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1 of [ 0721 FRM Preamble EO12866_GHG+Fuel Eff Stds for Med
- Heavy
- Duty Engines+Vehicles 2060
- AP61.docx ] **ENVIRONMENTAL PROTECTION AGENCY**  40 CFR Parts 85, 86, 600, 1036, 1037, 1039, 1065, 1066, and 1068 **DEPARTMENT OF TRANSP ORTATION**  National Highway Traffic Safet y Administration 49 CFR Parts 5 23, 534, and 5 35 [EPA

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– OAR

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– 0162; NHTSA
- 2010
- 00 79 ; FRL
- xxxx - x] RI N 2060
- AP61; RI

N 2127
- AK74 Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium
- and Heav y - Duty

Engines and Vehi cles AGENCIES: Environmental Protection Agency (EPA) and National Highway Traffi c Safety Administration (NHTSA) ACTION: Final Rules

__________________________________________________________________ SUMMARY: EPA and NHTSA , on behalf of the Department of Transportation, are each finalizing rules to establish a comprehensive H eavy - D ut y N ational P rogram that will reduce greenhouse gas emissions and fuel consumption for on
- road heav y - dut y vehicles , responding to the President’s directive on May 21, 2010, to take coordinated steps to produce a new generation of clean vehicles
. NHTSA’s final fuel consumption standards and EPA’s final carbon dioxide ( CO 2 ) emissions standards are tailored to each of three regulatory

categories of he av y - dut y vehicles: ( 1 ) Combination Tractors ; (2 ) Heav y - duty Pickup Trucks and Vans; and (3) Vocational Vehicles. The rules include separate standards for the engines that power combination tractors and vocational vehicles. Certain rules are exclusive to the EPA program. These include EPA ’ s final hydrofluorocarbon emissions standards to control leakage from air conditioning s ys tems in combination tractors, and pickup trucks and vans. These also include EPA’s final nitrous oxide (N 2 O) and methane (CH 4 ) emis sions standards that will appl y to all heav y duty engines, pickup truck s and vans. EPA is also finalizing provisions allowing light
duty vehicle manufacturers to use CO 2 credits to meet the light
- dut y vehicle N 2 O and CH 4 standards , and a technical amendment to the criteria pollutant emissions require ment s for certain switch locomotives
. EPA’s final greenhouse gas emission standards under the Clean Air Act w ill begin with model year 2014. NHTSA’s final fuel consumption standards under the Energy******* **E.O. 12866 Review**

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2 of In dependence and Security Act of 2007 w ill be voluntary in model years 2014 and 2015, becoming mandatory with model year 201 6 for most regulatory categories
. Commercial trailers are not regulated in this phase of the Heavy
- Duty National Program. The agencies estimate that the combined standards will reduce CO 2 emissions by approximately

280 million metric tons and save over 500 million barrels of oil over the life of vehicles sold during the 2014 through 2018 model years , providing over $ 7 b illion in net societal benefits, and $4 9 b illion in net societal benefits when private fuel savings are considered
. DATES: These final rules are effective on **[Insert date 6**  **0 days after publication in the Federal**  **Register] ,**  sixt

y days after date of

publication in the **Federal Register**
. The incorporation b y reference of certain publications listed in this regulation is approved b y the Director of the Federal Register as of **[Insert date 6 0 days**  **after publication in the**  **Federal Register]**
. **ADDRESSES:** EPA and NHTSA have established dockets for this action under Docket ID No. EPA

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– 0162 and NHTSA
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- 0079 , respectively
. All documents in the docket are listed on the www.regulations.gov web site. Although listed in the index, some information i s not publicly availab le, e.g. , confidential business information or other information whose disclosure is restricted b y statute. Certain other material, such as cop yri ghted material, is not placed on the Internet and will be publicly available onl y in hard copy form. Publicly

available docket materials are available either electronically

through www.regulations.gov or in hard cop y at the following locations: **EPA** : EPA Docket Center, EPA/DC , EPA West Building, 1301 Constitution Ave., N.W., Room 3334, Wash ington DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday

through Friday , excluding legal holiday s. The telephone number for the Public Reading Room is (202) 566

– 174 4, and the telephone number for the Air Docket is (202) 566
- 1742. **NHT SA**  : Docket Management Facilit y, 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 thr ough Friday , except Federal holiday s. **FOR FURTHER INFORMATION CONTACT:** NHTSA: Li ly Smith , Office of Chief Counsel, National Highway Traffic Safet y Administration, 1200 New Jersey Avenue, SE, Washington, DC 20590. Telephone: (202) 366
- 0949 . EPA: Lauren Steele , Office of Transportation and Air Qualit y, Assessment and Standards Division (ASD), Environmental Protection Agency , 2000 Traverwood Drive, Ann Arbor, MI48105; telephone number: (734) 214
- 4788 ; fax number: (734) 214
- 4816 ; email address: steele.lauren@epa.gov , or contact the Assessment and Standards Division , email OTAQPUBLICWEB @epa.gov. SUPPLEMENTARY INFORMATION:******* **E.O. 12866 Review**

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3 of 

### A. **Does this Action Apply to Me** This action affect s companies that manufacture, sell, or import into the United States new heav y - dut y engines and new Class 2b through 8 trucks, including combination tractors, school and transit buses, vocational vehicles such as utility service trucks, as well as 3⁄4
- ton and 1
- ton pickup trucks and vans. The heav y - duty category incorporates all motor vehicles with a gross vehicle weight rating of 8,500 pounds or greater, and the engines that power them, except for medium
- duty passenger vehicles already covered by

the greenhouse gas emissi ons standards and corporate average fuel econom y standards issued for light
- dut y model ye ar 2012
- 2016 vehicles. Regulated categories and entities include the following: Category NAI CS Code a Examples of Potentially Affected Entities Industry 336111 Motor Vehicle Manufacturers, Engine and Truck Manufacturers 336112 336120 Industry 541514 Commercial Importers of Vehicles and Vehicle Components 811112 811198 Industry 336111 Alternative Fuel Vehicle Converters

336112 422720 454312 541514 541690 811198 Note: a North American Industry Classification System (NAICS) This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely covered by th ese rules . This table lists the ty pes of entities that the agencies are aware may be regulated by this action. Other ty

pes of entities not listed in the table could also be regulated. To determine whether your activities are regulated by this action, you should carefully examine the applicability criteria in the referenced regulations. You may

direct questions regarding the applicability of this action to the persons listed in the preceding **FOR FURTHER INFORMATION CONTACT** section.
**Table of Contents** A. Does this Action Apply to Me I. Overview******* **E.O. 12866 Review**

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4 of A. Introduction B. Building Blocks of the Heav y - duty National Program C. Summary

of the Final EPA and NHTSA HD National Program D. Summary

of Costs and Benefits of the HD National Program E. Program Flexibilities F. EPA and NHTSA Statutory Authorities G. Future HD GHG and Fuel Consumption Rulemakings II. Final GHG and Fuel Consumption Standards for Heav y - duty Engines and Vehicles A. What Vehicles Will Be Affected?

B. Class 7 and 8 Combination Tractors C. Heav y - Dut y Pickup Trucks and Vans D. Class 2b
- 8 Vocational Vehicles E. Other Standards Provisions III. Feasibility

Assessments and Conclusions A. Class 7
- 8 Combination Tractor B. Heav y - Dut y Pickup Trucks and Vans C. Class 2b
- 8 Vocational Vehicles IV . Final Regulatory

Flexibility

Provisions A. Averaging, Banking, and Trading Program B. Additional Flexibility

Provisions V. NHTSA and EPA Compliance, Certification, and Enforcement Provisions A. Overview B. Heav y - dut y Pickup Trucks and Vans C. Heav y - Dut y Engines D. Class 7 and 8 Combination Tractors******* **E.O. 12866 Review**

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5 of E. Class 2b
- 8 Vocational Vehicles F. General Regulatory

Provisions G. Penalties VI . How Will This Program Impact Fuel Consumption, GHG Emissions, and Climate Change? A. What Methodologies Did the Agencies Use to Project GHG Emissions and Fuel Consumption Impacts? B. MOVES Anal ys is C. What Are the Projected Reductions in Fuel Consumption and GHG Emissions? D. Overview of Climate Change Impacts from GHG Emissions E. Changes in Atmospheric CO 2 Concentrations, Global Mean Temperature, Sea Level Rise, and Ocean pH Associated with the Program’s GHG Emissions Reductions VII. How Wi ll This Final Action Impact Non
- GHG Emissions and Their Associated Effects? A. Emissions Inventory

I mpacts B. Health Effects of Non
- GHG Pollutants C. Environmental Effects of Non
- GHG Pollutants D. Air Qualit y Impacts of Non
- GHG Pollutants VIII. What are the Agencies’ Estimated Cost, Economic, and Other Impacts of the Final Program? A. Conceptual Framework for Evaluating Impacts B. Costs Associated With the Final Program C. Indirect Cost Multipliers D. Cost per Ton of Emissions Reductions E. Impacts of Reduction in Fuel Consumption F. Class Shifting and Fleet Turnover Impacts******* **E.O. 12866 Review**

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6 of G. Benefits of Reducing CO 2 Emissions H. Non
- GHG Health and Environmental Impacts I. Energy Security Impacts J. Other Impacts K. The Effect of Safet y Standards and Voluntary Safet y Improvements on Vehicle Weight L. Summary

of Costs and Benefits from the Greenhouse Gas Emissions Perspective M. Summary

of Costs and Benefits from the Fuel Efficiency Perspective N. Employ

ment Impacts IX . Anal ys is of the Alternatives A. What Are the Alternatives that the Agencies Considered? B. How Do These Alternatives Compare in Overall GHG Emissions Reductions and Fuel Efficiency and Cost? C. What I s the Agencies’ Decision Regarding Trailer Standards? X. Public Participation XI . NHTSA’s Record of Decision A. The Agency ’s Decision B. Alternatives Considered by NHTSA in Reaching its Decision, Including the Environmentally

Preferable Alternative C. Factors Balanced b y NHTSA in Making its Decision D. How the Factors and Considerations Balanced by NHTSA Entered into its Decision E. The Agency ’s Preferences among Alternatives Based o n Relevant Factors, In cluding Economic and Technical Considerations and Agency Statutory Missions F. Mitigation XII. Statutory

and Executive Order Reviews XIII. St atutory

Provisions and Legal Authorit y******* **E.O. 12866 Review**

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7 of A. EPA B. NHTSA List of Subjects 

## I. **Overview A.**  **Introduction** EPA and NHTSA (“the agencies”) are announcing a first
- ever program to reduce greenhouse gas (GHG) emissions and fuel consumption in the heavy
- dut y highway vehicle sector. This broad sector

– ranging from large pickups to sleeper
- cab tractor s – together represent the second largest contributor to oil consumption and GHG emission s from the mobile source sector , after light
- dut y passenger cars and trucks. These are the second joint rules issued by the agencies, following on the April 1, 2010 standards to sharply reduce GHG emissions and fuel consumption from MY 2012
- 2016 passenger cars and light trucks (published on May 7, 2010 at 75 FR 25324 ). In a May 21, 2010 memorandum to the Administrators of EPA and NHTSA (and the Secretaries of Transportation and Energy) , the President stated that “America has the opportunity

to lead the world in the development of a new generation of clean cars and trucks through innovative technologies and manufacturing that will spur economic growth and create high
- quality domes tic jobs, enhance our energy security , and improve our environment.” 2 , 3 In the May 2010 memorandum, the President specifically request ed the Administrators of EPA and NHTSA to “immediately begin work on a joint rulemaking under the Clean Air Act (CAA) and the Energy Independence and Security Act of 2007 (EISA) to establish fuel efficiency and greenhouse gas emissions standards for c ommercial m edium
- and h eav y - d ut y o n - h ighway v ehicles and w ork trucks beginning with the 2014 model year (MY).” In this final rulemaking each agency is addressing this Memorandum b y adopting rules under its respective authority that together comprise a coordinated and comprehensive HD National Program designed to address the urge nt and closely intertwined challenges of reduction of dependence on oil, achievement of energy securit y, and amelioration of global climate change.

