Friday, 

May 7, 2010 

Part II 

Environmental 

Protection Agency 

Department of 

Transportation 

National Highway Traffic Safety 

Administration 

40 CFR Parts 85, 86, and 600; 49 CFR 

Parts 531, 533, 536, et al. 

Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate 

Average Fuel Economy Standards; Final 

Rule 

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25324 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 

1 ‘‘Light-duty vehicle,’’ ‘‘light-duty truck,’’ and 

‘‘medium-duty passenger vehicle’’ are defined in 40 

CFR 86.1803–01. Generally, the term ‘‘light-duty 

vehicle’’ means a passenger car, the term ‘‘light-duty 

truck’’ means a pick-up truck, sport-utility vehicle, 

or minivan of up to 8,500 lbs gross vehicle weight 

rating, and ‘‘medium-duty passenger vehicle’’ means 

a sport-utility vehicle or passenger van from 8,500 

to 10,000 lbs gross vehicle weight rating. Mediumduty passenger vehicles do not include pick-up 

trucks. 

2 ‘‘Passenger car’’ and ‘‘light truck’’ are defined in 

49 CFR part 523. 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 85, 86, and 600 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

49 CFR Parts 531, 533, 536, 537 and 

538 

[EPA–HQ–OAR–2009–0472; FRL–9134–6; 

NHTSA–2009–0059] 

RIN 2060–AP58; RIN 2127–AK50 

Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate 

Average Fuel Economy Standards; 

Final Rule 

AGENCY: Environmental Protection 

Agency (EPA) and National Highway 

Traffic Safety Administration (NHTSA). 

ACTION: Final rule. 

SUMMARY: EPA and NHTSA are issuing 

this joint Final Rule to establish a 

National Program consisting of new 

standards for light-duty vehicles that 

will reduce greenhouse gas emissions 

and improve fuel economy. This joint 

Final Rule is consistent with the 

National Fuel Efficiency Policy 

announced by President Obama on May 

19, 2009, responding to the country’s 

critical need to address global climate 

change and to reduce oil consumption. 

EPA is finalizing greenhouse gas 

emissions standards under the Clean Air 

Act, and NHTSA is finalizing Corporate 

Average Fuel Economy standards under 

the Energy Policy and Conservation Act, 

as amended. These standards apply to 

passenger cars, light-duty trucks, and 

medium-duty passenger vehicles, 

covering model years 2012 through 

2016, and represent a harmonized and 

consistent National Program. Under the 

National Program, automobile 

manufacturers will be able to build a 

single light-duty national fleet that 

satisfies all requirements under both 

programs while ensuring that 

consumers still have a full range of 

vehicle choices. NHTSA’s final rule also 

constitutes the agency’s Record of 

Decision for purposes of its National 

Environmental Policy Act (NEPA) 

analysis. 

DATES: This final rule is effective on July 

6, 2010, sixty days after date of 

publication in the Federal Register. The 

incorporation by reference of certain 

publications listed in this regulation is 

approved by the Director of the Federal 

Register as of July 6, 2010. 

ADDRESSES: EPA and NHTSA have 

established dockets for this action under 

Docket ID No. EPA–HQ–OAR–2009– 

0472 and NHTSA–2009–0059, 

respectively. All documents in the 

docket are listed on the http:// 

www.regulations.gov Web site. Although 

listed in the index, some information is 

not publicly available, e.g., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

is not placed on the Internet and will be 

publicly available only in hard copy 

form. Publicly available docket 

materials are available either 

electronically through http:// 

www.regulations.gov or in hard copy at 

the following locations: EPA: EPA 

Docket Center, EPA/DC, EPA West, 

Room 3334, 1301 Constitution Ave., 

NW., Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 

4:30 p.m., Monday through Friday, 

excluding legal holidays. The telephone 

number for the Public Reading Room is 

(202) 566–1744. NHTSA: Docket 

Management Facility, M–30, U.S. 

Department of Transportation, West 

Building, Ground Floor, Rm. W12–140, 

1200 New Jersey Avenue, SE., 

Washington, DC 20590. The Docket 

Management Facility is open between 9 

a.m. and 5 p.m. Eastern Time, Monday 

through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

EPA: Tad Wysor, Office of 

Transportation and Air Quality, 

Assessment and Standards Division, 

Environmental Protection Agency, 2000 

Traverwood Drive, Ann Arbor MI 

48105; telephone number: 734–214– 

4332; fax number: 734–214–4816; e-mail 

address: wysor.tad@epa.gov, or 

Assessment and Standards Division 

Hotline; telephone number (734) 214– 

4636; e-mail address asdinfo@epa.gov. 

NHTSA: Rebecca Yoon, Office of Chief 

Counsel, National Highway Traffic 

Safety Administration, 1200 New Jersey 

Avenue, SE., Washington, DC 20590. 

Telephone: (202) 366–2992. 

SUPPLEMENTARY INFORMATION: 

Does this action apply to me? 

This action affects companies that 

manufacture or sell new light-duty 

vehicles, light-duty trucks, and 

medium-duty passenger vehicles, as 

defined under EPA’s CAA regulations,1

and passenger automobiles (passenger 

cars) and non-passenger automobiles 

(light trucks) as defined under NHTSA’s 

CAFE regulations.2 Regulated categories 

and entities include: 

Category NAICS codes A Examples of potentially regulated entities 

Industry .............. 336111, 336112 ...................................... Motor vehicle manufacturers. 

Industry .............. 811112, 811198, 541514 ........................ Commercial Importers of Vehicles and Vehicle Components. 

ANorth American Industry Classification System (NAICS). 

This list is not intended to be 

exhaustive, but rather provides a guide 

regarding entities likely to be regulated 

by this action. To determine whether 

particular activities may be regulated by 

this action, you should carefully 

examine the regulations. You may direct 

questions regarding the applicability of 

this action to the person listed in FOR

FURTHER INFORMATION CONTACT. 

Table of Contents 

I. Overview of Joint EPA/NHTSA National 

Program 

A. Introduction 

1. Building Blocks of the National Program 

2. Public Participation 

B. Summary of the Joint Final Rule and 

Differences From the Proposal 

1. Joint Analytical Approach 

2. Level of the Standards 

3. Form of the Standards 

4. Program Flexibilities 

5. Coordinated Compliance 

C. Summary of Costs and Benefits of the 

National Program 

1. Summary of Costs and Benefits of 

NHTSA’s CAFE Standards 

2. Summary of Costs and Benefits of EPA’s 

GHG Standards 

D. Background and Comparison of NHTSA 

and EPA Statutory Authority 

II. Joint Technical Work Completed for This 

Final Rule 

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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 25325 

A. Introduction 

B. Developing the Future Fleet for 

Assessing Costs, Benefits, and Effects 

1. Why did the agencies establish a 

baseline and reference vehicle fleet? 

2. How did the agencies develop the 

baseline vehicle fleet? 

3. How did the agencies develop the 

projected MY 2011–2016 vehicle fleet? 

4. How was the development of the 

baseline and reference fleets for this 

Final Rule different from NHTSA’s 

historical approach? 

5. How does manufacturer product plan 

data factor into the baseline used in this 

Final Rule? 

C. Development of Attribute-Based Curve 

Shapes 

D. Relative Car-Truck Stringency 

E. Joint Vehicle Technology Assumptions 

1. What technologies did the agencies 

consider? 

2. How did the agencies determine the 

costs and effectiveness of each of these 

technologies? 

F. Joint Economic Assumptions 

G. What are the estimated safety effects of 

the final MYs 2012–2016 CAFE and GHG 

standards? 

1. What did the agencies say in the NPRM 

with regard to potential safety effects? 

2. What public comments did the agencies 

receive on the safety analysis and 

discussions in the NPRM? 

3. How has NHTSA refined its analysis for 

purposes of estimating the potential 

safety effects of this Final Rule? 

4. What are the estimated safety effects of 

this Final Rule? 

5. How do the agencies plan to address this 

issue going forward? 

III. EPA Greenhouse Gas Vehicle Standards 

A. Executive Overview of EPA Rule 

1. Introduction 

2. Why is EPA establishing this Rule? 

3. What is EPA adopting? 

4. Basis for the GHG Standards Under 

Section 202(a) 

B. GHG Standards for Light-Duty Vehicles, 

Light-Duty Trucks, and Medium-Duty 

Passenger Vehicles 

1. What fleet-wide emissions levels 

correspond to the CO2 standards? 

2. What are the CO2 attribute-based 

standards? 

3. Overview of How EPA’s CO2 Standards 

Will Be Implemented for Individual 

Manufacturers 

4. Averaging, Banking, and Trading 

Provisions for CO2 Standards 

5. CO2 Temporary Lead-Time Allowance 

Alternative Standards 

6. Deferment of CO2 Standards for Small 

Volume Manufacturers With Annual 

Sales Less Than 5,000 Vehicles 

7. Nitrous Oxide and Methane Standards 

8. Small Entity Exemption 

C. Additional Credit Opportunities for CO2

Fleet Average Program 

1. Air Conditioning Related Credits 

2. Flexible Fuel and Alternative Fuel 

Vehicle Credits 

3. Advanced Technology Vehicle 

Incentives for Electric Vehicles, Plug-in 

Hybrids, and Fuel Cell Vehicles 

4. Off-Cycle Technology Credits 

5. Early Credit Options 

D. Feasibility of the Final CO2 Standards 

1. How did EPA develop a reference 

vehicle fleet for evaluating further CO2

reductions? 

2. What are the effectiveness and costs of 

CO2-reducing technologies? 

3. How can technologies be combined into 

‘‘packages’’ and what is the cost and 

effectiveness of packages? 

4. Manufacturer’s Application of 

Technology 

5. How is EPA projecting that a 

manufacturer decides between options to 

improve CO2 performance to meet a fleet 

average standard? 

6. Why are the final CO2 standards 

feasible? 

7. What other fleet-wide CO2 levels were 

considered? 

E. Certification, Compliance, and 

Enforcement 

1. Compliance Program Overview 

2. Compliance With Fleet-Average CO2

Standards 

3. Vehicle Certification 

4. Useful Life Compliance 

5. Credit Program Implementation 

6. Enforcement 

7. Prohibited Acts in the CAA 

8. Other Certification Issues 

9. Miscellaneous Revisions to Existing 

Regulations 

10. Warranty, Defect Reporting, and Other 

Emission-Related Components 

Provisions 

11. Light Duty Vehicles and Fuel Economy 

Labeling 

F. How will this Final Rule reduce GHG 

emissions and their associated effects? 

1. Impact on GHG Emissions 

2. Overview of Climate Change Impacts 

From GHG Emissions 

3. Changes in Global Climate Indicators 

Associated With the Rule’s GHG 

Emissions Reductions 

G. How will the standards impact nonGHG emissions and their associated 

effects? 

1. Upstream Impacts of Program 

2. Downstream Impacts of Program 

3. Health Effects of Non-GHG Pollutants 

4. Environmental Effects of Non-GHG 

Pollutants 

5. Air Quality Impacts of Non-GHG 

Pollutants 

H. What are the estimated cost, economic, 

and other impacts of the program? 

1. Conceptual Framework for Evaluating 

Consumer Impacts 

2. Costs Associated With the Vehicle 

Program 

3. Cost per Ton of Emissions Reduced 

4. Reduction in Fuel Consumption and Its 

Impacts 

5. Impacts on U.S. Vehicle Sales and 

Payback Period 

6. Benefits of Reducing GHG Emissions 

7. Non-Greenhouse Gas Health and 

Environmental Impacts 

8. Energy Security Impacts 

9. Other Impacts 

10. Summary of Costs and Benefits 

I. Statutory and Executive Order Reviews 

1. Executive Order 12866: Regulatory 

Planning and Review 

2. Paperwork Reduction Act 

3. Regulatory Flexibility Act 

4. Unfunded Mandates Reform Act 

5. Executive Order 13132 (Federalism) 

6. Executive Order 13175 (Consultation 

and Coordination With Indian Tribal 

Governments) 

7. Executive Order 13045: ‘‘Protection of 

Children From Environmental Health 

Risks and Safety Risks’’ 

8. Executive Order 13211 (Energy Effects) 

9. National Technology Transfer 

Advancement Act 

10. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

J. Statutory Provisions and Legal Authority 

IV. NHTSA Final Rule and Record of 

Decision for Passenger Car and Light 

Truck CAFE Standards for MYs 2012– 

2016 

A. Executive Overview of NHTSA Final 

Rule 

1. Introduction 

2. Role of Fuel Economy Improvements in 

Promoting Energy Independence, Energy 

Security, and a Low Carbon Economy 

3. The National Program 

4. Review of CAFE Standard Setting 

Methodology per the President’s January 

26, 2009 Memorandum on CAFE 

Standards for MYs 2011 and Beyond 

5. Summary of the Final MY 2012–2016 

CAFE Standards 

B. Background 

1. Chronology of Events Since the National 

Academy of Sciences Called for 

Reforming and Increasing CAFE 

Standards 

2. Energy Policy and Conservation Act, as 

Amended by the Energy Independence 

and Security Act 

C. Development and Feasibility of the Final 

Standards 

1. How was the baseline and reference 

vehicle fleet developed? 

2. How were the technology inputs 

developed? 

3. How did NHTSA develop the economic 

assumptions? 

4. How does NHTSA use the assumptions 

in its modeling analysis? 

5. How did NHTSA develop the shape of 

the target curves for the final standards? 

D. Statutory Requirements 

1. EPCA, as Amended by EISA 

2. Administrative Procedure Act 

3. National Environmental Policy Act 

E. What are the final CAFE standards? 

1. Form of the Standards 

2. Passenger Car Standards for MYs 2012– 

2016 

3. Minimum Domestic Passenger Car 

Standards 

4. Light Truck Standards 

F. How do the final standards fulfill 

NHTSA’s statutory obligations? 

G. Impacts of the Final CAFE Standards 

1. How will these standards improve fuel 

economy and reduce GHG emissions for 

MY 2012–2016 vehicles? 

2. How will these standards improve fleetwide fuel economy and reduce GHG 

emissions beyond MY 2016? 

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25326 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 

3President Obama Announces National Fuel 

Efficiency Policy, The White House, May 19, 2009. 

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

the_press_office/President-Obama-AnnouncesNational-Fuel-Efficiency-Policy/. Remarks by the 

President on National Fuel Efficiency Standards, 

The White House, May 19, 2009. Available at: 

http://www.whitehouse.gov/the_press_office/ 

Remarks-by-the-President-on-national-fuelefficiency-standards/. 

4 74 FR 24007 (May 22, 2009). 

5Available at: http://www.whitehouse.gov/the_

press_office/Presidential_Memorandum_Fuel

_Economy/. 

6 ‘‘Technical Support Document for 

Endangerment and Cause or Contribute Findings for 

Greenhouse Gases Under Section 202(a) of the 

Clean Air Act’’ Docket: EPA–HQ–OAR–2009–0472– 

11292, http://epa.gov/climatechange/ 

endangerment.html. 

7U.S. Environmental Protection Agency. 2009. 

Inventory of U.S. Greenhouse Gas Emissions and 

Sinks: 1990–2007. EPA 430–R–09–004. Available at 

http://epa.gov/climatechange/emissions/ 

downloads09/GHG2007entire_report-508.pdf. 

8U.S. EPA. 2009 Technical Support Document for 

Endangerment and Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean 

Air Act. Washington, DC. pp. 180–194. Available at 

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

downloads/Endangerment%20TSD.pdf. 

9U.S. Environmental Protection Agency. 2009. 

Inventory of U.S. Greenhouse Gas Emissions and 

Sinks: 1990–2007. EPA 430–R–09–004. Available at 

http://epa.gov/climatechange/emissions/

downloads09/GHG2007entire_report-508.pdf. 

10U.S. Environmental Protection Agency. RIA, 

Chapter 2. 

3. How will these final standards impact 

non-GHG emissions and their associated 

effects? 

4. What are the estimated costs and 

benefits of these final standards? 

5. How would these standards impact 

vehicle sales? 

6. Potential Unquantified Consumer 

Welfare Impacts of the Final Standards 

7. What other impacts (quantitative and 

unquantifiable) will these final standards 

have? 

H. Vehicle Classification 

I. Compliance and Enforcement 

1. Overview 

2. How does NHTSA determine 

compliance? 

3. What compliance flexibilities are 

available under the CAFE program and 

how do manufacturers use them? 

4. Other CAFE Enforcement Issues— 

Variations in Footprint 

5. Other CAFE Enforcement Issues— 

Miscellaneous 

J. Other Near-Term Rulemakings Mandated 

by EISA 

1. Commercial Medium- and Heavy-Duty 

On-Highway Vehicles and Work Trucks 

2. Consumer Information on Fuel 

Efficiency and Emissions 

K. NHTSA’s Record of Decision 

L. Regulatory Notices and Analyses 

1. Executive Order 12866 and DOT 

Regulatory Policies and Procedures 

2. National Environmental Policy Act 

3. Clean Air Act (CAA) 

4. National Historic Preservation Act 

(NHPA) 

5. Executive Order 12898 (Environmental 

Justice) 

6. Fish and Wildlife Conservation Act 

(FWCA) 

7. Coastal Zone Management Act (CZMA) 

8. Endangered Species Act (ESA) 

9. Floodplain Management (Executive 

Order 11988 & DOT Order 5650.2) 

10. Preservation of the Nation’s Wetlands 

(Executive Order 11990 & DOT Order 

5660.1a) 

11. Migratory Bird Treaty Act (MBTA), 

Bald and Golden Eagle Protection Act 

(BGEPA), Executive Order 13186 

12. Department of Transportation Act 

(Section 4(f)) 

13. Regulatory Flexibility Act 

14. Executive Order 13132 (Federalism) 

15. Executive Order 12988 (Civil Justice 

Reform) 

16. Unfunded Mandates Reform Act 

17. Regulation Identifier Number 

18. Executive Order 13045 

19. National Technology Transfer and 

Advancement Act 

20. Executive Order 13211 

21. Department of Energy Review 

22. Privacy Act 

I. Overview of Joint EPA/NHTSA 

National Program 

A. Introduction 

The National Highway Traffic Safety 

Administration (NHTSA) and the 

Environmental Protection Agency (EPA) 

are each announcing final rules whose 

benefits will address the urgent and 

closely intertwined challenges of energy 

independence and security and global 

warming. These rules will implement a 

strong and coordinated Federal 

greenhouse gas (GHG) and fuel economy 

program for passenger cars, light-dutytrucks, and medium-duty passenger 

vehicles (hereafter light-duty vehicles), 

referred to as the National Program. The 

rules will achieve substantial reductions 

of GHG emissions and improvements in 

fuel economy from the light-duty 

vehicle part of the transportation sector, 

based on technology that is already 

being commercially applied in most 

cases and that can be incorporated at a 

reasonable cost. NHTSA’s final rule also 

constitutes the agency’s Record of 

Decision for purposes of its NEPA 

analysis. 

This joint rulemaking is consistent 

with the President’s announcement on 

May 19, 2009 of a National Fuel 

Efficiency Policy of establishing 

consistent, harmonized, and 

streamlined requirements that would 

reduce GHG emissions and improve fuel 

economy for all new cars and light-duty 

trucks sold in the United States.3 The 

National Program will deliver additional 

environmental and energy benefits, cost 

savings, and administrative efficiencies 

on a nationwide basis that would likely 

not be available under a less 

coordinated approach. The National 

Program also represents regulatory 

convergence by making it possible for 

the standards of two different Federal 

agencies and the standards of California 

and other states to act in a unified 

fashion in providing these benefits. The 

National Program will allow automakers 

to produce and sell a single fleet 

nationally, mitigating the additional 

costs that manufacturers would 

otherwise face in having to comply with 

multiple sets of Federal and State 

standards. This joint notice is also 

consistent with the Notice of Upcoming 

Joint Rulemaking issued by DOT and 

EPA on May 19, 2009 4 and responds to 

the President’s January 26, 2009 

memorandum on CAFE standards for 

model years 2011 and beyond,5 the 

details of which can be found in Section 

IV of this joint notice. 

Climate change is widely viewed as a 

significant long-term threat to the global 

environment. As summarized in the 

Technical Support Document for EPA’s 

Endangerment and Cause or Contribute 

Findings under Section 202(a) of the 

Clear Air Act, anthropogenic emissions 

of GHGs are very likely (90 to 99 percent 

probability) the cause of most of the 

observed global warming over the last 

50 years.6 The primary GHGs of concern 

are carbon dioxide (CO2), methane, 

nitrous oxide, hydrofluorocarbons, 

perfluorocarbons, and sulfur 

hexafluoride. Mobile sources emitted 31 

percent of all U.S. GHGs in 2007 

(transportation sources, which do not 

include certain off-highway sources, 

account for 28 percent) and have been 

the fastest-growing source of U.S. GHGs 

since 1990.7 Mobile sources addressed 

in the recent endangerment and 

contribution findings under CAA 

section 202(a)—light-duty vehicles, 

heavy-duty trucks, buses, and 

motorcycles—accounted for 23 percent 

of all U.S. GHG in 2007.8 Light-duty 

vehicles emit CO2, methane, nitrous 

oxide, and hydrofluorocarbons and are 

responsible for nearly 60 percent of all 

mobile source GHGs and over 70 

percent of Section 202(a) mobile source 

GHGs. For light-duty vehicles in 2007, 

CO2 emissions represent about 94 

percent of all greenhouse emissions 

(including HFCs), and the CO2

emissions measured over the EPA tests 

used for fuel economy compliance 

represent about 90 percent of total lightduty vehicle GHG emissions.9 10

Improving energy security by 

reducing our dependence on foreign oil 

has been a national objective since the 

first oil price shocks in the 1970s. Net 

petroleum imports now account for 

approximately 60 percent of U.S. 

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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 25327 

11Panel on Policy Implications of Greenhouse 

Warming, National Academy of Sciences, National 

Academy of Engineering, Institute of Medicine, 

‘‘Policy Implications of Greenhouse Warming: 

Mitigation, Adaptation, and the Science Base,’’ 

National Academies Press, 1992. p. 287. 

12Although EPCA does not require the use of 

1975 test procedures for light trucks, those 

procedures are used for light truck CAFE standard 

testing purposes. 

13This is the method that EPA uses to determine 

compliance with NHTSA’s CAFE standards. 

14 549 U.S. 497 (2007). 

15 68 FR 52922 (Sept. 8, 2003). 

16 549 U.S. at 531–32. 

17For further information on Massachusetts v. 

EPA see the July 30, 2008 Advance Notice of 

Proposed Rulemaking, ‘‘Regulating Greenhouse Gas 

Emissions under the Clean Air Act’’, 73 FR 44354 

at 44397. There is a comprehensive discussion of 

the litigation’s history, the Supreme Court’s 

findings, and subsequent actions undertaken by the 

Bush Administration and the EPA from 2007–2008 

in response to the Supreme Court remand. Also see 

74 FR 18886, at 1888–90 (April 24, 2009). 

18 74 FR 32744 (July 8, 2009). 

petroleum consumption. World crude 

oil production is highly concentrated, 

exacerbating the risks of supply 

disruptions and price shocks. Tight 

global oil markets led to prices over 

$100 per barrel in 2008, with gasoline 

reaching as high as $4 per gallon in 

many parts of the U.S., causing financial 

hardship for many families. The export 

of U.S. assets for oil imports continues 

to be an important component of the 

historically unprecedented U.S. trade 

deficits. Transportation accounts for 

about two-thirds of U.S. petroleum 

consumption. Light-duty vehicles 

account for about 60 percent of 

transportation oil use, which means that 

they alone account for about 40 percent 

of all U.S. oil consumption. 

1. Building Blocks of the National 

Program 

The National Program is both needed 

and possible because the relationship 

between improving fuel economy and 

reducing CO2 tailpipe emissions is a 

very direct and close one. The amount 

of those CO2 emissions is essentially 

constant per gallon combusted of a 

given type of fuel. Thus, the more fuel 

efficient a vehicle is, the less fuel it 

burns to travel a given distance. The less 

fuel it burns, the less CO2 it emits in 

traveling that distance.11 While there are 

emission control technologies that 

reduce the pollutants (e.g., carbon 

monoxide) produced by imperfect 

combustion of fuel by capturing or 

converting them to other compounds, 

there is no such technology for CO2. 

Further, while some of those pollutants 

can also be reduced by achieving a more 

complete combustion of fuel, doing so 

only increases the tailpipe emissions of 

CO2. Thus, there is a single pool of 

technologies for addressing these twin 

problems, i.e., those that reduce fuel 

consumption and thereby reduce CO2

emissions as well. 

a. DOT’s CAFE Program 

In 1975, Congress enacted the Energy 

Policy and Conservation Act (EPCA), 

mandating that NHTSA establish and 

implement a regulatory program for 

motor vehicle fuel economy to meet the 

various facets of the need to conserve 

energy, including ones having energy 

independence and security, 

environmental and foreign policy 

implications. Fuel economy gains since 

1975, due both to the standards and 

market factors, have resulted in saving 

billions of barrels of oil and avoiding 

billions of metric tons of CO2 emissions. 

In December 2007, Congress enacted the 

Energy Independence and Securities Act 

(EISA), amending EPCA to require 

substantial, continuing increases in fuel 

economy standards. 

The CAFE standards address most, 

but not all, of the real world CO2

emissions because a provision in EPCA 

as originally enacted in 1975 requires 

the use of the 1975 passenger car test 

procedures under which vehicle air 

conditioners are not turned on during 

fuel economy testing.12 Fuel economy is 

determined by measuring the amount of 

CO2 and other carbon compounds 

emitted from the tailpipe, not by 

attempting to measure directly the 

amount of fuel consumed during a 

vehicle test, a difficult task to 

accomplish with precision. The carbon 

content of the test fuel 13 is then used to 

calculate the amount of fuel that had to 

be consumed per mile in order to 

produce that amount of CO2. Finally, 

that fuel consumption figure is 

converted into a miles-per-gallon figure. 

CAFE standards also do not address the 

5–8 percent of GHG emissions that are 

not CO2, i.e., nitrous oxide (N2O), and 

methane (CH4) as well as emissions of 

CO2 and hydrofluorocarbons (HFCs) 

related to operation of the air 

conditioning system. 

b. EPA’s GHG Standards for Light-duty 

Vehicles 

Under the Clean Air Act EPA is 

responsible for addressing air pollutants 

from motor vehicles. On April 2, 2007, 

the U.S. Supreme Court issued its 

opinion in Massachusetts v. EPA,14 a 

case involving EPA’s a 2003 denial of a 

petition for rulemaking to regulate GHG 

emissions from motor vehicles under 

section 202(a) of the Clean Air Act 

(CAA).15 The Court held that GHGs fit 

within the definition of air pollutant in 

the Clean Air Act and further held that 

the Administrator must determine 

whether or not emissions from new 

motor vehicles cause or contribute to air 

pollution which may reasonably be 

anticipated to endanger public health or 

welfare, or whether the science is too 

uncertain to make a reasoned decision. 

