

identify any change in circumstances or 

any evidence to suggest that the 

conditions that Congress identified as 

giving rise to serious air quality 

problems in California no longer exist. 

Therefore, using the traditional 

approach of reviewing the need for a 

separate California program to meet 

compelling and extraordinary 

conditions, I cannot deny the ACC 

waiver request (including the GHG and 

ZEV components, along with LEV III 

criteria pollutants) based on this 

criterion. 

As CARB notes in its waiver request, 

the goal of the CARB Board in directing 

CARB staff to redesign the ZEV 

regulation was to focus primarily on 

zero emission drive—that is BEV, FCV, 

and PHEVs in order to move advanced, 

low GHG vehicles from demonstration 

phase to commercialization. CARB also 

analyzed pathways to meeting 

California’s long term 2050 GHG 

reduction targets in the light-duty 

vehicle sector and determined that ZEVs 

would need to reach nearly 100 percent 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2131 

96EPA–HQ–OAR–2012–0562–0371 at 5–6, citing 

Vision for Clean Air: A Framework for Air Quality 

and Climate Planning, June 27, 2012, 

97 74 FR 32766. EPA incorporates this prior GHG 

waiver decision, and associated reasoning and 

interpretations, into today’s waiver decision. 

of new vehicle sales between 2040 and 

2050. CARB also notes that the ‘‘critical 

nature of the LEV III regulation is also 

highlighted in the recent effort to take 

a coordinated look at strategies to meet 

California’s multiple air quality and 

climate goals well into the future. This 

coordinated planning effort, Vision for 

Clean Air: A Framework for Air Quality 

and Climate Planning (Vision for Clean 

Air) 96 demonstrates the magnitude of 

the technology and energy 

transformation needed from the 

transportation sector and associated 

energy production to meet federal 

standards and the goals set forth by 

California’s climate change 

requirements. In addition to considering 

the level of change needed to implement 

the current SIP and reduce GHG 

emissions by 80 percent below 1990 

levels by 2050, the 2032 attainment date 

for the 0.075 ppm standard set in 2008 

was used as an interim target. Adopted 

or pending rules, such as the LEV III 

regulation, were considered essential as 

baseline reductions assumed for the 

future, yet California identified still 

more transformative changes to achieve 

the 2032 and 2050 targets. The Vision 

for Clean Air effort illustrates that in 

addition to the cleanup of passenger 

vehicles (at issue here) as soon as 

possible as required in the LEV III 

regulation, transition to zero- and nearzero emission technologies in all onand off-road engine categories is 

necessary to achieve the coordinated 

goals. 

Therefore, EPA believes that CARB’s 

2018 and later MY ZEV standards 

represent a reasonable pathway to reach 

these longer term goals. Under EPA’s 

traditional practice of affording CARB 

the broadest discretion possible, and 

deferring to CARB on its policy choices, 

we believe there is a rational connection 

between California ZEV standards and 

its attainment of long term air quality 

goals. Whether or not the ZEV standards 

achieve additional reductions by 

themselves above and beyond the LEV 

III GHG and criteria pollutant standards, 

the LEV III program overall does achieve 

such reductions, and EPA defers to 

California’s policy choice of the 

appropriate technology path to pursue 

to achieve these emissions reductions. 

The ZEV standards are a reasonable 

pathway to reach the LEV III goals, in 

the context of California’s longer term 

goals. 

6. CARB’s PM Standards 

EPA received comments suggesting 

that the PM standards promulgated 

within California’s LEV III regulation 

were infeasible. The Manufacturers in 

particular commented that the 

technological feasibility of the one 

milligram per mile PM standard, that 

commences its phase in starting with 

the 2025 MY, has not been 

demonstrated (this issue is discussed 

below in the Section VI). The 

Manufacturers appear to raise issue with 

whether additional PM emission 

reductions from light-duty vehicles are 

needed since they represent so small a 

fraction of the PM inventory in 

California. CARB’s supplemental 

comments assert that ‘‘while PM 

emission from LDVs are not a major 

contributor to the inventory, they are a 

significant contributor to urban 

pollution and human exposure, 

particularly near heavily travelled 

roadways, many of which are located in 

major urban centers in areas classified 

as non-attainment for health based PM 

ambient air quality standards.’’ CARB 

also notes that the exact amount of 

pollution reduced through any given 

emission standard and the costeffectiveness of any particular California 

standards are not waiver criteria and 

therefore not relevant to EPA’s 

determination. 

EPA does not believe that it is 

necessarily the Manufacturers’ 

contention that the PM standards are 

not needed to meet compelling and 

extraordinary conditions. Nevertheless, 

EPA believes it appropriate to note, 

once again, that the compelling and 

extraordinary conditions Congress 

identified as giving rise to serious air 

quality problems continue to give rise to 

the need for a separate California new 

motor vehicle emissions program. EPA 

believes this includes CARB’s serious 

PM air quality problems. EPA agrees 

that the PM standards will result in 

reductions in PM emissions, however 

small. It is not appropriate for EPA to 

second-guess CARB’s policy choices, 

including how best to address their air 

quality concerns. 

7. Section 209(b)(1)(B) Conclusion 

With respect to the need for 

California’s state standards to meet 

compelling and extraordinary 

conditions, I continue to apply the 

traditional interpretation of the waiver 

provision. As stated in the GHG waiver 

decision,97 the best way to interpret this 

provision is to determine whether 

California continues to have compelling 

and extraordinary conditions giving rise 

to a need for its own new motor vehicle 

emission program. Congress did not use 

this criterion to limit California’s 

discretion to a certain category of air 

pollution problems, nor does EPA 

believe this criterion limits California’s 

discretion to adopt or retain emission 

standards that are similar to EPA’s 

standards. In addition, it is 

inappropriate for EPA to second guess 

CARB’s policy choices and objectives in 

adopting ZEV standards designed to 

achieve long term emission benefits as 

well as projected to reasonably achieve 

some reduction in criteria pollutant 

emissions. 

Under this interpretation and 

application of this criterion, EPA cannot 

find that the opponents of the waiver 

have demonstrated that California does 

not need its state standards to meet 

compelling and extraordinary 

conditions. The opponents of the waiver 

have not adequately demonstrated that 

California no longer has a need for its 

motor vehicle emission program. 

Therefore, I determine that I cannot 

deny CARB’s ACC waiver request under 

section 209(b)(1)(B). 

C. Are the California ACC standards 

consistent with Section 202(a) of the 

Clean Air Act? 

EPA has reviewed the information 

submitted to the record of this 

proceeding to determine whether the 

parties opposing, or seeking a deferral 

of, this waiver request have met their 

burden to demonstrate that the ACC 

standards are not consistent with 

section 202(a). In its initial Waiver 

Request, CARB submitted information 

and argument that the ACC standards 

are consistent with section 202(a). 

CARB notes that in developing the LEV 

III requirements it considered several 

factors (e.g., technical feasibility, lead 

time available to meet the requirements, 

and the cost of compliance and the 

technical and resource challenges 

manufacturers face in complying with 

the requirement to simultaneously 

reduce criteria and GHG emissions). 

CARB notes that that criteria emissions 

elements of LEV III occur over an 11- 

year period (2015 through 2025) while 

the GHG emission element is 

implemented over a 9-year period from 

2017 through 2025. CARB sets forth its 

belief that both the stringency and 

implementation schedules for its PM 

standards are technologically feasible 

within the available lead time. With 

regard to LEV III GHG regulations, 

CARB noted that California coordinated 

with the EPA and NHTSA on technical 

and economic areas, and CARB has 


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98At the time of CARB’s waiver request EPA’s 

GHG emission rule had not yet been finalized. 

Subsequent to EPA’s final rule CARB has adopted 

the deemed to comply and has provided the 

regulation for EPA’s consideration. See also CARB 

Resolution 12–11 at 20. 

99The Manufacturers note that both the federal 

and the California GHG emission standards provide 

for a comprehensive mid-term evaluation of the 

MYs 2022–2025. Therefore, the Manufacturers 

clearly state that ‘‘Any amendments to California’s 

GHG emission standards made as a result of the 

mid-term evaluation will require analysis to 

determine whether the amendments fall within the 

scope of this waiver, or, if not, whether they qualify 

for a separate waiver under Section 209(b) of the 

Clean Air Act. 

100 MEMA I, 627 F.2d at 1126. 

101See e.g., 38 FR 30136 (November 1, 1973) and 

40 FR 30311 (July 18, 1975). 

102To be consistent, the California certification 

test procedures need not be identical to the Federal 

test procedures. California procedures would be 

inconsistent, however, if manufacturers would be 

unable to meet both the state and Federal test 

requirements with the same test vehicle in the 

course of the same test. See, e.g., 43 FR 32182, (July 

25, 1978). 

moved in parallel with the federal 

rulemaking in terms of stringency of the 

standards and lead time for compliance. 

CARB maintains that the standards and 

lead time are technologically feasible 

‘‘even before CARB proposes to amend 

its LEV III GHG regulations to allow 

National Program compliance to serve 

as compliance in California. It will be 

undeniably true should California adopt 

its ‘‘deemed to comply’’ rule as 

planned.’’ 98 With regard to the ZEV 

amendments, CARB noted the lack of 

objections from the regulated parties 

during CARB’s rulemaking and the 

regulated parties’ announcements of 

their planned ability to comply. 

The Manufacturers have submitted 

information and argument that their 

members see no way to measure and 

meet the 1 mg/mile PM standard 

beginning in 2025 (as part of the LEV III 

standards) and ask EPA to withhold 

issuing a waiver for this standard at this 

time. The Manufactures have 

commented that they do not oppose 

California’s GHG emission standards for 

the 2017 through 2025 MYs but suggests 

that EPA should grant California’s 

waiver request after CARB has finalized 

its regulatory amendments to allow for 

a national compliance option.99 Finally, 

while the Manufacturers agree that 

CARB’s ZEV amendments, as they affect 

2017 and earlier MYs, are within the 

scope of existing waivers, they are 

opposed to granting the waiver for the 

ZEV program past the 2017 MY based 

on argument that those standards will 

not be feasible either in California or in 

the individual Section 177 States given 

the status of the infrastructure and the 

level of consumer demand for ZEVs. 

EPA also received comment from the 

Dealers suggesting that EPA should not 

grant California a waiver for its GHG 

emission standards past MY 2021 since 

the technical capabilities after that time 

are uncertain. In addition, like the 

Manufacturers, NADA does not oppose 

CARB’s ZEV amendments through the 

2017 MY. However, NADA believes 

CARB’s ZEV amendments, as they affect 

2018 and later MYs, raise serious 

technological feasibility concerns 

including their economic feasibility 

(including their marketability when 

compared to non-ZEV vehicles). EPA’s 

analysis of the consistency of the CARB 

standards with section 202(a) of the Act 

follows. 

1. Historical Approach 

Under section 209(b)(1)(C), EPA must 

deny California’s waiver request if the 

Agency finds that California standards 

and accompanying enforcement 

procedures are not consistent with 

section 202(a) of the Act. The scope of 

EPA’s review under this criterion is 

narrow. EPA has previously stated that 

the determination is limited to whether 

those opposed to the waiver have met 

their burden of establishing that 

California’s standards are 

technologically infeasible, or that 

California’s test procedures impose 

requirements inconsistent with the 

federal test procedure.100 Previous 

waivers of federal preemption have 

stated that California’s standards are not 

consistent with section 202(a) if there is 

inadequate lead time to permit the 

development of technology necessary to 

meet those requirements, giving 

appropriate consideration to the cost of 

compliance within that time.101

California’s accompanying enforcement 

procedures would be inconsistent with 

section 202(a) if the federal and 

California test procedures conflict, i.e., 

if manufacturers would be unable to 

meet both the California and federal test 

requirements with the same test 

vehicle.102

EPA does not believe that there is any 

reason to review these criteria any 

differently for EPA’s evaluation of 

California’s ACC program request. There 

is nothing inherently different about 

how ACC control technologies should 

be reviewed when making a 

determination about technological 

feasibility or consistency of test 

procedures. 

In the ACC waiver proceeding, 

opponents of the waiver have presented 

evidence for EPA’s consideration which 

they believe will require EPA to make 

the finding of inconsistency with 

section 202(a), and therefore require 

EPA to deny or defer granting all or 

parts of the waiver request (e.g., a 

deferral on the 2025 and later MY 

phase-in of the 1 mg/mile PM standard 

of LEV III, a denial of the GHG emission 

standards for MY 2022 and later, and a 

denial of the 2018 through 2025 MY 

ZEV requirements or a deferral on the 

2021 and later MYs). As noted above, 

the commenters believe this finding 

should be made on one or more 

grounds, including: there exists either a 

lack of information or certainty of 

technological solutions based on the 

remoteness in time from the 

implementation of the standards; that 

there are questions of economic 

feasibility and marketability, including 

consumer demand; that technological 

consistency must include consideration 

of feasibility in section 177 states; and, 

that either the cost effectiveness of 

certain standards is unreasonable or that 

the standards are not needed for air 

quality purposes. EPA’s process for 

evaluating lead time is discussed 

immediately below and in subsequent 

parts of this section. The industry 

opponents also raise arguments based 

on the cost of compliance with the 

standards (including cost-effectiveness), 

which will be discussed below and in 

other parts of this section. To the extent 

the commenters raise questions about 

the need for CARB’s PM standards and 

that it could be the basis for EPA’s 

waiver consideration, we address such 

concerns in the discussion above 

concerning section 209(b)(1)(B). EPA 

has already addressed the Dealers 

suggestions that CARB’s ZEV 

requirements are not needed within the 

same discussion. 