2 Improving Energy Security, American Competitiveness and Job Creation, and Environmental Protection Through a Transformation of Our Nation’s Fleet of Cars And Trucks , ” Issued May 21, 2010, published at 75 FR 29399 , May 26, 2010
. 3 The May 2010 Presidential Memorandum also directed EPA and NHTSA, in close coordination with the California Air Resources Board, to build on the National Program for 2012
- 2016 MY light
- duty vehicles by developing and proposing coordinated light - duty vehicle standards for MY 2017
- 2025. The agencies have taken an initial step in this process, releasing a Joint Notice of Intent and Initial Joint Technical Assessment Report in September 2010 (75 FR 62739) , and a Supplemental Notice of Intent (75 F R 76337). The agencies plan to issue a full light
- duty vehicle proposal to extend the National Program to MY 2017
- 2025 in September 2011.******* **E.O. 12866 Review**

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8 of At the same time, the final program will enhance American competitiveness and job creation, benefit consumers and businesses b y reducing costs for transporting goods, and spur growth in the clean energy sector. The HD National Program the agencies are finalizing today reflects a collaborative effort between the agencies, a range of public interest nongovernmental organizations (NGOs), the state of California and the regulated industry
. At the time of the President’s announcement, a number of major HD truck and engine manufacturers representing the vast majority of this industry , and the California Air Resources Board (California ARB) , sent letters to EPA and NHTSA supporting the creation of a HD National Program based on a common set of principles. In the letters, the stakeholders committed to working with the agencies and with other stakeholders t oward a program consistent with common principles, including:

 In creased use of existing technologies to achieve significant GHG emissions and fuel consumption reductions;  A program that starts in 2014 and is fully phased in by 2018;  A program that w orks towards harmonization of methods for determining a vehicle’s GHG and fuel efficiency , recognizing the global nature of the issues and the industry ;  Standards that recognize the commercial needs of the trucking industry ; and  In centives leading to the earl y introduction of advanced technologies. The final rules adopted today reflect these principles. The final HD National Program builds on many years of heavy
- dut y engine and vehicle technology

development to achieve what the agencies believe is the greatest d egree of GHG emission and fuel consumption reduction appropriate , technologicall y and economically

feasible, and cost
- effective for model years 2014
- 2018
. In addition to taking aggressive steps that are reasonably possible now, based on the technological opportunities and pathways that present themselves during these model years , the agencies and industry

will also continue learning about emerging opportunities for this complex sector to further reduce GHG emissions and fuel consumption through future regu latory

steps . Similarly , the agencies will parti cipate in efforts to improve our ability to accuratel y characterize the actual in
- use fuel consumption and emissions of this complex sector. As technologies progress in the coming years and as the agencies improve the regulatory

tools to evaluate real world vehicle performance , we expect that we will develop a second phase of regulations to reinforce these initial rules and achieve further reductions in GHG emissions and fue l consumption reduction for the mid
- and longer
- term time frame (beyond 2018)
. The agencies are committed to working with all interested stakeholders in this effort and to the extent possible working towards alignment with similar programs being developed in Canada, Mexico, Europe, China, and Japan. In doing so, we will continue to evaluate man y of the structural and technical decisions we are making in today ’s final action in the context of new technologies and the new regulatory

tools that we expect to realize in the future.******* **E.O. 12866 Review**

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9 of The regulatory

program we are finalizing today is largel y unchanged from the proposal the agencies made on November 30, 2010 (see 75 FR 741512) . The structure of the program and the stringency of the standards are essentiall y the same as proposed. We have made a number of changes to the testing requirements and reporting requirements to provide greater regulatory certaint y and better align the NHTSA and EPA portions of the program. In response to comments, we have also made some changes to the averaging, banking and trading (ABT) provisions of the program that will make implementation of this final program more flexible for manufacturers. We have added provisions to further encourage the development of advanced te chnologies and to provide a more straightforward mechanism to certify engines and vehicles using innovative technologies. Finally in response to comments, we have made some technical changes to our emissions compliance model that results in different nume ric standards for both combination tractors and vocational vehicles to more accurately characterize emissions while maintaining the same overall stringency and therefore expected costs and benefits of the program. Heav y - dut y vehicles move much of the nation ’ s freight and carry out numerous other tasks, including utility work, concrete delivery , fire response, refuse collection, and many more. Heavy
- dut y vehicles are primaril y powered b y diesel engines, although about 37 percent of these vehicles are p owered b y gasoline engines. 4 Heav y - duty trucks 5 have long been an important part of the goods movement infrastructure in this country and have experienced significant growth over the last decade related to increased imports and exports of finished goods and increased shipping of finished goods to homes through internet purchases. The heav y - duty

sector is extremely

diverse in several respects, including t ypes of manufacturing companies involved, the range of sizes of trucks and engines they produce , the t ypes of work the trucks are designed to perform, and the regulatory history of different subcategories of vehicles and engines. The current heav y - dut y fleet encompasses vehicles from the “ 18
- wheeler ” combination tractors one sees on the highway to school and transit buses, to vocational vehicles such as utility service trucks, as well as the largest pickup trucks and vans. For purposes of this preamble, the term “ heavy
- duty” or “ HD ” is used to apply to all highway

vehicles and engines that are not w ithin the range of light
- dut y vehicles, light
- duty trucks, and medium
- duty passenger vehicles (MDPV) covered by the GHG and Corporate Average Fuel Economy (CAFE) standards issued for MY 2012
- 2016. 7 Italso does not include motorcycles. Thus, in this rule making, unless specified otherwise, the

4 References in this preamble to “gasoline” engines (and the vehicles pow ered by them) generally include other Otto
- c ycle engines as well, such as those fueled by ethanol and natural gas, except in contexts that are clearly gasoline
- specific. 5 In this rulemaking, EPA and NHTSA use the term “truck” in a general way, referring to all categories of regulated heavy
- duty hig hway vehicles (including buses). As such, the term is generally interchangeable with “heavy
- duty vehicle.” 7 Light
- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule 75 FR 25323, May 7, 2010.******* **E.O. 12866 Review**

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10 of heav y - dut y category incorporates all vehicles with a gross vehicle weight rating above 8,500 pounds, and the engines that power them, except for MDPVs. 8 The agencies proposed to cover all segments of the heav y - dut y category above, except the scopes differ with respect to recreati onal vehicles ( RV’s or motor homes). We note that the Energy

Independence and Security Act of 2007 requires NHTSA to set standards for “ commercial medium
- and heav y - duty on - highway

vehicles and work trucks. ” 9 The standards that EPA is finalizing today cover r ecreational on
- highway vehicles , while NHTSA proposed not to include recreational vehicles based on an interpretation of the term “ commercial medium
- and heav y - dut y on - highway commercial” vehicles. NHTSA stated in the NPRM that recreational vehicles are non commercial, and therefore outside of the ter m and the scope of its rul e. Oshkosh Corporation commented that this interpretation did not match the statutory definition of the term in EI SA, which defines “commercial medium
- and heav y duty on - highway

vehicle” by

weight only , 10 and that therefore the agency ’s interpretation of the term should be explicitly broadened to include all vehicles , and more than only vehicles that are not engaged in interstate commerce as defined b y the Federal Motor Carrier Safet y Administration in 49 CFR § 202. Alternativel y, Oshkosh suggested that if NHTSA followed the definition provided in EI SA, which makes no direct reference to the concept of “commercial,” there would be no logical reason to exclude RVs based on that definition. NHTSA has considered Oshkosh’s comment and reconsidered its interpretation that effectively

read words into the statutory definition. G iven the very wide variet y of vehicles contained in the HD fleet, reading those words into the definition and thereb y exclud ing certain ty

pes of vehicles could create illogical results , i.e., treating similar vehicles differentl y . Therefore, NHTSA will adhere to the statutory definition contained in EI SA for this rulemaking
. However, a s RVs were not included by NHTSA in the proposed regulation in the NPRM, they are not within the scope and must be excluded in NHTSA’s portion of the final program . Accordingl y, NHTSA will address this issue in the next rulemaking
. Setting GHG emissions standards for the heav y - duty sector will help to ameliorate climate change . The EPA Administrator found after a thorough examination of the scientific evidence on the causes and i mpact of current and future climate change, and careful review of public comments, that the science compellingl y supports a positive finding that atmospheric concentrations of these greenhouse gases result in air pollution
8 The CAA defines heavy
- duty as a truck , bus or other motor vehicles with a gross vehicle w eight rating exceeding 6 , 000 pounds ( CAA section 202(b)(3) ) . The term HD as used in this action refers to a subset of these vehicles and engines. 9 49 U.S.C. 32902(k)(2). “Commercial medium
- and heavy
- duty on
- highway vehicles” are defined as on
highway vehicles with a gross vehicle weight rating of 10,000 pounds or more, while “work trucks” are defined as vehicles rated between 8,500 and 10,000 pounds gross vehicle weight that are not MDPVs. See 49 U.S.C. §§ 32901(a)(7) and (a)(19). 11 U.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, D .C., available at Docket: EPA
- HQ
- OAR
- 2009
- 0 171
- 11 645 , and at http://epa.gov/climatechange/endangerment.html.******* **E.O. 12866 Review**

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11 of which may

reasonabl y be anticipated to endanger both public health and welfare. In her finding, the Administrator carefull y studied and relied heavily upon the major findings and conclusions from the recent assessments of the U.S. Climate Change Science Program and the U.N. Intergovernmental Panel on Climate Change. 74 FR 66496, December 15, 2009
. As summarized in the Technical Support Document for EPA ’ s Endangerment and Cause or Contribute Findings under Section 202(a) of the Clean Air Act, anthropogenic emissions of GHGs are very likely ( a 90 to 99 percent probability) the c ause of most of the observed global warming over the last 50 ye ars. 11 P rimary GHGs of concern are carbon dioxide (CO 2 ), methane (C H 4 ), nitrous oxide (N 2 O ) , hydrofluorocarbons (HFCs) , perfluorocarbons (PFCs) , and sulfur hexafluoride (SF 6 )
. 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. 12 Mobile sources addressed in EPA’s endangerment and contribution findings under CAA section 202(a)
-- light
- dut y vehicles, heav y - dut y trucks, buses, and motorcycles
-- accounted for 23 percent of all U.S. GHG emissions in 2007. 13 Heav y - dut y vehicles emit CO 2 , C H 4 , N 2 O , and HFCs and are responsible for nearl y 19 percent of all mobile source GHGs (nearly 6% of all U.S. GHGs) and about 25 p ercent of s ection 202(a) mobile source GHGs . For heavy
duty vehicles in 2007 , CO 2 emissions represent ed more than 99 percent of all GHG emissions (including HFCs )
. 14 Setting fuel consumption standards for the heav y - duty sector, pursuant to NHTSA’s EISA authority , will also improve our energy and national security by reducing our dependence on foreign oil , which has been a national objective since the first oil price sh ocks in the 1970s. Net petroleum imports now account for approximately 49
- 51 percent of U.S. petroleum consumption. World crude oil production is highly concentrated, exacerbating the risks of suppl y disruptions and price shocks as the recent unrest i n North Africa and the Persian Gulf highlights. Recently , oil prices have been over $100 per barrel, gasoline and diesel fuel prices in excess of $4 per gallon , causing financial hardship for many families and businesses . The export of U .S. assets in exchange for oil imports continues to be an important component of the historically unprecedented U.S. trade deficits. Transportation accounts for about 72 percent of U.S. petroleum consumption. Heav y - dut y vehicles account for about 17 perc ent of transportation oil use, which means that they alone account for about 12 percent of all U.S. oil consumption
. 15

