From: <james.tamm@dot.gov>

To: <Chandana_L._Achanta@omb.eop.gov>, William Charmley/AA/USEPA/US@EPA, <Neil.Eisner@dot.gov>, <Steve.Wood@dot.gov>, R

<rebecca.yoon@dot.gov>, <Joanne.Petrie@dot.gov>

Date: 11/30/2010 03:32 PM

Subject: RE: Summary of interagency working comments on draft NOI under EO 12866 review

Chandana,

Attached is the latest version for final review.

Jim

From: Achanta, Chandana L. [mailto:Chandana_L._Achanta@omb.eop.gov] 

Sent: Tuesday, November 30, 2010 3:18 PM

To: 'Charmley.William@epamail.epa.gov'; Eisner, Neil (OST); Wood, Steve (NHTSA); 

'Moran.Robin@epamail.epa.gov'; Tamm, James (NHTSA); Yoon, Rebecca (NHTSA); Petrie, Joanne (OST)

Subject: Summary of interagency working comments on draft NOI under EO 12866 review

Please find attached a summary of interagency working comments received on the draft supplemental 

NOI currently under EO 12866 review. They are for your consideration and subject to further policy 

review.

Thanks. 
** E.O. 12866 Review – Revised Version – Do Not Cite, Quote, or Release During Review**

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EO12866_LD GHG-CAFE 2017+_RIN2060-AQ54; RIN2127-AK79_Supplemental NOI_– Revision per 12866 

Review – 11-29-10

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, and 600

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 531 and 533

[EPA-HQ-OAR-2010-0799; FRL-9212-4; NHTSA-2010-0131]

RIN 2060-AQ54; RIN 2127-AK79

2017 and Later Model Year Light-Duty Vehicle GHG Emissions and CAFE Standards: 

Supplemental Notice of Intent

AGENCIES: Environmental Protection Agency (EPA) and the National Highway Traffic 

Safety Administration (NHTSA), Department of Transportation (DOT).

ACTION: Supplemental notice of intent to conduct a joint rulemaking.

SUMMARY: On May 21, 2010, President Obama issued a Presidential Memorandum 

requesting that the Environmental Protection Agency (EPA) and the National Highway 

Traffic Safety Administration (NHTSA), on behalf of the Department of Transportation,

develop, through notice and comment rulemaking, a coordinated National Program under the 

Clean Air Act (CAA) and the Energy Policy and Conservation Act (EPCA), as amended by 

the Energy Independence and Security Act (EISA), to improve fuel economy and to reduce 

greenhouse gas emissions of light-duty vehicles for model years 2017-2025. President 

Obama requested that the agencies issue a Notice of Intent (NOI) to issue a proposed 

rulemaking that announces plans for setting stringent fuel economy and greenhouse gas 

emissions standards for light-duty vehicles for model year 2017 and beyond. On September 

30, 2010, the agencies issued the requested Notice, which described the agencies’ initial 

assessment of potential levels of stringency for a National Program for model years 2017-

2025 (See 75 FR 62739 (Oct. 13, 2010). This Supplemental Notice highlights input on many 

of the key issues the agencies have received in response to the September NOI and the 

accompanying Interim Joint Technical Assessment (TAR) developed by EPA, NHTSA, and 

the California Air Resources Board, and also provides an overview of many of the key 

technical analyses the agencies have planned and are conducting to support the upcoming 

proposed rule. The agencies currently expect to issue a proposed rulemaking for a 

coordinated National Program for model year 2017-2025 light-duty vehicles by September 

30, 2011, and a final rulemaking by July 31, 2012.
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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; email address: wysor.tad@epa.gov, or Assessment 

and Standards Division Hotline; telephone number (734) 214-4636; e-mail address 

asdinfo@epa.gov. DOT/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: 

How Can I Get Copies Of This Document and Other Related Information?

NHTSA and EPA have established dockets for the September 30, 2010 Notice of 

Intent and upcoming rulemaking under Docket ID numbers NHTSA-2010-0131 and EPAHQ-OAR-2010-0799, respectively. You may read the materials placed in the dockets (e.g., 

the comments submitted in response to the September 30, 2010 Notice of Intent by other 

interested persons) at any time by going to http://www.regulations.gov. Follow the online 

instructions for accessing the dockets. You may also read the materials at the EPA Docket 

Center or NHTSA Docket Management Facility 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.

How Do I Prepare and Submit Comments?

The dockets established by the agencies will remain open for the duration of the 

rulemaking. While the agencies have not established a set comment period for this 

Supplemental NOI, you may continue to submit comments to the dockets throughout the 

course of the rulemaking. An explanation of how to submit comments to the rulemaking 

dockets is available in the September NOI, 75 Fed. Reg. 62739 (Oct. 13, 2010), or you may 

contact the agency officials listed above for more information. 

I. Introduction

A. Purpose of this Supplemental Notice of Intent (NOI)

This Supplemental Notice of Intent represents a further step in the process that EPA 

and NHTSA have initiated to develop a proposed rulemaking to establish greenhouse gas 

(GHG) and fuel economy standards for model years 2017-2025 light-duty vehicles. This 

document is meant to aid the public’s understanding of some of the key issues facing the 
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agencies in developing the upcoming rulemaking. This Supplemental NOI highlights many of 

the key comments that the agencies have received in response to the initial Notice of Intent 

issued on September 30, 2010, and to the Interim Joint Technical Assessment Report that 

accompanied that Notice.

1

 This Supplemental NOI, however, does not present a 

comprehensive summary of comments received to date. This Supplemental NOI also

discusses the agencies’ plans for some of the key technical work and analyses that will be 

undertaken in developing the upcoming proposed rulemaking. 