The Court further ruled that, in making 

these decisions, the EPA Administrator 

is required to follow the language of 

section 202(a) of the CAA. The Court 

rejected the argument that EPA cannot 

regulate CO2 from motor vehicles 

because to do so would de facto tighten 

fuel economy standards, authority over 

which has been assigned by Congress to 

DOT. The Court stated that ‘‘[b]ut that 

DOT sets mileage standards in no way 

licenses EPA to shirk its environmental 

responsibilities. EPA has been charged 

with protecting the public’s ‘health’ and 

‘welfare’, a statutory obligation wholly 

independent of DOT’s mandate to 

promote energy efficiency.’’ The Court 

concluded that ‘‘[t]he two obligations 

may overlap, but there is no reason to 

think the two agencies cannot both 

administer their obligations and yet 

avoid inconsistency.’’ 16 The case was 

remanded back to the Agency for 

reconsideration in light of the Court’s 

decision.17

On December 15, 2009, EPA 

published two findings (74 FR 66496): 

That emissions of GHGs from new 

motor vehicles and motor vehicle 

engines contribute to air pollution, and 

that the air pollution may reasonably be 

anticipated to endanger public health 

and welfare. 

c. California Air Resources Board 

Greenhouse Gas Program 

In 2004, the California Air Resources 

Board approved standards for new lightduty vehicles, which regulate the 

emission of not only CO2, but also other 

GHGs. Since then, thirteen states and 

the District of Columbia, comprising 

approximately 40 percent of the lightduty vehicle market, have adopted 

California’s standards. These standards 

apply to model years 2009 through 2016 

and require CO2 emissions for passenger 

cars and the smallest light trucks of 323 

g/mi in 2009 and 205 g/mi in 2016, and 

for the remaining light trucks of 439 g/ 

mi in 2009 and 332 g/mi in 2016. On 

June 30, 2009, EPA granted California’s 

request for a waiver of preemption 

under the CAA.18 The granting of the 

waiver permits California and the other 

states to proceed with implementing the 

California emission standards. 

In addition, to promote the National 

Program, in May 2009, California 

announced its commitment to take 

several actions in support of the 

National Program, including revising its 

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25328 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 

program for MYs 2009–2011 to facilitate 

compliance by the automakers, and 

revising its program for MYs 2012–2016 

such that compliance with the Federal 

GHG standards will be deemed to be 

compliance with California’s GHG 

standards. This will allow the single 

national fleet produced by automakers 

to meet the two Federal requirements 

and to meet California requirements as 

well. California is proceeding with a 

rulemaking intended to revise its 2004 

regulations to meet its commitments. 

Several automakers and their trade 

associations also announced their 

commitment to take several actions in 

support of the National Program, 

including not contesting the final GHG 

and CAFE standards for MYs 2012– 

2016, not contesting any grant of a 

waiver of preemption under the CAA for 

California’s GHG standards for certain 

model years, and to stay and then 

dismiss all pending litigation 

challenging California’s regulation of 

GHG emissions, including litigation 

concerning preemption under EPCA of 

California’s and other states’ GHG 

standards. 

2. Public Participation 

The agencies proposed their 

respective rules on September 28, 2009 

(74 FR 49454), and received a large 

number of comments representing many 

perspectives on the proposed rule. The 

agencies received oral testimony at three 

public hearings in different parts of the 

country, and received written comments 

from more than 130 organizations, 

including auto manufacturers and 

suppliers, States, environmental and 

other non-governmental organizations 

(NGOs), and over 129,000 comments 

from private citizens. 

The vast majority of commenters 

supported the central tenets of the 

proposed CAFE and GHG programs. 

That is, there was broad support from 

most organizations for a National 

Program that achieves a level of 250 

gram/mile fleet average CO2, which 

would be 35.5 miles per gallon if the 

automakers were to meet this CO2 level 

solely through fuel economy 

improvements. The standards will be 

phased in over model years 2012 

through 2016 which will allow 

manufacturers to build a common fleet 

of vehicles for the domestic market. In 

general, commenters from the 

automobile industry supported the 

proposed standards as well as the credit 

opportunities and other compliance 

provisions providing flexibility, while 

also making some recommendations for 

changes. Environmental and public 

interest non-governmental organizations 

(NGOs), as well as most States that 

commented, were also generally 

supportive of the National Program 

standards. Many of these organizations 

also expressed concern about the 

possible impact on program benefits, 

depending on how the credit provisions 

and flexibilities are designed. The 

agencies also received specific 

comments on many aspects of the 

proposal. 

Throughout this notice, the agencies 

discuss many of the key issues arising 

from the public comments and the 

agencies’ responses. In addition, the 

agencies have addressed all of the 

public comments in the Response to 

Comments document associated with 

this final rule. 

B. Summary of the Joint Final Rule and 

Differences From the Proposal 

In this joint rulemaking, EPA is 

establishing GHG emissions standards 

under the Clean Air Act (CAA), and 

NHTSA is establishing Corporate 

Average Fuel Economy (CAFE) 

standards under the Energy Policy and 

Conservation Action of 1975 (EPCA), as 

amended by the Energy Independence 

and Security Act of 2007 (EISA). The 

intention of this joint rulemaking is to 

set forth a carefully coordinated and 

harmonized approach to implementing 

these two statutes, in accordance with 

all substantive and procedural 

requirements imposed by law. 

NHTSA and EPA have coordinated 

closely and worked jointly in 

developing their respective final rules. 

This is reflected in many aspects of this 

joint rule. For example, the agencies 

have developed a comprehensive Joint 

Technical Support Document (TSD) that 

provides a solid technical underpinning 

for each agency’s modeling and analysis 

used to support their standards. Also, to 

the extent allowed by law, the agencies 

have harmonized many elements of 

program design, such as the form of the 

standard (the footprint-based attribute 

curves), and the definitions used for 

cars and trucks. They have developed 

the same or similar compliance 

flexibilities, to the extent allowed and 

appropriate under their respective 

statutes, such as averaging, banking, and 

trading of credits, and have harmonized 

the compliance testing and test 

protocols used for purposes of the fleet 

average standards each agency is 

finalizing. Finally, under their 

respective statutes, each agency is called 

upon to exercise its judgment and 

determine standards that are an 

appropriate balance of various relevant 

statutory factors. Given the common 

technical issues before each agency, the 

similarity of the factors each agency is 

to consider and balance, and the 

authority of each agency to take into 

consideration the standards of the other 

agency, both EPA and NHTSA are 

establishing standards that result in a 

harmonized National Program. 

This joint final rule covers passenger 

cars, light-duty trucks, and mediumduty passenger vehicles built in model 

years 2012 through 2016. These vehicle 

categories are responsible for almost 60 

percent of all U.S. transportation-related 

GHG emissions. EPA and NHTSA 

expect that automobile manufacturers 

will meet these standards by utilizing 

technologies that will reduce vehicle 

GHG emissions and improve fuel 

economy. Although many of these 

technologies are available today, the 

emissions reductions and fuel economy 

improvements finalized in this notice 

will involve more widespread use of 

these technologies across the light-duty 

vehicle fleet. These include 

improvements to engines, 

transmissions, and tires, increased use 

of start-stop technology, improvements 

in air conditioning systems, increased 

use of hybrid and other advanced 

technologies, and the initial 

commercialization of electric vehicles 

and plug-in hybrids. NHTSA’s and 

EPA’s assessments of likely vehicle 

technologies that manufacturers will 

employ to meet the standards are 

discussed in detail below and in the 

Joint TSD. 

The National Program is estimated to 

result in approximately 960 million 

metric tons of total carbon dioxide 

equivalent emissions reductions and 

approximately 1.8 billion barrels of oil 

savings over the lifetime of vehicles sold 

in model years (MYs) 2012 through 

2016. In total, the combined EPA and 

NHTSA 2012–2016 standards will 

reduce GHG emissions from the U.S. 

light-duty fleet by approximately 21 

percent by 2030 over the level that 

would occur in the absence of the 

National Program. These actions also 

will provide important energy security 

benefits, as light-duty vehicles are about 

95 percent dependent on oil-based fuels. 

The agencies project that the total 

benefits of the National Program will be 

more than $240 billion at a 3% discount 

rate, or more than $190 billion at a 7% 

discount rate. In the discussion that 

follows in Sections III and IV, each 

agency explains the related benefits for 

their individual standards. 

Together, EPA and NHTSA estimate 

that the average cost increase for a 

model year 2016 vehicle due to the 

National Program will be less than 

$1,000. The average U.S. consumer who 

purchases a vehicle outright is 

estimated to save enough in lower fuel 

costs over the first three years to offset 

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these higher vehicle costs. However, 

most U.S. consumers purchase a new 

vehicle using credit rather than paying 

cash and the typical car loan today is a 

five year, 60 month loan. These 

consumers will see immediate savings 

due to their vehicle’s lower fuel 

consumption in the form of a net 

reduction in annual costs of $130–$180 

throughout the duration of the loan (that 

is, the fuel savings will outweigh the 

increase in loan payments by $130–$180 

per year). Whether a consumer takes out 

a loan or purchases a new vehicle 

outright, over the lifetime of a model 

year 2016 vehicle, the consumer’s net 

savings could be more than $3,000. The 

average 2016 MY vehicle will emit 16 

fewer metric tons of CO2-equivalent 

emissions (that is, CO2 emissions plus 

HFC air conditioning leakage emissions) 

during its lifetime. Assumptions that 

underlie these conclusions are 

discussed in greater detail in the 

agencies’ respective regulatory impact 

analyses and in Section III.H.5 and 

Section IV. 

This joint rule also results in 

important regulatory convergence and 

certainty to automobile companies. 

Absent this rule, there would be three 

separate Federal and State regimes 

independently regulating light-duty 

vehicles to reduce fuel consumption 

and GHG emissions: NHTSA’s CAFE 

standards, EPA’s GHG standards, and 

the GHG standards applicable in 

California and other States adopting the 

California standards. This joint rule will 

allow automakers to meet both the 

NHTSA and EPA requirements with a 

single national fleet, greatly simplifying 

the industry’s technology, investment 

and compliance strategies. In addition, 

to promote the National Program, 

California announced its commitment to 

take several actions, including revising 

its program for MYs 2012–2016 such 

that compliance with the Federal GHG 

standards will be deemed to be 

compliance with California’s GHG 

standards. This will allow the single 

national fleet used by automakers to 

meet the two Federal requirements and 

to meet California requirements as well. 

California is proceeding with a 

rulemaking intended to revise its 2004 

regulations to meet its commitments. 

EPA and NHTSA are confident that 

these GHG and CAFE standards will 

successfully harmonize both the Federal 

and State programs for MYs 2012–2016 

and will allow our country to achieve 

the increased benefits of a single, 

nationwide program to reduce lightduty vehicle GHG emissions and reduce 

the country’s dependence on fossil fuels 

by improving these vehicles’ fuel 

economy. 

A successful and sustainable 

automotive industry depends upon, 

among other things, continuous 

technology innovation in general, and 

low GHG emissions and high fuel 

economy vehicles in particular. In this 

respect, this action will help spark the 

investment in technology innovation 

necessary for automakers to successfully 

compete in both domestic and export 

markets, and thereby continue to 

support a strong economy. 

While this action covers MYs 2012– 

2016, many stakeholders encouraged 

EPA and NHTSA to also begin working 

toward standards for MY 2017 and 

beyond that would maintain a single 

nationwide program. The agencies 

recognize the importance of and are 

committed to a strong, coordinated 

national program for light-duty vehicles 

for model years beyond 2016. 

Key elements of the National Program 

finalized today are the level and form of 

the GHG and CAFE standards, the 

available compliance mechanisms, and 

general implementation elements. These 

elements are summarized in the 

following section, with more detailed 

discussions about EPA’s GHG program 

following in Section III, and about 

NHTSA’s CAFE program in Section IV. 

This joint final rule responds to the 

wide array of comments that the 

agencies received on the proposed rule. 

This section summarizes many of the 

major comments on the primary 

elements of the proposal and describes 

whether and how the final rule has 

changed, based on the comments and 

additional analyses. Major comments 

and the agencies’ responses to them are 

also discussed in more detail in later 

sections of this preamble. For a full 

summary of public comments and EPA’s 

and NHTSA’s responses to them, please 

see the Response to Comments 

document associated with this final 

rule. 

1. Joint Analytical Approach 

NHTSA and EPA have worked closely 

together on nearly every aspect of this 

joint final rule. The extent and results 

of this collaboration are reflected in the 

elements of the respective NHTSA and 

EPA rules, as well as the analytical work 

contained in the Joint Technical 

Support Document (Joint TSD). The 

Joint TSD, in particular, describes 

important details of the analytical work 

that are shared, as well as any 

differences in approach. These include 

the build up of the baseline and 

reference fleets, the derivation of the 

shape of the curves that define the 

standards, a detailed description of the 

costs and effectiveness of the technology 

choices that are available to vehicle 

manufacturers, a summary of the 

computer models used to estimate how 

technologies might be added to vehicles, 

and finally the economic inputs used to 

calculate the impacts and benefits of the 

rules, where practicable. 

EPA and NHTSA have jointly 

developed attribute curve shapes that 

each agency is using for its final 

standards. Further details of these 

functions can be found in Sections III 

and IV of this preamble as well as 

Chapter 2 of the Joint TSD. A critical 

technical underpinning of each agency’s 

analysis is the cost and effectiveness of 

the various control technologies. These 

are used to analyze the feasibility and 

cost of potential GHG and CAFE 

standards. A detailed description of all 

of the technology information 

considered can be found in Chapter 3 of 

the Joint TSD (and for A/C, Chapter 2 

of the EPA RIA). This detailed 

technology data forms the inputs to 

computer models that each agency uses 

to project how vehicle manufacturers 

may add those technologies in order to 

comply with the new standards. These 

are the OMEGA and Volpe models for 

EPA and NHTSA, respectively. The 

models and their inputs can also be 

found in the docket. Further description 

of the model and outputs can be found 

in Sections III and IV of this preamble, 

and Chapter 3 of the Joint TSD. This 

comprehensive joint analytical 

approach has provided a sound and 

consistent technical basis for each 

agency in developing its final standards, 

which are summarized in the sections 

below. 

The vast majority of public comments 

expressed strong support for the joint 

analytical work performed for the 

proposal. Commenters generally agreed 

with the analytical work and its results, 

and supported the transparency of the 

analysis and its underlying data. Where 

commenters raised specific points, the 

agencies have considered them and 

made changes where appropriate. The 

agencies’ further evaluation of various 

technical issues also led to a limited 

number of changes. A detailed 

discussion of these issues can be found 

in Section II of this preamble, and the 

Joint TSD. 

2. Level of the Standards 

In this notice, EPA and NHTSA are 

establishing two separate sets of 

standards, each under its respective 

statutory authorities. EPA is setting 

national CO2 emissions standards for 

light-duty vehicles under section 202(a) 

of the Clean Air Act. These standards 

will require these vehicles to meet an 

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19There is no such statutory limitation with 

respect to light trucks. 

20The agencies are using a common conversion 

factor between fuel economy in units of miles per 

gallon and CO2 emissions in units of grams per 

mile. This conversion factor is 8,887 grams CO2 per 

gallon gasoline fuel. Diesel fuel has a conversion 

factor of 10,180 grams CO2 per gallon diesel fuel 

though for the purposes of this calculation, we are 

assuming 100% gasoline fuel. 21See 49 CFR 523.2 for the exact definition of 

‘‘footprint.’’ 

22Because required CAFE levels depend on the 

mix of vehicles sold by manufacturers in a model 

year, NHTSA’s estimate of future required CAFE 

levels depends on its estimate of the mix of vehicles 

that will be sold in that model year. NHTSA 

currently estimates that the MY 2011 standards will 

require average fuel economy levels of 30.4 mpg for 

passenger cars, 24.4 mpg for light trucks, and 27.6 

mpg for the combined fleet. 

estimated combined average emissions 

level of 250 grams/mile of CO2 in model 

year 2016. NHTSA is setting CAFE 

standards for passenger cars and light 

trucks under 49 U.S.C. 32902. These 

standards will require manufacturers of 

those vehicles to meet an estimated 

combined average fuel economy level of 

34.1 mpg in model year 2016. The 

standards for both agencies begin with 

the 2012 model year, with standards 

increasing in stringency through model 

year 2016. They represent a harmonized 

approach that will allow industry to 

build a single national fleet that will 

satisfy both the GHG requirements 

under the CAA and CAFE requirements 

under EPCA/EISA. 

Given differences in their respective 

statutory authorities, however, the 

agencies’ standards include some 

important differences. Under the CO2

fleet average standards adopted under 

CAA section 202(a), EPA expects 

manufacturers to take advantage of the 

option to generate CO2-equivalent 

credits by reducing emissions of 

hydrofluorocarbons (HFCs) and CO2

through improvements in their air 

conditioner systems. EPA accounted for 

these reductions in developing its final 

CO2 standards. NHTSA did not do so 

because EPCA does not allow vehicle 

manufacturers to use air conditioning 

credits in complying with CAFE 

standards for passenger cars.19 CO2

emissions due to air conditioning 

operation are not measured by the test 

procedure mandated by statute for use 

in establishing and enforcing CAFE 

standards for passenger cars. As a result, 

improvement in the efficiency of 

passenger car air conditioners is not 

considered as a possible control 

technology for purposes of CAFE. 

These differences regarding the 

treatment of air conditioning 

improvements (related to CO2 and HFC 

reductions) affect the relative stringency 

of the EPA standard and NHTSA 

standard for MY 2016. The 250 grams 

per mile of CO2 equivalent emissions 

limit is equivalent to 35.5 mpg 20 if the 

automotive industry were to meet this 

CO2 level all through fuel economy 

improvements. As a consequence of the 

prohibition against NHTSA’s allowing 

credits for air conditioning 

improvements for purposes of passenger 

car CAFE compliance, NHTSA is setting 

fuel economy standards that are 

estimated to require a combined 

(passenger car and light truck) average 

fuel economy level of 34.1 mpg by MY 

2016. 

The vast majority of public comments 

expressed strong support for the 

National Program standards, including 

the stringency of the agencies’ 

respective standards and the phase-in 

from model year 2012 through 2016. 

There were a number of comments 

supporting standards more stringent 

than proposed, and a few others 

supporting less stringent standards, in 

particular for the 2012–2015 model 

years. The agencies’ consideration of 

comments and their updated technical 

analyses led to only very limited 

changes in the footprint curves and did 

not change the agencies’ projections that 

the nationwide fleet will achieve a level 

of 250 grams/mile by 2016 (equivalent 

to 35.5 mpg). The responses to these 

comments are discussed in more detail 

in Sections III and IV, respectively, and 

in the Response to Comments 

document. 

As proposed, NHTSA and EPA’s final 

standards, like the standards NHTSA 

promulgated in March 2009 for MY 

2011, are expressed as mathematical 

functions depending on vehicle 

footprint. Footprint is one measure of 

vehicle size, and is determined by 

multiplying the vehicle’s wheelbase by 

the vehicle’s average track width.21 The 

standards that must be met by each 

manufacturer’s fleet will be determined 

by computing the sales-weighted 

average (harmonic average for CAFE) of 

the targets applicable to each of the 

manufacturer’s passenger cars and light 

trucks. Under these footprint-based 

standards, the levels required of 

individual manufacturers will depend, 

as noted above, on the mix of vehicles 

sold. NHTSA’s and EPA’s respective 

standards are shown in the tables below. 

It is important to note that the standards 

are the attribute-based curves 

established by each agency. The values 

in the tables below reflect the agencies’ 

projection of the corresponding fleet 

levels that will result from these 

attribute-based curves. 

As a result of public comments and 

updated economic and future fleet 

projections, EPA and NHTSA have 

updated the attribute based curves for 

this final rule, as discussed in detail in 

Section II.B of this preamble and 

Chapter 2 of the Joint TSD. This update 

in turn affects costs, benefits, and other 

impacts of the final standards. Thus, the 

agencies have updated their overall 

projections of the impacts of the final 

rule standards, and these results are 

only slightly different from those 

presented in the proposed rule. 

As shown in Table I.B.2–1, NHTSA’s 

fleet-wide CAFE-required levels for 

passenger cars under the final standards 

are projected to increase from 33.3 to 

37.8 mpg between MY 2012 and MY 

2016. Similarly, fleet-wide CAFE levels 

for light trucks are projected to increase 

from 25.4 to 28.8 mpg. NHTSA has also 

estimated the average fleet-wide 

required levels for the combined car and 

truck fleets. As shown, the overall fleet 

average CAFE level is expected to be 

34.1 mpg in MY 2016. These numbers 

do not include the effects of other 

flexibilities and credits in the program. 

These standards represent a 4.3 percent 

average annual rate of increase relative 

to the MY 2011 standards.22

TABLE I.B.2–1—AVERAGE REQUIRED FUEL ECONOMY (mpg) UNDER FINAL CAFE STANDARDS

2011-base 2012 2013 2014 2015 2016 

Passenger Cars ....................................... 30.4 33.3 34.2 34.9 36.2 37.8 

Light Trucks ............................................. 24.4 25.4 26.0 26.6 27.5 28.8 

Combined Cars & Trucks ................. 27.6 29.7 30.5 31.3 32.6 34.1 

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23The penalties are similar in function to 

essentially unlimited, fixed-price allowances. 

24NHTSA’s estimates account for availability of 

CAFE credits for the sale of flexible-fuel vehicles 

(FFVs), and for the potential that some 

manufacturers will pay civil penalties rather than 

comply with the CAFE standards. This yields 

NHTSA’s estimates of the real-world fuel economy 

that will likely be achieved under the final CAFE 

standards. NHTSA has not included any potential 

impact of car-truck credit transfer in its estimate of 

the achieved CAFE levels. 25 49 U.S.C. 32902(b)(4). 26 In the March 2009 final rule establishing MY 

2011 standards for passenger cars and light trucks, 

NHTSA estimated that the minimum required 

CAFE standard for domestically manufactured 

passenger cars would be 27.8 mpg under the MY 

2011 passenger car standard. 

27These levels do not include the effect of 

flexible fuel credits, transfer of credits between cars 

and trucks, temporary lead time allowance, or any 

other credits with the exception of air conditioning. 

Accounting for the expectation that 

some manufacturers could continue to 

pay civil penalties rather than achieving 

required CAFE levels, and the ability to 

use FFV credits,23 NHTSA estimates 

that the CAFE standards will lead to the 

following average achieved fuel 

economy levels, based on the 

projections of what each manufacturer’s 

fleet will comprise in each year of the 

program: 24

TABLE I.B.2–2—PROJECTED FLEET-WIDE ACHIEVED CAFE LEVELS UNDER THE FINAL FOOTPRINT-BASED CAFE 

STANDARDS (mpg) 

2012 2013 2014 2015 2016 

Passenger Cars ................................................................... 32.3 33.5 34.2 35.0 36.2 

Light Trucks ......................................................................... 24.5 25.1 25.9 26.7 27.5 

Combined Cars & Trucks ............................................. 28.7 29.7 30.6 31.5 32.7 

NHTSA is also required by EISA to set 

a minimum fuel economy standard for 

domestically manufactured passenger 

cars in addition to the attribute-based 

passenger car standard. The minimum 

standard ‘‘shall be the greater of (A) 27.5 

miles per gallon; or (B) 92 percent of the 

average fuel economy projected by the 

Secretary for the combined domestic 

and non-domestic passenger automobile 

fleets manufactured for sale in the 

United States by all manufacturers in 

the model year.* * * ’’ 25

Based on NHTSA’s current market 

forecast, the agency’s estimates of these 

minimum standards under the MY 

2012–2016 CAFE standards (and, for 

comparison, the final MY 2011 

standard) are summarized below in 

Table I.B.2–3.26 For eventual 

compliance calculations, the final 

calculated minimum standards will be 

updated to reflect the average fuel 

economy level required under the final 

standards. 

TABLE I.B.2–3—ESTIMATED MINIMUM STANDARD FOR DOMESTICALLY MANUFACTURED PASSENGER CARS UNDER MY 

2011 AND MY 2012–2016 CAFE STANDARDS FOR PASSENGER CARS (mpg) 

2011 2012 2013 2014 2015 2016 

27.8 30.7 31.4 32.1 33.3 34.7 

EPA is establishing GHG emissions 

standards, and Table I.B.2–4 provides 

EPA’s estimates of their projected 

overall fleet-wide CO2 equivalent 

emission levels.27 The g/mi values are 

CO2 equivalent values because they 

include the projected use of air 

conditioning (A/C) credits by 

manufacturers, which include both HFC 

and CO2 reductions. 

TABLE I.B.2–4—PROJECTED FLEET-WIDE EMISSIONS COMPLIANCE LEVELS UNDER THE FOOTPRINT-BASED CO2

STANDARDS (g/mi) 

2012 2013 2014 2015 2016 

Passenger Cars ................................................................... 263 256 247 236 225 

Light Trucks ......................................................................... 346 337 326 312 298 

Combined Cars & Trucks ............................................. 295 286 276 263 250 

As shown in Table I.B.2–4, fleet-wide 

CO2 emission level requirements for 

cars are projected to increase in 

stringency from 263 to 225 g/mi 

between MY 2012 and MY 2016. 

Similarly, fleet-wide CO2 equivalent 

emission level requirements for trucks 

are projected to increase in stringency 

from 346 to 298 g/mi. As shown, the 

overall fleet average CO2 level 

requirements are projected to increase 

in stringency from 295 g/mi in MY 2012 

to 250 g/mi in MY 2016. 

EPA anticipates that manufacturers 

will take advantage of program 

flexibilities such as flexible fueled 

vehicle credits and car/truck credit 

trading. Due to the credit trading 

between cars and trucks, the estimated 

improvements in CO2 emissions are 

distributed differently than shown in 

Table I.B.2–4, where full manufacturer 

compliance without credit trading is 

assumed. Table I.B.2–5 shows EPA’s 

projection of the achieved emission 

levels of the fleet for MY 2012 through 

2016, which does consider the impact of 

car/truck credit transfer and the increase 

in emissions due to certain program 

flexibilities including flex fueled 

vehicle credits and the temporary lead 

time allowance alternative standards. 

The use of optional air conditioning 

credits is considered both in this 

analysis of achieved levels and of the 

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28The close relationship between emissions of 

CO2—the most prevalent greenhouse gas emitted by 

motor vehicles—and fuel consumption, means that 

the technologies to control CO2 emissions and to 

improve fuel economy overlap to a great degree. 

compliance levels described above. As 

can be seen in Table I.B.2–5, the 

projected achieved levels are slightly 

higher for model years 2012–2015 due 

to EPA’s assumptions about 

manufacturers’ use of the regulatory 

flexibilities, but by model year 2016 the 

achieved level is projected to be 250 g/ 

mi for the fleet. 

TABLE I.B.2–5—PROJECTED FLEET-WIDE ACHIEVED EMISSION LEVELS UNDER THE FOOTPRINT-BASED CO2 STANDARDS

(g/mi) 

2012 2013 2014 2015 2016 

Passenger Cars ................................................................... 267 256 245 234 223 

Light Trucks ......................................................................... 365 353 340 324 303 

Combined Cars & Trucks ............................................. 305 293 280 266 250 

Several auto manufacturers stated that 

the increasingly stringent requirements 

for fuel economy and GHG emissions in 

the early years of the program should 

follow a more linear phase-in. The 

agencies’ consideration of comments 

and of their updated technical analyses 

did not lead to changes to the phase-in 

of the standards discussed above. This 

issue is discussed in more detail in 

Sections II.D, and in Sections III and IV. 

NHTSA’s and EPA’s technology 

assessment indicates there is a wide 

range of technologies available for 

manufacturers to consider in upgrading 

vehicles to reduce GHG emissions and 

improve fuel economy. Commenters 

were in general agreement with this 

assessment.28 As noted, these include 

improvements to the engines such as 

use of gasoline direct injection and 

downsized engines that use 

turbochargers to provide performance 

similar to that of larger engines, the use 

of advanced transmissions, increased 

use of start-stop technology, 

improvements in tire rolling resistance, 

reductions in vehicle weight, increased 

use of hybrid and other advanced 

technologies, and the initial 

commercialization of electric vehicles 

and plug-in hybrids. EPA is also 

projecting improvements in vehicle air 

conditioners including more efficient as 

well as low leak systems. All of these 

technologies are already available today, 

and EPA’s and NHTSA’s assessments 

are that manufacturers will be able to 

meet the standards through more 

widespread use of these technologies 

across the fleet. 