11 U.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, D .C., available at Docket: EPA
- HQ
- OAR
- 2009
- 0 171
- 11 645 , and at http://epa.gov/climatechange/endangerment.html. 12 U.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 13 See Endangerment TSD, Note 11 , above, at pp. 180
- 194. 14 U.S. Environmental Protection Agency. 2009. Inventory of U.S. Greenhouse Gas Emissions and Sinks: See Note 12 , above. 16 Pursuant to DOT Order 2100.2, NHTSA has docketed a memorandum recording those meetings that it attended and documents submitted by stakeholders which formed a basis for this action and w hich can be******* **E.O. 12866 Review**

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12 of In developing this HD National program , the a gencies have worked with a large and diverse group of stakeholders representing truck and engine manufacturers, trucking fleets, environmental organizations , and states including the State of California. 16 Further , it is our expectation based on our ongoing work with the State of California that the California ARB will be able to adopt regulati ons equivalent in practice to those of this HD National Program , just as it has done for past EPA regulation of heavy
- duty trucks and engines. NHTSA and EPA have been working with C alifornia ARB to enable that outcome. In light of the industry ’ s diversity , and consistent with the recommendations of the National Academ y of Sciences (NAS) as discussed further below, the agencies are adopting a HD National Program that recognizes the different sizes and work requirements of this wide range of heav y - duty vehic les and their engines. NHTSA ’ s final fuel consumption standards and EPA ’ s final GHG standards appl y to manufacturers of the following t ypes of heavy
- duty vehicles and their engines; the final provisions for each of these are described in more detail below in this section:

 Heav y - dut y Pickup Trucks and Vans  Combination Tractors  Vocational Vehicles As in the light
- dut y 2012
- 2016 MY vehicle rule , EPA ’ s and NHTSA ’ s final standards for the heav y - duty sector are largely harmonized with one another due to the close and direct relationship between improving the fuel efficiency of these vehicles and reducing their CO 2 tailpipe emissions. For all vehicles that consume carbon
- b ased fuels, the amount of CO 2 exhaust emissions is essentially constant per gallon for a given ty pe of fuel that is consumed. T he more efficient a heav y - duty truck is in completing its work, the lower its environmental impact will be , because the less fue l consume d to move cargo a given distance, the less CO 2 that truck emits directly into the air. T he technologies available for improving fuel efficiency , and therefore for reducing both CO 2 emissions and fuel consumption, are one and the same. 17 Be cause of this close technical relationship, NHTSA and EPA have been able to rely on jointl y - developed assumptions, anal ys es, and anal yt ical conclusions to support the standards and other provisions that NHTSA and EPA are adopting under our separate legal a uthorities. This program is based on standards for direct exhaust emissions from engines and vehicles. In characterizing the overall emissions impacts, benefits and costs of the program, analy ses of emissions from upstream sources have been conducted. In this made publicly available in its docket for this rulemaking . DOT Order 2100.2 is available at http://www.reg
- group.com/library/DOT2100
- 2.PDF
. 16 Pursuant to DOT Order 2100.2, NHTSA has docketed a memorandum recording those meetings that it attended and documents submitted by stakeholders which formed a basis for this action and w hich can be made publicly available in its docket for this rulemaking . DOT Order 2100.2 is available at http://www.reg
- group.com/library/DOT2100
- 2.PDF
. 17 However, as discussed below , in addition to addressing CO 2 , the EPA ’ s final standards also include provisions to address other GHGs (nitrous oxide, methane, and air condi tioning refrigerant emissions).), as required by the Endangerment Finding under the CAA. See Section II
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13 of action, the agencies use the term upstream to include emissions from the production and distribution of fuel
. A summary of th e analy sis of upstream emissions can be found in Section VI.C of this preamble , and further details are available in Chapter 5 of the RIA. The timelines for the implementation of the final NHTSA and EPA standards are also closely

coordinated. EPA ’ s final GHG emission standards will begin in model year 2014. In order to provide for the four full model years of regulatory lead time required by EISA, as discussed in Section I. B. (5) below, NHTSA ’ s final fuel consumption standards will be voluntary in model years 2014 and 2015, becoming mandatory in model ye ar 2016, except for diesel engine standards which will be voluntary in model years 2014, 2015 and 2016, becoming mandatory in model year 2017. Both agenc ies are also allowing for early

compliance in model year 2013. A detailed discus sion of how the final standards are consistent with each agency ’ s respective statutory requirements and authorities is found later in this preamble. Allison Transmission stated that sufficient time must be taken before issuing the final rule s in order to ensure that the standards are supportable. As explained in Sections II and III below, as well as in the RIA, the agencies believe there is sufficient lead time to meet all of the standards adopted in today ’s rules. For those areas for which the agencies have determined that insufficient time is available to develop appropriate standards, such as for trailers, the agencies are not including regulations as part of this initial program. NHTSA received several comments related to the timing of the implementation of its fuel consumption standards. The E ngine Manufacturers Association (E MA ) , the National Automobile Dealers Association (NADA ) , The Volvo Group ( Volvo ) , and Navistar argued that the timing of NHTSA’s standards violated the lead time requirement of 49 U.S.C. 32902(k)(3)(A), which states that standards under the new medium
- and heav y - dut y program shall have “not less than 4 full model y ears of regulatory lead
- time.” The commenter s seemed to interpret the voluntary program as the imposition of regulation upon industry . NADA described NHTSA’s standards during the voluntary period as “mandates.” NHTSA has reviewed this issue and believes that the regulatory schedule is consistent with the lead time requirement of 32902(k)(3). To clarify , NHTSA will not be imposing a mandatory

regulatory

program until 2016, and none of the voluntary standards will be “mandates.” As described in later sections, the voluntary standards would only

a ppl y to a manufacturer if it makes the voluntary and affirmative choice to opt - in to the program. 18 time frame Mandatory NHTSA standards will first come into effect in 2016, giving industry four full y ears of lead time with the NHTSA fuel consumption standards
. EMA, NADA, and Navistar also argued that the proposed standards would violate the stability

requirement of 49 U.S.C. 32902(k)(3)(B), which states that they shall have “not less than 3 full model years of regulatory stability .” EMA stated that since there are

18 Prior to or at the same time that a manufacturer submits its first application for a certificate of conformity; see Section V below
.******* **E.O. 12866 Review**

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14 of HD emission standards taking effect in 2013, the 2014 implementation date for this rule would violate the stabili ty requirements. NADA argued that the MY 2014
- 2017/2018 phase
- in period was inadequate to fulfill the stability requirement. Congress has not spoken directly to the meaning of the words “regulatory stability .” NHTSA believes that the “regulatory stabil ity” requirement exists to ensure that manufacturers will not be subject to new standards in repeated rulemakings too rapidly , given that Congress did not include a minimum duration period for the MD/HD standards. 19 NHTSA further believes that s tandards , which as set provide for increasing stringency during the period that the standards are applicable under this rule to be the maximum feasible during the regulatory period , are within the meaning of the statute
. In this statutory

context, NHTSA interprets the phrase “regulatory stability” in § 32902(k)(3)(B) as requiring that the standards remain in effect for three ye ars before they may be increased b y amendment . It does not prohibit standards which contain pre
determined stringency

increases. As laid out in Section II below, NHTSA’s final standards follow different phase
in schedules based on differences between the regulatory categories. Consistent with NHTSA’s statutory

obligation to implement a program designed to achieve the maximum feasible fuel efficiency

improvement, the standards increase in stringency based upon increasing fleet penetration rates for the available technologies. The NPRM proposed phase
- in schedules aligned with EPA’s, some of which followed pre
- determined stringency

increases. The NPRM also noted that NHTSA was considering alternate standards that would not change in stringency during the time frame when the regulations are effective for those standards that increased thr oughout the mandatory program . As described in Section II below, the final rule includes the proposed alt ernate standards for those standards that follow such a stringency phase
- in path. Therefore , NHTSA belie ves that the final rule provides ample stability for each standard. Each standard, associated phase
- in schedule, and alternative standard implemented by

this final rule w as noticed in the NPRM, and no standards that were not noticed at the time of this rul emaking will take effect before 2019. Those fuel consumption standards that become mandatory in 2017 will remain in effect through at least 2019. This further ensures that the standards in this rule will remain in effect for at least three ye ars, providi ng the statutoril y - mandated three full years of regulatory stability , and ensuring that manufacturers will not be subject to new or amended standards too rapidl y. Therefore, NHTSA believes the commenters’ concern about regulatory

stability is addressed in the structure of the rule. Neith er EPA nor NHTSA is adopting standards at this time for GHG emissions or fuel consumption, respectively , for heav y - dut y commercial trailers or for vehicles or engines manufactured b y small business es. The agencies recognize that aerody namic and tire rolli ng resistance improvements to trailers represent a significant opportunity to reduce fuel consumption and GHGs as evidenced by the work of the EPA SmartWay

19 In contrast , light
- duty

standards must remain in place for “at least 1, but not more than 5, model years.” 23902(b)(3)(B).******* **E.O. 12866 Review**

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15 of program. While we are deferring action today on setting trailer standards, the agencies are committ ed to moving forward to create a regulatory program for trailers that would complement the current vehicle program . See Section IX for more details on the agencies’ decisions regarding trailers, and Sections II and XI I for more details on the agencies’ decisions regarding small businesses. 

### B. **Building Block** **s of the**  **Heavy -**  **duty National Progra**  **m** The standards that are being adopted in this notice represent the first time that NHTSA and EPA are regulating the heav y - dut y sector fo r fuel consumption and GHG emissions, respectivel y. The HD National Program is rooted in EPA’s prior regulatory history , the SmartWay  Transport Partnership program, and extensive technical and engineering anal ys es done at the federal level. This section summarizes some of the most important of these precursors and foundations for this HD National Program. **(1) EPA’s**  **Traditional Heavy -**  **duty Regulatory Program** Since the 1980s, EPA has acted several times to address tailpipe emissions of criteria pollutants and air toxics from heavy
- dut y vehicles and engines. During the last 18 years, these programs have primaril y addressed emissions of particulate matter (PM) and the primary

ozone precursors, h ydrocarbons (HC) and oxides of nitrogen (NO X ). These programs have successfully achieved significant and cost
- effective reductions in emissions and associated health and welfare benefits to the nation. They have been structured in way s that account for the varying circumstances of the engine and truck industries. As req

uired by the CAA, the emission standards implemented by these programs include standards that apply at the time that the vehicle or engine is sold as well as standards that appl y in actual use. As a result of these programs, new vehicles meeting current e mission standards will emit 98% less NO X and 99% less PM than new trucks 20 ye ars ago. The resulting emission reductions provide significant public health and welfare benefits. The most recent EPA regulations which were full y phased
- in in 2010, the monetized health and welfare benefits alone are projected to be greater than $70 billion in 2030

– benefits far exceeding compliance costs and not including the unmonetized benefits resulting from reductions in air toxics and ozone precursors ( 66 FR 5002, January

18, 2001 ). EPA ’ s overall program go al has alway s been to achieve emissions reductions from the complete vehicles that operate on our roads. The agency has often accomplished this goal for man y heav y - duty truck categories through the regulation of heavy
- duty engine emissions. A key part of this success has been the development over many years of a well
- established, representative, and robust set of engine test procedures that industry and EPA now routinel y use to measure emissions and determine compliance with emission standards. These test procedures in turn serve the overall compliance program that EPA implements to help ensure that emissions reductions are being achieved. By isolating the engine from the many variables involved when the engine is installed and operated in a HD vehicle, E PA has been able to accuratel y address the contribution of the engine alone to overall emissions. The agencies discuss below how the final program******* **E.O. 12866 Review**