The purpose of this Supplemental NOI has changed from the agencies’ original intent 

for this document. The September NOI stated that a principal goal of the Supplemental NOI 

would be “to narrow the range of potential stringencies for the future proposed standards, as 

well as to reflect new technical data and information and, as appropriate, further analysis 

supplementing the Interim Joint TAR.”2 However, given the short amount of time between 

the issuance of the September NOI/TAR and this Supplemental NOI, the agencies were 

unable to complete several additional pieces of technical research in time for inclusion in 

analysis to support this Supplemental NOI. Additionally, based on the stakeholder input 

between the end of September and now and on public comments, the agencies have concluded 

that narrowing the range of potential stringencies would not be appropriate at this time. As 

discussed further in this Notice, in order to develop the proposed standards, a more complete 

analysis will need to be done. Therefore, at this time we are not updating the assessment 

presented in the September NOI, and instead we will continue to conduct analyses for 

purposes of developing the proposal. Many of the public comments supported the agencies’ 

plans, noted in the September NOI, as to types and scope of analyses to be conducted for the 

proposed rulemaking. Therefore, the agencies are moving forward with this work as further 

described in Section III. As NHTSA and EPA move forward, we will continue to work with 

California in our technical assessments of potential standards, and will continue extensive 

dialogue with stakeholders. 

B. Background on the September NOI and Interim Joint Technical Assessment 

Report

As discussed above, the September NOI was issued in response to a May 21, 2010 

Presidential Memorandum, which requested that NHTSA and EPA develop, through notice 

and comment rulemaking, a coordinated National Program under the Clean Air Act (CAA) 

and the Energy Policy and Conservation Act (EPCA), as amended by the Energy 

Independence and Security Act (EISA), to improve fuel economy and reduce greenhouse gas 

emissions of light-duty vehicles for model years 2017-2025. The Presidential Memorandum 

stated “The program should also seek to achieve substantial annual progress in reducing 

transportation sector greenhouse gas emissions and fossil fuel consumption, consistent with 

my Administration's overall energy and climate security goals, through the increased

 

1

In addition to publishing the September NOI in the Federal Register (see supra Note 1 above), the agencies 

also posted both the September NOI and the Interim Joint TAR on our websites. Readers may access them at 

http://www.epa.gov/otaq/climate/regulations.htm and http://www.nhtsa.gov/fuel-economy

2

75 Fed. Reg. at 62741.
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domestic production and use of existing, advanced, and emerging technologies, and should 

strengthen the industry and enhance job creation in the United States.” This upcoming 

rulemaking will build on the first phase of the National Program for fuel economy and GHG 

emissions standards, for model year 2012-2016 vehicles, which was issued on April 1, 2010.3 

The Presidential Memorandum also requested that the agencies work with the State of 

California to develop a technical assessment to inform the rulemaking process. EPA and 

NHTSA worked with CARB to develop an initial technical assessment consistent with the 

President’s request. The agencies released the document, the Interim Joint Technical 

Assessment Report (TAR), in conjunction with the September NOI.4 

In the Interim Joint TAR, the agencies and CARB conducted an initial fleet-wide

analysis of improvements in overall average GHG emissions and fuel economy levels. The 

agencies stated in the September NOI that for purposes of an initial assessment, this range 

represents a reasonably broad range of stringency increases for potential future GHG 

emissions standards and is also consistent with the increases suggested by CARB in its letter 

of commitment in response to the President’s memorandum. We analyzed a range of

potential stringency scenarios for model year 2025, representing a 3, 4, 5, and 6 percent per 

year estimated decrease in GHG levels from the model year 2016 fleet-wide average of 250 

gram/mile (g/mi). Thus, the model year 2025 scenarios analyzed in the TAR range from 190 

g/mi (calculated to be equivalent to 47 miles per gallon, mpg) under the 3 percent per year 

reduction scenario to 143 g/mi (calculated to be equivalent to 62 mpg) under the 6 percent per 

year scenario.5 These levels correspond to on-road values of 37 to 50 mpg, respectively. For 

each of these scenarios, NHTSA, EPA, and CARB also analyzed four “technological 

pathways” by which these levels could be attained. These pathways were meant to represent 

ways that a hypothetical manufacturer could increase fuel economy and reduce greenhouse 

gas emissions, and do not represent ways that they would be required to or necessarily would

respond to future standards. Each technology pathway emphasizes a different mix of 

advanced technologies, by assuming various degrees of penetration of advanced gasoline 

 

3

See 75 FR 25324 (May 7, 2010).

4

“Interim Joint Technical Assessment Report: Light-Duty Vehicle Greenhouse Gas Emission Standards and 

Corporate Average Fuel Economy Standards for Model Years 2017-2025,” issued jointly by EPA, NHTSA and 

CARB, September 2010. Available at www.nhtsa.gov/fuel-economy and 

www.epa.gov/OTAQ/climate/regulations.htm.

5 The modeled scenarios, like the EPA’s MY 2012-2016 standards, include the potential use of air conditioning 

emission reductions, which EPA estimated at 15 grams (compared to a 2008 baseline) in 2025 for all four 

technology paths. The estimates for further air conditioning reductions are largely due to an anticipated increase 

in the use of alternative refrigerants. As a result of including A/C-related emission reductions in the modeling, 

however, the “mpg-equivalent” values presented in the September NOI and Interim Joint TAR do not reflect 

analysis of potential CAFE improvements, and should be taken as merely illustrative mpg levels if 

manufacturers achieved all modeled GHG emission improvements through reductions in tailpipe emissions. The 

agencies note additionally that real-world CO2 is typically 25 percent higher and real-world fuel economy is 

typically 20 percent lower. Thus the 3% to 6% range evaluated in the September assessment would span a range 

of real-world fuel economy values (again, if all improvements were achieved through reductions of tailpipe 

emissions) of approximately 37 to 50 mpg-equivalent, which correspond to the regulatory test procedure values 

of 47 to 62, respectively.
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technologies, mass reduction, hybrid electric vehicles (HEVs), plug-in hybrids (PHEVs), and 

electric vehicles (EVs).6

The TAR also discusses the significant additional technical information and analysis 

that will be needed to support the rulemaking development process. For the initial assessment 

in the TAR, we analyzed the vehicle fleet as one single industry-wide fleet, which did not 

account for differences among individual manufacturers and did not separately analyze car 

and truck fleet standards, as required by EPCA/EISA. By focusing the analysis on the 

technology itself, independent of the individual manufacturer, the agencies produced results 

that indicated how that single hypothetical fleet could achieve greater GHG reductions and 

improved fuel economy in the most efficient manner. Treating the entire fleet as a single fleet 

assumes, for example, that averaging GHG performance across all vehicle platforms is 

possible irrespective of who the individual manufacturer is for a particular vehicle platform. 