With respect to the practicability of 

the standards in terms of lead time, 

during MYs 2012–2016 manufacturers 

are expected to go through the normal 

automotive business cycle of 

redesigning and upgrading their lightduty vehicle products, and in some 

cases introducing entirely new vehicles 

not on the market today. This rule 

allows manufacturers the time needed 

to incorporate technology to achieve 

GHG reductions and improve fuel 

economy during the vehicle redesign 

process. This is an important aspect of 

the rule, as it avoids the much higher 

costs that would occur if manufacturers 

needed to add or change technology at 

times other than their scheduled 

redesigns. This time period also 

provides manufacturers the opportunity 

to plan for compliance using a multiyear time frame, again consistent with 

normal business practice. Over these 

five model years, there will be an 

opportunity for manufacturers to 

evaluate almost every one of their 

vehicle model platforms and add 

technology in a cost effective way to 

control GHG emissions and improve 

fuel economy. This includes redesign of 

the air conditioner systems in ways that 

will further reduce GHG emissions. 

Various commenters stated that the 

proposed phase-in of the standards 

should be introduced more aggressively, 

less aggressively, or in a more linear 

manner. However, our consideration of 

these comments about the phase-in, as 

well as our revised analyses, leads us to 

conclude that the general rate of 

introduction of the standards as 

proposed remains appropriate. This 

conclusion is also not affected by the 

slight difference from the proposal in 

the final footprint-based curves. These 

issues are addressed further in Sections 

III and IV. 

Both agencies considered other 

standards as part of the rulemaking 

analyses, both more and less stringent 

than those proposed. EPA’s and 

NHTSA’s analyses of alternative 

standards are contained in Sections III 

and IV of this preamble, respectively, as 

well as the agencies’ respective RIAs. 

The CAFE and GHG standards 

described above are based on 

determining emissions and fuel 

economy using the city and highway 

test procedures that are currently used 

in the CAFE program. Some 

environmental and other organizations 

commented that the test procedures 

should be improved to reflect more realworld driving conditions; auto 

manufacturers in general do not support 

such changes to the test procedures at 

this time. Both agencies recognize that 

these test procedures are not fully 

representative of real-world driving 

conditions. For example, EPA has 

adopted more representative test 

procedures that are used in determining 

compliance with emissions standards 

for pollutants other than GHGs. These 

test procedures are also used in EPA’s 

fuel economy labeling program. 

However, as discussed in Section III, the 

current information on effectiveness of 

the individual emissions control 

technologies is based on performance 

over the CAFE test procedures. For that 

reason, EPA is using the current CAFE 

test procedures for the CO2 standards 

and is not changing those test 

procedures in this rulemaking. NHTSA, 

as discussed above, is limited by statute 

in what test procedures can be used for 

purposes of passenger car testing, 

although there is no such statutory 

limitation with respect to test 

procedures for trucks. However, the 

same reasons for not changing the truck 

test procedures apply for CAFE as well. 

Both EPA and NHTSA are interested 

in developing programs that employ test 

procedures that are more representative 

of real-world driving conditions, to the 

extent authorized under their respective 

statutes. This is an important issue, and 

the agencies intend to continue to 

evaluate it in the context of a future 

rulemaking to address standards for 

model year 2017 and thereafter. This 

could include consideration of a range 

of test procedure changes to better 

represent real-world driving conditions 

in terms of speed, acceleration, 

deceleration, ambient temperatures, use 

of air conditioners, and the like. With 

respect to air conditioner operation, 

EPA discusses the public comments on 

these issues and the final procedures for 

determining emissions credits for 

controls on air conditioners in Section 

III. 

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29 71 FR 17566 (Apr. 6, 2006). 

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

31Based on vehicles produced for sale in the 

United States. 

32The equations are equivalent but are specified 

differently due to differences in the agencies’ 

respective models. 

Finally, based on the information EPA 

developed in its recent rulemaking that 

updated its fuel economy labeling 

program to better reflect average realworld fuel economy, the calculation of 

fuel savings and CO2 emissions 

reductions that will be achieved by the 

CAFE and GHG standards includes 

adjustments to account for the 

difference between the fuel economy 

level measured in the CAFE test 

procedure and the fuel economy 

actually achieved on average under realworld driving conditions. These 

adjustments are industry averages for 

the vehicles’ performance as a whole, 

however, and are not a substitute for the 

information on effectiveness of 

individual control technologies that will 

be explored for purposes of a future 

GHG and CAFE rulemaking. 

3. Form of the Standards 

NHTSA and EPA proposed attributebased standards for passenger cars and 

light trucks. NHTSA adopted an 

attribute approach based on vehicle 

footprint in its Reformed CAFE program 

for light trucks for model years 2008– 

2011,29 and recently extended this 

approach to passenger cars in the CAFE 

rule for MY 2011 as required by EISA.30

The agencies also proposed using 

vehicle footprint as the attribute for the 

GHG and CAFE standards. Footprint is 

defined as a vehicle’s wheelbase 

multiplied by its track width—in other 

words, the area enclosed by the points 

at which the wheels meet the ground. 

Most commenters that expressed a view 

on this topic supported basing the 

standards on an attribute, and almost all 

of these supported the proposed choice 

of vehicle footprint as an appropriate 

attribute. The agencies continue to 

believe that the standards are best 

expressed in terms of an attribute, and 

that the footprint attribute is the most 

appropriate attribute on which to base 

the standards. These issues are further 

discussed later in this notice and in 

Chapter 2 of the Joint TSD. 

Under the footprint-based standards, 

each manufacturer will have a GHG and 

CAFE target unique to its fleet, 

depending on the footprints of the 

vehicle models produced by that 

manufacturer. A manufacturer will have 

separate footprint-based standards for 

cars and for trucks. Generally, larger 

vehicles (i.e., vehicles with larger 

footprints) will be subject to less 

stringent standards (i.e., higher CO2

grams/mile standards and lower CAFE 

standards) than smaller vehicles. This is 

because, generally speaking, smaller 

vehicles are more capable of achieving 

lower levels of CO2 and higher levels of 

fuel economy than larger vehicles. 

While a manufacturer’s fleet average 

standard could be estimated throughout 

the model year based on projected 

production volume of its vehicle fleet, 

the standard to which the manufacturer 

must comply will be based on its final 

model year production figures. A 

manufacturer’s calculation of fleet 

average emissions at the end of the 

model year will thus be based on the 

production-weighted average emissions 

of each model in its fleet. 

The final footprint-based standards 

are very similar in shape to those 

proposed. NHTSA and EPA include 

more discussion of the development of 

the final curves in Section II below, 

with a full discussion in the Joint TSD. 

In addition, a full discussion of the 

equations and coefficients that define 

the curves is included in Section III for 

the CO2 curves and Section IV for the 

mpg curves. The following figures 

illustrate the standards. First, Figure 

I.B.3–1 shows the fuel economy (mpg) 

car standard curve. 

Under an attribute-based standard, 

every vehicle model has a performance 

target (fuel economy for the CAFE 

standards, and CO2 g/mile for the GHG 

emissions standards), the level of which 

depends on the vehicle’s attribute (for 

this rule, footprint). The manufacturers’ 

fleet average performance is determined 

by the production-weighted 31 average 

(for CAFE, harmonic average) of those 

targets. NHTSA and EPA are setting 

CAFE and CO2 emissions standards 

defined by constrained linear functions 

and, equivalently, piecewise linear 

functions.32 As a possible option for 

future rulemakings, the constrained 

linear form was introduced by NHTSA 

in the 2007 NPRM proposing CAFE 

standards for MY 2011–2015. 

NHTSA is establishing the attribute 

curves below for assigning a fuel 

economy level to an individual vehicle’s 

footprint value, for model years 2012 

through 2016. These mpg values will be 

production weighted to determine each 

manufacturer’s fleet average standard 

for cars and trucks. Although the 

general model of the equation is the 

same for each vehicle category and each 

year, the parameters of the equation 

differ for cars and trucks. Each 

parameter also changes on an annual 

basis, resulting in the yearly increases in 

stringency. Figure I.B.3–1 below 

illustrates the passenger car CAFE 

standard curves for model years 2012 

through 2016 while Figure I.B.3–2 

below illustrates the light truck standard 

curves for model years 2012–2016. The 

MY 2011 final standards for cars and 

trucks, which are specified by a 

constrained logistic function rather than 

a constrained linear function, are shown 

for comparison. 

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EPA is establishing the attribute 

curves below for assigning a CO2 level 

to an individual vehicle’s footprint 

value, for model years 2012 through 

2016. These CO2 values will be 

production weighted to determine each 

manufacturer’s fleet average standard 

for cars and trucks. As with the CAFE 

curves above, the general form of the 

equation is the same for each vehicle 

category and each year, but the 

parameters of the equation differ for cars 

and trucks. Again, each parameter also 

changes on an annual basis, resulting in 

the yearly increases in stringency. 

Figure I.B.3–3 below illustrates the CO2

car standard curves for model years 

2012 through 2016 while Figure I.B.3– 

4 shows the CO2 truck standard curves 

for model years 2012–2016. 


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33 49 CFR 523. 

NHTSA and EPA received a number 

of comments about the shape of the car 

and truck curves. We address these 

comments further in Section II.C below 

as well as in Sections III and IV. 

As proposed, NHTSA and EPA will 

use the same vehicle category 

definitions for determining which 

vehicles are subject to the car curve 

standards versus the truck curve 

standards. In other words, a vehicle 

classified as a car under the NHTSA 

CAFE program will also be classified as 

a car under the EPA GHG program, and 

likewise for trucks. Auto industry 

commenters generally agreed with this 

approach and believe it is an important 

aspect of harmonization across the two 

agencies’ programs. Some other 

commenters expressed concern about 

potential consequences, especially in 

how cars and trucks are distinguished. 

However, EPA and NHTSA are 

employing the same car and truck 

definitions for the MY 2012–2016 CAFE 

and GHG standards as those used in the 

CAFE program for the 2011 model year 

standards.33 This issue is further 

discussed for the EPA standards in 

Section III, and for the NHTSA 

standards in Section IV. This approach 

of using CAFE definitions allows EPA’s 

CO2 standards and the CAFE standards 

to be harmonized across all vehicles for 

this program. However, EPA is not 

changing the car/truck definition for the 

purposes of any other previous rules. 

Generally speaking, a smaller 

footprint vehicle will have higher fuel 

economy and lower CO2 emissions 

relative to a larger footprint vehicle 

when both have the same degree of fuel 

efficiency improvement technology. In 

this final rule, the standards apply to a 

manufacturers overall fleet, not an 

individual vehicle, thus a manufacturers 

fleet which is dominated by small 

footprint vehicles will have a higher 

fuel economy requirement (lower CO2

requirement) than a manufacturer 

whose fleet is dominated by large 

footprint vehicles. A footprint-based 

CO2 or CAFE standard can be relatively 

neutral with respect to vehicle size and 

consumer choice. All vehicles, whether 

smaller or larger, must make 

improvements to reduce CO2 emissions 

or improve fuel economy, and therefore 

all vehicles will be relatively more 

expensive. With the footprint-based 

standard approach, EPA and NHTSA 

believe there should be no significant 

effect on the relative distribution of 

different vehicle sizes in the fleet, 

which means that consumers will still 

be able to purchase the size of vehicle 

that meets their needs. While targets are 

manufacturer specific, rather than 

vehicle specific, Table I.B.3–1 illustrates 

the fact that different vehicle sizes will 

have varying CO2 emissions and fuel 

economy targets under the final 

standards. 

TABLE I.B.3—1 MODEL YEAR 2016 CO2 AND FUEL ECONOMY TARGETS FOR VARIOUS MY 2008 VEHICLE TYPES

Vehicle type Example models 

Example model 

footprint 

(sq. ft.) 

CO2 emissions 

target 

(g/mi) 

Fuel economy 

target 

(mpg) 

Example Passenger Cars 

Compact car ............................................. Honda Fit .................................................. 40 206 41.1 

Midsize car ................................................ Ford Fusion .............................................. 46 230 37.1

Fullsize car ................................................ Chrysler 300 ............................................. 53 263 32.6 

Example Light-duty Trucks 

Small SUV ................................................ 4WD Ford Escape .................................... 44 259 32.9 

Midsize crossover ..................................... Nissan Murano ......................................... 49 279 30.6 

Minivan ...................................................... Toyota Sienna .......................................... 55 303 28.2

Large pickup truck .................................... Chevy Silverado ....................................... 67 348 24.7 

4. Program Flexibilities 

EPA’s and NHTSA’s programs as 

established in this rule provide 

compliance flexibility to manufacturers, 

especially in the early years of the 

National Program. This flexibility is 

expected to provide sufficient lead time 

for manufacturers to make necessary 

technological improvements and reduce 

the overall cost of the program, without 

compromising overall environmental 

and fuel economy objectives. The broad 

goal of harmonizing the two agencies’ 

standards includes preserving 

manufacturers’ flexibilities in meeting 

the standards, to the extent appropriate 

and required by law. The following 

section provides an overview of this 

final rule’s flexibility provisions. Many 

auto manufacturers commented in 

support of these provisions as critical to 

meeting the standards in the lead time 

provided. Environmental groups, some 

States, and others raised concerns about 

the possibility for windfall credits and 

loss of program benefits. The provisions 

in the final rule are in most cases the 

same as those proposed. However 

consideration of the issues raised by 

commenters has led to modifications in 

certain provisions. These comments and 

the agencies’ response are discussed in 

Sections III and IV below and in the 

Response to Comments document. 

a. CO2/CAFE Credits Generated Based 

on Fleet Average Performance 

Under this NHTSA and EPA final 

rule, the fleet average standards that 

apply to a manufacturer’s car and truck 

fleets are based on the applicable 

footprint-based curves. At the end of 

each model year, when production of 

the model year is complete, a 

production-weighted fleet average will 

be calculated for each averaging set (cars 

and trucks). Under this approach, a 

manufacturer’s car and/or truck fleet 

that achieves a fleet average CO2/CAFE 

level better than the standard can 

generate credits. Conversely, if the fleet 

average CO2/CAFE level does not meet 

the standard, the fleet would incur 

debits (also referred to as a shortfall). 

Under the final program, a 

manufacturer whose fleet generates 

credits in a given model year would 

have several options for using those 

credits, including credit carry-back, 

credit carry-forward, credit transfers, 

and credit trading. These provisions 

exist in the MY 2011 CAFE program 

under EPCA and EISA, and similar 

provisions are part of EPA’s Tier 2 

program for light-duty vehicle criteria 

pollutant emissions, as well as many 

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34 49 U.S.C. 32903(a)(2). 

35 49 U.S.C. 32903(g)(4). 

36 49 U.S.C. 32903(f)(2). 

37EPCA provides a statutory incentive for 

production of FFVs by specifying that their fuel 

economy is determined using a special calculation 

procedure that results in those vehicles being 

assigned a higher fuel economy level than would 

Continued 

other mobile source standards issued by 

EPA under the CAA. The manufacturer 

will be able to carry back credits to 

offset a deficit that had accrued in a 

prior model year and was subsequently 

carried over to the current model year. 

EPCA also provides for this. EPCA 

restricts the carry-back of CAFE credits 

to three years, and as proposed EPA is 

establishing the same limitation, in 

keeping with the goal of harmonizing 

both sets of standards. 

After satisfying any need to offset preexisting deficits, remaining credits can 

be saved (banked) for use in future 

years. Under the CAFE program, EISA 

allows manufacturers to apply credits 

earned in a model year to compliance in 

any of the five subsequent model 

years.34 As proposed, under the GHG 

program, EPA is also allowing 

manufacturers to use these banked 

credits in the five years after the year in 

which they were generated (i.e., five 

years carry-forward). 

EISA required NHTSA to establish by 

regulation a CAFE credits transferring 

program, which NHTSA established in 

a March 2009 final rule codified at 49 

CFR Part 536, to allow a manufacturer 

to transfer credits between its vehicle 

fleets to achieve compliance with the 

standards. For example, credits earned 

by over-compliance with a 

manufacturer’s car fleet average 

standard could be used to offset debits 

incurred due to that manufacturer’s not 

meeting the truck fleet average standard 

in a given year. EPA’s Tier 2 program 

also provides for this type of credit 

transfer. As proposed for purposes of 

this rule, EPA allows unlimited credit 

transfers across a manufacturer’s cartruck fleet to meet the GHG standard. 

This is based on the expectation that 

this flexibility will facilitate 

manufacturers’ ability to comply with 

the GHG standards in the lead time 

provided, and will allow the required 

GHG emissions reductions to be 

achieved in the most cost effective way. 

Under the CAA, unlike under EISA, 

there is no statutory limitation on cartruck credit transfers. Therefore, EPA is 

not constraining car-truck credit 

transfers, as doing so would reduce the 

flexibility for lead time, and would 

increase costs with no corresponding 

environmental benefit. For the CAFE 

program, however, EISA limits the 

amount of credits that may be 

transferred, which has the effects of 

limiting the extent to which a 

manufacturer can rely upon credits in 

lieu of making fuel economy 

improvements to a particular portion of 

its vehicle fleet, but also of potentially 

increasing the costs of improving the 

manufacturer’s overall fleet. EISA also 

prohibits the use of transferred credits 

to meet the statutory minimum level for 

the domestic car fleet standard.35 These 

and other statutory limits will continue 

to apply to the determination of 

compliance with the CAFE standards. 

EISA also allowed NHTSA to 

establish by regulation a CAFE credit 

trading program, which NHTSA 

established in the March 2009 final rule 

at 40 CFR part 536, to allow credits to 

be traded (sold) to other vehicle 

manufacturers. As proposed, EPA 

allows credit trading in the GHG 

program. These sorts of exchanges are 

typically allowed under EPA’s current 

mobile source emission credit programs, 

although manufacturers have seldom 

made such exchanges. Under the 

NHTSA CAFE program, EPCA also 

allows these types of credit trades, 

although, as with transferred credits, 

traded credits may not be used to meet 

the minimum domestic car standards 

specified by statute.36 Comments 

discussing these provisions supported 

the proposed approach. These final 

provisions are the same as proposed. 

As further discussed in Section IV of 

this preamble, NHTSA sought to find a 

way to provide credits for improving the 

efficiency of light truck air conditioners 

(A/Cs) and solicited public comments to 

that end. The agency did so because the 

power necessary to operate an A/C 

compressor places a significant 

additional load on the engine, thus 

reducing fuel economy and increasing 

CO2 tailpipe emissions. See Section 

III.C.1 below. The agency would have 

made a similar effort regarding cars, but 

a 1975 statutory provision made it 

unfruitful even to explore the possibility 

of administratively proving such credits 

for cars. The agency did not identify a 

workable way of providing such credits 

for light trucks in the context of this 

rulemaking. 

b. Air Conditioning Credits Under the 

EPA Final Rule 

Air conditioning (A/C) systems 

contribute to GHG emissions in two 

ways. Hydrofluorocarbon (HFC) 

refrigerants, which are powerful GHGs, 

can leak from the A/C system (direct A/ 

C emissions). As just noted, operation of 

the A/C system also places an additional 

load on the engine, which results in 

additional CO2 tailpipe emissions 

(indirect A/C related emissions). EPA is 

allowing manufacturers to generate 

credits by reducing either or both types 

of GHG emissions related to A/C 

systems. Specifically, EPA is 

establishing a method to calculate CO2

equivalent reductions for the vehicle’s 

full useful life on a grams/mile basis 

that can be used as credits in meeting 

the fleet average CO2 standards. EPA’s 

analysis indicates that this approach 

provides manufacturers with a highly 

cost-effective way to achieve a portion 

of GHG emissions reductions under the 

EPA program. EPA is estimating that 

manufacturers will on average generate 

11 g/mi GHG credit toward meeting the 

250 g/mi by 2016 (though some 

companies may generate more). EPA 

will also allow manufacturers to earn 

early A/C credits starting in MY 2009 

through 2011, as discussed further in a 

later section. There were many 

comments on the proposed A/C 

provisions. Nearly every one of these 

was supportive of EPA including A/C 

control as part of this rule, though there 

was some disagreement on some of the 

details of the program. The HFC 

crediting scheme was widely supported. 

The comments mainly were 

concentrated on indirect A/C related 

credits. The auto manufacturers and 

suppliers had some technical comments 

on A/C technologies, and there were 

many concerns with the proposed idle 

test. EPA has made some minor 

adjustments in both of these areas that 

we believe are responsive to these 

concerns. EPA addresses A/C issues in 

greater detail in Section III of this 

preamble and in Chapter 2 of EPA’s 

RIA. 

c. Flexible-Fuel and Alternative Fuel 

Vehicle Credits 

EPCA authorizes a compliance 

flexibility incentive under the CAFE 

program for production of dual-fueled 

or flexible-fuel vehicles (FFV) and 

dedicated alternative fuel vehicles. 

FFVs are vehicles that can run both on 

an alternative fuel and conventional 

fuel. Most FFVs are E85 capable 

vehicles, which can run on either 

gasoline or a mixture of up to 85 percent 

ethanol and 15 percent gasoline (E85). 

Dedicated alternative fuel vehicles are 

vehicles that run exclusively on an 

alternative fuel. EPCA was amended by 

EISA to extend the period of availability 

of the FFV incentive, but to begin 

phasing it out by annually reducing the 

amount of FFV incentive that can be 

used toward compliance with the CAFE 

standards.37 Although NHTSA 

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otherwise occur. This is typically referred to as an 

FFV credit. 

38 Id. 

39EPCA does not permit such an allowance. 

Consequently, manufacturers who may be able to 

take advantage of a lead-time allowance under the 

GHG standards would be required to comply with 

the applicable CAFE standard or be subject to 

penalties for non-compliance. 

expressed concern about the non-use of 

alternative fuel by FFVs in a 2002 report 

to Congress (Effects of the Alternative 

Motor Fuels Act CAFE Incentives 

Policy), EISA does not premise the 

availability of the FFV credits on actual 

use of alternative fuel by an FFV 

vehicle. Under NHTSA’s CAFE 

program, pursuant to EISA, no FFV 

credits will be available for CAFE 

compliance after MY 2019.38 For 

dedicated alternative fuel vehicles, there 

are no limits or phase-out of the credits. 

As required by the statute, NHTSA will 

continue to allow the use of FFV credits 

for purposes of compliance with the 

CAFE standards until the end of the 

EISA phase-out period. 

For the GHG program, as proposed, 

EPA will allow FFV credits in line with 

EISA limits, but only during the period 

from MYs 2012 to 2015. After MY 2015, 

EPA will only allow FFV credits based 

on a manufacturer’s demonstration that 

the alternative fuel is actually being 

used in the vehicles and based on the 

vehicle’s actual performance. EPA 

discusses this in more detail in Section 

III.C of the preamble, including a 

summary of key comments. These 

provisions are being finalized as 

proposed, with further discussion in 

Section III.C of how manufacturers can 

demonstrate that the alternative fuel is 

being used. 

d. Temporary Lead-Time Allowance 

Alternative Standards Under the EPA 

Final Rule 

Manufacturers with limited product 

lines may be especially challenged in 

the early years of the National Program, 

and need additional lead time. 

Manufacturers with narrow product 

offerings may not be able to take full 

advantage of averaging or other program 

flexibilities due to the limited scope of 

the types of vehicles they sell. For 

example, some smaller volume 

manufacturer fleets consist entirely of 

vehicles with very high baseline CO2

emissions. Their vehicles are above the 

CO2 emissions target for that vehicle 

footprint, but do not have other types of 

vehicles in their production mix with 

which to average. Often, these 

manufacturers pay fines under the 

CAFE program rather than meet the 

applicable CAFE standard. EPA believes 

that these technological circumstances 

call for more lead time in the form of a 

more gradual phase-in of standards. 

EPA is finalizing a temporary leadtime allowance for manufacturers that 

sell vehicles in the U.S. in MY 2009 and 

for which U.S. vehicle sales in that 

model year are below 400,000 vehicles. 

This allowance will be available only 

during the MY 2012–2015 phase-in 

years of the program. A manufacturer 

that satisfies the threshold criteria will 

be able to treat a limited number of 

vehicles as a separate averaging fleet, 

which will be subject to a less stringent 

GHG standard.39 Specifically, a 

standard of 25 percent above the 

vehicle’s otherwise applicable foot-print 

target level will apply to up to 100,000 

vehicles total, spread over the four year 

period of MY 2012 through 2015. Thus, 

the number of vehicles to which the 

flexibility could apply is limited. EPA 

also is setting appropriate restrictions 

on credit use for these vehicles, as 

discussed further in Section III. By MY 

2016, these allowance vehicles must be 

averaged into the manufacturer’s full 

fleet (i.e., they will no longer be eligible 

for a different standard). EPA discusses 

this in more detail in Section III.B of the 

preamble. 

EPA received comments from several 

smaller manufacturers that the TLAAS 

program was insufficient to allow 

manufacturers with very limited 

product lines to comply. These 

manufacturers commented that they 

need additional lead time to meet the 

standards, because their CO2 baselines 

are significantly higher and their vehicle 

product lines are even more limited, 

reducing their ability to average across 

their fleets compared even to other 

TLAAS manufacturers. EPA fully 

summarizes the public comments on the 

TLAAS program, including comments 

not supporting the program, in Section 

III.B. In summary, in response to the 

lead time issues raised by 

manufacturers, EPA is modifying the 

TLAAS program that applies to 

manufacturers with between 5,000 and 

50,000 U.S. vehicle sales in MY 2009. 

EPA believes these provisions are 

necessary given that, compared with 

other TLAAS manufacturers, these 

manufacturers have even more limited 

product offerings across which to 

average and higher baseline CO2

emissions, and thus need additional 

lead-time to meet the standards. These 

manufacturers would have an increased 

allotment of vehicles, a total of 250,000, 

compared to 100,000 vehicles (for other 

TLAAS-eligible manufacturers). In 

addition, the TLAAS program for these 

manufacturers would be extended by 

one year, through MY 2016 for these 

vehicles, for a total of five years of 

eligibility. The other provisions of the 

TLAAS program would continue to 

apply, such as the restrictions on credit 

trading and the level of the standard. 

Additional restrictions would also apply 

to these vehicles, as discussed in 

Section III. In addition, for the smallest 

volume manufacturers, those with 

below 5,000 U.S. vehicle sales, EPA is 

not setting standards at this time but is 

instead deferring standards until a 

future rulemaking. This is essentially 

the same approach we are using for 

small businesses, which are exempted 

from this rule. The unique issues 

involved with these manufacturers will 

be addressed in that future rulemaking. 

Further discussion of the public 

comment on these issues and details on 

these changes from the proposed 

program are included in Section III. 

e. Additional Credit Opportunities 

Under the Clean Air Act (CAA) 

EPA is establishing additional 

opportunities for early credits in MYs 

2009–2011 through over-compliance 

with a baseline standard. The baseline 

standard is set to be equivalent, on a 

national level, to the California 

standards. Credits can be generated by 

over-compliance with this baseline in 

one of two ways—over-compliance by 

the fleet of vehicles sold in California 

and the CAA section 177 States (i.e., 

those States adopting the California 

program), or over-compliance with the 

fleet of vehicles sold in the 50 States. 