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16 of incorporates the existing engine
- based approach used for criteria pollutant regulations, as well as new vehi cle
- based approaches. **(2) NHTSA**  **’ s Responsibilities to**  **Regulate Heavy**  **- Duty Fuel Efficiency under**  **EISA** With the passage of the EI SA in December 2007, Congress laid out a framework developing the first fuel efficiency regulations for HD vehicles. As codified at 49 U.S.C. 32902(k), EISA requires NHTSA to develop a regulatory s ys tem for the fuel efficiency of commercial medium
- duty and heavy
- duty

on - highway

vehicles and work trucks in three steps: a study

by NAS, a study

by NHTSA, and a rulemaking to deve lop the regulations themselves. 21 Specificall y, section 102 of EI SA, codified at 49 U.S.C. 32902(k)(2), states that not later than two years after completion of the NHTSA study, DOT (b y delegation, NHTSA), in consultation with the Department of Energy (DOE) and EPA, shall develop a regulation to implement a “ commercial medium
- duty and heav y - duty

on - highway vehicle and work truck fuel efficiency improvement program designed to achieve the maximum feasible improvement. ” NHTSA interprets the timing requirement s as permitting a regulation to be developed earlier, rather than as requiring the agency to wait a specified period of time. Congress specified that as part of the “ HD fuel efficiency improvement program designed to achieve the maximum feasible improvement, ” NHTSA must adopt and implement:

 Appropriate test methods;  Measurement metrics;  Fuel economy

standards; 22 and  Compliance and enforcement protocols. Congress emphasized that the test methods, measurement metrics, standards, and compliance and enforcement protocols must all be appropriate , cost- effective , and technologically feasible for commercial medium
- duty and heav y - dut y on - highway vehicles and work trucks. NHTSA notes that these criteria are different from the “ four factors ” of 49 U.S.C. 32902(f) 23 that have long governed NHTSA ’ s setting of fuel

21 The NAS study is described below , and the NHTSA study accompanies this FRM. 22 In the context of 49 U.S.C. 32902(k), NHTSA interprets “fuel economy standards” as referring not specifically to miles per gallon, as in the light
- duty vehicle context, but inst ead more broadly to account as accurately as possible for MD/HD fuel efficiency . While it is a metric that NHTSA considered for setting MD/HD fuel efficiency standards, the agency recognizes that miles per gallon may not be an appropriate metric given the wo rk that MD/HD vehicles are manufactured to do . NHTSA is thus finalizing alternative metrics as discussed further below
. 23 49 U.S.C. 32902(f) states that “When deciding maximum feasible average fuel economy under this section, [NHTSA] shall consider tec hnological feasibility, economic practicability, the effect of other motor vehicle standards of the Government on fuel economy, and the need of the United States to conserve energy.”******* **E.O. 12866 Review**

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17 of econom y standards for passenger cars and light trucks, although man y of the same issues are consi dered under each of these provisions. Congress also stated that NHTSA may set separate standards for different classes of HD vehicles, which the agency interprets broadly

to allow regulation of HD engines in addition to HD vehicles, and provided requirements new to 49 U.S.C. 32902 in terms of timing of regulations, stating that the standards adopted as a result of the agency ’ s rulemaking shall provide not less than four full model y ears of regulatory lead time, and three full model ye ars of regulatory stabi lity
. **(3) National Academy of**  **Sciences Report on Heavy**  **- Duty Technology**  In April 2010 a s mandated by Congress in EISA, the National Research Council (NRC) under NAS issued a report to NHTSA and to Congress evaluating medium
- duty and heav y - dut y truck fuel efficiency improvement opportunities , titled “ Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heav y - duty Vehicles. ” 24 This study

covers the same universe of heavy
- duty vehicles that is the focus of this final rulemaking

– all highway vehicles that are not light
- duty , MDPVs, or motorcycles. The agencies have carefully evaluated the research supporting this report and its recommendations an d have incorporated them to the extent practicable in the development of this rulemaking. The NAS report is far reaching in its review of the technologies that are available and which may

become available in the future to reduce fuel consumption from medium and heav y - dut y vehicles. In presenting the full range of technical opportunities the report includes technologies which may not be available until 2020 or even further into the future. As such, the report provides not only a valuable list of off the shelf technologies from which the agencies have drawn in developing this near
- term 2014
- 2018 program consistent with the set of principles set forth b y the President, but the report also provides a road map the agencies can use as we look to develop future regulations for this sector. A review of the technologies in the NAS report makes clear that there are not only man y technologies readily

available today

to achieve important reductions in fuel consumption, like the ones we used in developing the 2014
- 2018 program, but there are also great opportunities for even larger reductions in the future through the development of advanced h ybrid drive s ystems and sophisticated engine technologies such as Rankine waste heat recovery . The agencies will again make exte nsive use of this report when we move forward to develop the next phase of regulations for medium and heavy
- dut y vehicles. Allison Transmission commented that NHTSA (implicitly , both agencies) had improperly

relied on the NAS report and failed to do suffic ient independent anal ys is, which Allison claimed did not meet the statutory obligation to provide an adequate basis

24 Committee to Assess Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles; National Research Council; Transportation Research Board (2010). “Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heavy
- Duty Vehicles,” (hereafter, “NAS Report”). Washington, D.C., The National Academies Press. Ava ilable electronically from the National Academies Press Website at http://www.nap.edu/catalog. php?record_id=12845 (last accessed September 10, 2010).******* **E.O. 12866 Review**

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18 of for the rule. First, an agency does not improperl y delegate its authorit y or judgment merel y b y using work performed b y outside parties as the factual basis for its decision making. See U.S. Telecom Ass’n v. FCC, 359 F.3d 554, 568 (D.C. Cir. 2004); 21 United Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1216
- 17 (D.C. Cir. 1980). Here, although EPA and NHTSA carefull y considered the NAS repo rt, the agencies’ consideration and use of the report was not uncritical and the agencies’ exercised reasonable independent judgment in developing the proposed and final rule s . Consistent with EI SA’s direction, NAS submitted a report evaluating MD/HD fuel economy standards to NHTSA in March of 2010. The agencies reviewed the findings and recommendations of the NAS report when developing the proposed rule s , as was clearl y intended by

Congress, but also conducted an independent study , as described throughout the record to the propos al and summarized in Section X of the NPRM , 75 FR at 74351
- 56. Inconducting its analy sis of the NAS report, the agencies found that several key recommendations, such as the use of fuel efficiency metrics, were the best approach to implementing the new program. However, the agencies rejected other recommendations of the NAS report, for example , by proposing separate regulation of engines and vehicles and the regulation of large manufacturers. **(4) The NHTSA and EPA Light**  **- duty National GHG**  **and Fuel Economy Program**  On May 7 , 2010, EPA and NHTSA finalized the first
- ever National Program for light
- duty cars and trucks, which set GHG emissions and fuel economy standards for model years 2012
- 2016 ( see 75 FR 25324) . The agencies have used the light
- duty National Program as a model for this final HD National Program in man y respects. This is most apparent in the case of heav y - dut y pickups and vans, which are very similar to the light
- duty trucks addressed in the light
- dut y National Program both technologically as well as in terms of how they are manufactured (i.e., the same company often makes both the vehicle and the engine). For these vehicles, there are close parallels to the light
- dut y program i n how the agencies have developed our respective final standards and compliance structures, although, as discussed below, the technologies applied to light
duty trucks are not invariably

applicable to heavy
- duty pickups and vans at the same penetration rat es in the lead time afforded in this heav y - dut y action. Another difference is that each agency

adopts standards based on attributes other than vehicle footprint, as discussed below. Due to the diversit y of the remaining HD vehicles, there are fewer parall els with the structure of the light
- duty program. However, the agencies have maintained the same collaboration and coordination that characterized the development of the light
- dut y program. Most notably , as with the light
- dut y program, manufacturers will be able to design and build vehicles to meet a closel y coordinated, harmonized national program, and avoid unnecessaril y duplicative testing and compliance burdens. **(5) EPA’s**  **Sm artWay Program**  EPA ’ s voluntary

SmartWay

Transport Partnership program encourages shipping and trucking companies to take actions that reduce fuel consumption and CO 2 by working******* **E.O. 12866 Review**

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19 of with the shipping community and the freight sector to identify low carbon strategies and technologies, and b y providing technical information, financial incent ives, and partner recognition to accelerate the adoption of these strategies. Through the SmartWay program, EPA has worked closely with truck manufacturers and truck fleets to develop test procedures to evaluate vehicle and component performance in reduci ng fuel consumption and has conducted testing and has established test programs to verify technologies that can achieve these reductions. Over the last six years, EPA has developed hands
- on experience testing the largest heav y - dut y trucks and evaluating i mprovements in tire and vehicle aerodynamic performance. In 2010, according to vehicle manufacturers, approximately five percent of new combination heavy
- dut y trucks will meet the SmartWay

performance criteria demonstrating that they represent the pinnacl e of current heav y - duty truck reductions in fuel consumption. In developing this HD National Program, the agencies have drawn from the SmartWay

experience, as discussed in detail both in Sections II and III below (e.g., developing test procedures to evalu ate trucks and truck components) but also in the RIA (estimating performance levels from the application of the best available technologies identified in the SmartWay program). These technologies provide part of the basis for the GHG emission and fuel con sumption standards in this rulemaking for certain ty pes of new heav y - dut y Class 7 and 8 combination tractors. In addition to identifying technologies, the SmartWay program includes operational approaches that truck fleet owners as well as individual driv ers and their freight customers can incorporate , that the NHTSA and EPA believe will complement the final standards. These include such approaches as improved logistics and driver training, as discussed in the RIA . This approach is consistent with the on e of the three alternative approaches that the NAS recommended be considered. The three approaches were raising fuel taxes, relax ing truck size and weight restrictions, and encouraging incentives to disseminate information to inform truck drivers about th e relationship between driving behavior and fuel savings. Taxes and truck size and weight limits are mandated b y public law; as such, these options are outside EPA ’ s and NHTSA ’ s authorit y to implement. However, complementary operational measures like dri ver training, which SmartWay does promote, can complement the final standards and also provide benefits for the existing truck fleet, furthering the public policy objectives of addressing energy security and climate change. **(6) Environment Canada**  The Government of Canada’s Department of the Environment (E nvironment Canada) assisted EPA 's development of this rulemaking b y conducting emissions testing of heav y - dut y vehicles at their test facilities to gather data on a range of possible test cycles, and to evaluat e the impact of certain emissions reduction technologies. Environment Canada also facilitated the evaluation of heav y - dut y vehicle aerodynamic properties at Canada’s National Research Council wind tunnel, and during coast down testing.******* **E.O. 12866 Review**

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20 of We expect the technical collaboration with Environment Canada to continue as we implement testing and compliance verification procedures for this rulemaking. We may also begin to develop a knowledge base enabling improvement upon this regulatory framework for model years beyond 2018 (for example, improvements to the means of demonstrating compliance). We also expect to continue our collaboration with Environment Canada on compliance issues. Collaboration with Environment Canada is taking place under the Canada
- U.S. Air Quality

Committee. 