Regarding lead time, EPA historically 

has relied on two decisions from the 

U.S. Court of Appeals for the D.C. 

Circuit for guidance regarding the lead 

time requirements of section 202(a). 

Section 202(a) provides that an emission 

standard shall take effect after 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. 

In Natural Resources Defense Council v. 

EPA (NRDC), 655 F.2d 318 (DC Cir. 

1981), the court reviewed claims that 

EPA’s PM standards for diesel cars and 

light trucks were either too stringent or 

not stringent enough. In upholding the 

EPA standards, the court concluded: 

Given this time frame [a 1980 decision on 

1985 model year standards]; we feel that 

there is substantial room for deference to the 

EPA’s expertise in projecting the likely 

course of development. The essential 

question in this case is the pace of that 

development, and absent a revolution in the 

study of industry, defense of such a 

projection can never possess the inescapable 


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103Natural Resources Defense Council v. EPA, 

655 F.2d 318, 331. (emphasis added) 

104 International Harvester v. Ruckelshaus, 478 F 

2d. 615, 626. 

105NRDC, 655 F.2d 318, 330. 

106 Id. The ‘‘hardships’’ referred to are hardships 

that would be created for manufacturers able to 

comply with the more stringent standards being 

relaxed late in the process. 

107 40 FR 23102, 23103 (waiver decision citing 

views of Congressman Moss and Senator Murphy) 

(May 28, 1975). 

108 Id. at 23103. 

109 74 FR 32744, 32774 (July 8, 2009). 

110CARB’s waiver request at 25–26. MEMA I, 627 

F.2d at 1105, 1114 n. 40 (‘‘[T]he ‘cost of 

compliance’ consideration relates to the timing of 

standards and procedures.’’) CARB notes that EPA 

has recognized that the only relevance of costs is 

their impact on timing, e.g. ‘‘Manufacturers do not 

contend that the cost of compliance will be 

significantly reduced by extending lead time 

beyond the minimal period required for 

compliance.’’ (36 FR 17459 (August 31, 1971)). 

111NRDC, 655 F.2d 318, 331. 

112H.R. Rep. No. 95–294, 95th Cong., 1st Sess. 

301 (1977). 

logic of a mathematical deduction. We think 

that the EPA will have demonstrated the 

reasonableness of its basis for projection if it 

answers any theoretical objections to the 

[projected control technology], identifies the 

major steps necessary in refinement of the 

technology, and offers plausible reasons for 

believing that each of those steps can be 

completed in the time available (emphasis 

added).103

Another key case addressing the lead 

time requirements of section 202(a) is 

International Harvester v. Ruckelshaus 

(International Harvester), 478 F 2.d 615 

(DC Cir. 1979). In International 

Harvester, the court reviewed EPA’s 

decision to deny applications by several 

automobile and truck manufacturers for 

a one-year suspension of the 1975 

emission standards for light-duty 

vehicles. In the suspension proceeding, 

the manufacturers presented data 

which, on its face, showed little chance 

of compliance with the 1975 standards, 

but which, at the same time, contained 

many uncertainties and inconsistencies 

regarding test procedures and 

parameters. In a May 1972 decision, the 

Administrator applied an EPA 

methodology to the submitted data, and 

concluded that ‘‘compliance with the 

1975 standards by application of present 

technology can probably be achieved,’’ 

and so denied the suspension 

applications.104 In reviewing the 

Administrator’s decision, the court 

found that the applicants had the 

burden of coming forward with data 

showing that they could not comply 

with the standards, and if they did, then 

EPA had the burden of demonstrating 

that the methodology it used to predict 

compliance was sufficiently reliable to 

permit a finding of technological 

feasibility. In that case, EPA failed to 

meet this burden. 

With respect to lead time, the court in 

NRDC pointed out that the court in 

International Harvester ‘‘probed deeply 

into the reliability of EPA’s 

methodology’’ because of the relatively 

short amount of lead time involved (a 

May 1972 decision regarding 1975 MY 

vehicles, which could be produced 

starting in early 1974), and because ‘‘the 

hardship resulting if a suspension were 

mistakenly denied outweigh the risk of 

a suspension needlessly granted.’’ 105

The NRDC court compared the 

suspension proceedings with the 

circumstances concerning the diesel 

standards before it: ‘‘The present case is 

quite different; ‘the base hour’ for 

commencement of production is 

relatively distant, and until that time the 

probable effect of a relaxation of the 

standard would be to mitigate the 

consequences of any strictness in the 

final rule, not to create new 

hardships.’’ 106 The NRDC court further 

noted that International Harvester did 

not involve EPA’s predictions of future 

technological advances, but an 

evaluation of presently available 

technology. 

EPA also evaluates CARB’s request in 

light of congressional intent regarding 

the waiver program generally. This is 

consistent with the motivation behind 

section 209(b) to foster California’s role 

as a laboratory for motor vehicle 

emission control, in order ‘‘to continue 

the national benefits that might flow 

from allowing California to continue to 

act as a pioneer in this field.’’ 107

For these reasons, EPA believes that 

California must be given substantial 

deference when adopting motor vehicle 

emission standards which may require 

new and/or improved technology to 

meet challenging levels of compliance. 

This deference was discussed in an 

early waiver decision when EPA 

approved the waiver request for 

California’s 1977 MY standards: 

Even on this issue of technological 

feasibility I would feel constrained to 

approve a California approach to the problem 

which I might also feel unable to adopt at the 

Federal level in my own capacity as a 

regulator. The whole approach of the Clean 

Air Act is to force the development of new 

types of emission control technology where 

that is needed by compelling the industry to 

‘catch up’ to some degree with newly 

promulgated standards. Such an approach to 

automotive emission control might be 

attended with costs, in the shape of a 

reduced product offering, or price or fuel 

economy penalties, and by risks that a wider 

number of vehicle classes may not be able to 

complete their development work in time. 

Since a balancing of these risks and costs 

against the potential benefits from reduced 

emissions is a central policy decision for any 

regulatory agency, under the statutory 

scheme outlined above I believe I am 

required to give very substantial deference to 

California’s judgment on that score.’’ 108

CARB, while maintaining that the 

NRDC approach is the correct 

measurement here, commented that the 

technological sophistication of ZEVs 

currently being produced is anticipated 

to continue to advance, making 

commercial production and compliance 

of these vehicles by MY 2018 and later 

more feasible. CARB also notes that the 

only relevance of costs in a section 

209(b) waiver proceeding is in the 

context of technological feasibility. 

‘‘Past waiver determinations have made 

clear that for the cost of compliance to 

be found excessive it would need to be 

‘‘very high’’ such that the cost to 

customers who purchased a complying 

vehicle would be doubled or tripled.109

Additionally, the relevance of the cost 

of compliance analysis is limited to the 

question of whether such costs will 

adversely affect the timing of an 

emission standard.’’ 110

Under NRDC, when compliance with 

CARB standards is phased-in over a 

lengthy time period, the reasonableness 

of a projection of technological 

feasibility can be based on answering 

any theoretical objections to the 

projected control technology; 

identifying the major steps necessary in 

refinement of the technology; and 

offering plausible reasons for believing 

that each of those steps can be 

completed in the time available.111

EPA’s review of the evidence on the 

technological feasibility of CARB’s ACC 

standards, in particular the standards 

which EPA received comment, follows. 

Congress has stated that the 

consistency requirement of section 

202(a) relates to technological 

feasibility.112 Section 202(a)(2) states, in 

part, that any regulation promulgated 

under its authority ‘‘shall take effect 

after such period as the Administrator 

finds necessary to permit the 

development and application of the 

relevant technology, considering the 

cost of compliance within that time.’’ 

Section 202(a) thus requires the 

Administrator to first review whether 

adequate technology already exists, or if 

it does not, whether there is adequate 

time to develop and apply the 

technology before the standards go into 

effect. 

In MEMA I, the court addressed the 

cost of compliance issue at some length 

in reviewing a waiver decision. 

According to the court: 

Section 202’s cost of compliance concern, 

juxtaposed as it is with the requirement that 

the Administrator provide the requisite lead 


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2134 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

113 MEMA I at 1118 (emphasis added). See also 

id. at 1114 n. 40 (A[T]he ‘cost of compliance’ 

criterion relates to the timing of standards and 

procedures.). 

114See, e.g., 47 FR 7306, 7309 (Feb. 18, 1982), 43 

FR 25735 (Jun. 14, 1978), and 46 FR 26371, 26373 

(May 12, 1981). 

115 36 FR 17158 (August 31, 1971). See also 40 

FR 23102, 23104; 58 FR 4166 (January 7, 1993), LEV 

Waiver Decision Document at 20. 

116CARB notes that EPA has identified areas of 

improvement to Part 1066 it intends to evaluate in 

cooperation with CARB and industry (see pp. 54– 

59 of CARB’s Technical Support Document at: 

http://www.arb.ca.gov/regact/2012/leviiighg2012/ 

levappp.pdf). 

117 Id. at P–8 through P–20. CARB’s Board has 

provided direction to its staff (Resolution 12–11 at 

21) to conduct a review of the 1 mg/mi PM standard 

in the 2015 timeframe and report back to the Board 

its results. 

time to allow technological developments, 

refers to the economic costs of motor vehicle 

emission standards and accompanying 

enforcement procedures. See S. Rep. No. 192, 

89th Cong., 1st Sass. 5–8 (1965); H.R. Rep. 

No. 728 90th Cong., 1st Sass. 23 (1967), 

reprinted in U.S. Code Cong. & Admin. News 

1967, p. 1938. It relates to the timing of a 

particular emission control regulation rather 

than to its social implications. Congress 

wanted to avoid undue economic disruption 

in the automotive manufacturing industry 

and also sought to avoid doubling or tripling 

the cost of motor vehicles to purchasers. It, 

therefore, requires that the emission control 

regulations be technologically feasible within 

economic parameters. Therein lies the intent 

of the cost of compliance requirement 

(emphasis added).113

Previous waiver decisions are fully 

consistent with MEMA I, which 

indicates that the cost of compliance 

must reach a very high level before the 

EPA can deny a waiver. Therefore, past 

decisions indicate that the costs must be 

excessive to find that California’s 

standards are inconsistent with section 

202(a).114 It should be noted that, as 

with other issues related to the 

determination of consistency with 

section 202(a), the burden of proof 

regarding the cost issue falls upon the 

opponents of the grant of the waiver. 

Consistent with MEMA I, the Agency 

has evaluated costs in the waiver 

context by looking at the actual cost of 

compliance in the time provided by the 

regulation, not the regulation’s costeffectiveness. The appropriate level of 

cost-effectiveness is a policy decision of 

California that is considered and made 

when California adopts the regulations, 

and EPA, historically, has deferred to 

these policy decisions. EPA has stated 

in this regard, ‘‘the law makes it clear 

that the waiver request cannot be denied 

unless the specific findings designated 

in the statute can be made. The issue of 

whether a proposed California 

requirement is likely to result in only 

marginal improvement in air quality not 

commensurate with its cost or is 

otherwise an arguably unwise exercise 

of regulatory power is not legally 

pertinent to my decision under section 

209 * * *.’’ 115 Thus, EPA will look at 

the compliance costs for manufacturers 

in developing and applying the 

technology and not at cost effectiveness 

when making a waiver decision. 

2. LEV III Criteria Pollutant Standards 

California has adopted new standards 

for exhaust emissions of non-methane 

organic gases (NMOG), NOX, and PM, as 

well as evaporative emissions standards. 

These standards phase in beginning 

with MY 2015. The LEV III standards 

are similar, in many respects, in 

structure to those in the existing federal 

Tier 2 program. As with the Tier 2 

program, the proposed standards would 

apply to all light-duty vehicles (LDVs, 

or passenger cars, light-duty trucks 

(LDT1s, LDT2s, LDT3s, and LDT4s)) 

below 8,500 pounds GVWR (Gross 

Vehicle Weight Rating), and MediumDuty Passenger Vehicles, or MDPVs 

(8,500 to 10,000 lbs GVWR). Based on 

our review of the LEV III criteria 

pollutant standards, and because EPA 

did not receive any comments objecting 

to CARB’s LEV III criteria pollutant 

standards, with the exception of the PM 

standard issue discussed below, we find 

it unnecessary to provide a full written 

review whether such standards are 

consistent with section 202(a), as those 

opposing the waiver have clearly not 

met their burden regarding the issue, 

and we otherwise cannot make a finding 

that such standards are inconsistent 

with section 202(a). 

a. Particulate Matter Standards 

The Manufacturers generally note that 

testing for and complying with the 

revised particulate matter standards will 

present significant burdens on the 

industry. In short, the Manufacturers 

recommend that EPA withhold issuing 

a waiver for the MY 2025 PM standard. 