This can be thought of as analyzing the fleet as if there was a single large manufacturer, 

instead of multiple individual manufacturers. In addition, this analysis assumed there are no 

statutory or other limits on manufacturers’ ability to transfer credits between passenger car 

and light truck fleets, no limits on the ability to trade credits between manufacturers, and that 

all manufacturers fully utilize such flexibilities with no transfer costs in doing so. 

The approach used for the TAR analyses provides an initial and approximate 

evaluation of the potential costs and benefits of the fleet-wide scenarios modeled. The 

agencies, however, cautioned in the Interim Joint TAR that several of the simplifications 

employed in the September NOI/TAR evaluation would not be used for purposes of a full 

Federal rulemaking analysis because such analysis must reflect all statutory requirements and 

limitations faced by the agencies in setting GHG and CAFE standards. The agencies noted 

that EPCA/EISA, in particular, are fairly prescriptive as compared to the CAA. In order to 

ensure that NHTSA’s statutory framework is accounted for, and as permitted under the CAA, 

the agencies’ analysis for the NPRM will examine attribute-based standards under which each 

manufacturer is subject to its own individual passenger car and light truck CAFE and GHG 

requirements for each model year, where the standard for each manufacturer is based on the 

production-weighted average of its passenger car and light truck targets, with the targets 

established in the attribute-based curves. 

 

6

Pathway A represented an approach where the industry would focus on HEVs, with less reliance on advanced 

gasoline vehicles and mass reduction, relative to Pathways B and C; Pathway B focused on advanced gasoline 

vehicles and mass reduction at a more moderate level (higher than in Pathway A but less than in Pathway C); 

Pathway C focused on advanced gasoline vehicles and mass reduction, and to a lesser extent on HEVs; and 

Pathway D focused on the use of PHEV, EV, and HEV technology, and relied less on advanced gasoline 

vehicles and mass reduction. Further information on the four technology pathways is provided in Section II.A.3 

of the September NOI and in Section 6.3 of the Interim Report.
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Additionally, the NPRM’s CAFE analysis will account for EPCA/EISA restrictions on 

credit use and transfer/trading, the ability of manufacturers to pay fines in lieu of compliance, 

the differential impact of potential standards on individual manufacturers (historically 

relevant to NHTSA’s determinations of whether standards are economically practicable), and 

a more extensive analysis of relevant social benefits.7 The NOI also noted NHTSA’s practice 

of considering safety effects in determining appropriate levels of standards stringency, as 

recognized approvingly in case law over several decades. In addition, EPA has also 

considered safety impacts in previous mobile source rules, including for the 2012-2016 

National Program. Generally, the agencies stressed that much work remained to be done, and 

that the upcoming rulemaking to develop the standards for MYs 2017 and beyond will be 

based on a full analysis that is consistent with both statutes and similar to the analysis for the 

MYs 2012-2016 rulemaking. Moreover, as noted in the September NOI, the agencies 

analyzed scenarios in the 3-6% range, but we have made no decisions on the appropriate 

standards for the NPRM. For the full proposed rulemaking, the agencies are not precluded 

from considering standards outside of this range. For purposes of the Draft Environmental 

Impact Statement and NPRM discussed below, NHTSA intends to analyze standards both 

within and outside this range, as well as an alternative which is estimated to maximize net 

benefits.

II. Highlights of Stakeholder Input to Date on the September NOI and TAR

EPA and NHTSA requested comment on the initial assessments contained in the 

September NOI and the TAR. The agencies received comments from more than 30 

organizations and more than 100,000 individuals. In addition to the public comments, 

NHTSA, EPA, and CARB met individually with the ten largest automobile original 

equipment manufacturers (OEMs),

8

as well as environmental non-governmental organizations 

(NGOs),9and representatives of state and local governments.10 We summarize below some 

key themes that we heard from stakeholders, both in the public comments and in the outreach 

meetings. This summary is meant to provide an overview of many key issues we heard from 

stakeholders, and is in no way meant to reflect a full summary of the public comments 

received. We encourage readers interested in more details to review the actual public 

comments received in the agencies’ dockets. The agencies will continue to consider all of 

these comments as we develop the proposed rulemaking.

 

7 Relevant social benefits would include, for example, the social cost of carbon, criteria pollution reduction and 

energy security improvements. A much more detailed discussion of caveats with respect to the September 

NOI/TAR analysis can be found in Section 6.2 of the Interim Joint TAR, pp. 6-1 through 6-6.

8 NHTSA, EPA, and CARB met with the representatives of the following OEMs: Chrysler, Ford, General 

Motors, Honda, Toyota, Hyundai, Nissan, BMW, Daimler, and Volkswagen.

9 NHTSA, EPA, and CARB met with representatives from several environmental NGOs, including the Natural 

Resources Defense Council, Union of Concerned Scientists, Sierra Club, National Wildlife Federation, ACEEE, 

Environment America, Safe Climate Campaign, and Environmental Defense Fund.

10 NHTSA, EPA and CARB met with representatives of the National Association of Clean Air Agencies 

(NACAA) and the Northeast States for Coordinated Air Use Management (NESCAUM), and several 

representatives of individual state and local governments.
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A. Continuing the National Program for Model Years 2017-2025

There was widespread stakeholder support for continuing the National Program for 

improved fuel economy and greenhouse gas standards for model years 2017-2025.

In both the written comments in response to the NOI and in our recent meetings with 

automotive companies (both the meetings held during July-August 2010 prior to the NOI, and 

in our meetings with automotive companies in October-November 2010, after the publication 

of the NOI), all manufacturers indicated their support for the continuation of the National 

Program approach, established in the 2012-2016 Joint NHTSA-EPA final rule, for model 

years 2017 and later. The manufacturers emphasized the significant benefits in the 

development of coordinated fuel economy and greenhouse gas standards that can be met with 

a single fleet of vehicles that can be sold nationwide. OEMs were also supportive of the ongoing coordination between NHTSA and EPA with CARB in the development of 2017-2025 

program, including coordination on the time frame for the State and Federal rulemaking, in 

order to help ensure alignment of the state and federal standards.