### C. **Summary of the**  **Final EPA and NHTSA HD National Program** When EPA first addressed emissions from heav y - duty trucks in the 1980s, it established standards for engines, based on the amount of work performed (grams of pollutant per unit of work, expressed as grams per brake horsepower
- hour or g/bhp
- hr). 25 This approach recognized the fact that engine characteristics are the dominant deter minant of the t ypes of emissions generated, and engine
- based technologies (including exhaust aftertreatment sy stems) need to be the focus for addressing those emissions. Vehicle
- based technologies, in contrast, have less influence on overall truck emissio ns of the pollutants that EPA has regulated in the past. The engine testing approach also recognized the relativel y small number of distinct heav y - duty engine designs, as compared to the extremely wide range of truck designs. EPA concluded at that time that any

incremental gain in conventional emission control that could be achieved through regulation of the complete vehicle would be small in comparison to the cost of addressing the many variants of complete trucks that make up the heav y - dut y sector

– sma ller and larger vocational vehicles for dozens of purposes, various designs of combination tractors, and many others. Addressing GHG emissions and fuel consumption from heav y - duty trucks, however, requires a different approach. Reducing GHG emissions and fuel consumption requires increasing the inherent efficiency of the engine as well as making changes to the vehicles to reduce the amount of work demanded from the engine in order to move the truck down the road. A focus on the entire vehicle is thus requ ired. For example, in addition to the basic emissions and fuel consumption levels of the engine, the aerod ynamics of the vehicle can have a major impact on the amount of work that must be performed to transport freight at common highway speeds. For this first rulemaking, the agencies proposed a complimentary engine and vehicle approach in order to achieve the maximum feasible near
- term reductions. NHTSA received comments on the proposal to create complementary engine and vehicle standards. Volvo and Daim ler argued that EI SA limited NHTSA’s authority to
25 The term “brake power” refers to engine torque and power as m easured at the interface between the engine ’s output shaft and the dynamometer. This contrasts with “indicated power”, which is a calculated value based on the pressure dynamics in the combustion chamber, not including internal losses that occur due to friction and pumping work. Since the measure ment procedure inherently measures brake torque and power, the final regulations refer simply to g/hp
- hr. This is consistent with EPA’s other emission control programs, which generally include standards in g/kW
- hr.******* **E.O. 12866 Review**

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21 of the regulation of completed vehicles and did not give the agency authorit y to regulate engines. 49 U.S.C. 3290 2(k)(2) grants NHTSA broad authority to regulate this sector, stating simply

that the Secretary

“shall determine in a rulemaking proceeding how to implement a commercial medium
- and heav y - duty on
- highway vehicle and work truck fuel efficiency

improvement p rogram designed to achieve the maximum feasible improvement,” considering appropriateness, cost
- effectiveness, and technological feasibility . NHTSA does not believe that this language precludes the regulation of engines, but rather explicitly leaves the r egulatory

approach to the agency ’s expertise and discretion. See 75 FR at 74173 n. 36. Considering the factors described in the NPRM and in Section s III and IV below , NHTSA continues to believe that the separate regulation of engines and vehicles is both consistent with the agency ’s statutory mandate to determine how to implement a regulatory program designed to achieve the maximum feasible improvement and facilitates coordination with EPA’s efforts to reduce greenhouse gas emissions
. As described elsewhere in this preamble, the final standards under the HD National Program address the complete vehicle, to the extent practicable and appropriate under the agencies’ respective statutory authorities, through complementary engin e and vehicle standards. The agencies continue to believe that this complementary engine and vehicle approach is the best way to achieve near term reductions from the heavy
- dut y sect or . However, we also recognize as did the NAS committee and a wide range of industry and environmental commenters, that in order to full y capture the multi
- faceted sy nergistic aspects of engine and vehicle design a more comprehensive complete vehicle standard may

be more appropriate in the future. The agencies are committed to fully exploring such a possibility and to developing the testing and modeling tools necessary to enable such a regulatory

approach. We intend to work with all interested stakeholders as we move forward in the future. **(1) Brief Overview**  **of the Heavy**  **- duty Truck Industry**  The heav y - duty

truck sector spans a wide range of vehicles with often unique form and function. A primary indicator of the extreme diversit y among heavy
- dut y trucks is the range of load
- carrying capability across the industry
. The heavy
- dut y truck sector is often subdivided by vehicle weight classifications , as defined b y the vehicle ’ s gross vehicle weight rating ( GVWR), which is a measure of the combined curb (empt y) weight and cargo carrying capacity of the truck
. 26 Table I
- 1 below outlines the vehicle weight classifications commonly used for man y years for a variet y of purposes by businesses and b y several federal agencies, including the Department of Transportation, the Environmental Protection Agency , the Department of Commerce, and the Internal Revenue Service.

26 GVWR describes the maximum load that c an be carried by a vehicle, including the weight of the vehicle itself. Heavy
- duty

vehicles also have a gross combined w eight rating (GCWR), which describes the maximum load that the vehicle can haul, including the weight of a loaded trailer and the vehic le itself.******* **E.O. 12866 Review**

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22 of **Table I**  **- 1**  **: Vehicle Weight Classification**  Class 2b 3 4 5 6 7 8 GVWR ( lb ) 8,501
-

10,000 10,001
-

14,000 14,001
-

16,000 16,001
-

19,500 19,501

- 26,000 26,001
-

33,000 > 33,001 In the framework of these vehicle weight classifications, the heav y - dut y truck sector refers to Class 2b through Class 8 vehicles and the engines that power those vehicles. 27 Unlike light
- duty vehicles, which are primarily used for transporting passengers for personal travel, heavy
- dut y vehicles fill much more di verse operator needs
. Heavy
- dut y pickup trucks and vans (Classes 2b and 3) are used chiefly as work truck and vans, and as shuttle vans, as well as for personal transportation , with an average annual mileage in the range of 15,000 miles. The rest of the heav y - dut y sector is used for carryi ng cargo and/or performing specialized tasks. “ Vocational ” vehicles, which may span Classes 2b through 8, vary widel y in size, including smaller and larger van trucks, utility “bucket ” trucks, tank truc ks, refuse trucks, urban and over
- the
- road buses, fire trucks, flat
- bed trucks, and dump trucks, among others. The annual mileage of these trucks is as varied as their uses, but for the most part tends to fall in between heavy
- dut y pickups/vans and the large combination tractors, t ypically from 15,000 to 150,000 miles per year, although some travel more and some less. Class 7 and 8 combination tractor trailers

– some equipped with sleeper cabs and some not
-- are primaril y used for freight transportation. They are sold as tractors and sometimes run without a trailer in between loads , but most of the time they run with one or more trailers that can carry up to 50,000 pounds or more of payload , consuming significant quantities of fuel and producing signific ant amounts of GHG emissions
. The combination tractor - trailers used in combination applications can travel more than 150,000 miles per y ear. EPA and NHTSA have designed our respective standards in careful consideration of the diversity

and complexity

of the heavy
- dut y truck industry , as discussed next. **(2) Summary**  **of Final EPA GHG Emission Standards and NHTSA Fuel Consumption**  **Standards** As described above, NHTSA and EPA recognize the importance of addressing the entire vehicle in reducing fuel consumption and GHG emissions. At the same time, the agencies understand that the complexity of the industry

means that we will need to use different approaches to achieve this goal, depending on the characteristics of each general ty pe of truck. We are therefore divid ing the industry into three discrete regulatory categories for purposes of setting our respective standards

– combination tractors, heavy
duty pickups and vans, and vocational vehicles
-- based on the relative degree of homogeneity

among trucks within each category . For each regulatory category , the agencies are adopting related but distinct program approaches reflecting the specific challenges that we see in these segments. In the following paragraphs, we discuss EPA ’ s final GHG emission standards and NH TSA ’ s final fuel consumption standards for the three regulatory

categories of heav y - dut y vehicles and their engines.
27 Class 2b vehicles designed as passenger vehicles (Medium Duty Passenger Vehicles, MDPVs) are covered by the light
- duty GHG and fuel economy standards and not addressed in this rulemaking.******* **E.O. 12866 Review**

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23 of The agencies are adopting test metrics that express fuel consumption and GHG emissions relative to the most important measures of heav y - duty truck utility

for each segment , consistent with the recommendation of the 2010 NAS Report that metrics should reflect and account for the work performed by various ty

pes of HD vehicles
. This approach differs from NHTSA’s light
- dut y program that uses fu e l economy as the basis. The NA S committee discussed the difference between fuel econom y (a measure of how far a vehicle will go on a gallon of fuel) and fuel consumption (the inverse measure, of how much fuel is consumed in driving a given distance) as p otential metrics for MD/HD regulations. The committee concluded that fuel economy would not be a good metric for judging the fuel efficiency of a heav y - dut y vehicle, and stated that NHTSA should instead consider fuel consumption as the metric for its standards. As a result, for heavy
duty pickup trucks and vans, EPA and NHTSA are finalizing standards on a per
- mile basis (g/mile for the EPA standards, gallons/100 miles for the NHTSA standards), as explained in Section I. C. (2) (b) below. For heavy
- dut y trucks, both combination and vocational, the agencies are adopting standards expressed in terms of the key measure of freight movement, tons of payload miles or, more simply , ton - miles. Hence, for EPA the final standards are in the form of the mass of emissions from carrying a ton of cargo over a distance of one mile (g/ton
- mi). Similarly , the final NHTSA standards are in terms of gallons of fuel consum ed over a set distance (one thousand miles), or gal/1,000 ton
- mile. Finally , for engines, EPA is adopting standards in the form of grams of emissions per unit of work (g/bhp
- hr), the same metric used for the heavy
- dut y highway engine standards for criteri a pollutants today . Similarl y, NHTSA is finalizing standards for heav y - dut y engines in the form of gallons of fuel consumption per 100 units of work (gal/100 bhp
hr). Section II below discusses the final EPA and NHTSA standards in greater detail. (a ) Class 7 and 8 Combination Tractors Class 7 and 8 combination tractors and their engines contribute the largest portion of the total GHG emissions and fuel consumption of the heav y - duty sector , approximately 65 percent , due to their large payload s, their hi gh annual miles traveled , and their major role in national freight transport. 28 These vehicles consist of a cab and engine (tractor or combination tractor) and a detachable trailer. In general, reducing GHG emissions and fuel consumption for these vehicl es will involve improvements in aerod ynamics and tires and reduction in idle operation, as well as engine
- based efficiency improvements. In general, the heavy
- duty combination tractor industry consists of tractor manufacturers (which manufacture the trac tor and purchase and install the engine) and trailer manufacturers . These manufacturers are usually not the same entity
. We are not aware of an y m anufacturer that ty picall y assembles both the finished truck and the trailer and introduces the combination into commerce for sale to a buyer. T he owners of trucks

28 The on
- highway Class 7 and 8 combination tractors c onstitute the vast majority of this regulatory category, and form the backbone of this HD National Program. A small fraction of combination tractors are used in off

- road applications and are regulated differently, as described in Section II.******* **E.O. 12866 Review**

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24 of and trailers are often distinct as well . A t ypical truck buyer will purchase only the tractor. The trailers are usually purchased and owned b y fleets and shippers. This occurs in part because truc king fleets on average maintain 3 trailers per tractor and in some cases as many as 6 or more trailers per tractor. There are also large differences in the kinds of manufacturers involved with producing tractors and trailers. For HD highway tractors and their engines, a relatively limited number of manufacturers produce the vast majority of these products. The trailer manufacturing industry is quite different, and includes a large number of companies, many of which are relatively

small in size and produc tion volume. Setting standards for the products involved
-- tractors and trailers
-- requires recognition of the large differences between these manufacturing industries, which can then warrant consideration of different regulatory approaches. Based on these industry

characteristics , EPA and NHTSA believe that the most straightforward regulatory approach for combination tractors and trailers is to establish standards for tractors separatel y from trailers
. As discussed below in Section IX , the agencies are adopting standards for the tractors and their engines in this rulemaking, but did not propose and are not adopting standards for trailers. As with the other regulatory categories of heavy
- duty vehicles, EPA and NHTSA have concluded that achieving reductions in GHG emissions and fuel consumption from combination tractors requires addressing both the cab and the engine, and EPA and NHTSA each are adopting standards that reflect this conclusion. The importance of the cab is that its design determines the amount of power that the engine must produce in moving the truck down the road. As illustrated in Figure I
- 1 , the loads that require additional power from the engine include air resistance (aerodynamics), tire rolling resistance, and parasitic losses (including accessory loads and fricti on in the drivetrain). The importance of the engine design is that it determines the basic GHG emissions and fuel consumption performance of the engine for the variety of demands placed on the engine, regardless of the characteristics of the cab in which it is installed. The agencies intend for the final standards to result in the application of improved technologies for lower GHG emissions and fuel consumption for both the cab and the engine
.******* **E.O. 12866 Review**