While noting that the phase in of the 3 

mg/mile FTP PM standard beginning in 

MY 2017 will be very challenging, they 

nevertheless state that the 

Manufacturers are optimistic that 

vehicles will achieve this level with 

time. Recognizing that there are long 

lead time changes, the Manufacturers 

appear to be agreeing with CARB’s 

planned phased-in approach starting in 

the 2017 MY. Also, the Manufacturers 

are not objecting to EPA issuing a 

waiver for the 3 mg/mile PM standards 

based on their stated testing concerns. 

However, the Manufacturers believe 

the 1 mg/mile PM standard, which 

begins its phase-in starting in the 2025 

MY, raises further feasibility issues. 

Based on their knowledge of PM 

measurement and vehicle PM control 

technology, the Manufacturers state that 

their members ‘‘see no way to both 

measure and meet this standard.’’ The 

Manufacturers believe that setting a 

standard that is unachievable today is 

inappropriate, and they do not believe 

EPA should issue a waiver for these 

standards at this time. 

Finally, the Manufacturers note that 

there is ample time to revisit the waiver 

request without interfering with CARB’s 

implementation of standards should 

they be deemed feasible (during CARB’s 

planned review of the standard). 

CARB’s supplemental comments note 

that the LEV III PM standards are based 

on a particular concern for their impact 

on public health and safety. As noted in 

their LEV III Technical Support 

Document, CARB acknowledges that 

while PM emissions from LDVs are not 

a major contributor to the inventory, 

they are a significant contributor to 

urban pollution and human exposure. 

CARB also notes that the exact amount 

of pollution reduced and the costeffectiveness of particular California 

standards is not relevant to EPA’s 

waiver determination. 

What is relevant, CARB maintains, is 

that thirteen years of lead time (from the 

date of its adopted regulations to the 

first model year of the phase-in 

standards in 2025) are provided to 

improve the test procedure and for 

industry to incorporate needed 

improvements to their engines and fuel 

systems. CARB maintains that it has 

consistently demonstrated PM 

measurement capability at 1 mg/mi 

using new test procedures under 

development by EPA under 40 CFR Part 

1066.116 CARB suggests that EPA apply 

the rationale of NRDC and find that 

CARB has identified barriers to 

implementation of needed technologies 

and a viable path to overcome these 

barriers. For example, CARB states test 

data that they have presented 

demonstrates PM levels from current 

port fuel injected (PFI) engines below 1 

mg/mi and from late model gasoline 

direct injection engines (GDI) 

approaching 1 mg/mi. CARB expects 

further technical improvements over the 

extensive lead time provided.117 CARB 

has also identified that some of the low 

carbon technologies with proven track 

records that are most likely to be used 

(to meet GHG emission requirements) 

are: Advanced port fuel injection 

engines, GDI engines, boosted and 

downsized engines, clean diesel 

engines, hybrid, and plug-in hybrid 

technology among others. CARB notes 


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118 Id. 119 40 FR 23102, 23103 (May 28, 1975). 120EPA–HQ–OAR–2012–0562–0011 at ES–6. 

that each of these technologies will have 

a particular impact on PM emissions. 

CARB notes that many of these 

technologies may be able to currently 

meet 2025 MY PM standards and that 

further improvements are reasonable. 

For example: (1) CARB’s Technical 

Support Document states ‘‘Some 

current, well-maintained PFI-equipped 

LDVs emit PM mass levels below 1 mg/ 

mi. For example, published research 

reports PM emissions rates for both PFI 

ULEV and SULEV vehicles of 

approximately 0.7 mg/mi or much less 

over the Federal Test Procedure (FTP or 

FTP–75) cycle’’ and (2) ‘‘Car makers 

who choose to pursue gasoline-fueled, 

CO2 friendlier GDI internal combustion 

engines for their future vehicles will 

have two principal technical solutions 

for further reduction of PM mass 

emissions. One solution can utilize next 

generation state-of-the-art engines (e.g., 

start-stop system where the ICE 

automatically shuts down and starts up 

at idle) with optimized fuel injection 

strategies (e.g., spray-guided central 

injector) at nearly no net cost increase. 

The second solution employs postcombustion control in the form of the 

gasoline particle filter (GPF) at an 

additional cost.’’ 118

b. EPA’s Response to Comments 

As explained below, EPA believes 

CARB presents a proper view of how 

lead time should be evaluated, for 

purposes of waiver review by EPA, and 

that CARB has provided reasonable 

responses to any theoretical objections 

to the projected control technology; 

identified the major steps necessary in 

refinement of the technology; and 

offered plausible reasons for believing 

that each of those steps can be 

completed in the time available. 

We also believe that CARB has 

properly set forth the role of EPA in 

reviewing California standards which 

require new and/or improved 

technology to meet challenging levels of 

compliance. EPA is not setting its own 

standards under section 202(a) of the 

Clean Air Act, rather EPA’s role within 

its waiver review is more limited and 

takes place in the context of deference 

that Congress envisioned for California. 

This deference was discussed in an 

early waiver decision when EPA 

approved the waiver request for 

California’s 1977 model year standards: 

Even on this issue of technological 

feasibility I would feel constrained to 

approve a California approach to the problem 

which I might also feel unable to adopt at the 

Federal level in my own capacity as a 

regulator. The whole approach of the Clean 

Air Act is to force the development of new 

types of emission control technology where 

that is needed by compelling the industry to 

‘catch up’ to some degree with newly 

promulgated standards. Such an approach to 

automotive emission control might be 

attended with costs, in the shape of a 

reduced product offering, or price or fuel 

economy penalties, and by risks that a wider 

number of vehicle classes may not be able to 

complete their development work in time. 

Since a balancing of these risks and costs 

against the potential benefits from reduced 

emissions is a central policy decision for any 

regulatory agency, under the statutory 

scheme outlined above I believe I am 

required to give very substantial deference to 

California’s judgment on that score.119

Regarding the feasibility of the CARB 

1 mg/mile PM standard that commences 

its phase-in starting with the 2025 MY, 

EPA believes that it is proper to review 

this through the NRDC prism. In other 

words, EPA believes it appropriate to 

provide substantial room for deference 

to CARB’s projections. Although the 

Manufacturers have raised a variety of 

concerns they have not provided any 

data or other information to demonstrate 

why the pathways and steps identified 

by CARB are unreasonable. EPA 

believes having given appropriate 

deference that CARB has reasonably 

projected possible pathways to address 

the theoretical concerns with the 2025 

phased-in PM standard, including 

concerns relating to testing capability. 

The Manufacturers have provided no 

data or other information to demonstrate 

why CARB’s identified path of 

improvements in testing technology and 

procedures is not feasible in the lead 

time provided. Similarly, the 

Manufacturers have provided no data or 

other information to demonstrate why 

CARB’s identified technology solutions 

and possible refinements are infeasible, 

especially given the amount of lead time 

provided. Given the amount of lead time 

provided by CARB and their identified 

paths for improvements, EPA believes 

the opponents to the waiver have not 

met their burden of proof in regards to 

the PM standards commencing in MY 

2025. 

Therefore, based on the record before 

us, EPA cannot find that the opponents 

of the PM standard in 2025 have met 

their requisite burden of proof to 

demonstrate that such standards are 

inconsistent with section 202(a). Thus 

EPA cannot deny CARB’s ACC waiver 

request on this basis. 

3. LEV III GHG Emission Standards 

CARB has worked closely with EPA 

and NHTSA throughout the 

development of the MY 2017–2025 GHG 

emission standards and has moved in 

parallel with the agencies in setting 

standards that are essentially equivalent 

in terms of lead time and stringency. 

CARB projects that its GHG emissions 

standards for MYs 2017–2025 will 

reduce fleet average CO2 levels by about 

34 percent from MY 2016 levels of 251 

g/mile down to about 166 g/mile, based 

on the projected mix of vehicles sold in 

California. The basic structure of the 

GHG standards is consistent with that of 

EPA’s GHG standards. CARB uses two 

vehicle categories, passenger cars and 

light trucks. CARB projects that the 

standards will reduce car CO2 emissions 

by approximately 4.9%/year, reduce 

truck CO2 emissions by approximately 

4.1%/year (the truck CO2 standard target 

curves move downward at 

approximately 3.5%/year through the 

2016–2021 period and about 5%/year 

from 2021–2025), and reduce combined 

light-duty CO2 emissions by 

approximately 4.5%/year from 2016 

through 2025. 

CARB notes that the CO2 emission 

reduction estimates are approximate 

because the required emission level to 

achieve compliance with the standards 

for each vehicle manufacturer depends 

on each manufacturer’s ultimate sales 

mix of vehicles.120 Within the two 

categories, the CO2 standard targets for 

vehicle models sold by each automaker 

are indexed to the vehicles’ footprint, 

which is calculated as each vehicle 

model‘s wheelbase times its average 

track width. As a result of this 

regulatory structure, the precise CO2

emission rates that will result from the 

standards in each year from 2017 

through 2025 will depend on the 

ultimate sales-weighted mix of vehicles 

(i.e., according to vehicle sales in each 

category and the footprint of the 

models) sold in each year. 

CARB also adopted separate nitrous 

oxide (N2O) and methane (CH4) 

standards that are harmonized with the 

standards EPA first adopted in the MY 

2012–2016 rulemaking. As with the EPA 

program, manufacturers may use CO2

credits to meet the N2O and CH4

standards on a CO2-equivelent basis. 

CARB includes most of the 

flexibilities established by EPA for MYs 

2017–2025. CARB includes averaging, 

banking, and trading provisions which 

allow for 5-year credit carry-forward 

and 3-year credit carry-back and credit 

trading between manufacturers. 

Manufacturers may generate air 

conditioning system credits through 

system efficiency improvements, low 

refrigerant leakage designs, and use of 

low global warming potential 


srobinson on DSK4SPTVN1PROD with 
2136 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

121EPA allows a 0 g/mile compliance value to be 

used for vehicles sold in MY2017–2021 and caps 

the cumulative number of vehicles that a 

manufacturer may use the 0 g/mile compliance 

value for in MYs 2022–2025. 

122California Air Resources Board, EPA–HQ– 

OAR–2012–0562–0021, at 16. 123 77 FR 53199, 53200 (August 31, 2012). 124Air Resources Board, EPA–HQ–OAR–2012– 

0562–0011, at 135. 

125CARB Resolution 12–35 (November 15, 2012). 

126EPA–HQ–OAR–2012–0562–0374. 

127California Air Resources Board, EPA–HQ– 

OAR–2012–0562–0011, at 102–103. 

128California Air Resources Board, EPA–HQ– 

OAR–2012–0562–0011, at 103–108. 

129 Joint Technical Support Document: Final 

Rulemaking for 2017–2025 Light-duty Vehicle 

Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards, Chapter 3, EPA– 

420–R–12–901, August 2012. 

refrigerants. Manufacturers may 

generate up to 18.8 g/mile CO2- 

equivalent credit for cars and 24.4 g/ 

mile CO2-equivelent credits for trucks 

from air conditioning system 

improvements. CARB also moved to 

harmonize air conditioning system test 

procedures with EPA, replacing the A/ 

C idle test requirement with the AC17 

test procedure. 

In addition CARB adopted off-cycle 

credits provisions similar to those 

adopted by EPA, which provide credits 

to manufacturers based on real world 

improvements in CO2 emissions not 

captured on the 2-cycle test procedure. 

CARB adopted a list of pre-approved 

credits that manufacturers may claim by 

using pre-approved technologies. As 

with the EPA program, off-cycle credits 

based on the pre-approved credits list is 

capped at 10 g/mile. CARB also 

provides full-size pickup truck 

technology credits of 10 or 20 g/mile per 

vehicle depending on the level of 

technology employed, similar to the 

EPA program. Manufacturers may 

generate technology incentive credits by 

using hybrid technologies or by meeting 

performance-based criteria over a 

specified minimum percentage of full 

size pickup truck production. 

The EPA and CARB programs differ in 

their treatment of advanced technology 

vehicles, specifically plug-in hybrids, 

battery electric vehicles, and fuel cell 

vehicles. EPA’s program encourages the 

production of these advanced 

technology vehicles in two ways; by 

providing incentive multipliers for these 

technologies and by not counting the 

upstream emissions associated with 

electric operation for the first several 

model years of the program.121 CARB 

does not provide a multiplier incentive 

or allow for the use of a 0 g/mile 

compliance value. CARB explains that 

incentives are not needed for plug-in 

hybrids, battery electric vehicles, and 

fuel cell vehicles under their GHG 

program because the California ZEV 

program requires manufacturers to 

produce vehicles using these 

technologies. 

In its Final Statement of Reasons, 

CARB reiterated its commitment, as 

directed by Board Resolution 12–11, to 

accept compliance with EPA’s GHG 

emission standards for MY 2017–2025 

as compliance with California’s GHG 

standards if CARB determines that 

EPA’s final rule preserves the GHG 

reduction benefits set forth in EPA’s 

proposed rule.122 CARB also notes their 

plan to adopt a ‘‘deemed to comply’’ 

rule within their waiver request to EPA. 

EPA stated in the Federal Register 

notice announcing the opportunity for 

hearing and comment on CARB’s June 

27, 2012 ACC waiver request that ‘‘EPA 

invites comment on all aspects of 

CARB’s waiver request, and specifically 

invites comment on CARB’s waiver 

request in light of CARB’s plans 

concerning adoption of a ‘‘deemed to 

comply’’ provision into its LEV III GHG 

standards. This will allow EPA to 

consider any ‘‘deemed to comply’’ 

provision and comments on it when 

taking action on CARB’s request for a 

waiver.’’ 123

On September 14, 2012, CARB 

proposed amendments to their program 

to permit compliance based on 

compliance with EPA’s GHG standards. 