EPA is also providing for early credits 

based on over-compliance with CAFE, 

but only for vehicles sold in States 

outside of California and the CAA 

section 177 states. Under the early 

credit provisions, no early FFV credits 

would be allowed, except those 

achieved by over-compliance with the 

California program based on California’s 

provisions that manufacturers 

demonstrate actual use of the alternative 

fuel. EPA’s early credits provisions are 

designed to ensure that there would be 

no double counting of early credits. 

NHTSA notes, however, that credits for 

overcompliance with CAFE standards 

during MYs 2009–2011 will still be 

available for manufacturers to use 

toward compliance in future model 

years, just as before. 

EPA received comments from some 

environmental organizations and States 

expressing concern that these early 

credits were inappropriate windfall 

credits because they provided credits for 

actions that were not surplus, that is 

above what would otherwise be 

required for compliance with either 

State or Federal motor vehicle 

standards. This focused on the credits 

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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 25341 

for over-compliance with the California 

standards generated during model years 

2009 and perhaps 2010, where 

according to commenters the CAFE 

requirements were in effect more 

stringent than the California standards. 

EPA believes that early credits provide 

a valuable incentive for manufacturers 

that have implemented fuel efficient 

technologies in excess of their CAFE 

compliance obligations prior to MY 

2012. With appropriate restrictions, 

these credits, reflecting over-compliance 

over a three model year time frame (MY 

2009–2011) and not just over one or two 

model years, will be surplus reductions 

and not otherwise required by law. 

Therefore, EPA is finalizing these 

provisions largely as proposed, but in 

response to comments, with an 

additional restriction on the trading of 

MY 2009 credits. The overall structure 

of this early credit program addresses 

concerns about the potential for 

windfall credits in the first one or two 

model years. This issue is fully 

discussed in Section III.C. 

EPA is providing an additional 

temporary incentive to encourage the 

commercialization of advanced GHG/ 

fuel economy control technologies— 

including electric vehicles (EVs), plugin hybrid electric vehicles (PHEVs), and 

fuel cell vehicles (FCVs)—for model 

years 2012–2016. EPA’s proposal 

included an emissions compliance 

value of zero grams/mile for EVs and 

FCVs, and the electric portion of PHEVs, 

and a multiplier in the range of 1.2 to 

2.0, so that each advanced technology 

vehicle would count as greater than one 

vehicle in a manufacturer’s fleetwide 

compliance calculation. EPA received 

many comments on the proposed 

incentives. Many State and 

environmental organization commenters 

believed that the combination of these 

incentives could undermine the GHG 

benefits of the rule, and believed the 

emissions compliance values should 

take into account the net upstream GHG 

emissions associated with electrified 

vehicles compared to vehicles powered 

by petroleum based fuel. Auto 

manufacturers generally supported the 

incentives, some believing the 

incentives to be a critical part of the 

National Program. Most auto makers 

supported both the zero grams/mile 

emissions compliance value and the 

higher multipliers. 

Upon considering the public 

comments on this issue, EPA is 

finalizing an advanced technology 

vehicle incentive program that includes 

a zero gram/mile emissions compliance 

value for EVs and FCVs, and the electric 

portion of PHEVs, for up to the first 

200,000 EV/PHEV/FCV vehicles 

produced by a given manufacturer 

during MY 2012–2016 (for a 

manufacturer that produces less than 

25,000 EVs, PHEVs, and FCVs in MY 

2012), or for up to the first 300,000 EV/ 

PHEV/FCV vehicles produced during 

MY 2012–2016 (for a manufacturer that 

produces 25,000 or more EVs, PHEVs, 

and FCVs in MY 2012). For any 

production greater than this amount, the 

compliance value for the vehicle will be 

greater than zero gram/mile, set at a 

level that reflects the vehicle’s net 

increase in upstream GHG emissions in 

comparison to the gasoline vehicle it 

replaces. In addition, EPA is not 

finalizing a multiplier. EPA will also 

allow this early advanced technology 

incentive program beginning in MYs 

2009–2011. The purpose of these 

provisions is to provide a temporary 

incentive to promote technologies 

which have the potential to produce 

very large GHG reductions in the future. 

The tailpipe GHG emissions from EVs, 

FCVs, and PHEVs operated on grid 

electricity are zero, and traditionally the 

emissions of the vehicle itself are all 

that EPA takes into account for purposes 

of compliance with standards set under 

section 202(a). This has not raised any 

issues for criteria pollutants, as 

upstream emissions associated with 

production and distribution of the fuel 

are addressed by comprehensive 

regulatory programs focused on the 

upstream sources of those emissions. At 

this time, however, there is no such 

comprehensive program addressing 

upstream emissions of GHGs, and the 

upstream GHG emissions associated 

with production and distribution of 

electricity are higher than the 

corresponding upstream GHG emissions 

of gasoline or other petroleum based 

fuels. In the future, vehicle fleet 

electrification combined with advances 

in low-carbon technology in the 

electricity sector have the potential to 

transform the transportation sector’s 

contribution to the country’s GHG 

emissions. EPA will reassess the issue of 

how to address EVs, PHEVs, and FCVs 

in rulemakings for model years 2017 

and beyond, based on the status of 

advanced vehicle technology 

commercialization, the status of 

upstream GHG control programs, and 

other relevant factors. Further 

discussion of the temporary advanced 

technology vehicle incentives, including 

more detail on the public comments and 

EPA’s response, is found in Section 

III.C. 

EPA is also providing an option for 

manufacturers to generate credits for 

employing new and innovative 

technologies that achieve GHG 

reductions that are not reflected on 

current test procedures, as proposed. 

Examples of such ‘‘off-cycle’’ 

technologies might include solar panels 

on hybrids, adaptive cruise control, and 

active aerodynamics, among other 

technologies. These three credit 

provisions are discussed in more detail 

in Section III. 

5. Coordinated Compliance 

Previous NHTSA and EPA regulations 

and statutory provisions establish ample 

examples on which to develop an 

effective compliance program that 

achieves the energy and environmental 

benefits from CAFE and motor vehicle 

GHG standards. NHTSA and EPA have 

developed a program that recognizes, 

and replicates as closely as possible, the 

compliance protocols associated with 

the existing CAA Tier 2 vehicle 

emission standards, and with CAFE 

standards. The certification, testing, 

reporting, and associated compliance 

activities closely track current practices 

and are thus familiar to manufacturers. 

EPA already oversees testing, collects 

and processes test data, and performs 

calculations to determine compliance 

with both CAFE and CAA standards. 

Under this coordinated approach, the 

compliance mechanisms for both 

programs are consistent and nonduplicative. EPA will also apply the 

CAA authorities applicable to its 

separate in-use requirements in this 

program. 

The compliance approach allows 

manufacturers to satisfy the new 

program requirements in the same 

general way they comply with existing 

applicable CAA and CAFE 

requirements. Manufacturers would 

demonstrate compliance on a fleetaverage basis at the end of each model 

year, allowing model-level testing to 

continue throughout the year as is the 

current practice for CAFE 

determinations. The compliance 

program design establishes a single set 

of manufacturer reporting requirements 

and relies on a single set of underlying 

data. This approach still allows each 

agency to assess compliance with its 

respective program under its respective 

statutory authority. 

NHTSA and EPA do not anticipate 

any significant noncompliance under 

the National Program. However, failure 

to meet the fleet average standards (after 

credit opportunities are exhausted) 

would ultimately result in the potential 

for penalties under both EPCA and the 

CAA. The CAA allows EPA 

considerable discretion in assessment of 

penalties. Penalties under the CAA are 

typically determined on a vehiclespecific basis by determining the 

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40NHTSA’s analysis estimates multi-year 

planning effects within a context in which each 

model year is represented explicitly, and 

technologies applied in one model year carry 

forward to future model years. NHTSA does not 

currently have a reasonable basis to estimate how 

a manufacturer might, for example, weigh the 

transfer of credits from the passenger car to the light 

truck fleet in MY 2013 against the potential to carry 

light truck technologies forward from MY 2013 

through MY 2016. 

number of a manufacturer’s highest 

emitting vehicles that caused the fleet 

average standard violation. This is the 

same mechanism used for EPA’s 

National Low Emission Vehicle and Tier 

2 corporate average standards, and to 

date there have been no instances of 

noncompliance. CAFE penalties are 

specified by EPCA and would be 

assessed for the entire noncomplying 

fleet at a rate of $5.50 times the number 

of vehicles in the fleet, times the 

number of tenths of mpg by which the 

fleet average falls below the standard. In 

the event of a compliance action arising 

out of the same facts and circumstances, 

EPA could consider CAFE penalties 

when determining appropriate remedies 

for the EPA case. 

Several stakeholders commented on 

the proposed coordinated compliance 

approach. The comments indicated 

broad support for the overall approach 

EPA proposed. In particular, both 

regulated industry and the public 

interest community appreciated the 

attempt to streamline compliance by 

adopting current practice where 

possible and by coordinating EPA and 

NHTSA compliance requirements. Thus 

the final compliance program design is 

largely unchanged from the proposal. 

Some commenters requested additional 

detail or clarification in certain areas 

and others suggested some relatively 

narrow technical changes, and EPA has 

responded to these suggestions. EPA 

and NHTSA summarize these comments 

and the agencies’ responses in Sections 

III and IV, respectively, below. The 

Response to Comments document 

associated with this document includes 

all of the comments and responses 

received during the comment period. 

C. Summary of Costs and Benefits of the 

National Program 

This section summarizes the projected 

costs and benefits of the CAFE and GHG 

emissions standards. These projections 

helped inform the agencies’ choices 

among the alternatives considered and 

provide further confirmation that the 

final standards are an appropriate 

choice within the spectrum of choices 

allowable under their respective 

statutory criteria. The costs and benefits 

projected by NHTSA to result from 

these CAFE standards are presented 

first, followed by those from EPA’s 

analysis of the GHG emissions 

standards. 

For several reasons, the estimates for 

costs and benefits presented by NHTSA 

and EPA, while consistent, are not 

directly comparable, and thus should 

not be expected to be identical. Most 

important, NHTSA and EPA’s standards 

would require slightly different fuel 

efficiency improvements. EPA’s GHG 

standard is more stringent in part due to 

its assumptions about manufacturers’ 

use of air conditioning credits, which 

result from reductions in air 

conditioning-related emissions of HFCs 

and CO2. NHTSA was unable to make 

assumptions about manufacturers’ 

improving the efficiency of air 

conditioners due to statutory 

limitations. In addition, the CAFE and 

GHG standards offer different program 

flexibilities, and the agencies’ analyses 

differ in their accounting for these 

flexibilities (for example, FFVs), 

primarily because NHTSA is statutorily 

prohibited from considering some 

flexibilities when establishing CAFE 

standards, while EPA is not. These 

differences contribute to differences in 

the agencies’ respective estimates of 

costs and benefits resulting from the 

new standards. 

NHTSA performed two analyses: a 

primary analysis that shows the 

estimates of costs, fuel savings, and 

related benefits that the agency 

considered for purposes of establishing 

new CAFE standards, and a 

supplemental analysis that reflects the 

agency’s best estimate of the potential 

real-world effects of the CAFE 

standards, including manufacturers’ 

potential use of FFV credits in 

accordance with the provisions of EISA 

concerning their availability. Because 

EPCA prohibits NHTSA from 

considering the ability of manufacturers 

to use of FFV credits to increase their 

fleet average fuel economy when 

establishing CAFE standards, the 

agency’s primary analysis does not 

include them. However, EPCA does not 

prohibit NHTSA from considering the 

fact that manufacturers may pay civil 

penalties rather than complying with 

CAFE standards, and NHTSA’s primary 

analysis accounts for some 

manufacturers’ tendency to do so. In 

addition, NHTSA’s supplemental 

analysis of the effect of FFV credits on 

benefits and costs from its CAFE 

standards, demonstrates the real-world 

impacts of FFVs, and the summary 

estimates presented in Section IV 

include these effects. Including the use 

of FFV credits reduces estimated pervehicle compliance costs of the 

program. However, as shown below, 

including FFV credits does not 

significantly change the projected fuel 

savings and CO2 reductions, because 

FFV credits reduce the fuel economy 

levels that manufacturers achieve not 

only under the standards, but also under 

the baseline MY 2011 CAFE standards. 

Also, EPCA, as amended by EISA, 

allows manufacturers to transfer credits 

between their passenger car and light 

truck fleets. However, EPCA also 

prohibits NHTSA from considering 

manufacturers’ ability to increase their 

average fuel economy through the use of 

CAFE credits when determining the 

stringency of the CAFE standards. 

Because of this prohibition, NHTSA’s 

primary analysis does not account for 

the extent to which credit transfers 

might actually occur. For purposes of its 

supplemental analysis, NHTSA 

considered accounting for the 

possibility that some manufacturers 

might utilize the opportunity under 

EPCA to transfer some CAFE credits 

between the passenger car and light 

truck fleets, but determined that in 

NHTSA’s year-by-year analysis, 

manufacturers’ credit transfers cannot 

be reasonably estimated at this time.40

EPA made explicit assumptions about 

manufacturers’ use of FFV credits under 

both the baseline and control 

alternatives, and its estimates of costs 

and benefits from the GHG standards 

reflect these assumptions. However, 

under the GHG standards, FFV credits 

would be available through MY 2015; 

starting in MY 2016, EPA will only 

allow FFV credits based on a 

manufacturer’s demonstration that the 

alternative fuel is actually being used in 

the vehicles and the actual GHG 

performance for the vehicle run on that 

alternative fuel. 

EPA’s analysis also assumes that 

manufacturers would transfer credits 

between their car and truck fleets in the 

MY 2011 baseline subject to the 

maximum value allowed by EPCA, and 

that unlimited car-truck credit transfers 

would occur under the GHG standards. 

Including these assumptions in EPA’s 

analysis increases the resulting 

estimates of fuel savings and reductions 

in GHG emissions, while reducing 

EPA’s estimates of program compliance 

costs. 

Finally, under the EPA GHG program, 

there is no ability for a manufacturer to 

intentionally pay fines in lieu of 

meeting the standard. Under EPCA, 

however, vehicle manufacturers are 

allowed to pay fines as an alternative to 

compliance with applicable CAFE 

standards. NHTSA’s analysis explicitly 

estimates the level of voluntary fine 

payment by individual manufacturers, 

which reduces NHTSA’s estimates of 

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41These figures do not account for the 

compliance flexibilities that NHTSA is prohibited 

from considering when determining the level of 

new CAFE standards, because manufacturers’ 

decisions to use those flexibilities are voluntary. 42NHTSA also estimated the benefits associated 

with three more estimates of a one ton GHG 

reduction in 2010 ($5, $35, and $65), which will 

likewise grow thereafter. See Section II for a more 

detailed discussion of the social cost of carbon. 

both the costs and benefits of its CAFE 

standards. In contrast, the CAA does not 

allow for fine payment (civil penalties) 

in lieu of compliance with emission 

standards, and EPA’s analysis of 

benefits from its standard thus assumes 

full compliance. This assumption 

results in higher estimates of fuel 

savings, of reductions in GHG 

emissions, and of manufacturers’ 

compliance costs to sell fleets that 

comply with both NHTSA’s CAFE 

program and EPA’s GHG program. 

In summary, the projected costs and 

benefits presented by NHTSA and EPA 

are not directly comparable, because the 

GHG emission levels established by EPA 

include air conditioning-related 

improvements in equivalent fuel 

efficiency and HFC reductions, because 

of the assumptions incorporated in 

EPA’s analysis regarding car-truck credit 

transfers, and because of EPA’s 

projection of complete compliance with 

the GHG standards. It should also be 

expected that overall, EPA’s estimates of 

GHG reductions and fuel savings 

achieved by the GHG standards will be 

slightly higher than those projected by 

NHTSA only for the CAFE standards 

because of the reasons described above. 

For the same reasons, EPA’s estimates of 

manufacturers’ costs for complying with 

the passenger car and light trucks GHG 

standards are slightly higher than 

NHTSA’s estimates for complying with 

the CAFE standards. 

A number of stakeholders commented 

on NHTSA’s and EPA’s analytical 

assumptions in estimating costs and 

benefits of the program. These 

comments and any changes from the 

proposed values are summarized in 

Section II.F, and further in Sections III 

(for EPA) and IV (for NHTSA); the 

Response to Comments document 

presents the detailed responses to each 

of the comments. 

1. Summary of Costs and Benefits of 

NHTSA’s CAFE Standards 

NHTSA has analyzed in detail the 

costs and benefits of the final CAFE 

standards. Table I.C.1–1 presents the 

total costs, benefits, and net benefits for 

NHTSA’s final CAFE standards. The 

values in Table I.C.1–1 display the total 

costs for all MY 2012–2016 vehicles and 

the benefits and net benefits represent 

the impacts of the standards over the 

full lifetime of the vehicles projected to 

be sold during model years 2012–2016. 

It is important to note that there is 

significant overlap in costs and benefits 

for NHTSA’s CAFE program and EPA’s 

GHG program and therefore combined 

program costs and benefits, which 

together comprise the National Program, 

are not a sum of the two individual 

programs. 

TABLE I.C.1–1—NHTSA’S ESTIMATED

2012–2016 MODEL YEAR COSTS, 

BENEFITS, AND NET BENEFITS

UNDER THE CAFE STANDARDS BEFORE FFV CREDITS

[2007 dollars] 

3% Discount Rate: $billions 

Costs ....................................... 51.8 

Benefits ................................... 182.5 

Net Benefits ............................ 130.7 

7% Discount Rate: 

Costs ....................................... 51.8 

Benefits ................................... 146.3 

Net Benefits ............................ 94.5 

NHTSA estimates that these new 

CAFE standards will lead to fuel savings 

totaling 61 billion gallons throughout 

the useful lives of vehicles sold in MYs 

2012–2016. At a 3% discount rate, the 

present value of the economic benefits 

resulting from those fuel savings is $143 

billion. At a 7% discount rate, the 

present value of the economic benefits 

resulting from those fuel savings is $112 

billion.41

The agency further estimates that 

these new CAFE standards will lead to 

corresponding reductions in CO2

emissions totaling 655 million metric 

tons (mmt) during the useful lives of 

vehicles sold in MYs 2012–2016. The 

present value of the economic benefits 

from avoiding those emissions is $14.5 

billion, based on a global social cost of 

carbon value of approximately $21 per 

metric ton (in 2010, and growing 

thereafter).42 It is important to note that 

NHTSA’s CAFE standards and EPA’s 

GHG standards will both be in effect, 

and each will lead to increases in 

average fuel economy and CO2

emissions reductions. The two agencies’ 

standards together comprise the 

National Program, and this discussion of 

costs and benefits of NHTSA’s CAFE 

standards does not change the fact that 

both the CAFE and GHG standards, 

jointly, are the source of the benefits 

and costs of the National Program. 

TABLE I.C.1–2—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (mmt) UNDER CAFE 

STANDARDS (WITHOUT FFV CREDITS) 

2012 2013 2014 2015 2016 Total 

Fuel (b. gal.) ................................. 4 .2 8 .9 12 .5 16 .0 19 .5 61 .0 

CO2 (mmt) .................................... 44 94 134 172 210 655 

Considering manufacturers’ ability to 

earn credit toward compliance by 

selling FFVs, NHTSA estimates very 

little change in incremental fuel savings 

and avoided CO2 emissions, assuming 

FFV credits would be used toward both 

the baseline and final standards: 

TABLE I.C.1–3—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (MILLION METRIC TONS, MMT) 

UNDER CAFE STANDARDS (WITH FFV CREDITS) 

2012 2013 2014 2015 2016 Total 

Fuel (b. gal.) ............................................. 4.9 8.2 11.3 15.0 19.1 58.6 

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43CO2 benefits for purposes of these tables are 

calculated using the $21/ton SCC values. Note that 

net present value of reduced GHG emissions is 

calculated differently than other benefits. The same 

discount rate used to discount the value of damages 

from future emissions (SCC at 5, 3, and 2.5 percent) 

is used to calculate net present value of SCC for 

internal consistency. 

TABLE I.C.1–3—NHTSA FUEL SAVED (BILLION GALLONS) AND CO2 EMISSIONS AVOIDED (MILLION METRIC TONS, MMT) 

UNDER CAFE STANDARDS (WITH FFV CREDITS)—Continued 

2012 2013 2014 2015 2016 Total 

CO2 (mmt) ................................................ 53 89 123 163 208 636 

NHTSA estimates that these fuel 

economy increases would produce other 

benefits both to drivers (e.g., reduced 

time spent refueling) and to the U.S. 

(e.g., reductions in the costs of 

petroleum imports beyond the direct 

savings from reduced oil purchases, as 

well as some disbenefits (e.g., increase 

traffic congestion) caused by drivers’ 

tendency to travel more when the cost 

of driving declines (as it does when fuel 

economy increases). NHTSA has 

estimated the total monetary value to 

society of these benefits and disbenefits, 

and estimates that the standards will 

produce significant net benefits to 

society. Using a 3% discount rate, 

NHTSA estimates that the present value 

of these benefits would total more than 

$180 billion over the useful lives of 

vehicles sold during MYs 2012–2016. 

More discussion regarding monetized 

benefits can be found in Section IV of 

this notice and in NHTSA’s Regulatory 

Impact Analysis. Note that the benefit 

calculation in Tables I.C.1–4 through 1– 

7 includes the benefits of reducing CO2

emissions,43 but not the benefits of 

reducing other GHG emissions. 

TABLE I.C.1–4—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV CREDITS, 

USING 3 PERCENT DISCOUNT RATE) 

2012 2013 2014 2015 2016 Total 

Passenger Cars ....................................... 6.8 15.2 21.6 28.7 35.2 107.5 

Light Trucks ............................................. 5.1 10.7 15.5 19.4 24.3 75.0 

Combined .......................................... 11.9 25.8 37.1 48.0 59.5 182.5 

Using a 7% discount rate, NHTSA 

estimates that the present value of these 

benefits would total more than $145 

billion over the same time period. 

TABLE I.C.1–5—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV CREDITS, 

USING 7 PERCENT DISCOUNT RATE) 

2012 2013 2014 2015 2016 Total 

Passenger Cars ....................................... 5.5 12.3 17.5 23.2 28.6 87.0 

Light Trucks ............................................. 4.0 8.4 12.2 15.3 19.2 59.2 

Combined .......................................... 9.5 20.7 29.7 38.5 47.8 146.2 

NHTSA estimates that FFV credits 

could reduce achieved benefits by about 

3.8%: 

TABLE I.C.1–6A—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING

A 3 PERCENT DISCOUNT RATE) 

2012 2013 2014 2015 2016 Total 

Passenger Cars ....................................... 7.6 13.7 19.1 25.6 34.0 100.0 

Light Trucks ............................................. 6.4 10.4 14.6 19.8 24.4 75.6 

Combined .......................................... 14.0 24.1 33.7 45.4 58.4 175.6 

TABLE I.C.1–6B—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING

A 7 PERCENT DISCOUNT RATE) 

2012 2013 2014 2015 2016 Total 

Passenger Cars ....................................... 6.1 11.1 15.5 20.7 27.6 80.9 

Light Trucks ............................................. 5.0 8.2 11.5 15.6 19.3 59.7 

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TABLE I.C.1–6B—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING

A 7 PERCENT DISCOUNT RATE)—Continued 

2012 2013 2014 2015 2016 Total 

Combined .......................................... 11.2 19.3 27.0 36.4 46.9 140.7 

NHTSA attributes most of these 

benefits—about $143 billion (at a 3% 

discount rate and excluding 

consideration of FFV credits), as noted 

above—to reductions in fuel 

consumption, valuing fuel (for societal 

purposes) at the future pre-tax prices 

projected in the Energy Information 

Administration’s (AEO’s) reference case 

forecast from the Annual Energy 

Outlook (AEO) 2010 Early Release. 

NHTSA’s Final Regulatory Impact 

Analysis (FRIA) accompanying this rule 

presents a detailed analysis of specific 

benefits of the rule. 

TABLE I.C.1–7—SUMMARY OF BENEFITS FUEL SAVINGS AND CO2 EMISSIONS REDUCTION DUE TO THE RULE (BEFORE

FFV CREDITS) 

Amount 

Monetized value (discounted) 

3% discount rate 7% discount rate 

Fuel savings ......................................... 61.0 billion gallons ............................... $143.0 billion ....................................... $112.0 billion. 

CO2 emissions reductions ................... 655 mmt .............................................. $14.5 billion ......................................... $14.5 billion. 

NHTSA estimates that the increases in 

technology application necessary to 

achieve the projected improvements in 

fuel economy will entail considerable 

monetary outlays. The agency estimates 

that incremental costs for achieving its 

standards—that is, outlays by vehicle 

manufacturers over and above those 

required to comply with the MY 2011 

CAFE standards—will total about $52 

billion (i.e., during MYs 2012–2016). 

TABLE I.C.1–8—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV 

CREDITS) 

2012 2013 2014 2015 2016 Total 

Passenger Cars ....................................... 4.1 5.4 6.9 8.2 9.5 34.2 

Light Trucks ............................................. 1.8 2.5 3.7 4.3 5.4 17.6 

Combined .......................................... 5.9 7.9 10.5 12.5 14.9 51.7 

NHTSA estimates that use of FFV 

credits could significantly reduce these 

outlays: 

TABLE I.C.1–9—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER CAFE STANDARDS (WITH FFV 

CREDITS) 

2012 2013 2014 2015 2016 Total 

Passenger Cars ....................................... 2.6 3.6 4.8 6.1 7.5 24.6 

Light Trucks ............................................. 1.1 1.5 2.5 3.4 4.4 12.9 

Combined .......................................... 3.7 5.1 7.3 9.5 11.9 37.5 

The agency projects that 

manufacturers will recover most or all 

of these additional costs through higher 

selling prices for new cars and light 

trucks. To allow manufacturers to 

recover these increased outlays (and, to 

a much lesser extent, the civil penalties 

that some companies are expected to 

pay for noncompliance), the agency 

estimates that the standards would lead 

to increases in average new vehicle 

prices ranging from $457 per vehicle in 

MY 2012 to $985 per vehicle in MY 

2016: 

TABLE I.C.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS

(BEFORE FFV CREDITS) 

2012 2013 2014 2015 2016 

Passenger Cars ................................................................... 505 573 690 799 907 

Light Trucks ......................................................................... 322 416 621 752 961 

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TABLE I.C.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS

(BEFORE FFV CREDITS)—Continued 

2012 2013 2014 2015 2016 

Combined ...................................................................... 434 513 665 782 926 

NHTSA estimates that use of FFV 

credits could significantly reduce these 

costs, especially in earlier model years: 

TABLE I.C.1–11—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS

(WITH FFV CREDITS) 

2012 2013 2014 2015 2016 

Passenger Cars ................................................................... 303 378 481 593 713 

Light Trucks ......................................................................... 194 260 419 581 784 

Combined ...................................................................... 261 333 458 589 737 

NHTSA estimates, therefore, that the 

total benefits of these CAFE standards 

will be more than three times the 

magnitude of the corresponding costs. 

As a consequence, its standards would 

produce net benefits of $130.7 billion at 

a 3 percent discount rate (with FFV 

credits, $138.2 billion) or $94.5 billion 

at a 7 percent discount rate over the 

useful lives of vehicles sold during MYs 

2012–2016. 

2. Summary of Costs and Benefits of 

EPA’s GHG Standards 

EPA has analyzed in detail the costs 

and benefits of the final GHG standards. 

Table I.C.2–1 shows EPA’s estimated 

lifetime discounted cost, benefits and 

net benefits for all vehicles projected to 

be sold in model years 2012–2016. It is 

important to note that there is 

significant overlap in costs and benefits 

for NHTSA’s CAFE program and EPA’s 

GHG program and therefore combined 

program costs and benefits are not a 

sum of the individual programs. 