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**Figure** Accordingl y, for Class 7 and 8 combination tractors, the agencies are each finalizing two sets of standards. For veh tractor manufacturers are required to vehicle standard will ty

pically be determined based on a customized vehicle simulation model, called the Greenhouse gas Emissions Model (GEM) NAS Report recommendations to require using vehicle simulation rather than chassis d ynamometer testing. This compliance model was developed b y EPA specificall y for this final action. It is an accurate and cost effective alternative to measuring em vehicle on a chassis dy

namometer. Instead of using a chassis dy namometer as an indirect way to evaluate real
- world operation and performance, various characteristics of the vehicle are measured and these me characteristics relate to key technologies appropriate for this subcategory of truck including aerodynamic features, weight reductions, tire rolling resistance, the presence of idle
- reducing technology, a representative typical engine, rather than a vehicle regulated separately . Using these inputs, the model will be used to quantify the overall performance of the vehicle in terms of model ’ s development and design, as well as the sources for inputs, are discussed in detail in Section II below and in Chapter 4 of the RIA. (i ) Final Standards for Class 7 and 8 Combination The vehicle standards that EPA and NHTSA are adopting for Class 7 and 8 combination tractor manufacturers are based on several key attributes related to GHG emissions and fuel consumption that we believe reasonably represent the differences in utility

and performance among these vehicles. The final standards differ depending on GVWR ( i.e

29 Adapted f

rom Figure 4.1
. Class 8 Truck Energy Audit, Technology Roadmap for the 21st Century Truck Program: A Government
- Industry Research Partnership, 21CT **Revised Version**

**– Do Not Cite, Quote, or Release During Review** 

25 of **Figure I**  **- 1**  **: Com** **bination Tractor and Trailer Loads 29**  Accordingl y, for Class 7 and 8 combination tractors, the agencies are each finalizing two sets of standards. For veh icle
- related emissions and fuel consumption, tractor manufacturers are required to meet vehicle
- based standards. Compliance with the vehicle standard will ty

pically be determined based on a customized vehicle simulation model, called the Greenhouse gas Emissions Model (GEM) , which is consistent with the NAS Report recommendations to require compliance testing for combination tractors using vehicle simulation rather than chassis d ynamometer testing. This compliance model was developed b y EPA specificall y for this final action. It is an accurate and cost effective alternative to measuring em issions and fuel consumption while operating the vehicle on a chassis dy

namometer. Instead of using a chassis dy namometer as an indirect world operation and performance, various characteristics of the vehicle are measured and these me asurements are used as inputs to the model. These characteristics relate to key technologies appropriate for this subcategory of truck including aerodynamic features, weight reductions, tire rolling resistance, the presence of reducing technology, and vehicle speed limiters. The model also assumes the use of a representative typical engine, rather than a vehicle
- specific engine, because engines are regulated separately . Using these inputs, the model will be used to quantify the overall of the vehicle in terms of CO 2 emissions and fuel consumption. The s development and design, as well as the sources for inputs, are discussed in detail in Section II below and in Chapter 4 of the RIA. Final Standards for Class 7 and 8 Combination Tractors and Their Engines The vehicle standards that EPA and NHTSA are adopting for Class 7 and 8 combination tractor manufacturers are based on several key attributes related to GHG emissions and fuel consumption that we believe reasonably represent the differences in utility

and performance among these vehicles. The final standards differ i.e ., whether the truck is Class 7 or Class 8), the height of the roof Class 8 Truck Energy Audit, Technology Roadmap for the 21st Century Truck Industry Research Partnership, 21CT
- 001, December 2000
.

**Do Not Cite, Quote, or Release During Review** *******

Accordingl y, for Class 7 and 8 combination tractors, the agencies are each related emissions and fuel consumption, based standards. Compliance with the vehicle standard will ty

pically be determined based on a customized vehicle simulation which is consistent with the compliance testing for combination tractors using vehicle simulation rather than chassis d ynamometer testing. This compliance model was developed b y EPA specificall y for this final action. It is an accurate and cost
issions and fuel consumption while operating the vehicle on a chassis dy

namometer. Instead of using a chassis dy namometer as an indirect world operation and performance, various characteristics of the

asurements are used as inputs to the model. These characteristics relate to key technologies appropriate for this subcategory of truck

– including aerodynamic features, weight reductions, tire rolling resistance, the presence of and vehicle speed limiters. The model also assumes the use of specific engine, because engines are regulated separately . Using these inputs, the model will be used to quantify the overall emissions and fuel consumption. The s development and design, as well as the sources for inputs, are discussed in detail Tractors and Their Engines The vehicle standards that EPA and NHTSA are adopting for Class 7 and 8 combination tractor manufacturers are based on several key attributes related to GHG emissions and fuel consumption that we believe reasonably represent the many differences in utility

and performance among these vehicles. The final standards differ ., whether the truck is Class 7 or Class 8), the height of the roof Class 8 Truck Energy Audit, Technology Roadmap for the 21st Century Truck******* **E.O. 12866 Review**

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26 of of the cab, and whether it is a “ day cab ” or a “ sleeper cab.” These lat er two attributes are important because the height of the roof, designed to correspond to the height of the trailer, significantl y affects air resistance, and a sleeper cab generall y corresponds to the opportunity

for extended duration idle emission and fu el consumption improvements. We received a number of comments supporting this approach and no comments that provided a compelling reason to change our approach in this final action. Thus, the agencies have created nine subcategories within the Cl ass 7 and 8 combination tractor category based on the differences in expected emissions and fuel consumption associated with the key attributes of GVWR, cab ty pe, and roof height. The agencies are setting standards beginning in 2014 model year with more stringent standards following in 2017 model y ear. Table I
- 2 presents the agencies’ respective standards for combination tractor manufacturers for the 2017 m odel year . The standards represent an overall fuel consumption and CO 2 emissions reduction up to 23 percent from the tractors and the engines installed in them when compared to a baseline 2010 model ye ar tractor. The standard values shown below differ somewhat from the proposal, reflecting refinements made to the GEM in res ponse to comments. These changes did not impact our estimates of the relative effectiveness of the various control technologies modeled in this final action nor the overall cost or benefits or cost effectiveness estimated for these final vehicle standards
. The agencies are also creating an allowance for certain tractors to be classified as vocational tractors and thus comply using vocational standards, while allowing other tractors that perform off
- road to be exempted from the vehicle standards. **Table I**  **- 2**  **: Heavy -**  **duty Co**  **mbination Tr**  **actor EPA Emissions Standards (g CO**  **2 /ton**  **- mi**  **le) and**

**NHTSA Fuel Consumption Standards**  **(gal/ 1,000**  **ton -**  **mile)** 2017 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 104 8 0 66 Mid Roof 115 86 73 High Roof 120 89 72 2017 Model Year Gallons of Fuel per 1,000 Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10. 2 7.8 6.5 Mid Roof 11.3 8.4 7.2 High Roof 11. 8 8. 7 7. 1 In addition, the agencies are finalizing separate performance standards for the engines manufactured for use in these trucks. EPA ’ s engine
- based CO 2 standards and NHTSA ’ s engine
- based fuel consumption standards are implemented using EPA’s existing test procedures and regulatory structure for criteria pollutant emissions from medium
- and heav y - duty engines. As at proposal, the final engine standards vary depending o n engine size linked to intended vehicle service class. Consistent with our proposal, the agencies are finalizing an interim alternative compression ignition engine******* **E.O. 12866 Review**

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27 of standard for model years 2014
- 2016. This alternative standard is designed to provide a glide path for legacy diesel engine products that may not be able to compl y with the final engine standards for model years 2014
- 16 given the short (approximatel y 2
- ye ar) lead time of this program. We believe this alternative standard is appropriate for a first
- ever program when the overall baseline performance of the industry is quite varied and where the short lead time means that not every product can be brou ght into compliance b y 2014. The alternative standard only applies through model y ear 2016. Separatel y, EPA is also finalizing engine
- based N 2 O and CH 4 standards and credits for manufacturers of the engines used in these combination tractors. EPA is fina lizing separate engine
- based standards for N 2 O and CH 4 because the agency believes that emissions of these GHGs are technologicall y related solel y to the engine, fuel, and emissions aftertreatment sy stems, and the agency is not aware of any

influence of ve hicle
- based technologies on these emissions. NHTSA is not incorporating standards for N 2 O and CH 4 because these emissions do not impact fuel consumption in a significant way . The standards that EPA is finalizing for N 2 O and CH 4 are less stringent than those we proposed, reflecting new data provided to the agencies in comments on the proposal showing that the current baseline level of N 2 O and CH 4 emissions varies more than EPA had expected. EPA expects that manufacturers of current engin e technologies will be able to comply

with the final N 2 O and CH 4 “cap” standards with little or no technological improvements; the value of the standards will be to prevent significant increases in these emissions as alternative technologies are developed and introduced in the future. Compliance with the final EPA engine
- based CO 2 standards and the final NHTSA fuel consumption standards, as well as the final EPA N 2 O and CH 4 standards, will be determined using the appropriate EPA engine test procedure, as discussed in Section II below. As with the other categories of heav y - duty vehicles, EPA and NHTSA are finalizing respective standards that will apply to Class 7 and 8 tr actor s at the time of production (as in Table I
- 2 , above). In addition, EPA is finalizing separate standards that will apply

for a specified period of time in use. All of the standards for these vehicles , as well as details about the provisions for certification and implementation of these standards, are discussed in more detail in Sections II, III, IV, and V below and in the RIA. (ii) EPA’s Final Air Conditioning Leakage Standard for Class 7 and 8 Combination Tractors In addition to the final EPA tractor
- and engine
- based standards for CO 2 and engine
- based standards for N 2 O, and CH 4 emissions, EPA is also finalizing a separate standard to reduce leakage of HFC refrigerant from cabin air conditioning (A/C) sy stems from combination tractor s, to apply to the tractor manufacturer. This standard is independent of the CO 2 tractor standard, as discussed below in Section II.E.5 . Because******* **E.O. 12866 Review**

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28 of the current refrigerant used widel y in all these s ys tems has a very high global warming potential, EPA is con cerned about leakage of refrigerant. 31 Because the interior volume to be cooled for most tr actor cabins is similar to that of light
- dut y vehicles , the size and design of current tr actor A/C sy stems is also very similar. The comp liance approach for Class 7 and 8 tractors is therefore similar to that in the light
- dut y rule in that these standards are design
- based. Manufacturers will choose technologies from a menu of leak
- reducing technologies sufficient to comply with the standard, as opposed to using a test to measure performance. However, the final heav y - duty A/C provisions differ in two important way s from those established in the light
- dut y rule. First, the light
- dut y provisions were established as voluntary

way s to generate credits towards the CO 2 g/mi standard, and EPA took into account the expected use of such credits in establishing the CO 2 emissions standards. In the HD National Program, EPA is requiring that manufacturers actually meet a standard

– as opposed to havi ng the opportunity to earn a credit
-- for A/C refrigerant leakage. Thus, refrigerant leakage control is not accounted for in the final heav y - duty CO 2 standards. We are taking this approach here recognizing that while the benefits of leakage control are almost identical between light
- duty and heav y - duty

vehicles on a per vehicle basis, these benefits on a per mile basis expressed as a percentage of overall GHG emissions are much smaller for heav y - dut y vehicles due to their much higher CO 2 emissions rates and higher annual mileage when compared to light
- dut y vehicles. Hence a credit
- based approach as done for light
- duty vehicles would provide less motivation for manufacturers to install low leakage sy stems even though such s ys tems represent a highl y cost e ffective means to control GHG emissions. The second difference relates to the expression of the leakage rate. The light
- dut y A/C leakage standard is expressed in terms of grams per ye ar. For EPA’s heavy
- dut y program, however, because of the wide variety of sy stem designs and arrangements, a one
- size
- fits
- all gram per ye ar standard would not be appropriate, so EPA is adopting a standard in terms of annual mass leakage rate for A/C sy stems with refrigerant capacities less than or equal to 733 grams and percent of total refrigerant leakage per year for A/C sy stems with refrigerant capacities greater than 733 grams . Th e percent of total refrigerant leakage per ye ar requires the total refrigerant capacity of the A/C sy stem to be taken into account in determining compliance. EPA believes that this approach
-- a standard instead of a credit, and basing the standard on percent or mass of leakage over time