In its discussion of the differences 

between the EPA and CARB programs 

with regard to the treatment of advanced 

technology vehicles, CARB notes that 

manufacturers will have the option to 

comply with the federal program and 

utilize the EPA accounting provisions 

for these vehicles.124 On November 15, 

2012, the Air Resources Board agreed to 

accept compliance with federal 

standards as equivalent to compliance 

with California’s, approving the 

amendment for ‘‘deemed to comply.’’ 125

On December 7, 2012, CARB submitted 

additional information to EPA noting 

that CARB had approved further 

amendments to the ACC program, 

including the ‘‘deemed to comply’’ 

regulation, and therefore California has 

met its commitment to the National 

Program. CARB requested that EPA 

consider and take action on these 

amendments concurrent with the 

request set forth in CARB’s June 27, 

2012 ACC waiver request.126

a. Comments on CARB’s 2017 Through 

2025 GHG Emission Standards 

CARB’s waiver request notes that in 

2010, President Barack Obama directed 

EPA and NHTSA to work with 

California to develop GHG fleet 

standards for MY 2017 through 2025 

light-duty vehicles. In response, the 

three agencies developed the Interim 

Joint Technical Assessment Report 

(TAR), released in September 2010. The 

TAR was major milestone in the 

technical work done collaboratively by 

EPA, NHTSA, and CARB. CARB held 

four public technical workshops 

covering topics of efficiency, massreduction, and safety technology; 

collaborative technical contract work 

(e.g., with FEV, Ricardo, Lotus); and 

extensive meetings with a wide range of 

stakeholders to gather input. This 

collaboration ensured that the three 

agencies had a common set of technical 

information on which to inform their 

proposals, allowing the agencies to 

develop standards that are harmonized 

in terms of their stringency. 

CARB further notes that the feasibility 

analysis underlying its standards is 

based on several existing and emerging 

technologies that increase engine and 

transmission efficiency, reduce vehicle 

energy loads, improve auxiliary and 

accessory efficiency, and that would 

increasingly electrify vehicle 

subsystems with hybrid and electric 

drivetrains. The technology assessment 

conducted by CARB for the MY 2017– 

2025 standards builds on the original 

technical basis established in the 

previous rulemakings for California’s 

MY 2009–2016 and federal MY 2012– 

2016 standards. CARB notes that several 

individual technologies offer substantial 

CO2 reduction potential and that many 

of the technologies have only seen 

limited deployment in new vehicle 

models.127

In its Initial Statement of Reasons staff 

report, CARB highlights several CO2

reduction technologies that 

manufacturers can employ to meet the 

standards.128 The list of technologies 

cited by CARB is very similar to the list 

of technologies considered by EPA and 

NHTSA in evaluating standards for MYs 

2017–2025.129 Vehicle road load and 

accessory energy loads can be improved, 

for example, through mass reduction, 

improved accessories, electric power 

steering, improved aerodynamics, and 

low rolling resistance tires. CARB notes 

several considerable opportunities for 

engine efficiency improvements. Engine 

efficiency technologies include turbo 

charging and downsizing, gasoline 

direct injection, continuously variable 

valve lift, cylinder deactivation, and 

diesel-fueled engines. CARB also 

describes transmission efficiency 

improvements important in allowing the 

operation of the engine in its lowest fuel 

consumption operating points more 

frequently. These include more gears 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2137 

130EDF’s comment at EPA–HQ–OAR–2012– 

0562–0025 and 0353; and NRDC’s comment at 

EPA–HQ–OAR–2012–0562–0347. 

131EPA–HQ–OAR–2012–0562–0373 at 8. 

132 77 FR 62880–62882 and 62777. 

133See 77 FR 62671–62673 for discussion on EPA 

statutory authority. 

134 77 FR 62786. 

135 77 FR 62784–62788. 

136 77 FR 62624. 

137See 77 FR 62702–62713 for a description of 

the EPA and NHTSA joint technology and cost 

assessment. More detail is provided in the joint 

Technical Support Document for the rule. 

(e.g., 8 speed transmissions), closer gear 

ratio spacing, optimized controls, and 

dual clutch transmissions that allow 

essentially the same efficiency as 

manual transmissions. 

CARB’s analysis also includes various 

hybrid systems that offer significant 

potential CO2 reductions through the 

elimination of engine idling, reduction 

in fuel consumption during 

deceleration, reduction of acceleration 

power requirement through launch 

assist, and the recovery of vehicle 

energy losses through regenerative 

braking during deceleration. Finally, 

CARB also includes emerging electric 

drive technologies including plug-in 

hybrids, electric, and hydrogen fuel cell 

vehicles. 

EPA received several comments on 

CARB’s waiver request generally 

supporting the California GHG 

standards as feasible and consistent 

with CAA section 202(a). The 

Environmental Defense Fund (EDF) and 

the Natural Resources Defense Council 

(NRDC) commented that CARB 

coordinated with EPA and NHTSA in 

the development of the GHG standards 

and the California GHG standards are 

aligned with the federal GHG standards 

in terms of stringency and lead time. 

EDF further commented that EPA 

received letters from 13 automakers 

supporting the federal GHG standards, 

and based on this coordination and 

support EPA can only determine that 

the CARB GHG standards are 

feasible.130

EPA received comments from the 

Dealers that EPA should not provide a 

waiver to California for the MY 2022– 

2025 GHG standards because the 

standards for these years are not 

consistent with CAA section 202(a). The 

commenter states that by committing to 

a mid-term evaluation in its own GHG 

program, EPA has already determined 

that ‘‘technological capabilities after MY 

2022 are too remote to be accurately 

predicted.’’ The commenter argues that 

it is inappropriate for CARB to obtain a 

waiver for years where it cannot 

demonstrate technological feasibility 

regardless of the fact that California has 

agreed to participate in the mid-term 

review. The Dealers assert that by 

agreeing to participate in the mid-term 

evaluation, CARB ‘‘has admitted that 

the technological feasibility of its GHG 

standards for MYs 2022–2025 is not 

knowable at this time.’’ 

As part of the waiver decision 

process, CARB’s supplemental 

comments provided a response to 

comments submitted by NADA, 

including a response to NADA’s 

comments regarding the feasibility of 

the MY 2022–2025 standards.131 CARB 

comments that NADA concerns are not 

supported by relevant case law and 

should be dismissed. CARB comments 

that NADA is disregarding decades of 

precedent that clearly sets out the 

appropriate ‘‘technological feasibility’’ 

analysis under section 202(a). Citing 

Natural Resources Defense Council v. 

U.S. Environmental Protection Agency, 

(1981) 655 F.2d 318, 331, CARB notes 

CAA section 202(a) has historically been 

interpreted to allow for projections of 

likely future technological development. 

Such projections do not need to 

‘‘possess the inescapable logic of a 

mathematical deduction.’’ Instead, such 

a projection is considered sufficient if it 

‘‘answers any theoretical objections to 

the [projected technology], identifies the 

major steps necessary in refinement of 

the technology, and offers plausible 

reasons for believing that each of those 

steps can be completed in the time 

available.’’ Moreover, where the 

requirements of a standard are phased 

in over a lengthy period of time it bears 

on the likelihood of a proper finding of 

technological feasibility. CARB notes 

that the great length of time provided— 

until after MY 2022—supports a finding 

of technological feasibility under NRDC, 

and would be in line with past EPA 

waiver decisions. 

b. EPA Response to Comments 

EPA disagrees with NADA’s 

characterization of the mid-term review 

as it relates to the technological 

feasibility of the standards for MYs 

2022–2025. As discussed in the final 

rule for the EPA’s GHG emission 

standards, EPA has found that its 

standards are technologically feasible 

under CAA section 202(a), based on 

available information regarding 

technology and costs.132 EPA could not 

have adopted the standards for MYs 

2022–2025 if it did not find the 

standards to be consistent with CAA 

section 202(a) which requires EPA to 

consider issues of technological 

feasibility, cost, and available leadtime.133 As EPA discusses in the final 

rule in response to comments, ‘‘EPA 

does not agree that the mid-term 

evaluation is legally required, or that the 

standards adopted today would be 

arbitrary and capricious or without 

substantial evidence to support them 

absent such a mid-term evaluation. The 

final rule and supporting information 

and analysis amply justify the 

reasonableness and appropriateness of 

the final GHG standards adopted by 

EPA, irrespective of the provisions for a 

mid-term evaluation.’’ 134 EPA is 

committed to conducting a mid-term 

evaluation for MYs 2022–2025 in close 

coordination with NHTSA and CARB 

given the long time frame in 

implementing standards out to MY 2025 

and given NHTSA’s obligation to 

conduct a separate rulemaking in order 

to establish final standards for vehicles 

for those years.135 With respect to the 

waiver, however, EPA believes that 

NADA’s reference to the mid-term 

review does not demonstrate 

technological infeasibility (or any 

requisite level of uncertainty) or that the 

CARB standards are inconsistent with 

section 202(a), particularly given that 

the CARB standards are closely aligned 

to those adopted by EPA. In addition, 

compliance with EPA’s GHG standards 

will be deemed to be compliance with 

CARB’s GHG standards. EPA agrees 

with CARB’s response to the NADA 

concerns and believes that a reasonable 

technology path forward has been 

projected in support of the MY 2022– 

2025 standards, which is further 

supported by the substantial amount of 

lead-time provided for these standards. 

EPA believes that the substantial 

amount of lead-time provided also 

accords with a finding of technological 

feasibility under NRDC, and would be 

in line with past EPA waiver decisions. 

EPA did not receive any additional 

comments on the waiver decision 

regarding the technology assessment or 

cost analysis done by CARB in support 

of their GHG standards. CARB has 

adopted GHG standards that are closely 

aligned to those adopted by EPA for 

MYs 2017–2025. In EPA’s final rule 

establishing the MY 2017–2025 

standards, EPA concluded that the 

standards are feasible in the lead time 

provided and the costs are reasonable, 

as required under Section 202(a) of the 

CAA.136 The technical basis for the 

standards was developed jointly by 

EPA, NHTSA, and CARB. The 

methodology and underlying data used 

by CARB to assess technologies and 

costs, as summarized above, are very 

similar and in many cases the same as 

those used by EPA to assess the 

standards.137 The extended lead time 


srobinson on DSK4SPTVN1PROD with 
2138 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

138EPA–HQ–OAR–2012–0562–0374 at 6–13. 

139The Manufacturers note that California does 

not believe that another waiver request is necessary 

once the amendments are finalized, further 

supporting its request to wait until after CARB 

finalizes its rule. 

140See CARB’s Resolution 12–35 (November 15, 

2012) at EPA–HQ–OAR–2012–0562–0374 

(attachment 64), Executive Order R–12–016 

(December 6, 2012) at EPA–HQ–OAR–2012–0562– 

0374 (attachment 66). 

141See EPA–HQ–OAR–2012–0562–0374 

(attachment 65). 

provides the necessary time for 

manufacturers to combine individual 

technologies, many of which are 

currently available, into optimized 

packages and apply them across their 

vehicle fleets. 

It is also important to note that the 

EPA and CARB GHG programs are very 

similar in terms of the structure of the 

programs and flexibilities contained in 

the programs. The CO2 standards are 

attribute-based fleet average standards, 

based on vehicle footprint curves that 

are identical. The programs include 

averaging, banking, and trading 

provisions. Both GHG programs offer 

credits for air conditioning system 

improvements, off-cycle CO2 reductions, 

and full-size pickup truck technology 

incentives. Both GHG programs contain 

the same N2O and CH4 standards and 

essentially the same provisions for small 

volume manufacturer and small 

businesses. 

There are some aspects of the CARB 

program that differ from the EPA 

program but, as discussed below, EPA 

does not believe that these differences 

change the feasibility of the standards in 

any significant way. CARB has 

explained in detail how these standards 

can be met using technologies that are 

reasonably expected to be available in 

the regulatory timeframe. NADA does 

not substantially undermine this 

explanation. 

CARB estimated an average per 

vehicle cost in MY 2025 of $1,340 

without the new ZEV requirements and 

$1,840 with the new ZEV requirements. 

In its final rule, EPA estimated an 

average per vehicle cost of about $1,800 

in MY 2025 for the EPA GHG standards. 

Both agencies conclude that these upfront per vehicle costs will be more than 

offset by consumer fuel savings over the 

life of the vehicles. 

Perhaps the most significant 

differences between the CARB and EPA 

vehicle programs involve the new 

California ZEV requirements which 

mandate use of ZEV-type technologies 

for a portion of a manufacturer’s fleet, 

and therefore may alter the technology 

pathways that manufacturers might 

otherwise choose to meet the GHG 

standards. EPA has reviewed the 

consistency of the ZEV requirements 

with section 202(a) separately below 

The CARB and EPA programs also 

differ in the treatment of vehicles 

capable of electric operation. EPA 

provides an advanced technology 

incentive multiplier through MY 2021 

to encourage the increased sales of plugin hybrids (PHEVs), electric vehicles 

(BEVs), and fuel cell vehicles (FCVs). 