TABLE I.C.2–1—EPA’S ESTIMATED

2012–2016 MODEL YEAR LIFETIME

DISCOUNTED COSTS, BENEFITS, AND

NET BENEFITS ASSUMING THE $21/ 

TON SCC VALUE abcd

[2007 dollars] 

3% Discount rate $Billions 

Costs ....................................... 51 .5 

Benefits ................................... 240 

TABLE I.C.2–1—EPA’S ESTIMATED

2012–2016 MODEL YEAR LIFETIME

DISCOUNTED COSTS, BENEFITS, AND

NET BENEFITS ASSUMING THE $21/ 

TON SCC VALUE abcd—Continued 

[2007 dollars] 

3% Discount rate $Billions 

Net Benefits ............................ 189 

7% Discount rate 

Costs ....................................... 51 .5 

Benefits ................................... 192 

Net Benefits ............................ 140 

aAlthough EPA estimated the benefits associated with four different values of a one ton 

GHG reduction ($5, $21, $35, $65), for the 

purposes of this overview presentation of estimated costs and benefits EPA is showing the 

benefits associated with the marginal value 

deemed to be central by the interagency working group on this topic: $21 per ton of CO2e, 

in 2007 dollars and 2010 emissions. The $21/ 

ton value applies to 2010 CO2 emissions and 

grows over time. bAs noted in Section III.H, SCC increases 

over time. The $21/ton value applies to 2010 

CO2 emissions and grows larger over time. c Note that net present value of reduced 

GHG emissions is calculated differently than 

other benefits. The same discount rate used to 

discount the value of damages from future 

emissions (SCC at 5, 3, and 2.5 percent) is 

used to calculate net present value of SCC for 

internal consistency. Refer to Section III.H for 

more detail. 

d Monetized GHG benefits exclude the value 

of reductions in non-CO2 GHG emissions 

(HFC, CH4 and N2O) expected under this final 

rule. Although EPA has not monetized the 

benefits of reductions in these non-CO2 emissions, the value of these reductions should not 

be interpreted as zero. Rather, the reductions 

in non-CO2 GHGs will contribute to this rule’s 

climate benefits, as explained in Section 

III.F.2. The SCC TSD notes the difference between the social cost of non-CO2 emissions 

and CO2 emissions, and specifies a goal to 

develop methods to value non-CO2 emissions 

in future analyses. 

Table I.C.2–2 shows EPA’s estimated 

lifetime fuel savings and CO2 equivalent 

emission reductions for all vehicles sold 

in the model years 2012–2016. The 

values in Table I.C.2–2 are projected 

lifetime totals for each model year and 

are not discounted. As documented in 

EPA’s Final RIA, the potential credit 

transfer between cars and trucks may 

change the distribution of the fuel 

savings and GHG emission impacts 

between cars and trucks. As discussed 

above with respect to NHTSA’s CAFE 

standards, it is important to note that 

NHTSA’s CAFE standards and EPA’s 

GHG standards will both be in effect, 

and each will lead to increases in 

average fuel economy and reductions in 

CO2 emissions. The two agencies’ 

standards together comprise the 

National Program, and this discussion of 

costs and benefits of EPA’s GHG 

standards does not change the fact that 

both the CAFE and GHG standards, 

jointly, are the source of the benefits 

and costs of the National Program. 

TABLE I.C.2–2—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVED AND GHG EMISSIONS AVOIDED

2012 2013 2014 2015 2016 Total 

Cars .................. Fuel (billion gallons) ...................................... 4 .0 5 .5 7 .3 10 .5 14 .3 41 .6 

Fuel (billion barrels) ...................................... 0 .10 0 .13 0 .17 0 .25 0 .34 0 .99 

CO2 EQ (mmt) .............................................. 49 .3 68 .5 92 .7 134 177 521 

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TABLE I.C.2–2—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVED AND GHG EMISSIONS AVOIDED— 

Continued 

2012 2013 2014 2015 2016 Total 

Light Trucks ...... Fuel (billion gallons) ...................................... 3 .3 5 .0 6 .6 9 .0 12 .2 36 .1 

Fuel (billion barrels) ...................................... 0 .08 0 .12 0 .16 0 .21 0 .29 0 .86 

CO2 EQ (mmt) .............................................. 39 .6 61 .7 81 .6 111 147 441 

Combined .. Fuel (billion gallons) ...................................... 7 .3 10 .5 13 .9 19 .5 26 .5 77 .7 

Fuel (billion barrels) ...................................... 0 .17 0 .25 0 .33 0 .46 0 .63 1 .85 

CO2 EQ (mmt) .............................................. 88 .8 130 174 244 325 962 

Table I.C.2–3 shows EPA’s estimated 

lifetime discounted benefits for all 

vehicles sold in model years 2012–2016. 

Although EPA estimated the benefits 

associated with four different values of 

a one ton GHG reduction ($5, $21, $35, 

$65), for the purposes of this overview 

presentation of estimated benefits EPA 

is showing the benefits associated with 

one of these marginal values, $21 per 

ton of CO2, in 2007 dollars and 2010 

emissions. Table I.C.2–3 presents 

benefits based on the $21 value. Section 

III.H presents the four marginal values 

used to estimate monetized benefits of 

GHG reductions and Section III.H 

presents the program benefits using 

each of the four marginal values, which 

represent only a partial accounting of 

total benefits due to omitted climate 

change impacts and other factors that 

are not readily monetized. The values in 

the table are discounted values for each 

model year of vehicles throughout their 

projected lifetimes. The benefits include 

all benefits considered by EPA such as 

fuel savings, GHG reductions, PM 

benefits, energy security and other 

externalities such as reduced refueling 

and accidents, congestion and noise. 

The lifetime discounted benefits are 

shown for one of four different social 

cost of carbon (SCC) values considered 

by EPA. The values in Table I.C.2–3 do 

not include costs associated with new 

technology required to meet the GHG 

standard. 

TABLE I.C.2–3—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME DISCOUNTED BENEFITS ASSUMING THE $21/TON

SCC VALUE abc

[Billions of 2007 dollars] 

Discount rate 

Model year 

2012 2013 2014 2015 2016 Total 

3% ............................................................ $21.8 $32.0 $42.8 $60.8 $83.3 $240 

7% ............................................................ 17.4 25.7 34.2 48.6 66.4 192 

a The benefits include all benefits considered by EPA such as the economic value of reduced fuel consumption and accompanying savings in 

refueling time, climate-related economic benefits from reducing emissions of CO2 (but not other GHGs), economic benefits from reducing emissions of PM and other air pollutants that contribute to its formation, and reductions in energy security externalities caused by U.S. petroleum consumption and imports. The analysis also includes disbenefits stemming from additional vehicle use, such as the economic damages caused by 

accidents, congestion and noise. b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount 

the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section III.H for more detail. c Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as 

zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes 

the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value non-CO2

emissions in future analyses. Also, as noted in Section III.H, SCC increases over time. The $21/ton value applies to 2010 emissions and grows 

larger over time. 

Table I.C.2–4 shows EPA’s estimated 

lifetime fuel savings, lifetime CO2

emission reductions, and the monetized 

net present values of those fuel savings 

and CO2 emission reductions. The 

gallons of fuel and CO2 emission 

reductions are projected lifetime values 

for all vehicles sold in the model years 

2012–2016. The estimated fuel savings 

in billions of barrels and the GHG 

reductions in million metric tons of CO2

shown in Table I.C.2–4 are totals for the 

five model years throughout their 

projected lifetime and are not 

discounted. The monetized values 

shown in Table I.C.2–4 are the summed 

values of the discounted monetized-fuel 

savings and monetized-CO2 reductions 

for the five model years 2012–2016 

throughout their lifetimes. The 

monetized values in Table I.C.2–4 

reflect both a 3 percent and a 7 percent 

discount rate as noted. 

TABLE I.C.2–4—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVINGS, CO2 EMISSION REDUCTIONS, AND

DISCOUNTED MONETIZED BENEFITS AT A 3% DISCOUNT RATE

[Monetized values in 2007 dollars] 

Amount $ value 

(billions) 

Fuel savings ...................................................................................................... 1.8 billion barrels ................................. $182, 3% discount rate. 

$142, 7% discount rate. 

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TABLE I.C.2–4—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVINGS, CO2 EMISSION REDUCTIONS, AND

DISCOUNTED MONETIZED BENEFITS AT A 3% DISCOUNT RATE—Continued 

[Monetized values in 2007 dollars] 

Amount $ value 

(billions) 

CO2e emission reductions (CO2 portion valued assuming $21/ton CO2 in 

2010).

962 MMT CO2e ................................... $17 a b. 

a $17 billion for 858 MMT of reduced CO2 emissions. As noted in Section III.H, the $21/ton value applies to 2010 emissions and grows larger 

over time. Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected under this final 

rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC 

TSD notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to value 

non-CO2 emissions in future analyses. b Note that net present value of reduced CO2 emissions is calculated differently than other benefits. The same discount rate used to discount 

the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section III.H for more detail. 

Table I.C.2–5 shows EPA’s estimated 

incremental and total technology 

outlays for cars and trucks for each of 

the model years 2012–2016. The 

technology outlays shown in Table 

I.C.2–5 are for the industry as a whole 

and do not account for fuel savings 

associated with the program. 

TABLE I.C.2–5—EPA’S ESTIMATED INCREMENTAL TECHNOLOGY OUTLAYS

[Billions of 2007 dollars] 

2012 2013 2014 2015 2016 Total 

Cars .......................................................... $3.1 $5.0 $6.5 $8.0 $9.4 $31.9 

Trucks ...................................................... 1.8 3.0 3.9 4.8 6.2 19.7 

Combined .......................................... 4.9 8.0 10.3 12.7 15.6 51.5 

Table I.C.2–6 shows EPA’s estimated 

incremental cost increase of the average 

new vehicle for each model year 2012– 

2016. The values shown are incremental 

to a baseline vehicle and are not 

cumulative. In other words, the 

estimated increase for 2012 model year 

cars is $342 relative to a 2012 model 

year car absent the National Program. 

The estimated increase for a 2013 model 

year car is $507 relative to a 2013 model 

year car absent the National Program 

(not $342 plus $507). 

TABLE I.C.2–6—EPA’S ESTIMATED INCREMENTAL INCREASE IN AVERAGE NEW VEHICLE COST

[2007 dollars per unit] 

2012 2013 2014 2015 2016 

Cars ...................................................................................... $342 $507 $631 $749 $869 

Trucks .................................................................................. 314 496 652 820 1,098 

Combined ...................................................................... 331 503 639 774 948 

D. Background and Comparison of 

NHTSA and EPA Statutory Authority 

Section I.C of the proposal contained 

a detailed overview discussion of the 

NHTSA and EPA statutory authorities. 

In addition to the discussion in the 

proposal, each agency discusses 

comments pertaining to its statutory 

authority and the agency’s responses in 

Sections III and IV of this notice, 

respectively. 

II. Joint Technical Work Completed for 

This Final Rule 

A. Introduction 

In this section NHTSA and EPA 

discuss several aspects of the joint 

technical analyses on which the two 

agencies collaborated. These analyses 

are common to the development of each 

agency’s final standards. Specifically we 

discuss: the development of the vehicle 

market forecast used by each agency for 

assessing costs, benefits, and effects, the 

development of the attribute-based 

standard curve shapes, the 

determination of the relative stringency 

between the car and truck fleet 

standards, the technologies the agencies 

evaluated and their costs and 

effectiveness, and the economic 

assumptions the agencies included in 

their analyses. The Joint Technical 

Support Document (TSD) discusses the 

agencies’ joint technical work in more 

detail. 

B. Developing the Future Fleet for 

Assessing Costs, Benefits, and Effects 

1. Why did the agencies establish a 

baseline and reference vehicle fleet? 

In order to calculate the impacts of 

the EPA and NHTSA regulations, it is 

necessary to estimate the composition of 

the future vehicle fleet absent these 

regulations, to provide a reference point 

relative to which costs, benefits, and 

effects of the regulations are assessed. 

As in the proposal, EPA and NHTSA 

have developed this comparison fleet in 

two parts. The first step was to develop 

a baseline fleet based on model year 

2008 data. The second step was to 

project that fleet into model years 2011– 

2016. This is called the reference fleet. 

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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 25349 

44That is, the manufacturers who have 

traditionally paid fines under EPCA instead of 

complying with the CAFE standards were 

‘‘allowed,’’ for purposes of the reference fleet, to 

reach only the CAFE level at which paying fines 

became more cost-effective than adding technology, 

even if that fell short of the MY 2011 standards. 

45 40 CFR 600.512–08, Model Year Report. 

46The agencies have also looked at the impact of 

the rule in EIA’s projection, and concluded that the 

impact was small. EPA and NHTSA have evaluated 

the differences between the AEO 2010 (early draft) 

and AEO 2009 and found little difference in the 

fleet projections (or fuel prices). This analysis can 

be found in the memo to the docket: Kahan, A. and 

Pickrell, D. Memo to Docket EPA–HQ–OAR–2009– 

0472 and Docket NHTSA–2009–0059. ‘‘Energy 

Information Administration’s Annual Energy 

Outlook 2009 and 2010.’’ March 24, 2010. 

47See, e.g., 74 FR 49484. 

The third step was to modify that MY 

2011–2016 reference fleet such that it 

had sufficient technology to meet the 

MY 2011 CAFE standards. This final 

version of the reference fleet is the lightduty fleet estimated to exist in MY 

2012–2016 in the absence of today’s 

standards, based on the assumption that 

manufacturers would continue to meet 

the MY 2011 CAFE standards (or pay 

civil penalties allowed under EPCA 44) 

in the absence of further increases in the 

stringency of CAFE standards. Each 

agency used this approach to develop a 

final reference fleet to use in its 

modeling. All of the agencies’ estimates 

of emission reductions, fuel economy 

improvements, costs, and societal 

impacts are developed in relation to the 

respective reference fleets. 

EPA and NHTSA proposed a 

transparent approach to developing the 

baseline and reference fleets, largely 

working from publicly available data. 

This proposed approach differed from 

previous CAFE rules, which relied on 

confidential manufacturers’ product 

plan information to develop the 

baseline. Most of the public comments 

to the NPRM addressing this issue 

supported this methodology for 

developing the inputs to the rule’s 

analysis. Because the input sheets can 

be made public, stakeholders can verify 

and check EPA’s and NHTSA’s 

modeling, and perform their own 

analyses with these datasets. In this 

final rulemaking, EPA and NHTSA are 

using an approach very similar to that 

proposed, continuing to rely on publicly 

available data as the basis for the 

baseline and reference fleets. 

2. How did the agencies develop the 

baseline vehicle fleet? 

At proposal, EPA and NHTSA 

developed a baseline fleet comprised of 

model year 2008 data gathered from 

EPA’s emission certification and fuel 

economy database. MY 2008 was used 

as the basis for the baseline vehicle fleet 

because it was the most recent model 

year for which a complete set of data is 

publicly available. This remains the 

case. Manufacturers are not required to 

submit final sales and mpg figures for 

MY 2009 until April 2010,45 after the 

CAFE standard’s mandated 

promulgation date. Consequently, in 

this final rule, EPA and NHTSA made 

no changes to the method or the results 

of the MY 2008 baseline fleet used at 

proposal, except for some specific 

corrections to engineering inputs for 

some vehicle models reflected in the 

market forecast input to NHTSA’s CAFE 

model. More details about how the 

agencies constructed this baseline fleet 

can be found in Chapter 1.2 of the Joint 

TSD. Corrections to engineering inputs 

for some vehicle models in the market 

forecast input to NHTSA’s CAFE model 

are discussed in Chapter 2 of the Joint 

TSD. 

3. How did the agencies develop the 

projected MY 2011–2016 vehicle fleet? 

EPA and NHTSA have based the 

projection of total car and total light 

truck sales for MYs 2011–2016 on 

projections made by the Department of 

Energy’s Energy Information 

Administration (EIA). EIA publishes a 

mid-term projection of national energy 

use called the Annual Energy Outlook 

(AEO). This projection utilizes a number 

of technical and econometric models 

which are designed to reflect both 

economic and regulatory conditions 

expected to exist in the future. In 

support of its projection of fuel use by 

light-duty vehicles, EIA projects sales of 

new cars and light trucks. In the 

proposal, the agencies used the three 

reports published by EIA as part of the 

AEO 2009. We also stated that updated 

versions of these reports could be used 

in the final rules should AEO timely 

issue a new version. EIA published an 

early version of its AEO 2010 in 

December 2009, and the agencies are 

making use of it in this final 

rulemaking. The differences in projected 

sales in the 2009 report (used in the 

NPRM) and the early 2010 report are 

very small, so NHTSA and EPA have 

decided to simply scale the NPRM 

volumes for cars and trucks (in the 

aggregate) to match those in the 2010 

report. We thus employ the sales 

projections from the scaled updated 

2009 Annual Energy Outlook, which is 

equivalent to AEO 2010 Early Release, 

for the final rule. The scaling factors for 

each model year are presented in 

Chapter 1 of the Joint TSD for this final 

rule. 

The agencies recognize that AEO 2010 

Early Release does include some 

impacts of future projected increases in 

CAFE stringency. We have closely 

examined the difference between AEO 

2009 and AEO 2010 Early Release and 

we believe the differences in total sales 

and the car/truck split attributed to 

considerations of the standard in the 

final rule are small.46

In the AEO 2010 Early Release, EIA 

projects that total light-duty vehicle 

sales will gradually recover from their 

currently depressed levels by around 

2013. In 2016, car sales are projected to 

be 9.4 million (57 percent) and truck 

sales are projected to be 7.1 million (43 

percent). Although the total level of 

sales of 16.5 million units is similar to 

pre-2008 levels, the fraction of car sales 

is projected to be higher than that 

existing in the 2000–2007 timeframe. 

This projection reflects the impact of 

higher fuel prices, as well as EISA’s 

requirement that the new vehicle fleet 

average at least 35 mpg by MY 2020. 

The agencies note that AEO does not 

represent the fleet at a level of detail 

sufficient to explicitly account for the 

reclassification—promulgated as part of 

NHTSA’s final rule for MY 2011 CAFE 

standards—of a number of 2-wheel 

drive sport utility vehicles from the 

truck fleet to the car fleet for MYs 2011 

and after. Sales projections of cars and 

trucks for future model years can be 

found in the Joint TSD for these final 

rules. 

In addition to a shift towards more car 

sales, sales of segments within both the 

car and truck markets have been 

changing and are expected to continue 

to change. Manufacturers are 

introducing more crossover models 

which offer much of the utility of SUVs 

but use more car-like designs. The AEO 

2010 report does not, however, 

distinguish such changes within the car 

and truck classes. In order to reflect 

these changes in fleet makeup, EPA and 

NHTSA considered several other 

available forecasts. EPA purchased and 

shared with NHTSA forecasts from two 

well-known industry analysts, CSM 

Worldwide (CSM), and J.D. Powers. 

NHTSA and EPA decided to use the 

forecast from CSM, modified as 

described below, for several reasons 

presented in the NPRM preamble 47 and 

draft Joint TSD. The changes between 

company market share and industry 

market segments were most significant 

from 2011–2014, while for 2014–2015 

the changes were relatively small. 

Noting this, and lacking a credible 

forecast of company and segment shares 

after 2015, the agencies assumed 2016 

market share and market segments to be 

the same as for 2015. 

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25350 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / Rules and Regulations 

48 GM argued that the unusually large volume of 

large pickups led to higher overall requirements for 

those vehicles. As discussed below, the agencies’ 

analysis for the final rule corrects the number of 

large pickups. With this correction and other 

updates to the agencies’ market forecast and other 

analytical inputs, the target functions defining the 

final standards (and achieving the average required 

performance levels defining the national program) 

are very similar to those from the NPRM, especially 

for light trucks, as illustrated below in Figures II.C– 

7 and II.C–8. 

49These include the Ford F–250 & F–350, 

Econoline E–250, & E–350; Chevy Express, 

Silverado 2500, & 3500; GMC Savana, Dodge 2500, 

& 3500; among others. 

50The CSM Sales Forecast Excel file (‘‘CSM North 

America Sales Forecasts 2Q09 3Q09 4Q09 for the 

Docket’’) is available in the docket (Docket EPA– 

HQ–OAR–2009–0472). 

CSM Worldwide provides quarterly 

sales forecasts for the automotive 

industry. In the NPRM, the agencies 

identified a concern with the 2nd 

quarter CSM forecast that was used as 

a basis for the projection. CSM 

projections at that time were based on 

an industry that was going through a 

significant financial transition, and as a 

result the market share forecasts for 

some companies were impacted in 

surprising ways. As the industry’s 

situation has settled somewhat over the 

past year, the 4th quarter projection 

appears to address this issue—for 

example, it shows nearly a two-fold 

increase in sales for Chrysler compared 

to significant loss of market share 

shown for Chrysler in the 2nd quarter 

projection. Additionally, some 

commenters, such as GM, recognized 

that the fleet appeared to include an 

unusually high number of large pickup 

trucks.48 In fact, the agencies discovered 

(independently of the comments) that 

CSM’s standard forecast included all 

vehicles below 14,000 GVWR, including 

class 2b and 3 heavy duty vehicles, 

which are not regulated by this final 

rule.49 The commenters were thus 

correct that light duty reference fleet 

projections at proposal had more full 

size trucks and vans due to the mistaken 

inclusion of the heavy duty versions of 

those vehicles. The agencies requested a 

separate data forecast from CSM that 

filtered their 4th quarter projection to 

exclude these heavy duty vehicles. The 

agencies then used this filtered 4th 

quarter forecast for the final rule. A 

detailed comparison of the market by 

manufacturer can be found in the final 

TSD. For the public’s reference, copies 

of the 2nd, 3rd, and 4th quarter CSM 

forecasts have been placed in the docket 

for this rulemaking.50

We then projected the CSM forecasts 

for relative sales of cars and trucks by 

manufacturer and by market segment 

onto the total sales estimates of AEO 

2010. Tables II.B.3–1 and II.B.3–2 show 

the resulting projections for the 

reference 2016 model year and compare 

these to actual sales that occurred in 

baseline 2008 model year. Both tables 

show sales using the traditional 

definition of cars and light trucks. 

TABLE II.B.3–1—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MANUFACTURER IN 2008 AND ESTIMATED FOR 2016 

Cars Light trucks Total 

2008 MY 2016 MY 2008 MY 2016 MY 2008 MY 2016 MY 

BMW ................................................................................ 291,796 424,923 61,324 171,560 353,120 596,482 

Chrysler ............................................................................ 537,808 340,908 1,119,397 525,128 1,657,205 866,037 

Daimler ............................................................................. 208,052 272,252 79,135 126,880 287,187 399,133 

Ford .................................................................................. 709,583 1,118,727 1,158,805 1,363,256 1,868,388 2,481,983 

General Motors ................................................................ 1,370,280 1,283,937 1,749,227 1,585,828 3,119,507 2,869,766 

Honda ............................................................................... 899,498 811,214 612,281 671,437 1,511,779 1,482,651 

Hyundai ............................................................................ 270,293 401,372 120,734 211,996 391,027 613,368 

Kia .................................................................................... 145,863 455,643 135,589 210,717 281,452 666,360 

Mazda .............................................................................. 191,326 350,055 111,220 144,992 302,546 495,047 

Mitsubishi ......................................................................... 76,701 49,914 24,028 88,754 100,729 138,668 

Porsche ............................................................................ 18,909 33,471 18,797 16,749 37,706 50,220 

Nissan .............................................................................. 653,121 876,677 370,294 457,114 1,023,415 1,333,790 

Subaru .............................................................................. 149,370 230,705 49,211 95,054 198,581 325,760 

Suzuki .............................................................................. 68,720 97,466 45,938 26,108 114,658 123,574

Tata .................................................................................. 9,596 65,806 55,584 42,695 65,180 108,501

Toyota .............................................................................. 1,143,696 2,069,283 1,067,804 1,249,719 2,211,500 3,319,002 

Volkswagen ...................................................................... 290,385 586,011 26,999 124,703 317,384 710,011 

Total .......................................................................... 7,034,997 9,468,365 6,806,367 7,112,689 13,841,364 16,580,353 

TABLE II.B.3–2—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MARKET SEGMENT IN 2008 AND ESTIMATED FOR 2016 

Cars Light trucks 

2008 MY 2016 MY 2008 MY 2016 MY 

Full-Size Car ..................................... 829,896 530,945 Full-Size Pickup ............................... 1,331,989 1,379,036 

Luxury Car ........................................ 1,048,341 1,548,242 Mid-Size Pickup ............................... 452,013 332,082 

Mid-Size Car ..................................... 2,166,849 2,550,561 Full-Size Van .................................... 33,384 65,650 

Mini Car ............................................. 617,902 1,565,373 Mid-Size Van .................................... 719,529 839,194 

Small Car .......................................... 1,912,736 2,503,566 Mid-Size MAV * ................................ 110,353 116,077 

Specialty Car ..................................... 459,273 769,679 Small MAV ....................................... 231,265 62,514 

Full-Size SUV * ................................. 559,160 232,619 

Mid-Size SUV ................................... 436,080 162,502 

Small SUV ........................................ 196,424 108,858 

Full-Size CUV * ................................. 264,717 260,662 

Mid-Size CUV ................................... 923,165 1,372,200 

Small CUV ........................................ 1,548,288 2,181,296 

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51Note: In the NPRM, Ford’s 2008 sales per 

segment, and the total number of cars was different 

than shown here. The change in values is due to 

a correction of vehicle segments for some of Ford’s 

vehicles. 

TABLE II.B.3–2—ANNUAL SALES OF LIGHT-DUTY VEHICLES BY MARKET SEGMENT IN 2008 AND ESTIMATED FOR 2016— 

Continued 

Cars Light trucks 

2008 MY 2016 MY 2008 MY 2016 MY 

Total Sales ** ............................. 7,034,997 9,468,365 ........................................................... 6,806,367 7,079,323 

* MAV—Multi-Activity Vehicle, SUV—Sport Utility Vehicle, CUV—Crossover Utility Vehicle. 

** Total Sales are based on the classic Car/Truck definition. 

Determining which traditionallydefined trucks will be defined as cars 

for purposes of this final rule using the 

revised definition established by 

NHTSA for MYs 2011 and beyond 

requires more detailed information 

about each vehicle model. This is 

described in greater detail in Chapter 1 

of the final TSD. 

The forecasts obtained from CSM 

provided estimates of car and truck 

sales by segment and by manufacturer, 

but not by manufacturer for each market 

segment. Therefore, NHTSA and EPA 

needed other information on which to 

base these more detailed projected 

market splits. For this task, the agencies 

used as a starting point each 

manufacturer’s sales by market segment 

from model year 2008, which is the 

baseline fleet. Because of the larger 

number of segments in the truck market, 

the agencies used slightly different 

methodologies for cars and trucks. 

The first step for both cars and trucks 

was to break down each manufacturer’s 

2008 sales according to the market 

segment definitions used by CSM. For 

example, the agencies found that 

Ford’s 51 cars sales in 2008 were broken 

down as shown in Table II.B.3–3: 

TABLE II.B.3–3—BREAKDOWN OF

FORD’S 2008 CAR SALES

Full-size cars ....................... 160,857 units. 

Mid-size Cars ...................... 170,399 units. 

Small/Compact Cars ........... 180,249 units. 

Subcompact/Mini Cars ........ None. 

Luxury cars .......................... 87,272 units. 

Specialty cars ...................... 110,805 units. 