Many automotive companies that provided comments and two OEM associations 

expressed concern regarding the potential effects a revised California Zero Emission Vehicle 

(ZEV) program could have on a manufacturer’s ability to achieve a “single national fleet,” 

because the ZEV program could drive the use of particular vehicle technologies that may not 

be chosen by manufacturers to meet the federal CAFE and GHG standards. 

Support for the concept of the National Program approach was also included in written 

comments from auto dealers and automotive component manufacturers.

The states and environmental NGOs also expressed strong support for the continuation 

of the National Program in model years 2017-2025, and stated that the agencies should 

continue to fully include California in this process. Environmental NGOs stated that stringent 

GHG and fuel economy standards are needed to make America more energy independent, 

reduce global warming pollution to curb the impacts of climate change, and save consumers 

money at the pump keeping it in the American economy. Several NGOs also stated that 

future standards can help ensure the U.S. auto industry remains competitive globally, and 

emphasized that other countries and regions are moving forward with strengthened standards 

and plans for vehicle electrification programs. 

Although the environmental NGOs support a National Program, some suggested that 

the goal of a “single national fleet” does not mean that the EPA and NHTSA standards need 

to be identical. These commenters suggested that, as with the MYs 2012-2016 final 

rulemaking, the two agencies’ standards continue to include some important differences based 

on differences in statutes, such as the treatment of air conditioning, electric vehicles, and 

credit transfers. 

In addition, we have received comments from more than 100,000 individuals 

supporting stronger federal fuel economy and greenhouse gas standards for model years 2017-

2025. 
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B. Level of the Standards

Since publication of the September NOI and release of the Interim Joint Technical 

Report, the agencies have held further meetings with the ten largest auto manufacturers 

(OEMs), and from those meetings and written comments from OEMs and two OEM 

associations, we received a range of perspectives from the companies regarding the potential 

levels of stringency that the agencies should consider evaluating for model years 2017-2025 

standards in the upcoming full rulemaking. In general, the OEMs indicated that they are 

investing significantly in the full range of technologies discussed by the agencies in the 

September NOI and TAR, and the OEMs agree that many of those technologies offer a 

significant potential for reducing fuel consumption and GHG emissions. However, many 

OEMs also commented that the potential of certain technologies to reduce fuel consumption 

and GHG emissions was less than the agencies had projected, as discussed further below. 

Auto manufacturers indicated that they know how to produce a wide range of advanced 

technologies, and that they intend to introduce a wide range of vehicle models that rely upon 

these technologies, including advanced gasoline and diesel vehicles, hybrid-electric vehicles, 

plug-in hybrid electric vehicles, and battery-electric vehicles, during the model years in 

question. Many OEMs also commented, however, that due to its fundamental approach (as 

well as specific assumptions regarding available technologies), the analysis presented in the 

TAR understated the challenges and costs that manufacturers would face in attempting to 

achieve the examined scenarios. 

Manufacturers stated that EPCA does not allow unlimited credit transfers, and stated 

that an analysis consistent with EPCA would support less stringent CAFE standards than an 

analysis of the sort presented in the September NOI and TAR. 

Both manufacturers and the Consumer Federation of America (CFA) supported the 

agencies’ plans to assess manufacturers’ individual abilities to meet new standards.

Both in meetings with the agencies and in written comments, many OEMs nonetheless 

indicated that the level of stringency they could achieve in the future was not necessarily 

constrained by the availability of technology – that is, that technology does exist that they 

could deploy to meet fairly stringent standards. However, the OEMs emphasized that their 

ability to deploy that technology in a way that would help them to meet stringent standards 

and continue to offer vehicles that consumers would purchase would depend on a number of

other important factors, some of which are outside their direct control. Some of these factors 

include: the current relative high cost for some advanced technologies and uncertainty 

regarding the degree of cost reduction that will occur in the 2017-2025 timeframe; the future 

price of gasoline and diesel fuel; the existence of future consumer incentives for some 

advanced technologies; the level of consumer acceptance for HEV, PHEV, and EV 

technologies; and the willingness of consumers to pay higher prices for vehicles with 

advanced technologies and lower fuel consumption. Many OEMs also stressed that their 

ability to comply with future standards will be closely tied to the regulatory details of the 

model year 2017-2025 program, including the specific shape of the CAFE and GHG 

footprint-based standard curves for passenger cars and trucks, EPA’s treatment of upstream 
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CO2 emissions for electricity-derived vehicle power, and other details regarding the structure 

of the program. 

Based on the uncertainties expected during the 2017-2025 time frame, as described 

above, one OEM association stated in written comments that numeric commitments to rates of 

stringency increase are not possible for the 2017-2025 time frame, and several OEMs stated

similarly in individual meetings with the agencies. However, just over half of the firms 

provided comments in individual meetings with the agencies on the maximum rate of increase 

in stringency that they thought their firms could achieve for that time frame (as opposed to 

rates of increase that they believed were feasible for the industry as a whole). Most were in 

the 3 percent to 4 percent per year range, although one stated 2.5 percent per year and another 

stated between 5 percent and 6 percent per year. In all cases, these estimates of potential rates 

of increase included the assumption that 15 g/mi worth of additional CO2 credits for air 

conditioning system improvements would be available for the MY 2017-2025 period, and the 

majority also included the assumption that upstream emissions from electric power generation 

would not be included in their compliance calculations for EVs and PHEVs.

Many commenters discussed the merits of the agencies including a framework for a 

“mid-term review” of the MYs 2017-2025 standards. The majority of OEMs supported a 

mid-term review, but varied in their views of how to structure it. OEMs who supported a 

future review stated that it was necessary due to a number of factors, such as the long time

between standards promulgated in 2012 and the implementation of the standards in the model 

year 2017-2025 timeframe, and also a number of key uncertainties regarding future events 

and conditions as mentioned above, like OEMs’ ability to reduce technology costs, future fuel 

prices, and the willingness of consumers to purchase the advanced technology vehicles. 