CARB does not provide advanced 

technology incentive credits for these 

vehicles because these types of vehicles 

are required under the ZEV program and 

an incentive is not necessary. CARB also 

accounts for upstream emissions from 

electric operation starting in MY 2017 

while EPA phases in upstream 

accounting for MY 2022–2025 vehicles 

after vehicle sales thresholds are 

exceeded. These differences mean that 

PHEVs, BEVs, and FCVs do not receive 

as much credit in the CARB program 

compared to the EPA program. 

However, these vehicles still offer 

significantly lower CO2 levels in the 

CARB program compared to more 

conventional technologies, lowering a 

manufacturer’s CO2 fleet average. 

There are other minor differences 

between the CARB and EPA programs 

but EPA does not believe the differences 

have a significant impact on feasibility. 

Many of the differences in the programs 

arise from changes EPA made to various 

provisions between the proposal and 

final rules in response to comments. 

CARB delineates these minor 

differences in the Initial Statement of 

Reasons for their proposal to accept 

compliance with EPA’s GHG emission 

standards as compliance with 

California’s GHG emission standards 

(aka ‘‘deemed to comply’’).138 These 

include revisions to the off-cycle 

credits, air conditioning system credits, 

and full-size pick-up credits. While 

most of the changes made by EPA in its 

final rule directionally provide 

somewhat more flexibility to 

manufacturers, the changes do not 

ultimately change the level of credits 

potentially available. CARB concludes 

and EPA agrees that the programs 

remain sufficiently comparable. 

Finally, as discussed below, most if 

not all manufacturers will very likely 

opt to comply with the California 

program by complying with the EPA 

GHG emission standards, as permitted 

by the ‘‘deemed to comply’’ regulation. 

Therefore, the small differences between 

the programs will not in such cases have 

any practical implications for 

manufacturers. As CARB notes in its 

waiver request, ‘‘Throughout the 

development of the LEV III GHG 

regulations, California coordinated with 

the EPA and NHTSA on technical and 

economic areas, and CARB has moved 

in parallel with the federal rulemaking 

in terms of stringency of the standards 

and lead time for compliance.’’ Given 

this coordination, commenters have not 

shown that the LEV III GHG regulations 

are technologically infeasible or that the 

lead time provided is inadequate. 

The Manufacturers note that they do 

not oppose California’s request for a 

Section 209(b) waiver for its GHG 

emission standards but state that it 

would not be appropriate for the waiver 

to be granted until after California has 

finalized its regulatory amendments to 

allow for a national compliance 

option.139 ‘‘This national compliance 

option is integral to the commitment 

letters the industry and California 

signed in July 2011 and to the single 

national GHG/fuel economy program all 

stakeholders sought to achieve.’’ 

As noted above, CARB notified EPA 

by letter dated December 7, 2012 that 

CARB has approved further 

amendments to its ACC program, 

including the ‘‘deemed to comply’’ 

regulation.140 Included in CARB’s 

December 7, 2012 letter to EPA is 

CARB’s ‘‘Final ‘Clean’ Version of 

California’s 2017–2025 Advanced Clean 

CAR Program, including its Passenger 

Vehicle Greenhouse Gas Regulations 

and LEV/GHG Test Procedures, and its 

ZEV regulations and Test Procedures’’ 

all as amended December 6, 2012.141

EPA has not received any comment, 

based on its August 31, 2012 Federal 

Register Notice, that CARB’s ‘‘deemed 

to comply’’ regulation raises any issues 

regarding technological feasibility. EPA 

did receive comment from the 

Manufacturers requesting that EPA not 

grant CARB a waiver for its GHG 

emission standards until after CARB has 

finalized their ‘‘deemed to comply’’ 

regulations. Today’s waiver applies to 

CARB’s final regulation as adopted on 

December 6, 2012. 

After review of the information in this 

proceeding, EPA believes that those 

opposing the waiver have not met their 

burden of showing that compliance with 

California’s GHG standards is infeasible, 

even without the deemed to comply 

provision, based upon the current and 

future availability of the described 

technologies in the lead-time provided 

and considering the cost of compliance. 

The CARB technical information 

presented in this record clearly 

indicates that these requirements are 

feasible. In addition, California’s 

regulations include a ‘‘deemed to 

comply’’ provision which provides 

further strong support for this view. 

EPA therefore determines that those 

opposing the waiver have not met the 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2139 

142See CARB’s Initial Statement of Reasons 

(ISOR), EPA–HQ–OAR–2012–0562–0008 at 11. 

143CARB waiver request at 27–28. 144CARB’s ISOR at pp. 62–63. 

145EPA–HQ–OAR–2012–0562–0032. 

146EPA–HQ–OAR–2012–0562–0354. 

147EPA Hearing Transcript at 83. EPA–HQ–OAR– 

2012–0562–0026. 

burden of producing the evidence 

necessary for EPA to find that 

California’s GHG standards, including 

the ‘‘deemed to comply’’ provision, are 

not consistent with Section 202(a). 

4. California’s ZEV Amendments as 

They Affect 2018 Through 2025 Model 

Years 

As noted above, after a thorough 

review of CARB’s ZEV amendments, we 

have determined that such amendments, 

as they affect 2017 and earlier MYs, are 

within the scope of previous waivers of 

preemption. However, EPA recognizes 

that such amendments add significant 

new requirements, as they affect 2018 

and later MYs, and therefore such 

amendments are reviewed under the full 

waiver criteria. 

a. Comments on CARB’s ZEV 

Amendments 

CARB notes in its waiver request that 

to date, all vehicle manufacturers 

operating in California are in full 

compliance with the ZEV mandate. 

Nearly 5,600 ZEVs (BEVs and FCVs) are 

in operation statewide and 380,000 AT 

PZEVs are also in operation. Fuel cell 

vehicle and infrastructure is progressing 

with several automakers moving toward 

commercialization sometime after 2015. 

Cumulatively, automakers plan to have 

50,000 FCVs operational in California 

by 2017, according to CARB.142 CARB 

also notes that most manufacturers have 

near-term production plans to meet or 

over comply with the regulatory 

requirements through MY 2017. In 

addition, recently a number of 

manufacturers have announced 

aggressive production plans for PHEVs 

and BEVs for the next three MYs. CARB 

maintains that these announcements 

reflect technological advancement in 

lithium-ion battery technology and a 

general shift in customer demand and 

concern about environmental 

stewardship. CARB provides a table in 

its waiver request that summarizes 

manufacturers’ current ZEV and TZEV 

program commitments, by technology 

category and as publicly stated.143

CARB suggests that the table reveals that 

nearly every manufacturer will be 

introducing BEV and PHEV products 

within the next one to three years, and 

five manufacturers will commercially 

introduce FCVs by 2015. CARB states 

that the technological sophistication of 

ZEVs currently being produced is 

anticipated to advance, making 

commercial production and compliance 

of these vehicles by MY 2018 and later 

more feasible. A new feature of the ZEV 

amendments is that manufacturers will 

be allowed to use a variety of battery 

and fuel cell vehicle technologies to 

comply with the ZEV requirement, 

making compliance still more feasible. 

Finally, CARB notes that during its 

rulemaking proceedings for the adopting 

of the 2012 ZEV amendments they did 

not receive any comments questioning 

the overall technological feasibility of 

the amended standards. 

With regard to the manufacturer costs 

associated with the ZEV emission 

requirements CARB states that the ‘‘ZEV 

regulation must be considered in 

conjunction with the proposed LEV III 

amendments. Vehicles produced as a 

result of the ZEV regulation are part of 

a manufacturer’s light-duty fleet and are 

therefore included when calculating 

fleet averages for compliance with the 

LEV III GHG amendments. Because the 

ZEVs have ultra-low GHG emission 

levels that are far lower than non-ZEV 

technology, they are a critical 

component of automakers’ LEV III GHG 

standard compliance strategies. As such 

the ZEV program cost is considered as 

the difference in complying with the 

LEV III GHG fleet standard without the 

proposed amendments to the ZEV 

regulation versus with the proposed 

amendments to the ZEV regulation. 

Assuming that all of the associated 

direct manufacturing and ICMs are 

passed on to consumers, the average 

incremental price increase that results 

from the proposed LEV III GHG fleet 

standards and proposed ZEV regulation 

over the 2017 through 2025 timeframe 

will differ from the average increase 

resulting from compliance with only the 

LEV III GHG amendments. The average 

incremental vehicle price due to 

proposed LEV III GHG standards, but 

with no amendments to the current ZEV 

regulation, in 2025 is expected to be 

$1,340. The average incremental vehicle 

price considering the proposed LEV III 

GHG fleet standards and the proposed 

ZEV requirements in 2025 MY increases 

to $1,840, a $500 incremental increase. 

* * * In the broader context of the 

overall fleet, the ultra-low GHG ZEV 

technology is a major component of 

compliance with the LEV III GHG fleet 

standards for the overall light duty fleet. 

In that fleet context, the overall cost of 

the ZEV program is the difference in 

costs between the ‘‘GHG-plus-ZEV’’ and 

the ‘‘GHG only’’ scenarios.’’ 144

EPA has also received comment from 

several consumer and environmental 

groups that support CARB’s ZEV 

amendments. The Consumer Federation 

of America (CFA) provided comment 

that ‘‘California’s ability to set these 

strong standards is vitally important to 

the advancement of the auto industry 

and for meeting consumer demand for 

cleaner and more efficient cares in states 

across the nation. Consumers 

understand the benefits and have 

consistently voiced support for 

California’s leadership on clean car 

standards. In fact, CFA’s latest poll on 

the subject found that ‘‘more than 70% 

of Americans support states being 

allowed to continue setting tailpipe 

emission standards that, as a result, 

increase fuel economy for motor 

vehicles.’’ This commenter also 

provides the latest from a Consumer 

Reports poll on the subject, including 

‘‘Seventy-five percent of California 

consumers think California should 

require automakers to build fleets that 

include increasing numbers of zero 

emission vehicles including electric and 

hydrogen fuel cell cars.’’ 145 EPA 

received comment from Consumer 

Reports/Consumers Union (Consumer 

Reports) in support of CARB’s ACC 

program and notes the survey above. In 

addition, Consumer Reports notes that 

vehicle manufacturers are already 

offering plug-in hybrids and BEVs, with 

new models appearing all the time. 

‘‘Consumers, particularly in California, 

are very open to buying alt-fuel 

vehicles. Importantly, some of the 

cleanest vehicles or alt-fuel vehicles are 

also proving very satisfying to vehicle 

owners.’’ 146 EPA also received oral 

testimony from Calvert Investments 

noting that CARB’s ACC program will 

help drive innovation, investment, and 

job creation and thus they strongly 

support both the LEV III (including GHG 

standards) and ZEV requirements in the 

ACC program. ‘‘Customers want and in 

an increasing number of countries 

require cleaner cars and trucks, to go 

further on every gallon of gas, while 

cutting back on GHG emissions that 

contribute to climate change. 

Companies that fail to embrace relevant 

new technologies, from improving 

mileage for conventional internal 

combustion engines to developing 

hybrid, electric, and fuel cell vehicles, 

are putting themselves at risk.’’ 147

In addition, EPA received comment 

from NRDC that provided specific input 

on the criterion for consistency with 

CAA Section 202(a). NRDC states that 

the forecasted ZEV sales in California 

exceed ZEV requirements. In a report 

jointly published with NRDC, auto 

industry analysts Baum and Associates 


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2140 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

148EPA–HQ–OAR–2012–0562–0347. See Baum 

and Mui, ‘‘The Zero Emission Vehicle Program: An 

Analysis of Industry’s Ability to Meet the 

Standards’’, May 2010. Available at http:// 

docs.nrdc.org/energy/files/ene_10070701a.pdf. 149EPA believes the Manufacturers have 

mischaracterized the nature of CARB’s waiver 

request. CARB has only submitted its own ACC 

regulations to EPA and it has not submitted, nor has 

any other State submitted, section 177 state 

regulations. 

150NADA points to CARB’s waiver request at 25 

wherein CARB states ‘‘It is well established that 

EPA will find a regulation to be technically feasible 

if ‘a reasonable basis [exists] that a new technology 

will be available and economically achievable.’’ 

However, NADA fails to reference CARB’s 

subsequent (and EPA believe the appropriate view 

of cost) statement on the same page: ‘‘The only 

relevance of costs in a Section 209(b) waiver 

proceeding is in the context of technological 

feasibility. Past waiver determinations have made 

clear that for the cost of compliance to be found 

excessive it would need to be ‘very high’ such that 

the cost to consumers when purchased a complying 

vehicle would be doubled or tripled.’’ 