EPA and NHTSA then adjusted each 

manufacturer’s sales of each of its car 

segments (and truck segments, 

separately) so that the manufacturer’s 

total sales of cars (and trucks) matched 

the total estimated for each future model 

year based on AEO and CSM forecasts. 

For example, as indicated in Table 

II.B.3–1, Ford’s total car sales in 2008 

were 709,583 units, while the agencies 

project that they will increase to 

1,113,333 units by 2016. This represents 

an increase of 56.9 percent. Thus, the 

agencies increased the 2008 sales of 

each Ford car segment by 56.9 percent. 

This produced estimates of future sales 

which matched total car and truck sales 

per AEO and the manufacturer 

breakdowns per CSM. However, the 

sales splits by market segment would 

not necessarily match those of CSM 

(shown for 2016 in Table II.B.3–2). 

In order to adjust the market segment 

mix for cars, the agencies first adjusted 

sales of luxury, specialty and other cars. 

Since the total sales of cars for each 

manufacturer were already set, any 

changes in the sales of one car segment 

had to be compensated by the opposite 

change in another segment. For the 

luxury, specialty and other car 

segments, it is not clear how changes in 

sales would be compensated. For 

example, if luxury car sales decreased, 

would sales of full-size cars increase, 

mid-size cars, and so on? The agencies 

have assumed that any changes in the 

sales of cars within these three segments 

were compensated for by proportional 

changes in the sales of the other four car 

segments. For example, for 2016, the 

figures in Table II.B.3–2 indicate that 

luxury car sales in 2016 are 1,548,242 

units. Luxury car sales are 1,048,341 

units in 2008. However, after adjusting 

2008 car sales by the change in total car 

sales for 2016 projected by EIA and a 

change in manufacturer market share 

per CSM, luxury car sales decreased to 

1,523,171 units. Thus, overall for 2016, 

luxury car sales had to increase by 

25,071 units or 6 percent. The agencies 

accordingly increased the luxury car 

sales by each manufacturer by this 

percentage. The absolute decrease in 

luxury car sales was spread across sales 

of full-size, mid-size, compact and 

subcompact cars in proportion to each 

manufacturer’s sales in these segments 

in 2008. The same adjustment process 

was used for specialty cars and the 

‘‘other cars’’ segment defined by CSM. 

The agencies used a slightly different 

approach to adjust for changing sales of 

the remaining four car segments. 

Starting with full-size cars, the agencies 

again determined the overall percentage 

change that needed to occur in future 

year full-size car sales after 1) adjusting 

for total sales per AEO 2010, 2) 

adjusting for manufacturer sales mix per 

CSM and 3) adjusting the luxury, 

specialty and other car segments, in 

order to meet the segment sales mix per 

CSM. Sales of each manufacturer’s large 

cars were adjusted by this percentage. 

However, instead of spreading this 

change over the remaining three 

segments, the agencies assigned the 

entire change to mid-size vehicles. The 

agencies did so because the CSM data 

followed the trend of increasing 

volumes of smaller cars while reducing 

volumes of larger cars. If a consumer 

had previously purchased a full-size car, 

we thought it unlikely that their next 

purchase would decrease by two size 

categories, down to a subcompact. It 

seemed more reasonable to project that 

they would drop one vehicle size 

category smaller. Thus, the change in 

each manufacturer’s sales of full-size 

cars was matched by an opposite change 

(in absolute units sold) in mid-size cars. 

The same process was then applied to 

mid-size cars, with the change in midsize car sales being matched by an 

opposite change in compact car sales. 

This process was repeated one more 

time for compact car sales, with changes 

in sales in this segment being matched 

by the opposite change in the sales of 

subcompacts. The overall result was a 

projection of car sales for model years 

2012–2016—the reference fleet—which 

matched the total sales projections of 

the AEO forecast and the manufacturer 

and segment splits of the CSM forecast. 

These sales splits can be found in 

Chapter 1 of the Joint TSD for this final 

rule. 

As mentioned above, the agencies 

applied a slightly different process to 

truck sales, because the agencies could 

not confidently project how the change 

in sales from one segment preferentially 

went to or came from another particular 

segment. Some trend from larger 

vehicles to smaller vehicles would have 

been possible. However, the CSM 

forecasts indicated large changes in total 

sport utility vehicle, multi-activity 

vehicle and cross-over sales which 

could not be connected. Thus, the 

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52Note: In the NPRM this example showed 29 

percent instead of 7 percent. The significant 

decrease was due to using the filtered 4th quarter 

CSM forecast. Commenters, such as GM, had 

commented that we had too many full-size trucks 

and vans, and this change addresses their comment. 

53Note that WardsAuto.com is a fee-based 

service, but all information is public to subscribers. 

54Motortrend.com and Edmunds.com are free, 

no-fee Internet sites. 

agencies applied an iterative, but 

straightforward process for adjusting 

2008 truck sales to match the AEO and 

CSM forecasts. 

The first three steps were exactly the 

same as for cars. EPA and NHTSA broke 

down each manufacturer’s truck sales 

into the truck segments as defined by 

CSM. The agencies then adjusted all 

manufacturers’ truck segment sales by 

the same factor so that total truck sales 

in each model year matched AEO 

projections for truck sales by model 

year. The agencies then adjusted each 

manufacturer’s truck sales by segment 

proportionally so that each 

manufacturer’s percentage of total truck 

sales matched that forecast by CSM. 

This again left the need to adjust truck 

sales by segment to match the CSM 

forecast for each model year. 

In the fourth step, the agencies 

adjusted the sales of each truck segment 

by a common factor so that total sales 

for that segment matched the 

combination of the AEO and CSM 

forecasts. For example, projected sales 

of large pickups across all 

manufacturers were 1,286,184 units in 

2016 after adjusting total sales to match 

AEO’s forecast and adjusting each 

manufacturer’s truck sales to match 

CSM’s forecast for the breakdown of 

sales by manufacturer. Applying CSM’s 

forecast of the large pickup segment of 

truck sales to AEO’s total sales forecast 

indicated total large pickup sales of 

1,379,036 units. Thus, we increased 

each manufacturer’s sales of large 

pickups by 7 percent.52 The agencies 

applied the same type of adjustment to 

all the other truck segments at the same 

time. The result was a set of sales 

projections which matched AEO’s total 

truck sales projection and CSM’s market 

segment forecast. However, after this 

step, sales by manufacturer no longer 

met CSM’s forecast. Thus, we repeated 

step three and adjusted each 

manufacturer’s truck sales so that they 

met CSM’s forecast. The sales of each 

truck segment (by manufacturer) were 

adjusted by the same factor. The 

resulting sales projection matched 

AEO’s total truck sales projection and 

CSM’s manufacturer forecast, but sales 

by market segment no longer met CSM’s 

forecast. However, the difference 

between the sales projections after this 

fifth step was closer to CSM’s market 

segment forecast than it was after step 

three. In other words, the sales 

projection was converging to the desired 

result. The agencies repeated these 

adjustments, matching manufacturer 

sales mix in one step and then market 

segment in the next a total of 19 times. 

At this point, we were able to match the 

market segment splits exactly and the 

manufacturer splits were within 0.1 

percent of our goal, which is well 

within the needs of this analysis. 

The next step in developing the 

reference fleets was to characterize the 

vehicles within each manufacturersegment combination. In large part, this 

was based on the characterization of the 

specific vehicle models sold in 2008— 

i.e., the vehicles comprising the baseline 

fleet. EPA and NHTSA chose to base our 

estimates of detailed vehicle 

characteristics on 2008 sales for several 

reasons. One, these vehicle 

characteristics are not confidential and 

can thus be published here for careful 

review by interested parties. Two, 

because it is constructed beginning with 

actual sales data, this vehicle fleet is 

limited to vehicle models known to 

satisfy consumer demands in light of 

price, utility, performance, safety, and 

other vehicle attributes. 

As noted above, the agencies gathered 

most of the information about the 2008 

baseline vehicle fleet from EPA’s 

emission certification and fuel economy 

database. The data obtained from this 

source included vehicle production 

volume, fuel economy, engine size, 

number of engine cylinders, 

transmission type, fuel type, etc. EPA’s 

certification database does not include a 

detailed description of the types of fuel 

economy-improving/CO2-reducing 

technologies considered in this final 

rule. Thus, the agencies augmented this 

description with publicly available data 

which includes more complete 

technology descriptions from Ward’s 

Automotive Group.53 In a few instances 

when required vehicle information 

(such as vehicle footprint) was not 

available from these two sources, the 

agencies obtained this information from 

publicly accessible Internet sites such as 

Motortrend.com and Edmunds.com.54

The projections of future car and 

truck sales described above apply to 

each manufacturer’s sales by market 

segment. The EPA emissions 

certification sales data are available at a 

much finer level of detail, essentially 

vehicle configuration. As mentioned 

above, the agencies placed each vehicle 

in the EPA certification database into 

one of the CSM market segments. The 

agencies then totaled the sales by each 

manufacturer for each market segment. 

If the combination of AEO and CSM 

forecasts indicated an increase in a 

given manufacturer’s sales of a 

particular market segment, then the 

sales of all the individual vehicle 

configurations were adjusted by the 

same factor. For example, if the Prius 

represented 30 percent of Toyota’s sales 

of compact cars in 2008 and Toyota’s 

sales of compact cars in 2016 was 

projected to double by 2016, then the 

sales of the Prius were doubled, and the 

Prius sales in 2016 remained 30 percent 

of Toyota’s compact car sales. 

The projection of average footprint for 

both cars and trucks remained virtually 

constant over the years covered by the 

final rulemaking. This occurrence is 

strictly a result of the CSM projections. 

There are a number of trends that occur 

in the CSM projections that caused the 

average footprint to remain constant. 

First, as the number of subcompacts 

increases, so do the number of 2-wheel 

drive crossover vehicles (that are 

regulated as cars). Second, truck 

volumes have many segment changes 

during the rulemaking time frame. 

There is no specific footprint related 

trend in any segment that can be linked 

to the unchanging footprint, but there is 

a trend that non-pickups’ volumes will 

move from truck segments that are 

ladder frame to those that are unibodytype vehicles. A table of the footprint 

projections is available in the TSD as 

well as further discussion on this topic. 

4. How was the development of the 

baseline and reference fleets for this 

Final Rule different from NHTSA’s 

historical approach? 

NHTSA has historically based its 

analysis of potential new CAFE 

standards on detailed product plans the 

agency has requested from 

manufacturers planning to produce light 

vehicles for sale in the United States. 

Although the agency has not attempted 

to compel manufacturers to submit such 

information, most major manufacturers 

and some smaller manufacturers have 

voluntarily provided it when requested. 

The proposal discusses many of the 

advantages and disadvantages of the 

market forecast approach used by the 

agencies, including the agencies’ 

interest in examining product plans as 

a check on the reference fleet developed 

by the agencies for this rulemaking. One 

of the primary reasons for the request 

for data in 2009 was to obtain 

permission from the manufacturers to 

make public their product plan 

information for model years 2010 and 

2011. There are a number of reasons that 

this could be advantageous in the 

development of a reference fleet. First, 

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55An example of this is in the GM Pontiac line, 

which is in the process of being phased out during 

the course of this rulemaking. GM has similar 

vehicles within their other brands (like Chevy) that 

will ‘‘presumably’’ pick up the loss in Pontiac share. 

We model this simply by leaving the Pontiac brand 

in. 

some known changes to the fleet may 

not be captured by the approach of 

solely using publicly available 

information. For example, the agencies’ 

current market forecast includes some 

vehicles for which manufacturers have 

announced plans for elimination or 

drastic production cuts such as the 

Chevrolet Trailblazer, the Chrysler PT 

Cruiser, the Chrysler Pacifica, the Dodge 

Magnum, the Ford Crown Victoria, the 

Mercury Sable, the Pontiac Grand Prix, 

the Pontiac G5 and the Saturn Vue. 

These vehicle models appear explicitly 

in market inputs to NHTSA’s analysis, 

and are among those vehicle models 

included in the aggregated vehicle types 

appearing in market inputs to EPA’s 

analysis. However, although the 

agencies recognize that these specific 

vehicles will be discontinued, we 

continue to include them in the market 

forecast because they are useful as a 

surrogate for successor vehicles that 

may appear in the rulemaking time 

frame to replace the discontinued 

vehicles in that market segment.55

Second, the agencies’ market forecast 

does not include some forthcoming 

vehicle models, such as the Chevrolet 

Volt, the Ford Fiesta and several 

publicly announced electric vehicles, 

including the announcements from 

Nissan regarding the Leaf. Nor does it 

include several MY 2009 or 2010 

vehicles, such as the Honda Insight, the 

Hyundai Genesis and the Toyota Venza, 

as our starting point for defining 

specific vehicle models in the reference 

fleet was Model Year 2008. 

Additionally, the market forecast does 

not account for publicly announced 

technology introductions, such as Ford’s 

EcoBoost system, whose product plans 

specify which vehicles and how many 

are planned to have this technology. 

Chrysler Group LLC has announced 

plans to offer small- and medium-sized 

cars using Fiat powertrains. Were the 

agencies to rely on manufacturers’ 

product plans (that were submitted), the 

market forecast would account for not 

only these specific examples, but also 

for similar examples that have not yet 

been announced publicly. 

Some commenters, such as CBD and 

NESCAUM, suggested that the agencies’ 

omission of known future vehicles and 

technologies in the reference fleet 

causes inaccuracies, which CBD further 

suggested could lead the agencies to set 

lower standards. On the other hand, 

CARB commented that ‘‘the likely 

impact of this omission is minor.’’ 

Because the agencies’ analysis examines 

the costs and benefits of progressively 

adding technology to manufacturers’ 

fleets, the omission of future vehicles 

and technologies primarily affects how 

much additional technology (and, 

therefore, how much incremental cost 

and benefit) is available relative to the 

point at which the agencies’ 

examination of potential new standards 

begins. Thus, in fact, the omission only 

reflects the reference fleet, rather than 

the agencies’ conclusions regarding how 

stringent the standards should be. This 

is discussed further below. The agencies 

believe the above-mentioned comments 

by CBD, NESCAUM, and others are 

based on a misunderstanding of the 

agencies’ approach to analyzing 

potential increases in regulatory 

stringency. The agencies also note that 

manufacturers do not always use 

technology solely to increase fuel 

economy, and that use of technology to 

increase vehicles’ acceleration 

performance or utility would probably 

make that technology unavailable 

toward more stringent standards. 

Considering the incremental nature of 

the agencies’ analysis, and the 

counterbalancing aspects of potentially 

omitted technology in the reference 

fleet, the agencies believe their 

determination of the stringency of new 

standards has not been impacted by any 

such omissions. 

Moreover, EPA and NHTSA believe 

that not including such vehicles after 

MY 2008 does not significantly impact 

our estimates of the technology required 

to comply with the standards. If 

included, these vehicles could increase 

the extent to which manufacturers are, 

in the reference case, expected to overcomply with the MY 2011 CAFE 

standards, and could thereby make the 

new standards appear to cost less and 

yield less benefit relative to the 

reference case. However, in the 

agencies’ judgment, production of the 

most advanced technology vehicles, 

such as the Chevy Volt or the Nissan 

Leaf (for example), will most likely be 

too limited during MY 2011 through MY 

2016 to significantly impact 

manufacturers’ compliance positions. 

While we are projecting the 

characteristics of the future fleet by 

extrapolating from the MY 2008 fleet, 

the primary difference between the 

future fleet and the 2008 fleet in the 

same vehicle segment is the use of 

additional CO2-reducing and fuel-saving 

technologies. Both the NHTSA and EPA 

models add such technologies to 

evaluate means of complying with the 

standards, and the costs of doing so. 

Thus, our future projections of the 

vehicle fleet generally shift vehicle 

designs towards those more likely to be 

typical of newer vehicles. Compared to 

using product plans that show 

continued fuel economy increases 

planned based on expectations that 

CAFE standards will continue to 

increase, this approach helps to clarify 

the costs and benefits of the new 

standards, as the costs and benefits of 

all fuel economy improvements beyond 

those required by the MY 2011 CAFE 

standards are being assigned to the final 

rules. In some cases, the ‘‘actual’’ (vs. 

projected or ‘‘modeled’’) new vehicles 

being introduced into the market by 

manufacturers are done so in 

anticipation of this rulemaking. On the 

other hand, manufacturers may plan to 

continue using technologies to improve 

vehicle performance and/or utility, not 

just fuel economy. Our approach 

prevents some of these actual 

technological improvements and their 

associated cost and fuel economy 

improvements from being assumed in 

the reference fleet. Thus, the added 

technology will not be considered to be 

free (or having no benefits) for the 

purposes of this rule. 

In this regard, the agencies further 

note that manufacturer announcements 

regarding forward models (or future 

vehicle models) need not be accepted 

automatically. Manufacturers tend to 

limit accurate production intent 

information in these releases for reasons 

such as: (a) Competitors will closely 

examine their information for data in 

their product planning decisions; (b) the 

press coverage of forward model 

announcements is not uniform, meaning 

highly anticipated models have more 

coverage and materials than models that 

may be less exciting to the public and 

consistency and uniformity cannot be 

ensured with the usage of press 

information; and (c) these market 

projections are subject to change 

(sometimes significant), and 

manufacturers may not want to give the 

appearance of being indecisive, or 

under/over-confident to their 

shareholders and the public with 

premature release of information. 

NHTSA has evaluated the use of 

public manufacturer forward model 

press information to update the vehicle 

fleet inputs to the baseline and reference 

fleet. The challenges in this approach 

are evidenced by the continuous stream 

of manufacturer press releases 

throughout a defined rulemaking 

period. Manufacturers’ press releases 

suffer from the same types of 

inaccuracies that many commenters 

believe can affect product plans. 

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56A full-size pickup might be offered with 

various combinations of cab style (e.g., regular, 

extended, crew) and box length (e.g., 51⁄2′, 61⁄2′, 8′) 

and, therefore, multiple footprint sizes. CAFE 

compliance data for MY 2008 data does not contain 

footprint information, and does not contain 

information that can be used to reliably identify 

which pickup entries correspond to footprint values 

estimable from public or commercial sources. 

Therefore, the agencies have used the known 

production levels of average values to represent all 

variants of a given pickup line (e.g., all variants of 

the F–150 and the Sierra/Silverado) in order to 

calculate the sales-weighted average footprint value 

for each pickup family. Again, this has no impact 

on the results of our modeling effort, although it 

would require re-estimation if we were to examine 

light truck standards of a different shape. In the 

extreme, one single footprint value could be used 

for every vehicle sold by a single manufacturer as 

long as the fuel economy standard associated with 

this footprint value represented the sales-weighted, 

harmonic average of the fuel economy standards 

associated with each vehicle’s footprint values. 57 49 U.S.C. 32902(a)(3)(A). 

Manufacturers can often be overly 

optimistic in their press releases, both 

on projected date of release of new 

models and on sales volumes. 

More generally and more critically, as 

discussed in the proposal and as 

endorsed by many of the public 

comments, there are several advantages 

to the approach used by the agencies in 

this final rule. Most importantly, today’s 

market forecast is much more 

transparent. The information sources 

used to develop today’s market forecast 

are all either in the public domain or 

available commercially. Another 

significant advantage of today’s market 

forecast is the agencies’ ability to assess 

more fully the incremental costs and 

benefits of the proposed standards. In 

addition, by developing baseline and 

reference fleets from common sources, 

the agencies have been able to avoid 

some errors—perhaps related to 

interpretation of requests—that have 

been observed in past responses to 

NHTSA’s requests. An additional 

advantage of the approach used for this 

rule is a consistent projection of the 

change in fuel economy and CO2

emissions across the various vehicles 

from the application of new technology. 

With the approach used for this final 

rule, the baseline market data comes 

from actual vehicles (on the road today) 

which have actual fuel economy test 

data (in contrast to manufacturer 

estimates of future product fuel 

economy)—so there is no question what 

is the basis for the fuel economy or CO2

performance of the baseline market data 

as it is. 

5. How does manufacturer product plan 

data factor into the baseline used in this 

Final Rule? 

In the spring and fall of 2009, many 

manufacturers submitted product plans 

in response to NHTSA’s recent requests 

that they do so. NHTSA and EPA both 

have access to these plans, and both 

agencies have reviewed them in detail. 

A small amount of product plan data 

was used in the development of the 

baseline. The specific pieces of data are: 

• Wheelbase. 

• Track Width Front. 

• Track Width Rear. 

• EPS (Electric Power Steering). 

• ROLL (Reduced Rolling Resistance). 

• LUB (Advance Lubrication i.e. low 

weight oil). 

• IACC (Improved Electrical 

Accessories). 

• Curb Weight. 

• GVWR (Gross Vehicle Weight 

Rating). 

The track widths, wheelbase, curb 

weight, and GVWR for vehicles could 

have been looked up on the Internet 

(159 were), but were taken from the 

product plans when available for 

convenience. To ensure accuracy, a 

sample from each product plan was 

used as a check against the numbers 

available from Motortrend.com. These 

numbers will be published in the 

baseline file since they can be easily 

looked up on the internet. On the other 

hand, EPS, ROLL, LUB, and IACC are 

difficult to determine without using 

manufacturer’s product plans. These 

items will not be published in the 

baseline file, but the data has been 

aggregated into the agencies’ baseline in 

the technology effectiveness and cost 

effectiveness for each vehicle in a way 

that allows the baseline for the model to 

be published without revealing the 

manufacturer’s data. 

Also, some technical information that 

manufacturers have provided in product 

plans regarding specific vehicle models 

is, at least insofar as NHTSA and EPA 

have been able to determine, not 

available from public or commercial 

sources. While such gaps do not bear 

significantly on the agencies’ analysis, 

the diversity of pickup configurations 

necessitated utilizing a sales-weighted 

average footprint value 56 for many 

manufacturers’ pickups. Since our 

modeling only utilizes footprint in order 

to estimate each manufacturer’s CO2 or 

fuel economy standard and all the other 

vehicle characteristics are available for 

each pickup configuration, this 

approximation has no practical impact 

on the projected technology or cost 

associated with compliance with the 

various standards evaluated. The only 

impact which could arise would be if 

the relative sales of the various pickup 

configurations changed, or if the 

agencies were to explore standards with 

a different shape. This would 

necessitate recalculating the average 

footprint value in order to maintain 

accuracy. 

Additionally, as discussed in the 

NPRM, in an effort to update the 2008 

baseline to account for the expected 

changes in the fleet in the near-term 

model years 2009–2011 described 

above, NHTSA requested permission 

from the manufacturers to make this 

limited product plan information 

public. Unfortunately, virtually no 

manufacturers agreed to allow the use of 

their data after 2009 model year. A few 

manufacturers, such as GM and Ford, 

stated we could use their 2009 product 

plan data after the end of production 

(December 31), but this would not have 

afforded us sufficient time to do the 

analysis for the final rule. Since the 

agencies were unable to obtain 

consistent updates, the baseline and 

reference fleets were not updated 

beyond 2008 model year for the final 

rule. The 2008 baseline fleet and 

projections were instead updated using 

the latest AEO and CSM data as 

discussed earlier. 

NHTSA and EPA recognize that the 

approach applied for the current rule 

gives transparency and openness of the 

vehicle market forecast high priority, 

and accommodates minor inaccuracies 

that may be introduced by not 

accounting for future product mix 

changes anticipated in manufacturers’ 

confidential product plans. For any 

future fleet analysis that the agencies are 

required to perform, NHTSA and EPA 

plan to request that manufacturers 

submit product plans and allow some 

public release of information. In 

performing this analysis, the agencies 

plan to reexamine potential tradeoffs 

between transparency and technical 

reasonableness, and to explain resultant 

choices. 

C. Development of Attribute-Based 

Curve Shapes 

In the NPRM, NHTSA and EPA 

proposed to set attribute-based CAFE 

and CO2 standards that are defined by 

a mathematical function for MYs 2012– 

2016 passenger cars and light trucks. 

EPCA, as amended by EISA, expressly 

requires that CAFE standards for 

passenger cars and light trucks be based 

on one or more vehicle attributes related 

to fuel economy, and be expressed in 

the form of a mathematical function.57

The CAA has no such requirement, 

though in past rules, EPA has relied on 

both universal and attribute-based 

standards (e.g., for nonroad engines, 

EPA uses the attribute of horsepower). 

However, given the advantages of using 

attribute-based standards and given the 

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58See 74 FR 14359 (Mar. 30, 2009). 

59Production for sale in the United States. 

60The equations are equivalent but are specified 

differently due to differences in the agencies’ 

respective models. 

61This function is linear in fuel consumption but 

not in fuel economy. 

goal of coordinating and harmonizing 

CO2 standards promulgated under the 

CAA and CAFE standards promulgated 

under EPCA, EPA also proposed to issue 

standards that are attribute-based and 

defined by mathematical functions. 

There was consensus in the public 

comments that EPA should develop 

attribute-based CO2 standards. 

Comments received in response to the 

agencies’ decision to base standards on 

vehicle footprint were largely 

supportive. Several commenters (BMW, 

NADA, NESCAUM) expressed support 

for attribute-based (as opposed to flat or 

universal) standards generally, and 

agreed with EPA’s decision to 

harmonize with NHTSA in this respect. 

Many commenters (Aluminum 

Association, BMW, ICCT, NESCAUM, 

NY DEC, Schade, Toyota) also 

supported the agencies’ decision to 

continue setting CAFE standards, and 

begin setting GHG standards, on the 

basis of vehicle footprint, although one 

commenter (NJ DEP) opposed the use of 

footprint due to concern that it 

encourages manufacturers to upsize 

vehicles and undercut the gains of the 

standard. Of the commenters supporting 

the use of footprint, several focused on 

the benefits of harmonization—both 

between EPA and NHTSA, and between 

the U.S. and the rest of the world. BMW 

commented, for example, that many 

other countries use weight-based 

standards rather than footprint-based. 

While BMW did not object to NHTSA’s 

and EPA’s use of footprint-based 

standards, it emphasized the impact of 

this non-harmonization on 

manufacturers who sell vehicles 

globally, and asked the agencies to 

consider these effects. NADA supported 

the use of footprint, but cautioned that 

the agencies must be careful in setting 

the footprint curve for light trucks to 

ensure that manufacturers can continue 

to provide functionality like 4WD and 

towing/hauling capacity. 

Some commenters requested that the 

agencies consider other or more 

attributes in addition to footprint, 

largely reiterating comments submitted 

to the MYs 2011–2015 CAFE NPRM. 

Cummins supported the agencies using 

a secondary attribute to account for 

towing and hauling capacity in large 

trucks, for example, while Ferrari asked 

the agencies to consider a multiattribute approach incorporating curb 

weight, maximum engine power or 

torque, and/or engine displacement, as 

it had requested in the previous round 

of CAFE rulemaking. An individual, Mr. 

Kenneth Johnson, commented that 

weight-based standards would be 

preferable to footprint-based ones, 

because weight correlates better with 

fuel economy than footprint, because 

the use of footprint does not necessarily 

guarantee safety the way the agencies 

say it does, and because weight-based 

standards would be fairer to 

manufacturers. 

In response, EPA and NHTSA 

continue to believe that the benefits of 

footprint-attribute-based standards 

outweigh any potential drawbacks 

raised by commenters, and that 

harmonization between the two 

agencies should be the overriding goal 

on this issue. As discussed by NHTSA 

in the MY 2011 CAFE final rule,58 the 

agencies believe that the possibility of 

gaming is lowest with footprint-based 

standards, as opposed to weight-based 

or multi-attribute-based standards. 