Many OEMs suggested that if the current rulemaking established standards from model year 

2017-2025, then a review of the later model year (2020-2025, or 2021-2025) standards should 

be undertaken in the 2014 to 2017 time frame, and re-examine only the appropriateness of 

those model year standards, in part due to lead time concerns with changing the earlier model 

year standards. As an alternative, one auto industry association suggested that instead of 

incorporating a mid-term review, the agencies should break the MY 2017-2025 standard 

setting process into three separate rulemakings, rather than establishing standards for all of 

these MYs in the current rulemaking process. 

OEM recommendations also varied regarding how such a review should be 

undertaken, what factors should be considered, and what should be the role of the agencies 

(including potentially CARB). Many OEMs stressed that a review should not just examine 

their “progress” in meeting the standards, but should also focus on external conditions (as 

discussed above, fuel price, technology costs, and consumer acceptance). Several

manufacturers and one OEM association additionally recommended that the review process 

include using an independent panel of experts to periodically consider whether rulemaking 

assumptions have turned out to be valid. Depending on the details and facts that come to light 

during the review, several OEMs stated that the results of any future review of the standards 

could result in an increase in stringency, a decrease in stringency, or no change in stringency. 

Most OEMs stated that they would give this topic additional consideration as the agencies 

move forward with the development of the Joint NPRM.
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Many state and local governments, including the Northeast States for Coordinated Air 

Use Management (NESCAUM), the National Association of Clean Air Agencies (NACAA), 

and the governors of nine states, along with environmental NGOs, and a large number of 

individuals voiced strong support for proposing standards based on a 6 percent annual rate of 

improvement, or alternatively, a 60 mpg standard by 2025. Many of these commenters stated 

that the agencies’ analysis in the September NOI and TAR indicates that the 6 percent level is 

technically feasible and cost-effective, would provide the greatest estimated lifetime owner 

fuel savings, and is necessary to keep the U.S. auto industry competitive globally by requiring 

them to build more fuel-efficient vehicles. NESCAUM commented that, under the initial 

assessment, the 6 percent rate of increase represented the only scenario that projected 

widespread introduction of PHEVs and EVs. In addition, Environment America submitted 

letters from more than 150 state and local elected officials, leaders of a number of businesses, 

and organizations supporting standards that would require 60 mpg by 2025. 

The Governors of nine states, including New York, Maine, Maryland, Massachusetts, 

New Mexico, Oregon, Pennsylvania, Vermont, and Washington, stated their support for a 

standard of 60 mpg by 2025, and cite a key reason that more efficient vehicles will reduce 

unnecessary consumer spending at the pump, keeping money in their state and local 

economies. 

Several NGOs stated that the September NOI and Interim TAR provide a strong basis 

for setting a standard of at least 6 percent annual improvement rate, which they believe is 

level that provides the greatest GHG reduction and oil saving benefits. Some groups stated 

that much of the basic vehicle design and technology to build a fleet that achieves at least 62 

mpg is already in use in vehicles today, in the form of hybrids, PHEVs, and EVs entering the 

market this fall. They further stated that this fleetwide level is achievable for manufacturers 

especially given that the agencies are providing 6 to 15 years of leadtime. 

The Union of Concerned Scientists and Natural Resources Defense Council 

conducted a joint analysis of fleetwide annual emission reductions in the MYs 2017-2025 

timeframe, and they stated the TAR substantiates their assessment’s conclusion that a 6%

annual reduction is both technically feasible and cost effective. Further, these groups stated 

that their analysis would support a 7% annual reduction by model year 2025 if using the 

TAR’s 0 g/mi accounting method for EV upstream emissions. Several other groups also 

recommended that the agencies analyze scenarios more stringent than 6 percent, such as 7 

percent, or other approaches such as a rate representing the point at which net benefits are 

maximized, or a rate representing the point at which total costs are equal to total benefits. 

Some NGOs also commented that the 3 and 4 percent scenarios fail to significantly advance 

clean vehicle technology, noting that the TAR analysis projected no use of EVs or PHEVs by 

manufacturers in meeting these scenarios.

Environmental NGOs and states that offered comments on a mid-term review 

expressed concern that it could be used to weaken the standards and that it could cause 

uncertainty for manufacturers by implying that later year standards would be somehow less 

binding. These commenters suggested that this could undermine the development of 
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advanced technologies, and that any review, if one must occur, should be limited in scope, 

focus only on later model years, occur only once, and consider more stringent standards.

C. Technology Costs, Effectiveness, Feasibility, and Safety 

Our stakeholder meetings with the OEMs, as well as the written comments from 

several OEMs and two trade associations, raised several concerns with the September NOI 

and the TAR regarding the agencies’ initial assessment of technology cost, effectiveness, and 

feasibility. In addition several OEMs discussed the important issues regarding vehicle mass 

reduction and potential impacts on vehicle safety. We summarize here some of the major 

issues raised by the OEMs.

Most automotive companies commented that the agencies’ estimates of most 

technology costs were in general too low, though for some OEMs this was not the case for all 

technologies. Nearly every OEM stressed that the agencies’ costs estimates for lithium-ion 

batteries for HEVs/PHEVs/EVs and mass reduction in particular were significantly too low 

compared to their projections for the 2020-2025 timeframe. One OEM association provided a 

list of several reasons why they believe the TAR cost estimates are too low, including the 

TAR projection that batteries will last the life of the vehicle and the agencies’ estimates for 

indirect costs, which they stated are low compared to a 2009 National Research Council 

Report. The OEM association also commented that the agencies should consider the potential 

for stranded capital in the 2017-2025 analysis in the event the MYs 2017-2025 standards 

result in a significant change in future vehicle designs compared to the investment 

manufactures have made and are making now to comply with the MYs 2012-2016 standards. 

This OEM association also noted more generally that while the OEMs supported the MYs 

2012-2016 standards, they had not evaluated the agencies’ analysis for that rulemaking 

carefully, and upon revisiting it found a number of assumptions carried into the TAR with 

which they do not agree.