151CARB’s supplemental comments at 6. See 49 

FR 18887, 18889 (May 3, 1984) and 58 FR 4166 

(January 7, 1993). See also MEMA I 627 F.2d 1095, 

1114–20 (Administrator properly declined to 

review potential anti-trust and constitutional 

implications of CARB regulations under 209(b)). 

projected potential ZEV sales from 2015 

to 2020. The 2012 ZEV amendments 

expect ZEV sales of about 75,000 

vehicles in MY 2018 and 130,000 

vehicles in 2020. The Baum Associates 

assessment, conducted before the ZEV 

amendments were proposed, projected 

ZEV sales of as much as 160,000 in MY 

2018 and 180,000 in MY 2020. Baum 

and Associates also forecasts on an 

ongoing basis for the introduction of 

new ZEV models into the marketplace 

in the next few years, demonstrating the 

technical feasibility of ZEV technologies 

today. The Baum and Associates 

forecasts are based on detailed 

information about supplier and OEM 

production plans. NRDC compared the 

Baum and Associates forecast for BEVs, 

PHEVs, and FCVs to the ZEV and TZEV 

production announcements included by 

CARB in their waiver request. NRDC 

found that there are even more models 

that will be introduced than identified 

by CARB.148

EPA received comment both from the 

Manufacturers and the Dealers stating 

their objections to CARB’s ZEV 

amendments as they affect 2018 and 

later MYs. The Manufacturers provide 

essentially three arguments for their 

assertion that the ZEV regulations are 

infeasible, particularly when applied 

individually in section 177 States. (The 

Manufacturers state that the 

amendments before EPA require an 

increasing number of ZEVs in California 

and each of the section 177 States.) 149

The Manufacturers claim that: 1) the 

infrastructure for BEVs will not be 

sufficient by MY 2018 to support 

increased sales of BEVS and that CARB 

has not explained how it determined 

that the infrastructure and the level of 

consumer demand in the Section 177 

States will be sufficient to justify the 

ending of the travel provisions for ZEVs 

after MY 2017; 2) the cost of the ZEV 

program far exceeds its environmental 

benefits, especially when compared to 

the LEV III and GHG programs in terms 

of cost per ton of CO2 removed: and 3) 

the current data on consumer demand 

for ZEVs indicates that it will not be 

feasible to meet the sales requirements 

for 2018 MY and beyond. In conjunction 

with this third argument the 

Manufacturers contend that the market 

for these types of vehicles has not 

developed as quickly as anticipated and 

therefore there is no basis to conclude 

that BEV sales will reach required levels 

by 2025. (The Manufacturers also state 

that it is ‘‘highly unlikely that the 

required infrastructure and level of 

consumer demand for ZEVs will be 

sufficient by MY 2018 in either 

California or in the individual Section 

177 States to support the ZEV sales 

requirements mandated by CARB.) 

Because of these concerns the 

Manufacturers suggest that EPA deny 

the ZEV waiver for 2018 and later MYs, 

or at least defer the program for MY 

2021 and later, until California, EPA, 

and the auto industry have conducted a 

mid-term review of ZEV similar to the 

GHG program. 

As noted above, the Manufacturers 

provide EPA with current vehicle sales 

and registration data. These data 

include current sales figures for hybrids 

(approximately 3% of annual sales 

nationally and approximately 6.1% in 

California according to registration 

data). The Manufacturers note that 

registration of hybrids in section 177 

states is far lower. The Manufacturers 

maintain that the low sales numbers are 

due substantially to the increased cost 

relative to traditional vehicles, and that 

the demand for BEVs in section 177 

States is particularly ‘‘sluggish.’’ 

However, the comments EPA received 

did not include forecasts, projections, 

data, or other evidence to support the 

Manufacturer’s conclusions about future 

ZEV sales, or in particular, to 

demonstrate that the CARB ZEV 

requirements are infeasible. 

The Dealers maintain that 

technological feasibility requires that 

not only certain technologies be 

possible, but they also be ‘‘economically 

achievable.’’ 150 The Dealers maintain 

that in order for ZEV vehicles to be 

marketable they must: (1) Be at least as 

safe as comparable conventionallyfueled vehicles, (2) offer a range 

comparable to conventionally-fueled 

vehicles, (3) offer a refueling time 

comparable to conventionally-fueled 

vehicles, (4) offer similar performance 

and capacities, and (5) come to market 

at a cost comparable to conventionallyfueled vehicles. The Dealers maintain 

that CARB’s estimates that ZEVs and 

TZEVs that will cost approximately 

$10,000 more than comparable 

traditional vehicles, with at best no 

performance advantages, are by 

definition not feasible as they will be 

unable to compete in the marketplace. 

CARB provides several responses to 

the comments submitted by the 

Manufacturers. In terms of the 

applicability of section 177 within 

EPA’s section 209 waiver deliberations, 

and consideration of the technological 

feasibility of CARB’s amendments 

adopted in such states, CARB notes that 

the proper scope of EPA’s inquiry is 

limited by the express terms of section 

209(b). This is well illustrated both in 

past waiver determinations and in case 

law.151 While CARB discredits the view 

that EPA should consider the feasibility 

of ZEV in other states, it also notes that 

charging infrastructure in states other 

than California does not seem to be a 

concern as both Nissan and General 

Motors are currently marketing 

advanced technology vehicles 

nationally, and Ford will begin 50-state 

marketing in early 2013. EPA notes that 

although it is unclear whether the 

Manufacturers are contesting the current 

or future adequacy of infrastructure in 

California (other than a sentence that 

states it is ‘‘highly unlikely’’), CARB 

nevertheless sets forth that there is 

much activity in the field of electric 

vehicle charging infrastructure, and that 

public charging programs are being 

funded by the California Energy 

Commission, U.S. DOE EV Everywhere 

program, the U.S. DOE EV Project, and 

other programs to address the needs of 

plug in vehicles. CARB also states that 

it appears that charging infrastructure is 

sufficient and efforts underway to 

address infrastructure needs (through 

the programs noted above and CARB’s 

own ZEV Executive Order) are focused 

on highest priority charging locations, 

namely multi-family dwellings and 

workplace charging. 

CARB also responds to concerns 

expressed about the feasibility of ZEV 

vehicles in terms of consumer demand. 

They note that current sales data for 

plug in vehicles show sales growing 

rapidly—faster than conventional 

hybrids grew when they were first 

launched. CARB states that these early 

sales data, aggressive programs for 

community readiness, public education, 

infrastructure development and 


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Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2141 

152CARB supplemental comments at 8, citing 

NRDC v EPA, 655 F.2d 318, 331. 

153CARB notes that it is important to recognize 

that the ZEV regulations do not place requirements 

on dealers to offer for sale or sell ZEVs; rather the 

requirement is on the automakers. Since the 

obligation to sell and place ZEVs in service falls to 

the automakers, it is the automakers’ responsibility 

to make the subject cars marketable and sellable by 

the dealers. 

154CARB supplemental comments at 11, citing 

Natural Resources Defense Council post (October 

31, 2012) attached as item 52 to supplemental 

comments. 

155CARB’s supplemental comments at 12. 

156EPA, 2010. United States Environmental 

Protection Agency, National Highway Safety and 

Traffic Administration and California Air Resources 

Board. September 2010. ‘‘Interim Joint Technical 

Assessment Report: Light-Duty Vehicle Greenhouse 

Gas Emission Standards and Corporate Average 

Fuel Economy Standards for Model Years 2017– 

2025’’ (p. vii). http://www.epa.gov/otaq/climate/ 

regulations/ldv-ghg-tar.pdf. 

157 Id. at 2–5. 

158CARB’s supplemental comments at 9, citing 74 

FR 32744, 32775 (July 8, 2009). CARB provides 

additional information explaining how the ZEV 

program was considered in conjunction with the 

LEV program and that the ZEV regulation remains 

an important part of California’s plans to reach 

attainment of health based air quality standards. 

159EPRI, Transportation Electrification, A 

Technology Overview, 2011 Technical Report, EPRI 

1021334, July 2011. Http://www.epri.com/abstracts/ 

pages/productabstract.aspx?ProductID=

000000000001021334. 

incentives are in place to support as 

much as possible consumer acceptance 

and adoption of ZEV technologies. 

CARB also notes that the Dealers 

comments in this regard can be 

addressed by examining relevant case 

law and EPA’s past application of the 

law. CARB notes that the Dealers’ 

statement that it is inappropriate for 

EPA to grant a waiver unless the Agency 

can ‘‘demonstrate technological 

feasibility for all the years in which 

those standards would be in effect’’ is 

disregarding decades of waiver 

precedent that clearly sets out the 

appropriate ‘‘technological feasibility’’ 

analysis under section 202(a).’’ Section 

202(a) has historically been interpreted 

to allow for projections of likely future 

technological development. Such 

projections do not need to ‘possess the 

inescapable logic of a mathematical 

deduction.’ Instead, such a projection is 

considered sufficient if it ‘‘answers any 

theoretical objections to the [projected 

technology], identifies the major steps 

necessary in refinement of the 

technology, and offers plausible reasons 

for believing that each of those steps can 

be completed in the time available.’’ 152

CARB also addresses the Dealers’ 

stated concerns about the marketability 

of ZEVs.153 CARB notes that a more 

appropriate measure of ZEV market 

success and growth potential is to 

examine the recent years when ZEVs 

have actually been available to 

consumers. In the last two years, with 

the introduction of Nissan Leaf, Ford 

Focus EV, Honda Fit EV, Mitsubishi 

IMiEV, and others, BEV sales have 

grown 228 percent.154 As discussed 

below, CARB also points to the Joint 

Technical Assessment Report (TAR), 

which was developed by EPA, NHTSA, 

and CARB, and released in September 

2010. 

CARB states that the Dealers disregard 

well established law and create their 

own definition of ‘‘technological 

feasibility’’ in suggesting that EPA 

consider in its assessment a comparison 

of ZEVs and conventional vehicles on 

cost, safety, and performance features 

such as range and refueling time. CARB 

relies upon cost (MEMA I at 1118), 

performance (International Harvester at 

641–647), and durability (NRDC at 333– 

335). CARB states: 

The ZEVs produced for the regulation will 

meet the same safety requirements that 

conventionally fueled vehicles meet. They 

already achieve acceleration and power 

characteristics expected on traditional 

vehicles and have demonstrated adequate 

durability. Range and refueling times are 

characteristics not traditionally taken into 

consideration. The automakers are targeting 

range for battery electric vehicles that match 

up with the vast majority of daily driving 

needs or most consumers (typical trips and 

typical daily needs are under 30 miles). For 

fuel cell vehicles, automakers have 

demonstrated range capability equal to or 

greater than conventionally fueled vehicles. 

With regard to refueling time, BEV drivers 

look at refueling differently; 30 seconds a day 

at home to plug in (with charging occurring 

overnight or while at work) and have a full 

range daily instead of visiting a gasoline 

station weekly is characterized as much more 

convenient. Fuel cell vehicles refuel in about 

the same amount of time as a gasoline car. 

By all of these measures ZEVs are more than 

technologically feasible for 

commercialization, certainly so with the 

abundant nine to 12 years of lead time for the 

2022–2025 model years that are the focus of 

the comments.155

CARB also relies upon the projections 

and explanations submitted with its 

initial waiver request and notes that the 

Dealers are taking issue with standards 

that do not come into effect until after 

a lengthy lead time. In addition to 

CARB’s waiver request projections and 

explanations noted at the outset of this 

section CARB also provides an 

explanation of the Joint Technical 

Assessment Report (TAR), which was 

developed by EPA, NHTSA, and CARB, 

and released in September 2010. The 

report concluded ‘‘electric drive 

vehicles including hybrid(s) * * * 

battery electric vehicles * * * plug-in 

hybrid(s) * * * and hydrogen fuel cell 

vehicles * * * can dramatically reduce 

petroleum consumption and GHG 

emissions compared to conventional 

technologies * * *. The future rate of 

penetration of these technologies into 

the vehicle fleet is not only related to 

future GHG and corporate average fuel 

economy (CAFE) standards, but also to 

future reductions in HEV/PHEV/EV 

battery costs, [and] the overall 

performance and consumer demand for 

the advance technologies * * *.’’ 156

CARB notes that the TAR stated that 

‘‘* * * [A] number of the firms 

suggested that in the 2020 timeframe 

their U.S. sales of HEVs, PHEVs, and 

EVs combined could be on the order of 

15–20 percent of their production.’’ 157

Lastly, CARB addresses the 

Manufacturers’ comments regarding the 

cost-effectiveness of CARB ZEV 

amendments, in terms of cost per ton of 

CO2 removal, in a manner similar to its 

response to the section 177 arguments— 

that such comments are irrelevant to 

EPA’s 209(b) waiver consideration. 

CARB notes EPA’s 2009 GHG waiver 

decision wherein EPA described the 

appropriate cost of compliance analysis 

under section 202(a): ‘‘Consistent with 

MEMA I, the Agency has to evaluate 

costs in the waiver context by looking 

at the actual cost of compliance in the 

time provided by the regulation, not the 

regulation’s cost effectiveness. Cost 

effectiveness is a policy decision of 

California that is considered and made 

when California adopts the regulations, 

and EPA, historically, has deferred to 

these policy decision * * *.The issue of 

whether a proposed California 

requirement is likely to result in only 

marginal improvement in air quality not 

commensurate with its cost or is 

otherwise an arguably unwise exercise 

of regulatory power is not legally 

pertinent to my decision under section 

209.’’158

In addition to the above facts, we 

believe additional information can help 

inform our review of the required 

increases in the sale of PHEVs, BEVS, 

and FCVs in California during the 2018 

through 2025 timeframe. 