Specifically, standards that incorporate 

weight, torque, power, towing 

capability, and/or off-road capability in 

addition to footprint would not only be 

significantly more complex, but by 

providing degrees of freedom with 

respect to more easily-adjusted 

attributes, they would make it less 

certain that the future fleet would 

actually achieve the average fuel 

economy and CO2 levels projected by 

the agencies. The agencies recognize 

that based on economic and consumer 

demand factors that are external to this 

rule, the distribution of footprints in the 

future may be different (either smaller 

or larger) than what is projected in this 

rule. However, the agencies continue to 

believe that there will not be significant 

shifts in this distribution as a direct 

consequence of this rule. The agencies 

are therefore finalizing MYs 2012–2016 

CAFE and GHG standards based on 

footprint. 

The agencies also recognize that there 

could be benefits for a number of 

manufacturers if there was greater 

international harmonization of fuel 

economy and GHG standards, but this is 

largely a question of how stringent 

standards are and how they are 

enforced. It is entirely possible that 

footprint-based and weight-based 

systems can coexist internationally and 

not present an undue burden for 

manufacturers if they are carefully 

crafted. Different countries or regions 

may find different attributes appropriate 

for basing standards, depending on the 

particular challenges they face—from 

fuel prices, to family size and land use, 

to safety concerns, to fleet composition 

and consumer preference, to other 

environmental challenges besides 

climate change. The agencies anticipate 

working more closely with other 

countries and regions in the future to 

consider how to mitigate these issues in 

a way that least burdens manufacturers 

while respecting each country’s need to 

meet its own particular challenges. 

Under an attribute-based standard, 

every vehicle model has a performance 

target (fuel economy and CO2 emissions 

for CAFE and CO2 emissions standards, 

respectively), the level of which 

depends on the vehicle’s attribute (for 

the proposal, footprint). The 

manufacturers’ fleet average 

performance is determined by the 

production-weighted 59 average (for 

CAFE, harmonic average) of those 

targets. NHTSA and EPA are 

promulgating CAFE and CO2 emissions 

standards defined by constrained linear 

functions and, equivalently, piecewise 

linear functions.60 As a possible option 

for future rulemakings, the constrained 

linear form was introduced by NHTSA 

in the 2007 NPRM proposing CAFE 

standards for MY 2011–2015. Described 

mathematically, the proposed 

constrained linear function was defined 

according to the following formula: 61

TARGET

MIN MAX c FOOTPRINT d,

=

× + ⎛

⎝

⎜ ⎞

⎠

⎟ ⎡

⎣

⎢ ⎤

⎦

⎥

1

1 1

a b,

Where TARGET = the fuel economy target (in mpg) 

applicable to vehicles of a given 

footprint (FOOTPRINT, in square feet), 

a = the function’s upper limit (in mpg), 

b = the function’s lower limit (in mpg), 


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c = the slope (in gpm per square foot) of the 

sloped portion of the function, 

d = the intercept (in gpm) of the sloped 

portion of the function (that is, the value 

the sloped portion would take if 

extended to a footprint of 0 square feet, 

and the MIN and MAX functions take the 

minimum and maximum, respectively, 

of the included values; for example, 

MIN(1,2) = 1, MAX(1,2) = 2, and 

MIN[MAX(1,2),3)]=2. 

Because the format is linear on a 

gallons-per-mile basis, not on a milesper-gallon basis, it is plotted as fuel 

consumption below. Graphically, the 

constrained linear form appears as 

shown in Figure II.C–1. 

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62These a, b, d coefficients differ from the a, b, 

d coefficients in the constrained linear fuel 

economy equation primarily by a factor of 8887 

(plus an additive factor for air conditioning). 

The specific form and stringency for 

each fleet (passenger car and light 

trucks) and model year are defined 

through specific values for the four 

coefficients shown above. 

EPA proposed the equivalent equation 

below for assigning CO2 targets to an 

individual vehicle’s footprint value. 

Although the general model of the 

equation is the same for each vehicle 

category and each year, the parameters 

of the equation differ for cars and trucks 

and for each model year. Described 

mathematically, EPA’s proposed 

piecewise linear function was as 

follows: 

Target = a, if x ≤ l 

Target = cx + d, if l < x ≤ h 

Target = b, if x > h 

In the constrained linear form similar in 

form to the fuel economy equation 

above, this equation takes the simplified 

form: 

Target = MIN [ MAX (c * x + d, a), b] 

Where 

Target = the CO2 target value for a given 

footprint (in g/mi) 

a = the minimum target value (in g/mi CO2) 62

b = the maximum target value (in g/mi CO2) 

c = the slope of the linear function (in g/mi 

per sq ft CO2) 

d = is the intercept or zero-offset for the line 

(in g/mi CO2) 

x = footprint of the vehicle model (in square 

feet, rounded to the nearest tenth) 

l & h are the lower and higher footprint limits 

or constraints or (‘‘kinks’’) or the 

boundary between the flat regions and 

the intermediate sloped line (in sq ft) 

Graphically, piecewise linear form, 

like the constrained linear form, appears 

as shown in Figure II.C–2. 

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63The agencies excluded diesel engines and 

strong hybrid vehicle technologies from this 

exercise (and only this exercise) because the 

agencies expect that manufacturers would not need 

to rely heavily on these technologies in order to 

comply with the proposed standards. NHTSA and 

EPA did include diesel engines and strong hybrid 

vehicle technologies in all other portions of their 

analyses. 

As for the constrained linear form, the 

specific form and stringency of the 

piecewise linear function for each fleet 

(passenger car and light trucks) and 

model year are defined through specific 

values for the four coefficients shown 

above. 

For purposes of the proposed rules, 

NHTSA and EPA developed the basic 

curve shapes using methods similar to 

those applied by NHTSA in fitting the 

curves defining the MY 2011 standards. 

The first step involved defining the 

relevant vehicle characteristics in the 

form used by NHTSA’s CAFE model 

(e.g., fuel economy, footprint, vehicle 

class, technology) described in Section 

II.B of this preamble and in Chapter 1 

of the Joint TSD. However, because the 

baseline fleet utilizes a wide range of 

available fuel saving technologies, 

NHTSA used the CAFE model to 

develop a fleet to which all of the 

technologies discussed in Chapter 3 of 

the Joint TSD 63 were applied, except 

dieselization and strong hybridization. 

This was accomplished by taking the 

following steps: (1) Treating all 

manufacturers as unwilling to pay civil 

penalties rather than applying 

technology, (2) applying any technology 

at any time, irrespective of scheduled 

vehicle redesigns or freshening, and (3) 

ignoring ‘‘phase-in caps’’ that constrain 

the overall amount of technology that 

can be applied by the model to a given 

manufacturer’s fleet. These steps helped 

to increase technological parity among 

vehicle models, thereby providing a 

better basis (than the baseline or 

reference fleets) for estimating the 

statistical relationship between vehicle 

size and fuel economy. 

In fitting the curves, NHTSA and EPA 

also continued to fit the sloped portion 

of the function to vehicle models 

between the footprint values at which 

the agencies continued to apply 

constraints to limit the function’s value 

for both the smallest and largest 

vehicles. Without a limit at the smallest 

footprints, the function—whether 

logistic or linear—can reach values that 

would be unfairly burdensome for a 

manufacturer that elects to focus on the 

market for small vehicles; depending on 

the underlying data, an unconstrained 

form, could result in stringency levels 

that are technologically infeasible and/ 

or economically impracticable for those 

manufacturers that may elect to focus on 

the smallest vehicles. On the other side 

of the function, without a limit at the 

largest footprints, the function may 

provide no floor on required fuel 

economy. Also, the safety 

considerations that support the 

provision of a disincentive for 

downsizing as a compliance strategy 

apply weakly, if at all, to the very largest 

vehicles. Limiting the function’s value 

for the largest vehicles leads to a 

function with an inherent absolute 

minimum level of performance, while 

remaining consistent with safety 

considerations. 

Before fitting the sloped portion of the 

constrained linear form, NHTSA and 

EPA selected footprints above and 

below which to apply constraints (i.e., 

minimum and maximum values) on the 

function. The agencies believe that the 

linear form performs well in describing 

the observed relationship between 

footprint and fuel consumption or CO2

emissions for vehicle models within the 

footprint ranges covering most vehicle 

models, but that the single (as opposed 

to piecewise) linear form does not 

perform well in describing this 

relationship for the smallest and largest 

vehicle models. For passenger cars, the 

agency noted that several manufacturers 

offer small, sporty coupes below 41 

square feet, such as the BMW Z4 and 

Mini, Honda S2000, Mazda MX–5 

Miata, Porsche Carrera and 911, and 

Volkswagen New Beetle. Because such 

vehicles represent a small portion (less 

than 10 percent) of the passenger car 

market, yet often have performance, 

utility, and/or structural characteristics 

that could make it technologically 

infeasible and/or economically 

impracticable for manufacturers 

focusing on such vehicles to achieve the 

very challenging average requirements 

that could apply in the absence of a 

constraint, EPA and NHTSA proposed 

to ‘‘cut off’’ the linear portion of the 

passenger car function at 41 square feet. 

The agencies recognize that for 

manufacturers who make small vehicles 

in this size range, this cut off creates 

some incentive to downsize (i.e., further 

reduce the size, and/or increase the 

production of models currently smaller 

than 41 square feet) to make it easier to 

meet the target. The cut off may also 

create the incentive for manufacturers 

who do not currently offer such models 

to do so in the future. However, at the 

same time, the agencies believe that 

there is a limit to the market for cars 

smaller than 41 square feet—most 

consumers likely have some minimum 

expectation about interior volume, 

among other things. The agencies thus 

believe that the number of consumers 

who will want vehicles smaller than 41 

square feet (regardless of how they are 

priced) is small, and that the incentive 

to downsize in response to this final 

rule, if present, will be minimal. For 

consistency, the agency proposed to ‘‘cut 

off’’ the light truck function at the same 

footprint, although no light trucks are 

currently offered below 41 square feet. 

The agencies further noted that above 56 

square feet, the only passenger car 

model present in the MY 2008 fleet 

were four luxury vehicles with 

extremely low sales volumes—the 

Bentley Arnage and three versions of the 

Rolls Royce Phantom. NHTSA and EPA 

therefore also proposed to ‘‘cut off’’ the 

linear portion of the passenger car 

function at 56 square feet. Finally, the 

agencies noted that although public 

information is limited regarding the 

sales volumes of the many different 

configurations (cab designs and bed 

sizes) of pickup trucks, most of the 

largest pickups (e.g., the Ford F–150, 

GM Sierra/Silverado, Nissan Titan, and 

Toyota Tundra) appear to fall just above 

66 square feet in footprint. EPA and 

NHTSA therefore proposed to ‘‘cut off’’ 

the linear portion of the light truck 

function at 66 square feet. 

Having developed a set of vehicle 

emissions and footprint data which 

represent the benefit of all non-diesel, 

non-hybrid technologies, we determined 

the initial values for parameters c and 

d were determined for cars and trucks 

separately. c and d were initially set at 

the values for which the average 

(equivalently, sum) of the absolute 

values of the differences was minimized 

between the ‘‘maximum technology’’ 

fleet fuel consumption (within the 

footprints between the upper and lower 

limits) and the straight line of the 

function defined above at the same 

corresponding vehicle footprints. That 

is, c and d were determined by 

minimizing the average absolute 

residual, commonly known as the MAD 

(Mean Absolute Deviation) approach, of 

the corresponding straight line. 

Finally, NHTSA calculated the values 

of the upper and lower parameters (a 

and b) based on the corresponding 

footprints discussed above (41 and 56 

square feet for passenger cars, and 41 

and 66 square feet for light trucks). 

The result of this methodology is 

shown below in Figures II.C–3 and II.C– 

4 for passenger cars and light trucks, 

respectively. The fitted curves are 

shown with the underlying ‘‘maximum 

technology’’ passenger car and light 

truck fleets. For passenger cars, the 

mean absolute deviation of the sloped 

portion of the function was 14 percent. 

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For trucks, the corresponding MAD was 

10 percent. 

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64For example, the agencies’ market forecast 

shows MY 2016 sales of 187,000 units for Toyota’s 

2WD Sienna, and shows 27 model configurations 

with MY 2016 sales of fewer than 100 units. 

Similarly, the agencies’ market forecast shows MY 

2016 sales of 268,000 for the Toyota Prius, and 

shows 29 model configurations with MY 2016 sales 

of fewer than 100 units. Sales-weighted analysis 

would give the Toyota Sienna and Prius more than 

a thousand times the consideration of many vehicle 

model configurations. Sales-weighted analysis 

would, therefore, cause a large number of vehicle 

model configurations to be virtually ignored. See 

discussion in NHTSA’s final rule for MY 2011 

passenger car and light truck CAFE standards, 74 

FR 14368 (Mar. 30, 2009), and in NHTSA’s NPRM 

for that rulemaking, 73 FR 24423–24429 (May 2, 

2008). 

65 Id. In the case of a dataset not drawn from a 

sample with a Gaussian, or normal, distribution, 

there is often a need to employ robust estimation 

methods rather than rely on least-squares approach 

to curve fitting. The least-squares approach has as 

an underlying assumption that the data are drawn 

The agencies used these functional 

forms as a starting point to develop 

mathematical functions defining the 

actual proposed standards as discussed 

above. The agencies then transposed 

these functions vertically (i.e., on a gpm 

or CO2 basis, uniformly downward) to 

produce the same fleetwide fuel 

economy (and CO2 emission levels) for 

cars and light trucks described in the 

NPRM. 

A number of public comments 

generally supported the agencies’ choice 

of attribute-based mathematical 

functions, as well as the methods 

applied to fit the function. Ferrari 

indicated support for the use of a 

constrained linear form rather than a 

constrained logistic form, support for 

the application of limits on the 

functions’ values, support for a 

generally less steep passenger car curve 

compared to MY 2011, and support for 

the inclusion of all manufacturers in the 

analysis used to fit the curves. ICCT also 

supported the use of a constrained 

linear form. Toyota expressed general 

support for the methods and outcome, 

including a less-steep passenger car 

curve, and the application of limits on 

fuel economy targets applicable to the 

smallest vehicles. The UAW commented 

that the shapes and levels of the curves 

are reasonable. 

Other commenters suggested that 

changes to the agencies’ methods and 

results would yield better outcomes. GM 

suggested that steeper curves would 

provide a greater incentive for limitedline manufacturers to apply technology 

to smaller vehicles. GM argued that 

steeper and, in their view, fairer curves 

could be obtained by using salesweighted least-squares regression rather 

than minimization of the unweighted 

mean absolute deviation. Conversely, 

students from UC Santa Barbara 

commented that the passenger car and 

light truck curves should be flatter and 

should converge over time in order to 

encourage the market to turn, as the 

agencies’ analysis assumes it will, away 

from light trucks and toward passenger 

cars. 

NADA commented that there should 

be no ‘‘cut-off’’ points (i.e., lower limits 

or floors), because these de facto 

‘‘backstops’’ might limit consumer 

choice, especially for light trucks—a 

possibility also suggested by the 

Alliance. The Alliance and several 

individual manufacturers also 

commented that the cut-off point for 

light trucks should be shifted to 72 

square feet (from the proposed 66 square 

feet), arguing that the preponderance of 

high-volume light truck models with 

footprints greater than 66 square feet is 

such that a 72 square foot cut-off point 

makes it unduly challenging for 

manufacturers serving the large pickup 

market and thereby constitutes a de 

facto backstop. Also, with respect to the 

smallest light truck models, Honda 

commented that the cut-off point should 

be set at the point defining the smallest 

10 percent of the fleet, both for 

consistency with the passenger car cutoff point, and to provide a greater 

incentive for manufacturers to downsize 

the smallest light truck models (which 

provide greater functionality than 

passenger cars). 

Other commenters focused on 

whether the agencies should have 

separate curves for different fleets or 

whether they should have a single curve 

that applied to both passenger cars and 

light trucks. This issue is related, to 

some extent, to commenters who 

discussed whether car and truck 

definitions should change. CARB, Ford, 

and Toyota supported separate curves 

for cars and trucks, generally stating that 

different fleets have different functional 

characteristics and these characteristics 

are appropriately addressed by separate 

curves. Likewise, AIAM, Chrysler, and 

NADA supported leaving the current 

definitions of car and truck the same. 

CBD, ICCT, and NESCAUM supported a 

single curve, based on concerns about 

manufacturers gaming the system and 

reclassifying passenger cars as light 

trucks in order to obtain the often-less 

stringent light truck standard, which 

could lead to lower benefits than 

anticipated by the agencies. 

In addition, the students from UC 

Santa Barbara reported being unable to 

reproduce the agencies’ analysis to fit 

curves to the passenger car and light 

truck fleets, even when using the model, 

inputs, and external analysis files 

posted to NHTSA’s Web site when the 

NPRM was issued. 

Having considered public comments, 

NHTSA and EPA have re-examined the 

development of curves underlying the 

standards proposed in the NPRM, and 

are promulgating standards based on the 

same underlying curves. The agencies 

have made this decision considering 

that, while EISA mandates that CAFE 

standards be defined by a mathematical 

function in terms of one or more 

attributes related to fuel economy, 

neither EISA nor the CAA require that 

the mathematical function be limited to 

the observed or theoretical dependence 

of fuel economy on the selected 

attribute or attributes. As a means by 

which CAFE and GHG standards are 

specified, the mathematical function 

can and does properly play a normative 

role. Therefore, NHTSA and EPA have 

concluded that, as supported by 

comments, the mathematical function 

can reasonably be based on a blend of 

analytical and policy considerations, as 

discussed below and in the Joint 

Technical Support Document. 

With respect to GM’s 

recommendation that NHTSA and EPA 

use weighted least-squares analysis, the 

agencies find that the market forecast 

used for analysis supporting both the 

NPRM and the final rule exhibits the 

two key characteristics that previously 

led NHTSA to use minimization of the 

unweighted Mean Absolute Deviation 

(MAD) rather than weighted leastsquares analysis. First, projected modelspecific sales volumes in the agencies’ 

market forecast cover an extremely wide 

range, such that, as discussed in 

NHTSA’s rulemaking for MY 2011, 

while unweighted regression gives lowselling vehicle models and high-selling 

vehicle models equal emphasis, salesweighted regression would give some 

vehicle models considerably more 

emphasis than other vehicle models.64

The agencies’ intention is to fit a curve 

that describes a technical relationship 

between fuel economy and footprint, 

given comparable levels of technology, 

and this supports weighting discrete 

vehicle models equally. On the other 

hand, sales weighted regression would 

allow the difference between other 

vehicle attributes to be reflected in the 

analysis, and also would reflect 

consumer demand. 

Second, even after NHTSA’s 

‘‘maximum technology’’ analysis to 

increase technological parity of vehicle 

models before fitting curves, the 

agencies’ market forecast contains many 

significant outliers. As discussed in 

NHTSA’s rulemaking for MY 2011, 

MAD is a statistical procedure that has 

been demonstrated to produce more 

efficient parameter estimates than leastsquares analysis in the presence of 

significant outliers.65 In addition, the 

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from a normal distribution, and hence fits a curve 

using a sum-of-squares method to minimize errors. 

This approach will, in a sample drawn from a nonnormal distribution, give excessive weight to 

outliers by making their presence felt in proportion 

to the square of their distance from the fitted curve, 

and, hence, distort the resulting fit. With outliers in 

the sample, the typical solution is to use a robust 

method such as a minimum absolute deviation, 

rather than a squared term, to estimate the fit (see, 

e.g., ‘‘AI Access: Your Access to Data Modeling,’’ at 

http://www.aiaccess.net/English/Glossaries/ 

GlosMod/e_gm_O_Pa.htm#Outlier). The effect on 

the estimation is to let the presence of each 

observation be felt more uniformly, resulting in a 

curve more representative of the data (see, e.g., 

Peter Kennedy, A Guide to Econometrics, 3rd 

edition, 1992, MIT Press, Cambridge, MA). 

agencies remain concerned that the 

steeper curves resulting from weighted 

least-squares analysis would increase 

the risk that energy savings and 

environmental benefits would be lower 

than projected, because the steeper 

curves would provide a greater 

incentive to increase sales of larger 

vehicles with lower fuel economy 

levels. Based on these technical 

considerations and these concerns 

regarding potential outcomes, the 

agencies have decided not to re-fit 

curves using weighted least-squares 

analysis, but note that they may 

reconsider using least-squares 

regression in future analysis. 

NHTSA and EPA have considered 

GM’s comment that steeper curves 

would provide a greater incentive for 

limited-line manufacturers to apply 

technology to smaller vehicles. While 

the agencies agree that a steeper curve 

would, absent any changes in fleet mix, 

tend to shift average compliance 

burdens away from GM and toward 

companies that make smaller vehicles, 

the agencies are concerned, as stated 

above, that steeper curves would 

increase the risk that induced increases 

in vehicle size could erode projected 

energy and environmental benefits. 

NHTSA and EPA have also 

considered the comments by the 

students from UC Santa Barbara 

indicating that the passenger car and 

light truck curves should be flatter and 

should converge over time. The agencies 

conclude that flatter curves would 

reduce the incentives intended in 

shifting from ‘‘flat’’ CAFE standards to 

attribute-based CAFE and GHG 

standards—those being the incentive to 

respond to attribute-based standards in 

ways that minimize compromises in 

vehicle safety, and the incentive for 

more manufacturers (than primarily 

those selling a wider range of vehicles) 

across the range of the attribute to have 

to increase the application of fuel-saving 

technologies. With regard to whether 

the agencies should set separate curves 

or a single one, NHTSA also notes that 

EPCA requires NHTSA to establish 

standards separately for passenger cars 

and light trucks, and thus concludes 

that the standards for each fleet should 

be based on the characteristics of 

vehicles in each fleet. In other words, 

the passenger car curve should be based 

on the characteristics of passenger cars, 

and the light truck curve should be 

based on the characteristics of light 

trucks—thus to the extent that those 

characteristics are different, an 

artificially-forced convergence would 

not accurately reflect those differences. 

However, such convergence could be 

appropriate depending on future trends 

in the light vehicle market, specifically 

further reduction in the differences 

between passenger car and light truck 

characteristics. While that trend was 

more apparent when car-like 2WD SUVs 

were classified as light trucks, it seems 

likely to diminish for the model year 

vehicles subject to these rules as the 

truck fleet will be more purely ‘‘trucklike’’ than has been the case in recent 

years. 

NHTSA and EPA have also 

considered comments on the maxima 

and minima that the agencies have 

applied to ‘‘cut off’’ the linear function 

underlying the proposed curves for 

passenger cars and light trucks. Contrary 

to NADA’s suggestion that there should 

be no such cut-off points, the agencies 

conclude that curves lacking maximum 

fuel economy targets (i.e., minimum 

CO2 targets) would result in average fuel 

economy and GHG requirements that 

would not be technologically feasible or 

economically practicable for 

manufacturers concentrating on those 

market segments. In addition, minimum 

fuel economy targets (i.e., maximum 

CO2 targets) are important to mitigate 

the risk to energy and environmental 

benefits of potential market shifts 

toward large vehicles. The agencies also 

disagree with comments by the Alliance 

and several individual manufacturers 

that the cut-off point for light trucks 

should be shifted to 72 square feet (from 

the proposed 66 square feet) to ease 

compliance burdens facing 

manufacturers serving the large pickup 

market. Such a shift would increase the 

risk that energy and environmental 

benefits of the standards would be 

compromised by induced increases in 

the sales of large pickups, in situations 

where the increased compliance burden 

is feasible and appropriate. Also, the 

agencies’ market forecast suggests that 

most of the light trucks models with 

footprints larger than 66 square feet 

have curb weights near or above 5,000 

pounds. This suggests, in turn, that in 

terms of highway safety, there is little or 

no need to discourage downsizing of 

light trucks with footprints larger than 

66 square feet. Based on these energy, 

environmental, technological feasibility, 

economic practicability, and safety 

considerations, the agencies conclude 

that the light truck curve should be cut 

off at 66 square feet, as proposed, rather 

than at 72 square feet. The agencies also 

disagree with Honda’s suggestion that 

the cut-off point for the smallest trucks 

be shifted to a larger footprint value, 

because doing so could potentially 

increase the incentive to reclassify 

vehicles in that size range as light 

trucks, and could thereby increase the 

possibility that energy and 

environmental benefits of the rule 

would be less than projected. 

Finally, considering comments by the 

UC Santa Barbara students regarding 

difficulties reproducing NHTSA’s 

analysis, NHTSA reexamined its 

analysis, and discovered some 

erroneous entries in model inputs 

underlying the analysis used to develop 

the curves proposed in the NPRM. 

These errors are discussed in NHTSA’s 

final Regulatory Impact Analysis (FRIA) 

and have since been corrected. They 

include the following: Incorrect 

valvetrain phasing and lift inputs for 

many BMW engines, incorrect indexing 

for some Daimler models, incorrectly 

enabled valvetrain technologies for 

rotary engines and Atkinson cycle 

engines, omitted baseline applications 

of cylinder deactivation in some Honda 

and GM engines, incorrect valve 

phasing codes for some 4-cylinder 

Chrysler engines, omitted baseline 

applications of advanced transmissions 

in some VW models, incorrectly enabled 

advanced electrification technologies for 

several hybrid vehicle models, and 

incorrect DCT effectiveness estimates 

for subcompact passenger cars. These 

errors, while not significant enough to 

impact the overall analysis of 

stringency, did affect the fitted slope for 

the passenger car curve and would have 

prevented precise replication of 

NHTSA’s NPRM analysis by outside 

parties. 

After correcting these errors and 

repeating the curve development 

analysis presented in the NPRM, 

NHTSA obtained the curves shown 

below in Figures II.C–5 and II.C–6 for 

passenger cars and light trucks, 

respectively. The fitted curves are 

shown with the underlying ‘‘maximum 

technology’’ passenger car and light 

truck fleets. For passenger cars, the 

mean absolute deviation of the sloped 

portion of the function was 14 percent. 

For trucks, the corresponding MAD was 

10 percent. 

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This refitted passenger car curve is 

similar to that presented in the NPRM, 

and the refitted light truck curve is 

nearly identical to the corresponding 

curve in the NPRM. However, the slope 

of the refitted passenger car curve is 

about 27 percent steeper (on a gpm per 

sf basis) than the curve presented in the 

NPRM. For passenger cars and light 

trucks, respectively, Figures II.C–7 and 

II.C–8 show the results of adjustment— 

discussed in the next section—of the 

above curves to yield the average 

required fuel economy levels 

corresponding to the final standards. 


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BILLING CODE 6560–50–C 

While the resultant light truck curves 

are visually indistinguishable from one 

another, the refitted curve for passenger 

cars would increase stringency for the 

smallest cars, decrease stringency for 

the largest cars, and provide a greater 

incentive to increase vehicle size 

throughout the range of footprints 

within which NHTSA and EPA project 

most passenger car models will be sold 

through MY 2016. The agencies are 

concerned that these changes would 

make it unduly difficult for 

manufacturers to introduce new small 

passenger cars in the United States, and 

unduly risk losses in energy and 

environmental benefits by increasing 

incentives for the passenger car market 

to shift toward larger vehicles. 

Also, the agencies note that the 

refitted passenger car curve produces 

only a slightly closer fit to the corrected 

fleet than would the curve estimated in 


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66ACEEE, American Lung Association, CARB, 

Christopher Lish, Environment America, EDF, MA 

DEP, NRDC, NESCAUM, Public Citizen, Sierra Club 

et al., SCAQMD, UCS, WA DE. 

67Commenters generally defined a ‘‘ratchet 

mechanism’’ as an automatic re-calculation of 

stringency to ensure cumulative goals are reached 

by 2016, even if emissions reductions and fuel 

savings fall short in the earlier years covered by the 

rulemaking. 