OEMs discussed with the agencies their concerns that the effectiveness (the 

technologies’ ability to reduce CO2 and fuel consumption) of both individual technologies as 

well as the packages of technologies identified in the TAR were too optimistic. In some cases 

manufacturers stated that they thought the differences were due to a range of potential 

engineering considerations which the TAR may not properly have accounted for, such as 

vehicle performance, utility (e.g., towing capability), and comfort (e.g., noise, vibration, and 

harshness), the role of competing regulatory or technical requirements (e.g., criteria pollutant 

and/or safety standards), and assumptions regarding future gasoline fuel properties (e.g., 

octane levels), although OEMs acknowledged that their review of the TAR’s technical 

effectiveness assessment was still ongoing. However, there were a number of OEMs that 

agreed with our assessment of a number of specific packages or individual technologies. The 

agencies expect to discuss these issues with the OEMs in much more depth over the next 

several months in order to assess the basis of these concerns, which could be based in part on 

the possibility of different assumptions about baseline technologies by the agencies and the 

OEMs.
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With regard to the feasibility of applying the technologies identified in the TAR, in 

general the OEMs agreed with the agencies that most of the technologies identified in the 

TAR could be applied to at least some vehicle models in the 2017-2025 timeframe (as nearly 

all of the technologies considered are either available today or are expected to be introduced 

into the market within the next few years). However, the OEMs highlighted several specific 

areas where they did not agree with the assessment in the TAR, or they believed that 

challenges exist. All OEMs stated that mass reduction will be an important element of their 

future fuel economy/CO2 reduction strategy, however; all of the OEMs also stated that mass 

reduction cannot be done as aggressively as indicated by several of the Technology Pathways 

analyzed in the TAR. All manufacturers and one OEM association expressly stated that a 30 

percent net mass reduction from model year 2008 to model year 2025 was not technically 

feasible. Reasons cited included, but were not limited to, manufacturing constraints, mass 

increases associated with known and potential vehicle safety requirements that may be 

developed between now and model year 2025, future voluntary standards (such as those 

established by NHTSA through the New Car Assessment Program (NCAP) and the Insurance 

Institute for Highway Safety (IIHS)), and other potential voluntary improvements, 

noise/vibration/harshness considerations, and the potential safety implications of severe 

weight reduction. One OEM association noted the agencies’ commitment to on-going work 

noted in the September NOI and stated that the agencies must complete these studies to 

inform the Joint NPRM, indicating that a failure by the agencies (and particularly NHTSA) to 

evaluate fully the potential safety effects of mass reduction in the 2017-2025 timeframe could 

leave the final rule legally vulnerable. Many manufacturers commented that reducing mass in 

the 20-25% range would likely not be practical for many vehicle models because of high costs 

and, in some cases, because they have already incorporated today some of the mass reduction 

technologies that could be used to reduce mass in the 20-25% range. Manufacturers 

encouraged the agencies to continue to analyze this issue carefully. 

Several environmental NGOs and the state organizations also expressed support for 

the continued technical work EPA, NHTSA, and CARB are doing on costs, effectiveness, 

mass reduction, and vehicle safety. 

One automotive supplier association (the Aluminum Association) commented that the 

mass reduction on the order of 15-30 percent discussed in the TAR was technologically 

achievable based in part through the use of aluminum. 

Several OEMs also commented during our stakeholder meetings on the relatively high 

level of penetration of full hybrids for a number of the Technology Pathways for the higher 

levels of stringency evaluated in the TAR. Some auto companies indicated that the HEV 

levels which approached nearly 70 percent of the new vehicle fleet may not be feasible from a 

lead-time perspective (independent of the OEMs’ concerns regarding the willingness of 

consumers to purchase those quantities of HEVs).
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D. Program Design Elements, Credit Opportunities and Flexibilities

Several commenters provided feedback on how various credit programs and other 

flexibilities contained in the model year 2012-2016 program might be assessed or adapted for 

the MYs 2017-2025 program.

1. Program Design Elements

Automotive OEMs, both in their written comments and in recent stakeholder meetings 

with the agencies, have stated that the agencies should continue many of the program design 

elements as well as flexibilities provided in the model year 2012-2016 National Program. A 

number of OEMs have stated that the agencies should continue with the use of separate car 

and truck based standards (as required by EPCA/EISA) and continue to use vehicle footprint 

as the attribute for determining a manufacturer’s CAFE and CO2 standards. 

2. Credits and Flexibilities

All automotive OEMs supported the agencies providing as much flexibility as possible 

through credit programs. Automotive OEMs generally expressed support for the continuation 

of both NHTSA’s and EPA’s regulatory provisions regarding the banking and trading of fuel 

economy/GHG credits, including the provisions for carry-forward and carry-back of credits 

across model years. A number of OEMs expressed concern, that additional flexibilities could 

be particularly important for the MYs 2017-2025 time frame, given the stringency of the MY 

2012-2016 standards. Regarding other program flexibilities, OEMs in general support the 

continuation of the flexibilities included in the model year 2012-2016 National Program, 

including the availability of emission credits for improvement in air conditioning GHG 

emissions under the EPA standards, and the availability of off-cycle GHG emission credits for 

technologies that produce real-world emission reductions but that are not captured under the 

regulatory test procedure, and provisions for unlimited credit trading between cars and trucks 

and between companies. A number of OEMs also supported the continuation of the 2012-

2016 programs provisions for credit transfer between the car and truck fleets, as well as 

trading of credits between automotive firms. Some automotive OEMs and their trade 

associations suggested that EPA and NHTSA may need to consider additional program 

flexibility for small and intermediate volume manufacturers for model years 2017-2025, 

similar to the compliance flexibility provided by EPA in the TLAAS program in the model 

year 2012-2016 program. 