EPA reviewed two additional studies 

of the market potential of ZEVs from the 

Electric Power Research Institute (EPRI) 

and the U.S. Energy Information 

Administration’s Annual Energy 

Outlook (AEO) that are relevant to 

CARB’s ZEV mandate. EPRI, a leading 

electric utility research organization 

published a July 2011 technical report, 

Transportation Electrification, A 

Technology Overview,159 which 

presents three market projection 

scenarios for EVs and PHEVs. The 

scenarios project a range of Low, 

Medium, and High sales volumes. The 


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2142 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

160U.S. Energy Information Administration, 

Annual Energy Outlook 2012, Data Tables, Table 57 

accessed 12/13/12 at http://www.eia.gov/oiaf/aeo/

tablebrowser/#release=AEO2012&subject=0- 

AEO2012&table=48-AEO2012®ion=1–0&cases=

hp2012-d022112a. 

161 ‘‘Interim Joint Technical Assessment Report: 

Light-Duty Vehicle Greenhouse Gas Emission 

Standards and Corporate Average Fuel Economy 

Standards for Model Years 2017–2025,’’ September 

2010. 

162CARB waiver request at 6. 

163Manufacturers’ comments at 16. 

164 MEMA I at 1118. 

EPRI projection for national EV and 

PHEV sales in 2018 ranges from a low 

of 500,000 vehicles to a high of 

1,920,000 vehicles. In 2025, the EPRI 

projections range from a low of 

1,144,000 to a high of 5,073,000 

vehicles. The Low projection mimics 

the historical market penetration of 

HEVs from 2000 through 2008, applying 

their rate of sales growth to PHEVs and 

EVs. The Medium projection is based on 

a ‘‘ground up’’ analysis of sales 

projections derived from PHEV and EV 

product announcements and production 

estimates. These projections are 

extrapolated past 2015 based on the 

aforementioned product announcements 

and the past sales performance of HEVs. 

The High projection is based on the 

average of the top third (more 

optimistic) of publicly available sales 

projections from several sources. In each 

of EPRI’s three cases, projected PHEV 

and EV national sales far exceed CARB’s 

ZEV mandate. EPA acknowledges that 

the EPRI study did not specifically 

project California sales but we believe it 

reasonable to assume that the supply of 

and demand for such vehicles will be 

significantly greater in California (and to 

some extent in section 177 states with 

ZEV programs) than it will be in states 

without a ZEV mandate. The EPRI study 

indicates that it would take less than 25 

percent of the total national sales of ZEV 

in the Low scenario in order to exceed 

the necessary ZEV sales percentages 

during the 2018 through 2025 timeframe 

in California. 

The U.S. Energy Information 

Administration (AEO) also analyzed two 

scenarios of market penetration for 

PHEVs and EVs in their Annual Energy 

Outlook 2012 (AEO2012).160 AEO’s 

reference case indicates a national 

market potential of around 165,000 EVs 

and PHEVs in 2018 which is more than 

twice the CARB ZEV requirement. In 

2025, the AEO reference case indicates 

a national market potential of 283,000 

ZEVs, which still exceeds CARB’s 

proposed ZEV requirement of nearly 

271,000. AEO’s reference case assumes 

EV technology cost, especially batteries, 

remains high through 2030. AEO’s High 

Technology Battery case, assumes the 

Department of Energy’s (DOE) battery 

cost goals are met in 2015. Generally, 

these battery costs are more comparable 

to battery costs used by CARB and EPA 

in the 2010 Joint Technical Assessment 

Report (TAR) 161 than those used in the 

reference case. The AEO High 

Technology Battery case indicates a 

market potential of ZEVs in 2018 as 

805,000 units, increasing to 1,394,000 in 

2025. As with the EPRI study above, 

using the projections of the AEO High 

Technology Battery case, it would take 

less than 25 percent of the total national 

sales of ZEV to exceed the necessary 

ZEV sales percentages during the 2018 

through 2025 timeframe in California. 

While both the EPRI and AEO market 

projections are for national sales, EPA 

believes it is reasonable to assume that 

a significant percentage of these 

vehicles will be sold in California as has 

been the past practice with HEVs and 

EVs. 

b. EPA’s Response to Comments 

After a review of the information in 

this proceeding, EPA has determined 

that the opponents of the ZEV standards 

have not demonstrated that the 

necessary increase in PHEV and ZEV 

sales necessary to meet the ZEV 

standards in the 2018 through 2025 MYs 

is infeasible. A review of the record, 

indicates that compliance with the ZEV 

standards, as they affect the 2018 

through 2025 MYs, is feasible giving 

consideration to cost and lead time 

available. CARB has answered any 

theoretical objections to the projected 

technology, identified the major steps 

necessary in refinement of the 

technology, and offers plausible reasons 

for believing that each of those steps can 

be completed in the time available. This 

assessment is based upon the current 

technology available along with 

projected improvements in technology 

and expected cost reductions (in 

addition to continuing increases in 

consumer demand in response to 

preferences for advance technologies, 

fuel savings, available and improved 

infrastructure, incentives, regulatory 

mandates, etc) and given the significant 

lead time provided. As discussed in 

detail below, EPA cannot find that those 

opposing the waiver request have met 

their burden of showing that California’s 

regulations are inconsistent with section 

202(a). Therefore, we cannot deny the 

waiver on that ground. 

Basic Feasibility of ZEV Technology 

At the outset we note that 

manufacturers are meeting the ZEV 

requirements today. As CARB noted in 

its waiver request, most manufacturers 

have near-term production plans to 

meet or over comply with regulatory 

requirements through 2017. More 

importantly, a number of manufacturers 

have clearly demonstrated the feasibility 

of ZEV technology with in-production 

or planned PHEV, BEV and FCV models 

within the next few years. 

Manufacturers are also afforded the 

flexibility to determine the appropriate 

mix between BEVs and FCVs. We note 

that no commenter suggested that the 

underlying technology is not available 

today nor is there any evidence in the 

record that contradicts CARB’s 

assertions that improvements and 

technology path moving forward will 

continue in the ZEV area in regards to 

range and other capabilities. The 

objections raised by those opposing the 

waiver on this point have to do less 

with the basic feasibility of ZEVs than 

with their acceptability/marketability, 

supporting infrastructure, and cost. 

Regarding the lead time provided by 

California to meet the ZEV phase-in 

requirements, the commenters have not 

met their burden to show that the lead 

time is insufficient. While the 

commenters noted general concerns 

about marketability, infrastructure and 

cost they made no claims that 

inadequate lead time exists or that 

CARB’s requirements would be feasible 

if more lead time were provided. 

Regarding the cost component of the 

technological feasibility test, EPA 

believes that the opponents of the 

waiver have not met their burden to 

show that the ZEV standards are not 

technologically feasible because of 

excessive cost. As noted above, EPA has 

traditionally examined whether the 

necessary technology exists today, and 

if not, what is the cost of developing 

and implementing such technology. To 

the extent it is appropriate for EPA to 

continue to examine the cost of 

implementing ZEV technology, CARB 

estimates that by 2025 the incremental 

cost of a ZEV or TZEV is expected to 

rapidly decline, yet remain 

approximately $10,000 (high end 

estimate) higher than a conventional 

vehicle.162 The Manufacturers note that 

CARB’s analysis provides an 

incremental cost of $12,900 in MY 

2020.163 Under EPA’s traditional 

analysis of cost in the waiver context, 

because such cost does not represent a 

‘‘doubling or tripling’’ of the vehicle 

cost, such cost is not excessive nor does 

it represent an infeasible standard.164

Moreover, though EPA believes that it is 

not necessary or appropriate for EPA to 

evaluate how manufacturers choose to 


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Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2143 

165 58 FR 4166 (January 13, 1993), and LEV 

Decision Document at pp. 185–186. See ‘‘State and 

Federal Standards of Mobile Source Emissions: 

Published by the National Research Council, 2006 

at 81, 83. ‘‘In contrast to section 209(b) in which 

Congress explicitly assigned EPA the role of 

approving waiver of federal preemption for 

California standards, in section 177, Congress did 

not assign EPA any role in approving adoption of 

California by other states. As EPA itself stated, 

‘language requiring that other States request and 

receive authorization from EPA is noticeable 

absent.’’ 

166See H.R. Rep. No. 95–294, 95th Cong. 1st Sess. 

14, 23, 26, 207–217, 301–302, 209–311 (1977); H.R. 

Rep. No. 95–564, 95th Cong., 1st Sess. 156, 158, 170 

(1977). 

167 43 FR 1829 (January 12, 1978), citing H.R. Rep 

No. 95–294, 95th Cong., 1st Sess. 301–302 (1977). 

168Engine Manufacturers Association v EPA, 88 

F3d 1075, 1080 (DC Cir. 1996). 

169 36 FR 17158 (August 31, 1971). See also 74 

FR 3232744, 32775 (July 8, 2009). 

170 Id. 

171 40 FR 23102, 23104 (May 18, 1975). See also 

Decision Document accompanying waiver 

determination in 58 FR 4166 (January 13, 1993). 

allocate the incremental costs of ZEVs 

over their respective California fleets. 

CARB has identified one methodology 

of speeding the cost over the entire fleet 

with a resulting incremental cost of 

approximately $500, which is well 

within acceptable cost levels. EPA notes 

that manufacturers and dealers have 

many possible strategies available to 

spread the cost of the ZEV requirement 

beyond ZEV purchasers, but that such 

strategies are within the market choices 

of the manufacturers and dealers. 

Although EPA received comment that a 

manufacturer may have to employ 

costly marketing strategies if consumers 

do not otherwise accept ZEV vehicles, 

we do not believe such statements 

evidence standards that are infeasible. 

EPA also notes the likely existence of 

additional incentive programs that will 

further enable the marketability of ZEV 

vehicles from a cost perspective. 

Relevance of Section 177 States on 

Consistency Analysis 

The opponents of CARB’s ZEV 

amendments, as they affect 2018 and 

later MYs, rely upon the implications of 

the adoption of CARB’s ZEV 

amendments in section 177 states and 

resulting feasibility concerns. EPA’s 

longstanding interpretation of section 

209(b) and its relationship with section 

177, is that it is not appropriate under 

section 209(b)(1)(C) to review California 

regulations, submitted by CARB, 

through the prism of adopted or 

potentially adopted regulations by 

section 177 states. EPA believes the 

language of section 209(b) is intended to 

apply solely to whether California’s 

regulations can be denied a waiver 

under the criteria of section 209(b). 

State regulations promulgated under 

section 177, which are promulgated by 

separate state agencies under their own 

authority, and which have not been 

submitted to EPA for waiver review, are 

not a proper focus of review for our 

determination regarding whether 

California’s state regulations meet the 

requirements under section 209(b). 

Section 177, and the state statutes 

authorizing state action under section 

177, is separate provisions with their 

own requirements, and those opposed to 

state regulations promulgated under 

section 177 would need to take action 

under those provisions in those states. 

An issue that arose during EPA’s 

consideration of California’s waiver 

request for its 1990 LEV standards was 

whether EPA could consider in its 

waiver decision the impact and 

implications of other states adopting the 

California standards under section 177. 

EPA concluded that section 209(b) does 

not authorize the agency to consider the 

impacts of actions or potential actions 

taken by other states under section 177 

in reviewing a waiver request by 

California for its state standards.165 EPA 

also received comment, during a 1978 

waiver review that EPA must consider 

each of the criteria of section 209(b) of 

the Act in light of the possibility that 

eligible States may impose the emission 

control requirements, for which a 

waiver has been granted, under section 

177. A commenter further argued that 

EPA could not grant a waiver unless and 

until we could make an affirmative 

finding that the basic market demand 

could be satisfied in all States eligible 

to adopt and enforce the California 

standards under section 177. We did not 

agree with the commenters’ 

interpretation of EPA’s responsibilities 

under section 209(b). ‘‘That section 

authorizes me to deny California a 

waiver only if I have determined that 

California does not meet the given 

criteria; it does not require me in 

granting a waiver to consider the 

impacts of actions taken by other States 

under section 177* * *’’ EPA 

continued ‘‘The legislative history 

behind the Clean Air Act Amendments 

of 1977 [the amendments that added 

section 177] contains no statement to 

the contrary.’’ 166 More significantly, the 

legislative history behind the 

amendments to section 209(b) 

specifically states that the intent of 

these amendments was * * * ‘‘to ratify 

and strengthen the California waiver 

provision and to affirm the underlying 

intent of that provision, i.e. to afford 

California the broadest possible 

discretion in selecting the best means to 

protect the health of its citizens and the 

public welfare.’’ 167 EPA also 

determined that Congress already had 

balanced the burdens on manufacturers 

by selecting the language they did for 

section 177 and believed that such 

authority should not place an undue 

burden on the vehicle manufacturers. 

EPA is also guided by the District of 

Columbia Circuit’s discussion of section 

177 and section 209: ‘‘Rather than being 

faced with 51 different standards, as 

they had feared, or with only one as 

they had sought, manufacturers must 

cope with two regulatory standards 

under the legislative compromise 

embodied in section 209(a).168

EPA also believes it important to 

clarify that the record and the comments 

do not indicate that the CARB Board 

based its technological feasibility 

analysis, in order to determine the 

ability of manufacturers to meet CARB’s 

standards within California, on the 

existence of any travel provisions or 

other regulatory provisions which may 

allow a manufacturer to take credit for 

certain ZEV sales outside of California. 

