[Federal Register Volume 62, Number 152 (Thursday, August 7, 1997)]
[Notices]
[Pages 42556-42557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20797]


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FEDERAL TRADE COMMISSION


Labeling Requirements for Alternative Fuels and Alternative 
Fueled Vehicles

AGENCY: Federal Trade Commission.

ACTION: Grant of Partial Exemption from the Commission's Alternative 
Fuels and Alternative Fueled Vehicles Rule.

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SUMMARY: The Commission has granted the petition of the Ford Motor 
Company (``Ford'') requesting permission to use an alternative fueled 
vehicle (``AFV'') label in California that differs from the AFV label 
specified in the Commission's rule concerning Labeling Requirements for 
Alternative Fuels and Alternative Fueled Vehicles (``Rule''). Pursuant 
to Rule 1.26 of the Commission's Rules of Practice, and Commission 
grants, for good cause, the requested relief without a notice and 
comment period because the Commission finds that such a procedure is 
unnecessary to protect the public interest in this case.

EFFECTIVE DATE: August 7, 1997.

FOR FURTHER INFORMATION CONTACT:
Neil Blickman, Attorney, Federal Trade Commission, Bureau of Consumer 
Protection, Division of Enforcement, Sixth Street and Pennsylvania 
Ave., N.W., Washington, DC 20580, (202) 326-3038.

SUPPLEMENTARY INFORMATION: 

Part A--Background Information

    On May 19, 1995, the Commission published the Alternative Fuels and 
Alternative Fueled Vehicles Rule in the Federal Register (60 FR 26926). 
The Rule, in pertinent part, established labeling requirements for new 
covered AFVs. The labels disclose specific cost and benefit information 
to enable consumers to make reasonable purchasing choices and 
comparisons. The labeling requirements for new covered AFVs became 
effective November 20, 1995.
    Section 309.20 of the Rule provides that before offering a new 
covered AFV for acquisition to consumers, manufacturers must affix on a 
visible surface of each such vehicle a new vehicle label consisting of 
three parts. Part one must disclose objective information about the 
estimated cruising range and environmental impact of the particular 
AFV. Part two must disclose and explain specific factors consumers 
should consider before buying an AFV. Part three must list specific 
toll-free telephone numbers for consumers who want to call the Federal 
government for more information about AFVs. Section 309.20 of the Rule 
further states that no marks or information other than that specified 
by the Rule may appear on the label.
    With respect to environmental impact, the labels must tell 
consumers whether or not the vehicle has met an Environmental 
Protection Agency (``EPA'') emission certification standard and, if so, 
what standard. If a vehicle has been certified, that fact must be noted 
with a mark in a box on the label, and a caret must be inserted above 
the standard the vehicle has been certified to meet. The graphic on the 
label depicts seven EPA emissions standards in increasing order of 
stringency.
    For several years, EPA has promulgated emissions classification 
standards as part of its Federal Motor Vehicle Control Program, which 
establishes pollution limits for ``criteria air pollutants'' (i.e., 
hydrocarbons, carbon monoxide, nitrogen oxides, and particulate 
matter). Each of these pollutants is released into the air from an 
automobile's tailpipe as exhaust. In addition, hydrocarbons in vapor 
form also are released due to the evaporation of fuel and during 
refueling. The standards apply to new motor vehicles manufactured in 
specified model years.

[[Page 42557]]

After manufacturers submit appropriate test reports and data, the EPA 
Administrator issues a ``certificate of conformity'' to those vehicle 
manufacturers demonstrating compliance with the applicable emissions 
standards.
    Pursuant to its authority under the 1990 Clean Air Act 
Amendments,\1\ EPA began issuing stricter emission standards for each 
model year as a way of reducing levels of the criteria air pollutants. 
One set of standards, the Tier 1 standards, was phased in beginning 
with the 1994 model year. The second set of standards establishes five 
stricter standards as part of a new ``clean-fuel vehicles'' program.\2\ 
To qualify as a clean-fuel vehicle, a vehicle must meet one of five 
sets of increasingly stringent standards. The standards are 
denominated, in increasing order of stringency, TLEV (``Transitional 
Low Emission Vehicle''), LEV (``Low Emission Vehicle''), ULEV (``Ultra 
Low Emission Vehicle''), ILEV (``Inherently Low Emission Vehicle''), 
and ZEV (``Zero Emission Vehicle''). Disclosures regarding both sets of 
EPA emission standards are required on the Rule's labels for new 
covered AFVs because the Commission determined that information 
concerning EPA emission certification levels provides a simple way of 
comparing different AFVs and, therefore, is useful to consumers 
considering AFV acquisitions.\3\
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    \1\ Pub. L. 101-549, 104 Stat. 2399 (1990).
    \2\ See 40 CFR 88 (1996).
    \3\ 60 FR 26926, 26946 (May 19, 1995).
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Part B--Ford's Proposal