Some environmental groups similarly expressed support for provisions that give 

manufacturers greater flexibility, such as averaging, banking, and trading, but emphasized that 

the provisions must not undermine the technology-forcing nature or the emissions benefits of 

the program. Several groups also stressed the need for transparency to provide clear public 

accounting of any credits and compliance programs. One environmental group, however, 

stated that while flexibilities might have been appropriate for the early years of the National 

Program, they should not persist indefinitely, and the MYs 2012-2016 standards should have 

provided plenty of time for manufacturers to achieve compliance by adding technology to 

their vehicles. This commenter therefore argued that the agencies should dispense with the 
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credits, incentives and flexibilities discussed in the September NOI, including averaging, 

banking, and trading (ABT).

Environmental groups generally commented that EPA should establish air 

conditioning standards rather than continue credits based on air conditioning system 

improvements. 

Environmental groups commented that given the extensive amount of lead time 

contemplated for the rulemaking, along with the fleet improvements that will have arisen due 

to model year 2012-2016 standards, the agencies should not constrain stringency levels in the 

2017-2025 rule based on lead time considerations. These environmental groups indicated, as 

stated in the model year 2012-2016 rulemaking and the TAR, that most vehicle models are

redesigned (not merely refreshed) every five years, such that most manufacturers should have 

ample opportunity to apply new technologies prior to MY 2025. In addition, some 

environmental groups commented that there is no evidence or compelling policy rationale to 

support continuing the Temporary Lead-time Allowance Alternative Standards (TLAAS) that 

were provided in the model year 2012-2016 program. In addition, one NGO commenter 

urged that EPA establish standards for small volume manufacturers (i.e., those manufacturers 

with annual U.S. sales of less than 5,000 vehicles), and that NHTSA end the statutory 

exemption from generally-applicable CAFE standards allowed for manufacturers of less than 

10,000 vehicles worldwide annually, as this commenter believes that by 2017, these 

manufacturers will have had ample time to bring their fleets into compliance.

3. Treatment of Upstream Emissions

With the exception of one company, all OEMs and their trade associations supported 

the use of a zero gram/mile CO2 tailpipe emissions value under the EPA regulations for all 

electric vehicles (EVs) as well as the grid-derived electricity for plug-in hybrid electric 

vehicles (PHEVs). OEMs provided a range of reasons for their position, including their 

perspectives that: automotive manufacturers do not have any control over the GHG emissions 

used to produce grid electricity, thus it would be unfair for EPA to require manufacturers to 

accept the burden of emissions for which vehicles are not directly (at the tailpipe) responsible; 

the inclusion of upstream emissions would be a significant deterrent to OEMs for investing 

the significant capital resources necessary to bring EVs and PHEVs to the market, and the 

resulting compliance value for those vehicles would not be significantly better than for nonEV and non-PHEV vehicles; there is too much variation across the national electricity grid in 

terms of CO2-generation intensity for a single upstream value to be meaningful; and such an 

approach is not consistent with EPA’s historic regulation of light-duty vehicles, as EPA does 

not account for the upstream emissions associated with gasoline and diesel production in 

vehicle compliance values (the Edison Electric Institute commented similarly).

The Edison Electric Institute (EEI) commented that EPA should be consistent in the 

treatment of upstream emissions by not including upstream emissions for any vehicles. EEI 

argues that there is too much variation in upstream energy production to produce “national 

average” values for any energy type. 
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The treatment of advanced technology vehicles continues to be a key concern for 

environmental groups. Environmental groups continue to believe that upstream CO2

emissions should be accounted for in determining vehicle emission rates for all vehicles. 

NRDC and the Union of Concerned Scientists also support the inclusion of upstream 

emissions accounting for electric vehicles, and they provided an analysis and comments that 

they believe support standards increasing at a 6 percent annual rate if upstream emissions are 

included, and up to 7 percent annual rate if a 0 g/mile CO2 emissions rate is used for the 

electric portion of vehicle operation.

The agencies also received comments from Natural Gas Interests strongly supporting 

the inclusion of full life-cycle GHG emissions for all petroleum and non-petroleum-fueled 

vehicles in determining vehicle compliance, noting that natural gas vehicles have 30 percent 

lower life-cycle GHG emissions compared to their gasoline-fueled counterparts.

Two automotive material supplier trade associations, the American Iron and Steel 

Institute and the World Steel Association, recommended that EPA and NHTSA include not 

only upstream emissions from fuel production (e.g., gasoline fuel and electricity) in the 

regulatory standard, but the entire life-cycle emissions of the vehicle manufacturing process 

as well. These commenters suggested that the inclusion of lifecycle GHG emissions at both 

the supplier and the OEM levels from the manufacturing process is the most appropriate 

method to ensure an overall reduction in GHG emissions from light-duty vehicles.

The State of New York Department of Transportation commented that they recognize 

the valid concerns about upstream emissions generation in the production of electricity and 

other energy sources used in fuels, and encourage the agencies to work cooperatively with the 

Department of Energy to develop incentives to expand clean, low-carbon power generation in 

the U.S. 

E. Other Comments

The agencies received additional comments in several areas including assumptions 

used in economic and benefit analyses (e.g., discount rates should be higher or lower, rebound 

effect should be higher or lower, values used to assess the social cost of carbon, potential 

consumer welfare effects), ensuring program benefits beyond fuel savings are properly 

accounted for, consideration of higher oil price scenarios, and potential employment impacts. 

Several commenters also provided recommendations regarding the need for the agencies to 

consider the role of EV/PHEV vehicle charging locations/infrastructure in the development of 

the 2017-2025 standards.

NACAA commented that they believe state and local governments have a key role to 

play in supporting the development of infrastructure for electric vehicle charging. State 

commenters also asked the agencies to work with DOE to encourage the installation of 

charging stations in homes and public locations, such as parking lots. 
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NACAA also commented that there are potential co-benefits of improved fuel 

economy/GHG standards in helping meet clean air goals for criteria pollutants and air toxics, 

especially if the new standards are stringent enough to encourage meaningful penetrations of 

electrified vehicles. 

Several environmental NGOs recommended that the agencies should establish

backstop standards to ensure that the projected fleet-wide reductions are still met in the event 

of shifts in sales mix and average vehicle size. 

All of these comments will be considered as we conduct our analyses for the proposed 

rulemaking. 