– is more appropriate for heav y - duty tractors than the light
- dut y vehicle approach and that it will achieve the desired reductions in refrigerant leakage. Compliance with the standard will be determined through a showing by the tractor manufacturer that it s A/C sy stem incorporates a combination of low
- leak technologies sufficient to meet the leakage rate of the applicable standard. The “ menu ” of technologies is very

similar to that established in the light
- dut y 2012
- 2016 MY vehicle rule. 32

31 The global warming potential for HFC
- 134a refrigerant of 1430 used in this program is consistent with the Intergovernmental Panel on Climate Change Fourth Assessment Report. 32 EPA has approved an alternative refrigerant, HFO
- 1234yf, which has a very low GWP, for use in light
duty vehicle mobile A/C systems. The final heavy
- duty vehicle A/ C leakage standard is designed to account for use of an alternative, low
- GWP refrigerant. If in the future this refrigerant is approved for******* **E.O. 12866 Review**

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29 of Finally , the agencies did no t propose and are not adopting an A/C s ys tem efficiency standard in this heavy
- dut y rulemaking, although an efficiency credit was a part of the light
- duty

rule. The much larger emissions of CO 2 from a heav y - duty tractor as compared to those from a light
- dut y vehicle mean that the relative amount of CO 2 that could be reduced through A/C efficiency improvements is very

small. A more detailed discussion of A/C related issues is found in Section I I .E.5 of this preamble. (b ) Heavy
-Duty Pickup Trucks and Vans (Class 2b and 3 ) Heav y - dut y vehicles with GVWR between 8,501 and 10,000 lb are classified in the industry

as Class 2b motor vehicles per the Federal Motor Carrier Safety Administration definition. As discussed above, Class 2b includes MDPVs that are regulated b y the agencies under the light
- duty vehicle rule , and the agencies are not adopting additional requirements for MDPVs in this rulemaking. Heavy
- duty vehicles with GVWR between 10,001 and 14,000 lb are classified as Class 3 motor vehicles. Class 2b and Class 3 heavy
- dut y vehicles (referred to in these rules as “ HD pickups and vans”) together emit about 15 percent of tod ay ’s GHG emissions from the heavy
- dut y vehicle sector. About 90 percent of HD pickups and vans are 3⁄4
- ton and 1
- ton pickup trucks, 12
- and 15
- passenger vans, and large work vans that are sold by vehicle manufacturers as complete vehicles, with no s econdary manufacturer making substantial modifications prior to registration and use. These vehicle manufacturers are companies with major light
- duty markets in the United States, primarily Ford, General Motors, and Chry sler. Furthermore, the technologie s available to reduce fuel consumption and GHG emissions from this segment are similar to the technologies used on light
- dut y pickup trucks , including both engine efficiency improvements (for gasoline and diesel engines) and vehicle efficiency improvements
. For these reasons, EPA believes it is appropriate to adopt GHG standards for HD pickups and vans based on the whole vehicle (including the engine), expressed as grams per mile, consistent with the way these vehicles are regulated b y EPA today for criteria pollutants. NHTSA believes it is appropriate to adopt corresponding gallons per 100 mile fuel consumption standards that are likewise based on the whole vehicle. This complete vehicle approach being adopted by both agencies for HD pickups and vans is con sistent with the recommendations of the NAS Committee in their 2010 Report. EPA and NHTSA also believe that the structure and man y of the detailed provisions of the recentl y finalized light
- duty

GHG and fuel economy

program, which also involves vehicle
- ba sed standards, are appropriate for the HD pickup and van GHG and fuel consumption standards as well, and this is reflected in the standards each agency is finalizing, as detailed in Section II.C. These commonalities include a new vehicle fleet average st andard for each manufacturer in each model ye ar and the determination of these fleet heavy
- duty applications and if it becomes widespread as a substitute for HFC
- 134a in heavy
- duty vehicle mo bile A/C systems, EPA may propose to revise or eliminate the leakage standard.******* **E.O. 12866 Review**

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30 of average standards based on production volume
- weighted targets for each model, with the targets varying based on a defined vehicle attribute. Vehicle testing will be condu cted on chassis dy

namo meters using the drive cycles from the EPA Federal Test Procedure ( Li ght
- dut y FTP or “ cit y ” test) and Highway Fuel Economy

Test (HFET or “ highway” tes t). 33 For the light
- dut y GHG and fuel econom y standards, the agencies factored in veh icle size by

basing the emissions and fuel economy targets on vehicle footprint (the wheelbase times the average track width). 34 For those standards, passenger cars and light trucks with larger footprints are assigned higher GHG and lower fuel economy targ et levels in acknowledgement of their inherent tendency to consume more fuel and emit more GHGs per mile. For HD pickups and vans, the agencies believe that setting standards based on vehicle attributes is appropriate, but feel that a work
- based metric provides a better attribute than the footprint attribute utilized in the light
- duty vehicle rulemaking. Work
- based measures such as payload and towing capabilit y are key among the parameters that characterize differences in the design of these v ehicles, as well as differences in how the vehicles will be utilized. Buyers consider these utility
- based attributes when purchasing a heav y - dut y pickup or van. EPA and NHTSA are therefore finalizing standards for HD pickups and vans based on a “w ork factor” attribute that combines their payload and towing capabilities, with an added adjustment for 4
- wheel drive vehicles. The agencies received a number of comments supporting this approach arguing , as the agencies had , that this approach was an eff ective way

to drive technology development and to appropriately reflect the utility

of work vehicles while setting a consistent metric measure of vehicle performance
. . As we proposed, the agencies are adopting provisions such that each manufacturer’s fleet average standard will be based on production volume
- weighting of target standards for all vehicles that in turn are based on each vehicle’s work factor. These target standards are taken from a set of curves ( mathematical functions), presented in Section II.C. EPA is also phasing in the CO 2 standards graduall y starting in the 2014 model year, at 15
- 20
- 40
- 60
- 100 percent of the model year 2018 standards stringency level in model years 2014
- 2015
- 2016
- 2017
- 2018, respectivel y. The phase
- in takes the form of a set of target standard curves, with increasing stringency in each model year, as detailed in Section II.C. The final EPA standards for 2018 (including a separate standard to control air conditioni ng s ys tem leakage) represent an average per
- vehicle reduction in GHGs of 17 percent for diesel vehicles and 12 percent for gasoline vehicles, compared to a common baseline, as described in Sections II.C and III.B of this preamble. Section II.C also discus ses the rationale behind the separate targets for diesel and gasoline vehicle standards. EPA is also finalizing a compliance alternative whereb y m anufacturers can phase in different percentages: 15
- 20
- 67
- 67
- 67
- 100 percent of the model year 2019 standards stringency

level in model years 2014
- 2015
- 2016
- 2017
- 2018
- 2019,
33 The Light
- duty FTP is a vehicle driving cycle that was originally developed for certifying light
- duty vehicles and subsequently applied to HD chassis testing for criteria pollutants. This contrasts with the Heavy
- duty

FTP, w hich refers to the transient engine test cycles used for certifying heavy
- duty engines (with separate cycles specified for diesel and spark
- ignition engines). 34 EISA requires CAFE standards for passenger cars and light trucks to be attribute
- based; see 49 U.S.C. 32902(b)(3)(A).******* **E.O. 12866 Review**

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31 of respectivel y. This compliance alternative parallels and is equivalent to NHTSA’s first alternative described below. NHTSA is allowing manufacturers to select one of two fuel cons umption standard alternatives for model years 2016 and later. T he first alternative defines individual gasoline vehicle and diesel vehicle fuel consumption target curves that wil l not change for model years 2016
- 2018 , and are equivalent to EPA’s 67
- 67
- 67
- 100 percent target curves in model ye ars 2016
- 2017
- 2018
- 2019, respectivel y . The target curves for this alternative are presented in Section II.C. The second alternative uses target curves that are equivalent to the EPA’s 40
- 60
- 100 percent target curves in model year s 2016
- 2017
- 2018 , respectivel y . Stringency for the alternatives has been selected to allow a manufacturer, through the use of the credit and deficit carry
- forward provisions that the agencies are also finalizing, to rel y on the same product plans to satisfy either of these two alternatives, and also EPA requirements. Under the provisions of the ABT program in today ’ s action , EPA and NHTSA have allowed manufacturers to carry forward credits and deficits for a set period of time. We are allowing manufacturers of vehicles or engines to carry

forward a de ficit for up to three years when there is less lead time available. If a manufacturer cannot meet an applicable standard in a given model year, it may make up its shortfall by

overcompl yi ng in a subsequent y ear, called reconciling a credit deficit. NHTSA is also allowing manufacturers to voluntaril y opt into the NHTSA HD pickup and van program in model y ears 2014 or 2015. For these model y ears, NHTSA’s fuel consumption target curves are equivalent to EPA’s target curves. The agencies received a numb er of comments suggesting that the standards for heav y - dut y pickups and vans should be made more stringent for gasoline vehicles and further that the phase
- in timing of the standards should be accelerated to the 2016 model ye ar (from 2018). We also receiv ed comments arguing that the proposed standards were aggressive and could only be met given the phase
- in schedules proposed by the agencies. In response to these comments, we reviewed again the technology assessments from the 2010 NAS report, our own joint light
- duty 2012
- 2016 rulemaking, and information provided b y the commenters relevant to the stringency of these standards. After reviewing all of the information, we continue to conclude that the proposed standards and associated phase
- in schedules repr esent technically stringent but reasonable standards considering the available lead time and costs to bring the necessary technologies to market and our own assessments of the efficacy of the technologies when applied to heav y - dut y pickup trucks and vans. Further detail on the feasibility of the standards and the agencies’ choices among alternative standards is found in S ection III.C below. The form and stringency

of the EPA and NHTSA standard s curves are based on a set of vehicle, engine, and transmissio n technologies expected to be used to meet the recentl y established GHG emissions and fuel economy standards f

or model year 2012
- 2016 light
- duty

vehicles, with full consideration of how these technologies are likel y to perform in heav y - dut y vehicle testing and use. All of these technologies are already in use or have been announced for upcoming model years in some light
- duty vehicle models , and some are in use in a portion of HD pickups and vans as well
. The technologies include:******* **E.O. 12866 Review**

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32 of  advanced 8
- speed automati c transmissions  aerod ynamic improvements  electro
- hydraulic power steering  engine friction reductions  improved accessories  low friction lubricants in powertrain components  lower rolling resistance tires  lightweighting  gasoline direct injection  gasoline engi ne coupled cam phasing  diesel aftertreatment optimization  air conditioning s ys tem leakage reduction (for EPA program onl y) See Section III. B for a detailed anal ys is of these and other potential technologies, including their feasibility, costs, and effectiv eness when emplo yed for reducing fuel consumption and CO 2 emissions in HD pickups and vans
. A relativel y small number of HD pickups and vans are sold b y vehicle manufacturers as incomplete vehicles, without the primary load
- carrying device or container attached. We are generall y regulating these vehicles as Class 2b through 8 vocational vehicles but are also allowing manufacturers the option to choose to comply with heav y - dut y pickup or van standards , as described in Section I.C
. (2)(c), because, like other vocational vehicles, we have little information on baseline aerody namic performance and opportunities for improvement. However, a sizeable subset of these incomplete vehicles, often called cab
- chassis vehicles, are sold by the vehicle manufacturers in configurations with many of the components that affect GHG emissions and fuel consumption identical to those on complete pickup truck or van counterparts

— including engines, cabs, frames, transmissions, axles, and whe els. We are including provisions that will allow manufacturers to include these vehicles , as well as some Class 4 and 5 vehicles, in the chassis
- based HD pickup and van program (i.e. subject to the standards for HD pickup s and van s ) , rather than the vocational vehicle program. These provisions are described in Section V.B (1)(e ). Additional flexibilities are also being finalized to create further incentives for advanced technology vehicles. In addition to the EPA CO 2 emission standards and the NHTSA fuel consumption standards for HD pickups and vans, EPA is also finalizing standards for two additional GHGs, N 2 O and CH 4 , as well as standards for air conditioning
- related HFC emissions. These standards ar e discussed in more detail in Section II.E. Finally , EPA is finalizing standards that will apply

to HD pickups and vans in use. All of the standards for these HD pickups and vans, as well as details about the provisions for certification and implementation of these standards, are discussed in Section II.C.******* **E.O. 12866 Review**