    In 1996, after the Commission promulgated its Rule, the State of 
California Air Resources Board (``CARB'') established a stringent 
emission standard denominated SULEV (``Super Ultra Low Emission 
Vehicle''). Although EPA has not amended its regulations to adopt this 
standard, according to staff at EPA and CARB, an AFV in California 
certified as meeting the requirements of the CARB SULEV standard is 
certified to a stricter emissions standard than a ULEV plus ILEV 
certified vehicle.\4\ Furthermore, a vehicle certified to a SULEV plus 
ILEV standard is certified to a stricter emissions standard than a 
SULEV certified vehicle.
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    \4\ According to EPA, a vehicle certified as meeting the 
requirements to both the ULEV and ILEV standards has lower combined 
exhaust and evaporative emission than an ILEV certified vehicle.
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    The California LEV program requires Ford to sell a specified 
percentage of vehicles that are certified to the LEV and ULEV 
standards. By certifying vehicles to the SULEV standard, however, Ford 
receives additional vehicle credits to comply with this program. Ford 
is in the process of certifying AFVs in California to the CARB SULEV 
emission standard and the EPA ILEV emission standard. Ford wishes to 
disclose to consumers in California information indicating that an AFV 
has been certified to the CARB SULEV emission standard. The problem 
Ford has encountered is that the Commission's AFV label provides no 
means of conveying such information because the SULEV emission standard 
did not exist at the time the Rule was promulgated, and, therefore, is 
not included as a disclosure on the Commission's AFV label.
    Ford, therefore, petitioned the Commission to permit it to use an 
AFV label, in California only, that differs in two respects from the 
AFV label described in section 309.20 of the Rule: \5\
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    \5\ Ford is a manufacturer of AFVs covered by the Rule. See 16 
CFR 309.1(f) and 309.1(r).
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    (1) To convey accurate information to consumers in California, Ford 
requested permission to add a check-box to the label with accompanying 
text that reads, ``This vehicle meets the California Air Resources 
Board emission standard noted below.''
    (2) For applicable new covered vehicles, Ford also requested 
permission to add ``SULEV'' and ``SULEV + ILEV'' disclosures to the 
list of emissions standards on the AFV label, between the ``ULEV + 
ILEV'' and ``ZEV'' standards.
    Ford asserted that granting its petition will provide additional 
useful information to consumers considering AFV acquisitions in 
California, and will permit it to demonstrate to consumers in that 
state the technological advances it has made in producing cleaner, 
lower-emitting vehicles.\6\
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    \6\ The Commission previously has granted similar requests 
without notice and comment procedures. See Fuel Rating Rule 
(formerly Octane Rule) exemptions granted to Sunoco in 1979 (44 FR 
33740) and in 1990 (55 FR 1871); to Gilbarco, Inc. in 1988 (53 FR 
29277); to Gilbarco on behalf of Exxon in 1989 (54 FR 14072); to 
Dresser Industries, Inc. on behalf of several gasoline refiners in 
1991 (56 FR 26821); to the Bennett Pump Co. on behalf of Wesco Oil 
Co. in 1993 (58 FR 64406); and to Gilbarco on behalf of several 
gasoline refiners in 1995 (60 FR 57584).
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    The Commission has determined that including the CARB SULEV 
emission standard on labels in California for new covered AFVs, in the 
format proposed by Ford, is appropriate, feasible, and consistent with 
the Rule's intent. In issuing the Rule, the Commission concluded that 
requiring disclosure of emission certification standards is appropriate 
and would be useful to consumers. The Commission noted further that 
incorporating environmental considerations into national energy policy 
was a key goal of the Energy Policy Act of 1992 (``EPA 92''),\7\ 
pursuant to which the Rule was promulgated, and improving the 
environment was a principal purpose of that statute. EPA 92 gives 
special attention to the fact that the environmental performance of 
alternative fuels differs, and that those differences need to be 
explained to consumers.\8\
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    \7\ Pub. L. 102-486, 106 Stat. 2776 (1992).
    \8\ 60 FR 26926, 26946.
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    In the Commission's view, granting Ford's petition to permit it to 
include the SULEV emission standard on AFV labels will provide 
additional comparative information regarding alternative fuels that 
will be helpful to consumers in California considering AFV acquisitions 
(e.g., fleet operators as well as environmentally concerned consumers). 
Specifically, because AFVs are certified to a specific emission 
standard, disclosure of the SULEV certification level will provide a 
simple and even more useful way of comparing different AFVs in 
California. Disclosure of additional objective data such as the SULEV 
certification level also will benefit consumers in California 
attempting to evaluate competitive advertising and marketing claims 
regarding any AFV's environmental performance.
    In addition, the Commission has determined that the AFV labeling 
approach proposed by Ford offers a clear, conspicuous, and easily 
readable disclosure to consumers of all Rule-required information and 
complies with the intent of the regulation. Furthermore, granting the 
AFV label variances requested will not adversely affect the public 
interest or result in any consumer injury, but rather will provide 
additional useful information to consumers while accommodating a 
technological development in the industry. Therefore, the Commission is 
granting Ford permission to use its proposed AFV label on new covered 
AFVs, provided that Ford uses its modified AFV label only in the State 
of California, and complies with the Rule's AFV label specifications in 
all other respects.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 97-20797 Filed 8-6-97; 8:45 am]
BILLING CODE 6750-01-M