Manufacturer Contentions Regarding 

Cost-Effectiveness 

With regard to the Manufacturers’ 

contention that CARB’s ZEV regulation 

is not cost-effective in terms of the cost 

per ton of removing CO2, EPA agrees 

with California’s argument that case law 

clearly precludes EPA’s consideration of 

this issue within the waiver context. 

Consistent with the court in MEMA I, 

the Agency has previously evaluated 

costs in the waiver context by looking 

at the actual cost of compliance in the 

lead time provided by the regulation, 

not the regulation’s cost 

effectiveness.169 As noted previously, 

EPA has clearly stated that ‘‘The issue 

of whether a proposed California 

requirement is likely to result in only 

marginal improvement in air quality not 

commensurate with its cost or is 

otherwise an arguably unwise exercise 

of regulatory power is not legally 

pertinent to my decision under section 

209 * * *.’’ 170 EPA has consistently 

afforded deference to CARB’s policy 

judgments and has recognized that ‘‘The 

structure and history of the California 

waiver provision clearly indicate both a 

Congressional intent and an EPA 

practice of leaving the decision on 

ambiguous and controversial matters of 

public policy to California’s 

judgment.’’ 171 To the extent the 

Manufacturers are raising general 

concerns regarding the cost associated 

with the ZEV technology and meeting 

applicable ZEV requirements, EPA has 

addressed this above. 


srobinson on DSK4SPTVN1PROD with 
2144 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

172Manufacturers comment at 13. 

173http://www.mitsubishicars.com/MMNA/jsp/ 

imiev/12/trims.do. 

174http://www.nissanusa.com/leaf-electric-car/ 

key-features. 

175http://www.teslamotors.com/goelectric#. 

176http://www.toyota.com/rav4ev/specs.html. 

177EPRI: Transportation Statistics Analysis for 

Electric Transportation, Technical Update EPRI 

#1021848, Dec 2011. 

Consumer Demand 

With respect to the consumer demand 

issues raised, we note that the record, 

based on comment from the 

Manufacturers and the Dealers, is 

insufficient to meet the burden of proof 

to counter the current and projected 

consumer demand evidence supplied by 

CARB and the other commenters 

supporting the waiver. EPA did not 

receive any evidence or data from 

commenters to refute the projections 

made by CARB or other commenters. 

Although the Dealers maintain that 

CARB’s point that BEV and even FCVs 

are being marketed today is not 

sufficient to demonstrate the demand 

for hundreds of thousands of ZEVs that 

will be required to be produced by 2025, 

the Dealers only turn to the history of 

the ZEV program. We believe such 

history is instructive. However, it does 

not meet the burden of proof required to 

demonstrate that the ZEV requirements 

are technologically infeasible looking 

forward, given the substantial amount of 

lead time before the standards take 

effect and the steps that manufacturers 

and dealers can take to facilitate 

compliance with these standards (e.g. 

rebates and other incentives). In 

addition, we note that PHEV and ZEV 

costs are projected to decrease as 

demand increases and regulatory floors 

are established. EPA believes CARB 

easily meets the historical test of 

whether their emission standards result 

in ‘‘doubling or tripling’’ of costs as 

applied in MEMA I noted above. EPA 

has heard directly from consumer 

groups that express confidence that 

demand for advance technology 

vehicles exists today and continues to 

grow. In addition to this evidence, EPA 

also believes that the analyses of future 

ZEV market potential, noted above, 

provide additional evidence that 

CARB’s projections are supportable. 

Moreover, while marketability is an 

important issue for Manufacturers and 

Dealers, it is questionable how relevant 

it is to basic technological feasibility. As 

discussed above, there is no real 

question about the basic feasibility of 

this technology, and that the cost of 

each vehicle, if carried across a 

Manufacturer’s entire sales line, is not 

as high as to implicate basic feasibility. 

That matter of how Manufacturers and 

Dealers choose to market these vehicles 

is one of market choice, as 

Manufacturers and Dealers attempt to 

maximize sales at the expense of other 

Manufacturers and Dealers. That the 

industry as a whole will experience 

increased costs, and that such increased 

costs will create marketability issues, is 

clear. But these are not so significant to 

implicate the technological feasibility of 

the vehicles for purposes of a waiver 

determination. 

Infrastructure 

The Manufacturers’ recommendation 

that EPA deny a waiver for the 2018 and 

later ZEV amendments is based largely 

on an argument surrounding lack of 

market demand (discussed above) and 

infrastructure in the section 177 states. 

The comments state, ‘‘* * * while 

California’s infrastructure and consumer 

market may be developing to the point 

where at some time in the future the 

introduction of the number of ZEVs 

required under the California 

regulations may be feasible in that State, 

the same is not true of all the Section 

177 States that have adopted ZEV.’’ 172

However, as explained above, EPA 

has determined in previous waiver 

actions that section 209(b) does not 

authorize the Agency to consider the 

impacts of actions or potential actions 

taken by other states under section 177 

in reviewing a waiver request. CARB 

provided considerable evidence of state 

and federal efforts and programs 

underway to ensure that the 

infrastructure needed for the ZEV 

program in California is available. The 

Manufacturers and Dealers do not take 

issue specifically with CARB’s 

assertions regarding the infrastructure 

that has been, and will be, put in place 

to meet these requirements in 

California. Therefore, based on the 

record before me those opposing the 

waiver on this basis have not met their 

burden of proof. 

Dealers’ List of Feasibility Criteria 

Lastly, EPA responds to the laundry 

list of requirements that the Dealers 

maintain is required in order for ZEVs 

to be marketable and thus for the ZEV 

regulations to be technologically 

feasible. The Dealers fail to provide any 

evidence to support their assertions nor 

do they refute the legal arguments and 

evidence otherwise in the record. For 

example, the Dealers fail to provide any 

evidence that ZEV vehicles are not as 

safe as the conventionally-fueled 

(conventional) vehicles of the same size. 

EPA agrees with CARB’s statements that 

ZEV vehicles will meet the same safety 

requirements that conventional vehicles 

must meet. In any case, while EPA takes 

safety into consideration when 

examining the feasibility of emission 

standards, this basic feasibility does not 

require an examination of the relative 

safety of each vehicle. 

With regard to performance—many 

ZEVs already achieve acceleration and 

power characteristics expected on 

conventional vehicles. In addition, the 

Dealers provide no evidence that ZEVs 

lack performance characteristics that are 

essential for basic feasibility of the 

vehicle. ZEVs on the market today span 

a wide range of performance capability. 

The Mitsubishi iMiEV is a small four 

seat electric city car.173 Nissan’s Leaf 

offers 5 seats and a size comparable to 

a Nissan Versa.174 Tesla’s Model S is a 

larger sedan with luxury and 

performance comparable to other luxury 

sedans. Tesla’s Roadster is a high 

performance two-seater EV.175 Finally, 

Toyota’s RAV4 EV is an electric version 

of their popular RAV4 SUV.176 All these 

vehicles are designed to compete 

favorably on a performance basis with 

conventional cars in the same class. 

EPA has not historically taken into 

consideration the range and refueling 

times. Moreover, NADA does not 

present any evidence or data to suggest 

necessary ranges and refueling times 

deemed essential by consumers. Nor do 

the Dealers provide evidence that BEVs 

are not now, and cannot be in the lead 

time permitted, be manufactured in a 

manner to be above these necessary 

ranges and times. Evidence in the record 

suggests that many consumers average 

drive trips and refueling expectations 

are well within the capacity of current 

ZEV technology. EPRI analyzed a 

‘‘National Household Travel Survey’’ 

that found: about 95% of daily driving 

is under 90 total miles; about 80% of 

daily driving is under 40 total miles; 

about 65% of daily driving is under 20 

miles; and, there seems to be little 

variation in daily driving habits 

between many factors such as weekday/ 

weekend, seasons, rural/urban, income, 

etc.177

EPA also notes that additional lead 

time is abundant, from nine to twelve 

years for the 2022–2025 timeframe for 

further developments to technology that 

can reasonably be expected. 

c. Conclusion on Technological 

Feasibility 

After its review of the information in 

this proceeding, EPA has determined 

that the industry opponents have not 

met the burden of producing the 

evidence necessary for EPA to find that 

California’s LEV III/GHG standards and 

ZEV emission standards (as finalized on 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 2145 

178 Dealers at 10. 

179See Motor and Equipment Manufacturers 

Ass’n v. Nichols, 142 F.3d 449, 462–63, 466–67 (DC 

Cir. 1998), MEMA I at 1111, 1114–20. 

December 6, 2012) are not consistent 

with Section 202(a). 

5. Consistency of Certification Test 

Procedures 

CARB notes that the test procedures 

for certifying ZEVs, AT PZEVs, and 

PZEVs are contained in the ZEV and 

LEV Standards and Test Procedures 

incorporated by reference in section 

1962.1(h) and 1962.2(h) and are largely 

un-amended by the 2012 ZEV 

rulemaking. The federal Tier 2 

regulations require manufacturers to 

measure emissions from ZEVs in 

accordance with the California test 

procedures. Accordingly there are no 

inconsistencies between the federal and 

California test procedures that would 

preclude a manufacturer from 

conducting one set of tests to 

demonstrate compliance with federal 

and California certification 

requirements. EPA has received no 

adverse comment or evidence of test 

procedure inconsistency and therefore 

we cannot deny the waiver on this basis. 

6. Relevance of the Energy Policy and 

Conservation Act (EPCA) to the Waiver 

Decision 

EPA received comment from the 

Dealers that CARB’s waiver request for 

its GHG emission standards should be 

denied because CARB’s standards are in 

direct conflict with EPCA. The Dealers 

note ‘‘EPCA expressly preempts state 

GHG emission standards because such 

laws relate to fuel economy 

standards.’’ 178

As EPA has stated on numerous 

occasions, section 209(b) of the Clean 

Air Act limits our authority to deny 

California’s requests for waivers to the 

three criteria therein, and EPA has 

refrained from denying California’s 

requests for waivers based on any other 

criteria. Where the Court of Appeals for 

the District of Columbia Circuit has 

reviewed EPA decisions declining to 

deny waiver requests based on criteria 

not found in section 209(b), the court 

has upheld and agreed with EPA’s 

determination.179

Evaluation of whether California’s 

GHG standards are preempted, either 

explicitly or implicitly, under EPCA, is 

not among the criteria listed under 

section 209(b). EPA may only deny 

waiver requests based on the criteria in 

section 209(b), and inconsistency with 

EPCA is not one of those criteria. In 

considering California’s request for a 

waiver, I therefore have not considered 

whether California’s standards are 

preempted under EPCA. As in previous 

waiver decisions, the decision on 

whether to grant the waiver is based 

solely on the criteria in section 209(b) 

of the Clean Air Act and this decision 

does not attempt to interpret or apply 

EPCA or any other statutory provision. 

VI. Decision 

The Administrator has delegated the 

authority to grant California section 

209(b) waivers of preemption to the 

Assistant Administrator for Air and 

Radiation. After review of the 

information submitted by CARB and 

other parties to this Docket, I find that 

those opposing the waiver request have 

not met the burden of demonstrating 

that California’s regulations do not 

satisfy one or more of the three statutory 

criteria of section 209(b). For this 

reason, I am granting California’s waiver 

request to enforce its ACC emission 

regulations, including the ‘‘deemed to 

comply’’ rule for GHG emissions. EPA 

also determines that CARB’s 

amendments to the ZEV program as they 

affect 2017 and prior MYs are within the 

scope of previous waivers of preemption 

granted to California for its ZEV 

regulations. In the alternative, EPA’s 

waiver of preemption for CARB’s ACC 

regulations includes a waiver of 

preemption for CARB’s ZEV 

amendments as they affect all MYs, 

including 2017 and prior MYs. 

My decision will affect not only 

persons in California but also persons 

outside the State who would need to 

comply with California’s GHG emission 

regulations. For this reason, I hereby 

determine and find that this is a final 

action of national applicability. 

Under section 307(b)(1) of the Act, 

judicial review of this final action may 

be sought only in the United States 

Court of Appeals for the District of 

Columbia Circuit. Petitions for review 

must be filed by March 11, 2013. Under 

section 307(b)(2) of the Act, judicial 

review of this final action may not be 

obtained in subsequent enforcement 

proceedings. 

VII. Statutory and Executive Order 

Reviews 

As with past waiver decisions, this 

action is not a rule as defined by 

Executive Order 12866. Therefore, it is 

exempt from review by the Office of 

Management and Budget as required for 

rules and regulations by Executive 

Order 12866. 

In addition, this action is not a rule 

as defined in the Regulatory Flexibility 

Act, 5 U.S.C. 601(2). Therefore, EPA has 

not prepared a supporting regulatory 

flexibility analysis addressing the 

impact of this action on small business 

entities. 

Further, the Congressional Review 

Act, 5 U.S.C. 801 et seq., as added by 

the Small Business Regulatory 

Enforcement Fairness Act of 1996, does 

not apply because this action is not a 

rule, for purposes of 5 U.S.C. 804(3). 

Dated: December 27, 2012. 

Gina McCarthy, 

Assistant Administrator, Office of Air and 

Radiation. 

[FR Doc. 2013–00181 Filed 1–8–13; 8:45 am] 

BILLING CODE 6560–50–P 


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