68CBD, MA DEP, NJ DEP, Public Citizen, Sierra 

Club et al., UCS. 

69CARB, Public Citizen, Sierra Club et al. 

70For example, the Alliance and Toyota said that 

upsizing would not be likely because (1) it would 

not necessarily make compliance with applicable 

standards easier, since larger vehicles tend to be 

heavier and heavier vehicles tend to achieve worse 

fuel economy/emissions levels; (2) it may require 

expensive platform changes; (3) target curves 

become increasingly more stringent from year to 

year, which reduces the benefits of upsizing; and 

(4) the mpg floor and gpm ceiling for the largest 

vehicles (the point at which the curve is ‘‘cut off’’) 

discourages manufacturers from continuing to 

upsize beyond a point because doing so makes it 

increasingly difficult to meet the flat standard at 

that part of the curve. 

71AIAM, Alliance, Ford, NADA, Toyota. 

72Alliance, Ford, NADA, UAW. 

the NPRM; with respect to the corrected 

fleet (between the ‘‘cut off’’ footprint 

values, and after the ‘‘maximum 

technology’’ analysis discussed above), 

the mean absolute deviation for the 

refitted curve is 13.887 percent, and that 

of a refitted curve held to the original 

slope is 13.933 percent. In other words, 

the data support the original slope very 

nearly as well as they support the 

refitted slope. 

Considering NHTSA’s and EPA’s 

concerns regarding the change in 

incentives that would result from a 

refitted curve for passenger cars, and 

considering that the data support the 

original curves about as well as they 

would support refitted curves, the 

agencies are finalizing CAFE and GHG 

standards based on the curves presented 

in the NPRM. 

Finally, regarding some commenters’ 

inability to reproduce the agencies’ 

NPRM analysis, NHTSA believes that its 

correction of the errors discussed above 

and its release (on NHTSA’s Web site) 

of the updated Volpe model and all 

accompanying inputs and external 

analysis files should enable outside 

parties to independently reproduce the 

agencies’ analysis. If outside parties 

continue to experience difficulty in 

doing so, we encourage them to contact 

NHTSA, and the agency will do its best 

to provide assistance. 

Thus, in summary, the agencies’ 

approach to developing the attributebased mathematical functions for MY 

2012–2016 CAFE and CO2 standards 

represents the agencies’ best technical 

judgment and consideration of potential 

outcomes at this time, and we are 

confident that the conclusions have 

resulted in appropriate and reasonable 

standards. The agencies recognize, 

however, that aspects of these decisions 

may merit updating or revision in future 

analysis to support CAFE and CO2

standards or for other purposes. 

Consistent with best rulemaking 

practices, the agencies will take a fresh 

look at all assumptions and approaches 

to curve fitting, appropriate attributes, 

and mathematical functions in the 

context of future rulemakings. 

The agencies also recognized in the 

NPRM the possibility that lower fuel 

prices could lead to lower fleetwide fuel 

economy (and higher CO2 emissions) 

than projected in this rule. One way of 

addressing that concern is through the 

use of a universal standard—that is, an 

average standard set at a (single) 

absolute level. This is often described as 

a ‘‘backstop standard.’’ The agencies 

explained that under the CAFE program, 

EISA requires such a minimum average 

fuel economy standard for domestic 

passenger cars, but is silent with regard 

to similar backstops for imported 

passenger cars and light trucks, while 

under the CAA, a backstop could be 

adopted under section 202(a) assuming 

it could be justified under the relevant 

statutory criteria. NHTSA and EPA also 

noted that the flattened portions of the 

curves at the largest footprints 

directionally address the issue of a 

backstop (i.e., the mpg ‘‘floor’’ or gpm 

‘‘ceiling’’ applied to the curves provides 

a universal and absolute value for that 

range of footprints). The agencies sought 

comment on whether backstop 

standards, or any other method within 

the agencies’ statutory authority, should 

and can be implemented in order to 

guarantee a level of CO2 emissions 

reductions and fuel savings under the 

attribute-based standards. 

The agencies received a number of 

comments regarding the need for a 

backstop beyond NHTSA’s alternative 

minimum standard. Comments were 

divided fairly evenly between support 

for and opposition to additional 

backstop standards. The following 

organizations supported the need for 

EPA and NHTSA to have explicit 

backstop standards: American Council 

for an Energy Efficient Economy 

(ACEEE), American Lung Association, 

California Air Resources Board (CARB), 

Environment America, Environment 

Defense Fund, Massachusetts 

Department of Environmental 

Protection, Natural Resources Defense 

Council (NRDC), Northeast States for 

Coordinated Air Use Management 

(NESCAUM), Public Citizen and Safe 

Climate Campaign, Sierra Club, State of 

Washington Department of Ecology, 

Union of Concerned Scientists, and a 

number of private citizens. Commenters 

in favor of additional backstop 

standards for all fleets for both NHTSA 

and EPA 66 generally stated that the 

emissions reductions and fuel savings 

expected to be achieved by MY 2016 

depended on assumptions about fleet 

mix that might not come to pass, and 

that various kinds of backstop standards 

or ‘‘ratchet mechanisms’’ 67 were 

necessary to ensure that those 

reductions were achieved in fact. In 

addition, some commenters 68 stated 

that manufacturers might build larger 

vehicles or more trucks during MYs 

2012–2016 than the agencies project, for 

example, because (1) any amount of 

slope in target curves encourages 

manufacturers to upsize, and (2) lower 

targets for light trucks than for 

passenger cars encourage manufacturers 

to find ways to reclassify vehicles as 

light trucks, such as by dropping 2WD 

versions of SUVs and offering only 4WD 

versions, perhaps spurred by NHTSA’s 

reclassification of 2WD SUVs as 

passenger cars. Both of these 

mechanisms will be addressed further 

below. Some commenters also discussed 

EPA authority under the CAA to set 

backstops,69 agreeing with EPA’s 

analysis that section 202(a) allows such 

standards since EPA has wide discretion 

under that section to craft standards. 

The following organizations opposed 

a backstop: Alliance of Automobile 

Manufacturers (AAM), Association of 

International Automobile Manufacturers 

(AIAM), Ford Motor Company, National 

Automobile Dealers Association 

(NADA), Toyota Motor Company, and 

the United Auto Workers Union. 

Commenters stating that additional 

backstops would not be necessary 

disagreed that upsizing was likely,70

and emphasized the anti-backsliding 

characteristics of the target curves. 

Others argued that universal absolute 

standards as backstops could restrict 

consumer choice of vehicles. 

Commenters making legal arguments 

under EPCA/EISA71 stated that 

Congress’ silence regarding backstops 

for imported passenger cars and light 

trucks should be construed as a lack of 

authority for NHTSA to create further 

backstops. Commenters making legal 

arguments under the CAA72 focused on 

the lack of clear authority under the 

CAA to create multiple GHG emissions 

standards for the same fleets of vehicles 

based on the same statutory criteria, and 

opposed EPA taking steps that would 

reduce harmonization with NHTSA in 

standard setting. Furthermore, AIAM 

indicated that EISA’s requirement that 

the combined (car and truck) fuel 

economy level reach at least 35 mpg by 

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73NHTSA and EPA agree with AIAM that the 

EISA 35 mpg requirement in MY 2020 has a 

backstop-like function, in that it requires a certain 

level of achieved fleetwide fuel economy by a 

certain date, although it is not literally a backstop 

standard. Considering that NHTSA’s MY 2011 

CAFE standards increased projected average fuel 

economy requirements (relative to the MY 2010 

standards) at a significantly faster rate than would 

be required to achieve the 35-in-2020 requirement, 

and considering that the standards being finalized 

today would increase projected average combined 

fuel economy requirements to 34.1 mpg in MY 

2016, four years before MY 2020, the agencies 

believe that the U.S. vehicle market would have to 

shift in highly unexpected ways in order to put the 

35-in-2020 requirement at risk, even despite the fact 

that due to the attribute-based standards, average 

fuel economy requirements will vary depending on 

the mix of vehicles produced for sale in the U.S. 

in each model year. The agencies further emphasize 

that both NHTSA and EPA plan to conduct and 

document retrospective analyses to evaluate how 

the market’s evolution during the rulemaking 

timeframe compares with the agencies’ forecasts 

employed for this rulemaking. Additionally, we 

emphasize that both agencies have the authority, 

given sufficient lead time, to revise their standards 

upwards if necessary to avoid missing the 35-in2020 requirement. 

74Schade. 

75For reference, NHTSA’s March 2009 final rule 

establishing MY 2011 CAFE standards was based on 

a forecast that passenger cars would represent 57.6 

percent of the MY 2011 fleet, and that MY 2011 

passenger cars and light trucks would average 45.6 

square feet (sf) and 55.1 sf, respectively, such that 

average required CAFE levels would be 30.2 mpg, 

24.1 mpg, and 27.3 mpg, respectively, for passenger 

cars, light trucks, and the overall light-duty fleet. 

Based on the agencies’ current market forecast, even 

as soon as MY 2011, passenger cars will comprise 

a larger share (59.2 percent) of the light vehicle 

market; passenger cars and light trucks will, on 

average, be smaller by 0.5 sf and 1.3 sf, respectively; 

and average required CAFE levels will be higher by 

0.2 mpg, 0.3 mpg, and 0.3 mpg, respectively, for 

passenger cars, light trucks, and the overall lightduty fleet. 

76Based on estimated standards presented in 

Tables III.B.1–1 and III.B.1–2. 

2020 itself constitutes a backstop.73 One 

individual 74 commented that while 

additional backstop standards might be 

necessary given optimism of fleet mix 

assumptions, both agencies’ authorities 

would probably need to be revised by 

Congress to clarify that backstop 

standards (whether for individual fleets 

or for the national fleet as a whole) were 

permissible. 

In response, EPA and NHTSA remain 

confident that their projections of the 

future fleet mix are reliable, and that 

future changes in the fleet mix of 

footprints and sales are not likely to 

lead to more than modest changes in 

projected emissions reductions or fuel 

savings.75 Both agencies thus remain 

confident in these fleet projections and 

the resulting emissions reductions and 

fuel savings from the standards. As 

explained in Section II.B above, the 

agencies’ projections of the future fleet 

are based on the most transparent 

information currently available to the 

agencies. In addition, there are only a 

relatively few model years at issue. 

Moreover, market trends today are 

consistent with the agencies’ estimates, 

showing shifts from light trucks to 

passenger cars and increased emphasis 

on fuel economy from all vehicles. 

Finally, the shapes of the curves, 

including the ‘‘flattening’’ at the largest 

footprint values, tend to avoid or 

minimize regulatory incentives for 

manufacturers to upsize their fleet to 

change their compliance burden. Given 

the way the curves are fit to the data 

points (which represent vehicle models’ 

fuel economy mapped against their 

footprint), the agencies believe that 

there is little real benefit to be gained by 

a manufacturer upsizing their vehicles. 

As discussed above, the agencies’ 

analysis indicates that, for passenger car 

models with footprints falling between 

the two flattened portions of the 

corresponding curve, the actual slope of 

fuel economy with respect to footprint, 

if fit to that data by itself, is about 27 

percent steeper than the curve the 

agencies are promulgating today. This 

difference suggests that manufacturers 

would, if anything, have more to gain by 

reducing vehicle footprint than by 

increasing vehicle footprint. For light 

trucks, the agencies’ analysis indicates 

that, for models with footprints falling 

between the two flatted portions of the 

corresponding curve, the slope of fuel 

economy with respect to footprint is 

nearly identical to the curve the 

agencies are promulgating today. This 

suggests that, within this range, 

manufacturers would typically have 

little incentive to either incrementally 

increase or reduce vehicle footprint. The 

agencies recognize that based on 

economic and consumer demand factors 

that are external to this rule, the 

distribution of footprints in the future 

may be different (either smaller or 

larger) than what is projected in this 

rule. However, the agencies continue to 

believe that there will not be significant 

shifts in this distribution as a direct 

consequence of this rule. 

At the same time, adding another 

backstop standard would have virtually 

no effect if the standard was weak, but 

a more stringent backstop could 

compromise the objectives served by 

attribute-based standards—that they 

distribute compliance burdens more 

equally among manufacturers, and at 

the same time encourage manufacturers 

to apply fuel-saving technologies rather 

than simply downsizing their vehicles, 

as they did in past decades under flat 

standards. This is why Congress 

mandated attribute-based CAFE 

standards in EISA. This compromise in 

objectives could occur for any 

manufacturer whose fleet average was 

above the backstop, irrespective of why 

they were above the backstop and 

irrespective of whether the industry as 

a whole was achieving the emissions 

and fuel economy benefits projected for 

the final standards, the problem the 

backstop is supposed to address. For 

example, the projected industry wide 

level of 250 gm/mile for MY 2016 is 

based on a mix of manufacturer levels, 

ranging from approximately 205 to 315 

gram/mile 76 but resulting in an industry 

wide basis in a fleet average of 250 gm/ 

mile. Unless the backstop was at a very 

weak level, above the high end of this 

range, then some percentage of 

manufacturers would be above the 

backstop even if the performance of the 

entire industry remains fully consistent 

with the emissions and fuel economy 

levels projected for the final standards. 

For these manufacturers and any other 

manufacturers who were above the 

backstop, the objectives of an attribute 

based standard would be compromised 

and unnecessary costs would be 

imposed. This could directionally 

impose increased costs for some 

manufacturers. It would be difficult if 

not impossible to establish the level of 

a backstop standard such that costs are 

likely to be imposed on manufacturers 

only when there is a failure to achieve 

the projected reductions across the 

industry as a whole. An example of this 

kind of industry wide situation could be 

when there is a significant shift to larger 

vehicles across the industry as a whole, 

or if there is a general market shift from 

cars to trucks. The problem the agencies 

are concerned about in those 

circumstances is not with respect to any 

single manufacturer, but rather is based 

on concerns over shifts across the fleet 

as a whole, as compared to shifts in one 

manufacturer’s fleet that may be more 

than offset by shifts the other way in 

another manufacturer’s fleet. However, 

in this respect, a traditional backstop 

acts as a manufacturer specific standard. 

The concept of a ratchet mechanism 

recognizes this problem, and would 

impose the new more stringent standard 

only when the problem arises across the 

industry as a whole. While the new 

more stringent standards would enter 

into force automatically, any such 

standards would still need to provide 

adequate lead time for the 

manufacturers. Given the limited 

number of model years covered by this 

rulemaking and the short lead-time 

already before the 2012 model year, a 

ratchet mechanism in this rulemaking 

that would automatically tighten the 

standards at some point after model year 

2012 is finished and apply the new 

more stringent standards for model 

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77We note that NHTSA’s recent clarification of 

the light truck definitions has significantly reduced 

the potential for gaming, and resulted in the 

reclassification of over a million vehicles from the 

light truck to the passenger car fleet. 78 Increasing the GVWR of a light truck (assuming 

this was the only goal) can be accomplished in a 

number of ways, and must include consideration of: 

(1) Redesign of wheel axles; (2) improving the 

vehicle suspension; (3) changes in tire specification 

(which will likely affect ride quality); (4) vehicle 

dynamics development (especially with vehicles 

equipped with electronic stability control); and (5) 

brake redesign. Depending on the vehicle, some of 

these changes may be easier or more difficult than 

others. 

79For example, since many 2WD SUVs are 

classified as passenger cars, manufacturers have 

already warned that high car standards relative to 

truck standards could create an incentive for them 

to drop the 2WD version and sell only the 4WD 

version. 

years 2016 or earlier, would fail to 

provide adequate lead time for any new, 

more stringent standards 

Additionally, we do not believe that 

the risk of vehicle upsizing or changing 

vehicle offerings to ‘‘game’’ the 

passenger car and light truck definitions 

is as great as commenters imply for the 

model years in question.77 The changes 

that commenters suggest manufacturers 

might make are neither so simple nor so 

likely to be accepted by consumers. For 

example, 4WD versions of vehicles tend 

to be more expensive and, other things 

being equal, have inherently lower fuel 

economy than their 2WD equivalent 

models. Therefore, although there is a 

market for 4WD vehicles, and some 

consumers might shift from 2WD 

vehicles to 4WD vehicles if 4WD 

becomes available at little or no extra 

cost, many consumers still may not 

desire to purchase 4WD vehicles 

because of concerns about cost premium 

and additional maintenance 

requirements; conversely, many 

manufacturers often require the 2WD 

option to satisfy demand for base 

vehicle models. Additionally, increasing 

the footprint of vehicles requires 

platform changes, which usually 

requires a product redesign phase (the 

agencies estimate that this occurs on 

average once every 5 years for most 

models). Alternatively, turning many 

2WD SUVs into 2WD light trucks would 

require manufacturers to squeeze a third 

row of seats in or significantly increase 

their GVWR, which also requires a 

significant change in the vehicle.78 The 

agencies are confident that the 

anticipated increases in average fuel 

economy and reductions in average CO2

emission rates can be achieved without 

backstops under EISA or the CAA. As 

noted above, the agencies plan to 

conduct retrospective analysis to 

monitor progress. Both agencies have 

the authority to revise standards if 

warranted, as long as sufficient lead 

time is provided. 

The agencies acknowledge that the 

MY 2016 fleet emissions and fuel 

economy goals of 250 g/mi and 34.1 

mpg for EPA and NHTSA respectively 

are estimates and not standards (the MY 

2012–2016 curves are the standards). 

Changes in fuel prices, consumer 

preferences, and/or vehicle survival and 

mileage accumulation rates could result 

in either smaller or larger oil and GHG 

savings. As explained above and 

elsewhere in the rule, the agencies 

believe that the possibility of not 

meeting (or, alternatively, exceeding) 

fuel economy and emissions goals 

exists, but is not likely. Given this, and 

given the potential complexities in 

designing an appropriate backstop, the 

agencies believe the balance here points 

to not adopting additional backstops at 

this time for the MYs 2012–2016 

standards other than NHTSA’s 

finalizing of the ones required by EPCA/ 

EISA for domestic passenger cars. 

Nevertheless, the agencies recognize 

there are many factors that are 

inherently uncertain which can affect 

projections in the future, including fuel 

price and other factors which are 

unrelated to the standards contained in 

this final rule. Such factors can affect 

consumer preferences and are difficult 

to predict. At this time and based on the 

available information, the agencies have 

not included a backstop for model years 

2012–2016. However, if circumstances 

change in the future in unanticipated 

ways, the agencies may revisit the issue 

of a backstop in the context of a future 

rulemaking either for model years 2012– 

2016 or as needed for standards for 

model years beyond 2016. This issue 

will be discussed further in Sections III 

and IV. 

D. Relative Car-Truck Stringency 

The agencies proposed fleetwide 

standards with the projected levels of 

stringency of 34.1 mpg or 250 g/mi in 

MY 2016 (as well as the corresponding 

intermediate year fleetwide standards) 

for NHTSA and EPA respectively. To 

determine the relative stringency of 

passenger car and light truck standards 

for those model years, the agencies were 

concerned that increasing the difference 

between the car and truck standards 

(either by raising the car standards or 

lowering the truck standards) could 

encourage manufacturers to build fewer 

cars and more trucks, likely to the 

detriment of fuel economy and CO2

reductions.79 In order to maintain 

consistent car/truck standards, the 

agencies applied a constant ratio 

between the estimated average required 

performance under the passenger car 

and light truck standards, in order to 

maintain a stable set of incentives 

regarding vehicle classification. 

To calculate relative car-truck 

stringency for the proposal, the agencies 

explored a number of possible 

alternatives, and for the reasons 

described in the proposal used the 

Volpe model in order to estimate 

stringencies at which net benefits would 

be maximized. The agencies have 

followed the same approach in 

calculating the relative car-truck 

stringency for the final standards 

promulgated today. Further details of 

the development of this approach can be 

found in Section IV of this preamble as 

well as in NHTSA’s RIA and EIS. 

NHTSA examined passenger car and 

light truck standards that would 

produce the proposed combined average 

fuel economy levels from Table I.B.2–2 

above. NHTSA did so by shifting 

downward the curves that maximize net 

benefits, holding the relative stringency 

of passenger car and light truck 

standards constant at the level 

determined by maximizing net benefits, 

such that the average fuel economy 

required of passenger cars remained 31 

percent higher than the average fuel 

economy required of light trucks. This 

methodology resulted in the average 

fuel economy levels for passenger cars 

and light trucks during MYs 2012–2016 

as shown in Table I.B.1–1. The 

following chart illustrates this 

methodology of shifting the standards 

from the levels maximizing net benefits 

to the levels consistent with the 

combined fuel economy standards in 

this final rule. 

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80We assume slightly higher A/C penetration in 

2012 than was assumed in the proposal only to 

Continued 

BILLING CODE 6560–50–C 

The final car and truck standards for 

EPA (Table I.B.1–4 above) were 

subsequently determined by first 

converting the average required fuel 

economy levels to average required CO2

emission rates, and then applying the 

expected air conditioning credits for 

2012–2016. These A/C credits are 

shown in the following table. Further 

details of the derivation of these factors 

can be found in Section III of this 

preamble or in the EPA RIA. 


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correct for rounding that occurred in the curve 

setting process. 

81As NHTSA explained in the NPRM, the 

Conference Report for EPCA, as enacted in 1975, 

makes clear, and the case law affirms, ‘‘a 

determination of maximum feasible average fuel 

economy should not be keyed to the single 

manufacturer which might have the most difficulty 

achieving a given level of average fuel economy.’’ 

CEI–I, 793 F.2d 1322, 1352 (D.C. Cir. 1986). Instead, 

NHTSA is compelled ‘‘to weigh the benefits to the 

nation of a higher fuel economy standard against 

the difficulties of individual automobile 

manufacturers.’’ Id. The law permits CAFE 

standards exceeding the projected capability of any 

particular manufacturer as long as the standard is 

economically practicable for the industry as a 

whole. Similarly, EPA is afforded great discretion 

under section 202(a) of the CAA to balance issues 

of technical feasibility, cost, adequacy of lead time, 

and safety, and certainly is not required to do so 

in a manner that imposes regulatory obligations 

uniformly on each manufacturer. See NRDC v. EPA, 

655 F. 2d 318, 322, 328 (D.C. Cir. 1981) (wide 

discretion afforded by the statutory factors, and 

EPA predictions of technical feasibility afforded 

considerable discretion subject to constraints of 

reasonableness EPA predictions of technical 

feasibility afforded considerable discretion subject 

to constraints of reasonableness); and cf. 

International Harvester Co. v. Ruckelshaus, 479 F. 

2d 615, 640 (D.C. Cir. 1973) (‘‘as long as feasible 

technology permits the demand for new passenger 

automobiles to be generally met, the basic 

requirements of the Act would be satisfied, even 

though this might occasion fewer models and a 

more limited choice of engine types’’). 

TABLE II.D–1 EXPECTED FLEET A/C CREDITS (IN CO2 EQUIVALENT g/mi) FROM 2012–2016 

Average 

technology 

penetration 

(%) 

Average credit 

for cars 

Average credit 

for trucks 

Average credit 

for combined 

fleet 

2012 ................................................................................................................. 80 28 3.4 3.8 3.5 

2013 ................................................................................................................. 40 4.8 5.4 5.0 

2014 ................................................................................................................. 60 7.2 8.1 7.5 

2015 ................................................................................................................. 80 9.6 10.8 10.0 

2016 ................................................................................................................. 85 10.2 11.5 10.6 

The agencies sought comment on the 

use of this methodology for 

apportioning the fleet stringencies to 

relative car and truck standards for 

2012–2016. General Motors commented 

that, compared to the passenger car 

standard, the light truck standard is too 

stringent because ‘‘the most fuel efficient 

cars and small trucks already meet the 

2016 MY requirements’’ but ‘‘the most 

fuel efficient large trucks must increase 

fuel economy by 20 percent to meet the 

2016 MY requirements.’’ GM 

recommended that the agencies relax 

stringency specifically for large pickups, 

such as the Silverado. 

The agencies disagree with the 

premise of the comment that the 

standard is too stringent under the 

applicable statutory provisions because 

some existing large trucks are not 

already meeting a later model year 

standard. Our analysis shows that the 

standards are not too stringent for 

manufacturers selling these vehicles. 

The agencies’ analyses demonstrate a 

means by which manufacturers could 

apply cost-effective technologies in 

order to achieve the standards, and we 

have provided adequate lead time for 

the technology to be applied. More 

important, the agencies’ analysis 

demonstrate that the fleetwide emission 

standards for MY 2016 are technically 

feasible, for example by implementing 

technologies such as engine downsizing, 

turbocharging, direct injection, 

improving accessories and tire rolling 

resistance, etc. 

GM did not comment on the use of 

the methodology applied by the 

agencies to develop the gap between the 

passenger car and light truck 

standards—only on the outcome of the 

methodology. For the reasons discussed 

below, the agencies maintain that the 

methodology applied above provides an 

appropriate basis to determine the gap 

between the passenger car and light 

truck standards, and disagree with GM’s 

arguments that the outcome is unfair. 

First, GM’s argument incorrectly 

suggests that every individual vehicle 

model must achieve its fuel economy 

and emissions targets. CAFE standards 

and new GHG emissions standards 

apply to fleetwide average performance, 

not model-specific performance, even 

though average required levels are based 

on average model-specific targets, and 

the agencies’ analysis demonstrates that 

GM and other manufacturers of large 

trucks can cost-effectively comply with 

the new standards. 

Second, GM implies that every 

manufacturer must be challenged 

equally with respect to fuel economy 

and emissions. Although NHTSA and 

EPA maintain that attribute-based CAFE 

and GHG emissions standards can more 

evenly balance compliance challenges, 

attribute-based standards are not 

intended to and cannot make these 

challenges equal, and while the agencies 

are mindful of the potential impacts of 

the standards on the relative 

competitiveness of different vehicle 

manufacturers, there is nothing in EPCA 

or the CAA 81 requiring that these 

challenges be equal. 

We have also already addressed and 

rejected GM’s suggestion of shifting the 

‘‘cut off’’ point for light trucks from 66 

square feet to 72 square feet, thereby 

‘‘dropping the floor’’ of the target 

function for light trucks. As discussed 

in the preceding section, this is so as not 

to forego the rules’ energy and 

environmental benefits, and because 

there is little or no safety basis to 

discourage downsizing of the largest 

light trucks. 

Finally, NHTSA and EPA disagree 

with GM’s claim that the outcome of the 

agencies’ approach is unfairly 

burdensome for light trucks as 

compared to passenger cars. Based on 

the agencies’ market forecast, NHTSA’s 

analysis indicates that incremental 

technology outlays could, on average, be 

comparable for passenger cars and light 

trucks under the final CAFE standards, 

and further indicates that the ratio of 

total benefits to total costs could be 

greater under the final light truck 

standards than under the final passenger 

car standards. 

E. Joint Vehicle Technology 

Assumptions 

Vehicle technology assumptions, i.e., 

assumptions about technologies’ cost, 

effectiveness, and the rate at which they 

can be incorporated into new vehicles, 

are often controversial as they have a 

significant impact on the levels of the 

standards. The agencies must, therefore, 

take great care in developing and 

justifying these estimates. In developing 

technology inputs for the analysis of the 

MY 2012–2016 standards, the agencies 

reviewed the technology assumptions 

that NHTSA used in setting the MY 

2011 standards, the comments that 

NHTSA received in response to its May 

2008 Notice of Proposed Rulemaking 

(NPRM), and the comments received in 

response to the NPRM for this rule. This 

review is consistent with the request by 

President Obama in his January 26 

memorandum to DOT. In addition, the 

agencies reviewed the technology input 

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