III. Plans for Developing the Proposed Rulemaking 

A. Continued Stakeholder Outreach and Key Areas of Technical Analysis in 

Developing the Proposed Rulemaking

This Supplemental NOI is an early step in NHTSA’s and EPA’s plans to propose a 

coordinated National Program for model year 2017-2025 light-duty vehicles with which (as 

with the model year 2012-2016 program) manufacturers could comply by building a single 

vehicle fleet. As NHTSA and EPA proceed to develop the proposed rulemaking, we plan to 

continue our ongoing dialogue with stakeholders, and we specifically welcome additional data 

and information that can inform our rulemaking efforts. 

EPA and NHTSA intend to continue working with the California Air Resources Board 

in developing the underlying technical assessments that will inform our future proposed 

standards and we will continue to work with CARB on additional program related issues and 

seek their input as we work toward our common goal of a National Program. We will 

continue to coordinate on a number of on-going studies, including technology cost, 

effectiveness, mass feasibility, and mass-related safety studies.

As we indicated in the September NOI and Interim Joint TAR, there are numerous 

areas of technical work that EPA and NHTSA have underway as part of developing our 

proposed standards. Some of these key areas include new technical assessments of advanced 

gasoline, diesel, and hybrid vehicle technology effectiveness; several new projects to evaluate 

the cost, feasibility, and safety impacts of mass reduction from vehicles; an on-going project 

to improve our cost estimates for advanced technologies; further consideration of battery life, 

durability, cost and safety; and further review of the lead time needed to implement advanced 

technologies. The agencies are working very closely with the Department of Energy on a 

number of projects related to these technical areas.

In addition, for the 2017-2025 NPRM, NHTSA and EPA will conduct an analysis of 

the effects of the proposed standards on vehicle safety, including societal effects. CARB is 

undertaking and coordinating with EPA and NHTSA on a study of how a future vehicle 
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design that incorporates high levels of mass reduction complies with vehicle safety standards 

and voluntary safety guidelines. NHTSA is also initiating a new study of the feasible amount 

of mass reduction based on a mid-size passenger car platform, and the effects of several 

advanced mass reduction design concepts on fleet safety. The NHTSA studies are being 

coordinated with EPA, DOE, and CARB.

The agencies expect that several, but not all of these studies will be completed in time 

to inform the NPRM. Others are expected to be completed in time to inform the final rule.

As discussed above, the agencies’ initial assessment in the Interim Joint TAR was 

limited to a fleet-wide level analysis of improvements in overall average GHG emissions and 

fuel economy level, which included a number of simplifying assumptions. NHTSA and EPA 

acknowledged in the September NOI that for the upcoming proposed rulemaking, we would 

conduct a more refined analysis, as required by EPCA/EISA and as allowed by the CAA, 

including separate analyses for car and light truck vehicle fleets, year-by-year attribute-based 

standards, and manufacturer-specific estimates of potential attribute-based standard targets 

and costs, among other statutory requirements. NHTSA and EPA also will perform a more 

thorough assessment of the impacts of proposed standards, as was done for the model year 

2012-2016 rulemaking, including analysis of improved energy security, monetized benefits of 

CO2 reductions, impacts of other pollutants, an assessment of the societal costs and benefits of 

potential standards, an assessment of potential safety impacts, an assessment of impacts on 

automobile sales, an assessment of employment impacts, an assessment of the regulatory 

program’s key design elements and flexibility mechanisms, and related issues.

Finally, as discussed in the September NOI, EPA is currently in the process of 

conducting an assessment of the potential need for additional controls on light-duty vehicles’ 

non-greenhouse gas emissions and gasoline fuel quality. EPA expects to coordinate the 

timing of any final action on new non-greenhouse gas emissions regulations for light-duty 

vehicles and gasoline with the final action on greenhouse gas emissions and CAFE 

regulations discussed in this Supplemental NOI.

In his May 21, 2010 Memorandum, the President highlighted the opportunity for the 

U.S. to lead the world in developing a new generation of clean cars and trucks, to spur 

economic growth and to create high‐quality jobs. In developing the proposal, the agencies will 

continue to gather input from stakeholders, including the OEMs and labor unions, on the 

potential impacts of standards on worker productivity, jobs, the automotive sector, and the 

opportunities for economic growth.

B. Anticipated Rulemaking Schedule

The May 21, 2010 Presidential Memorandum called for EPA and NHTSA to include 

in the September Notice of Intent a “schedule for setting those standards as expeditiously as 

possible, consistent with providing sufficient leadtime to vehicle manufacturers.” As we 
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indicated in the September NOI, the agencies expect to issue a joint Notice of Proposed 

Rulemaking (NPRM) by September 30, 2011, and a final rule by July 31, 2012. 

As required by the National Environmental Policy Act (NEPA), and by NHTSA and 

Council of Environmental Quality (CEQ) regulations, NHTSA will be developing a Draft 

Environmental Impact Statement (DEIS), to inform the upcoming NPRM. In the coming 

months, NHTSA will issue a scoping notice to request comment on the regulatory options that 

the DEIS should consider. A Final EIS (FEIS) will be issued at least 30 days prior to the 

release of the final rule.

As with any notice-and-comment rulemaking process, the agencies will provide full 

opportunity for the public to participate in the rulemaking process, consistent with 

EPCA/EISA, the Clean Air Act, Administrative Procedure Act, other applicable law, and 

Administration policies on openness and transparency in government. Upon publication of 

the NPRM, the agencies will open a public comment period for receiving written comments 

and expect to hold at least one joint public hearing to receive oral comments. We will 

describe all of these opportunities for public involvement in the NPRM which will be 

published in the Federal Register, and we will post this information on each agency’s website 

associated with this rulemaking. 
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2017 and Later Model Year Light-Duty Vehicle GHG Emissions and CAFE Standards: 

Supplemental Notice of Intent

Dated: __________________________

____________________________________________

Ray LaHood, Secretary, Department of Transportation.
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2017 and Later Model Year Light-Duty Vehicle GHG Emissions and CAFE Standards: 

Supplemental Notice of Intent

Dated: __________________________

_____________________________________________________

Lisa P. Jackson, Administrator, Environmental Protection Agency