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33 of (c) Class 2b
- 8 Vocational Vehicles Class 2b
- 8 vocational vehicle s consist of a wide variet y of vehicle ty pes. Some of the primary

applications for vehicle s in this segment include delivery , ref use, utility , dump, and cement trucks; transit, shuttle, and school buses; emergency vehicles, motor homes, 35 tow trucks, among others . These vehicle s and their engines contribute approximately 20 percent of today ’ s heavy
- dut y truck sector GHG emissions
. Manufacturing of vehicles in this segment of the industry is organized in a more complex way

than that of the other heav y - dut y categories
. Class 2b
- 8 vocational vehicle s are often built as a chassis with an installed engine and an installed transmissio n. Both the engine and transmissions are t ypicall y manufactured b y other manufacturers and the chassis manufacturer purchases and installs them. Many of the same companies that build Class 7 and 8 tractors are also in the Class 2b
- 8 chassis manufacturing market. The chassis is ty

picall y then sent to a body manufacturer , which completes the vehicle by installing the appropriate feature
-- such as dump bed, delivery box, or utility bucket
-- onto the chassis. Vehicle b ody manufacturers tend to be small bus inesses that specialize in specific t ypes of bodies or specialized features
. EPA and NHTSA proposed that in this vocational vehicle category the proposed GHG and fuel consumption standards appl y to chassis manufacturers. Chassis manufacturers play

a central role in the manufacturing process
. T he product they produce

– the chassis with engine and transmission

– includes the primary technologies that affect GHG emissions and fuel consumption. They also constitute a much more limited group of manufacturers for purposes of developing and implementing a regulatory

program. The agencies believe that a focus on the body manufacturers would be much less practical, since they represent a much more diverse set of manufacturers, many of whom are small businesses . Further , the part of the vehicle that they add affords very few opportunities to reduce GHG emissions and fuel consumption (given the limited role that aerodynamic s play s in man y ty pes of lower speed and stop
- and
- go operation ty picall y found with vocational vehicles.) Therefore, the agencies proposed that the standards in this vocational vehicle category would apply

to the chassis manufacturers of all heav y - dut y ve hicles not otherwise covered by the HD pickup and van standards or Class 7 and 8 combination tractor standards discussed above. The agencies requested comment on the proposed focus on chassis manufacturers. Volvo commented that the EI SA does not speak to the regulation of subs ys tems, such as incomplete vehicles, and argued that on the other hand, Section 32902(k)(2) prescribes the regulation of vehicles. Volvo further stated that precedent for the regulation of complete vehicles exists in the light
- duty f uel econom y rule. As noted above, NHTSA does not believe that EISA mandates a particular regulatory approach, but rather gives the agency wide latitude and explicitly leaves that determination to the agency . NHTSA also notes that its heavy
- duty rule creates a new fuel efficiency program for which the light
- dut y program does not necessarily serve as a useful precedent for

35 NHTSA’s final fuel consumption standards will not apply to recreational vehicles, as discussed in Section I
.******* **E.O. 12866 Review**

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34 of considerations of its structure. Unlike the light
- duty fuel econom y program, MD/HD vehicles are produced in widely diverse stages. Further, given the MD/HD market structure, where the complete vehicle manufacturers are numerous, diverse, and often small businesses, the regulation of complete vehicles would create unique difficulties for the application of appropriate and feasible technol ogies. These same considerations justify EPA’s determination, pursuant to CAA section 202 (a), to regulate only chassis manufacturers in this first stage of GHG rules for the heav y - dut y sector. NHTSA also notes that this rule does not represent the first time that the agency has regulated incomplete vehicles. Rather, incomplete vehicles have a history of regulation under the Federal Motor Vehicle Safet y Standards. 36 For this first phase of the HD National Program, NHTSA and EPA believe that given the complexity of the manufacturing process for vocational vehicles, and given the wide range of entities that participate in that process, vehicle fuel consumption standards would be most appropriately applied to chassis manufacturers and not to body builders. The agencies continue to believe that regulation of the chassis manufacturers for this vocational vehicle category will achieve the maximum feasible improvement in fuel efficiency for purposes of EI SA and appropriate emissions reductions for purposes of the CAA
. Therefore, consistent with our proposal the final standards in this vocational vehicle category

appl y to the chassis manufacturers of all heav y - dut y vehicles not otherwise covered b y the HD pickup and van standards or Class 7 and 8 combination tractor standards discussed above. As discussed above, EPA and NHTS A have concluded that reductions in GHG emissions and fuel consumption require addressing both the vehicle and the engine. As discussed above for Class 7 and 8 co mbination tractors, the agencies are each finalizing two sets of standards for Class 2b
- 8 vocational vehicles. For vehicle
- related emissions and fuel consumption, the agencies are adopting standards for chassis manufacturers: EPA CO 2 (g/ton
- mile) standards and NHTSA fuel consumption (gal/1,000 ton
- mile) standards). While the agencies believe that a freight
- based metric is broadly appropriate for vocational vehicles because the vocational vehicle population is dominated by

freight trucks and maintain that it is appropriate for the first phase of the program, the agencies may consider other metrics for future phases of a HD program. M anufacturers will use GEM, the same customized vehicle simu lation model used for Class 7 and 8 tractors, to determine compliance with the vocational vehicle standards finalized in this action . The primary manufacturer
- generated input into the GEM for this category of trucks will be a measure of tire rolling resis tance, as discussed further below, because tire improvements are the primary means of vehicle improvement available at this time for vocational vehicles. The model also assumes the use of a typical representative , compliant engine in the simulation, resul ting in an overall value for CO 2 emissions and one for fuel consumption. This is done for the same reason as for combination tractors. As is the case for combination tractors, the manufacturers of the engines intended for vocational vehicles will be subject to separate engine
- based standards.

36 See 49 U.S.C. §§ 567.5 and 568.4******* **E.O. 12866 Review**

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35 of (i ) Final Standards for Class 2b
- 8 Vocational Vehicles and their Engines Based on our analy sis and research, the agencies believe that the primary opportunity for reductions in vocational vehicle GHG emissions and fu el consumption will be through improved engine technologies and improved tire rolling resistance. For engines, as finalized for combination tractors, EPA and NHTSA are adopting separate standards for the manufacturers of engines used in Class 2b
- 8 vocatio nal vehicles. EPA ’ s final engine
- based CO 2 standards and NHTSA ’ s final engine
- based fuel consumption standards vary

based on the expected weight class and usage of the truck into which the engine will be installed. Tire rolling resistance is closely related to the weight of the vehicle. Therefore, we are adopting vehicle
- based standards for these trucks which vary according to one key

attribute, GVWR. For this initial HD rulemaking, we are adopting standards based on the same groupings of truck weight c lasses used for the engine standards
-- light heav y - duty , medium heav y - duty , and heavy heavy
- dut y. These groupings are appropriate for the final vehicle
- based standards because they parallel the general divisions among key engine characteristics, as discu ssed in Section II. As for the compression ignition engines used in Class 7 and 8 combination tractors, we are finalizing an interim alternative engine standard for model y ears 2014
- 2016. The need for this provision and our considerations in adopting it are the same for the engines used in vocational vehicles as for the engines used in combination tractors. As we proposed, these alternative standards will only be available through model year 2016. Additionally , manufacturers that use the interim alternative diesel engine standards for model years 2014
- 2016 under the EPA program must use equivalent fuel consumption standards under the NHTSA program
. For the 2014 to 2016 model years, manufacturers may

also choose to meet alternative engine standard s that are phased
- in over the model ye ars to coincide with new OBD requirements applicable for these same model years. The agencies received a significant number of comments arguing that our proposed standards for vocational vehicles did not reflect all of the technologies identified in the 2010 NAS report. The commenters encouraged the agencies to expand the program to bring in additional reductions through the use of new transmission technologies, vehicle weight reductions and h ybrid drivetrains. In gen eral, the agencies agree with the commenters central contention that there are additional technologies to improve the fuel efficiency of vocational vehicles. As discussed later, we are finalizing provisions to allow new technologies to be brought into the program through the innovative technology

credit program. ( See Sections I .E and IV below.) However, we are not finalizing standards that are premised on the use of these additional technologies because we have not been able to develop the test procedures, regulatory mechanisms and baseline performance data necessary to finalize a more comprehensive approach to controlling fuel efficiency and GHG emissions from vocational vehicles. In concept, the agencies would need to know the baseline weight , aerod ynamic performance, and transmission configuration for the wide range of vocational vehicles produced today . We do not have this information even for relativel y s mall portions of this market such as concrete mixers nor are we well informed regardin g the potential tradeoffs to changes to vehicle utility

that might exist for changes to concrete mixer designs in response to a******* **E.O. 12866 Review**

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36 of regulation. Nor did the commenters provide an y s uch information. Absent this information and the necessary regulatory

tools, w e believe the standards we are finalizing for vocational vehicles represent the most appropriate standards for this segment. We intend to address fuel consumption and GHG emissions from these vehicles in a more comprehensive manner through future regulati on and look forward to working with all stakeholders on this important segment in the future. As discussed below, we are including provisions to account for and credit the use of h ybrid technology as a technology

that can reduce emissions and fuel consump tion. Hy brid technology

can currentl y be a cost
- effective technology in certain specific vocational applications, and the agencies want to recognize and promote the use of this technology
. The agencies are setting standards beginning in the 2014 model year and establishing more stringent standards in the 2017 model year. Table I
- 3 presents EPA ’ s final CO 2 standards and NHTSA ’ s final fuel consumption standards for chassis manufacturers of Class 2b through Class 8 vocational vehicles for the 2017 model year. The 2017 model year standards represent a 6 to 9 percent reduction in CO 2 emissions and fuel consumption over a 2010 model y ear vehicle. **Table I**  **- 3**  **: Final 2017 Class 2b -**  **8 Vocational Vehicle EPA CO 2**  **Standards and NHTSA Fuel Consumption Standards**  EPA CO 2 (gram/ton
- mile) Standard Effective 2017 Model Year

Li ght Heav y - Dut y Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 CO 2 Emissions 373 225 222 NHTSA Fuel Consumption (gallon per 1,000 ton
- mile) Standard Effective 2017 Model Year Li ght Heav y - Dut y

Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 Fuel Consumption 36. 7 22.1 21.8 As mentioned above for Class 7 and 8 combination tractors, EPA believes that N 2 O and CH 4 emissions are technologicall y related solely to the engine, fuel, and emissions aftertreatment sy stems, and the agency is not aware of any

influence of vehicle
- based technologies on these emissions. Therefore, for Class 2b
- 8 vocational vehicles, EPA’s fi nal N 2 O and CH 4 standards cover manufacturers of the engines to be used in vocational vehicles. EPA did not propose, nor are we adopting separate vehicle
based standards for these GHGs. As for the engines used in Class 7 and 8 tractors, we are finalizing a somewhat higher N 2 O and CH 4 emission standards reflecting new data submitted to the agencies during the public comment period . EPA expects that manufacturers of current engine technologies will be able t o compl y with the final “cap” standards with little or no technological improvements; the value of the standards is that they will prevent significant increases in these emissions as alternative technologies are developed and introduced in the future. Compliance with the final EPA engine
- based CO 2 standards and the final NHTSA fuel consumption standards, as well as the final EPA******* **E.O. 12866 Review**

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37 of N 2 O and CH 4 standards, will be determined using the appropriate EPA engine test procedure, as discussed in Section II below. As with the other regulatory categories of heavy
- duty vehicles, EPA and NHTSA are adopting standards that apply to Class 2b
- 8 vocational vehicles at the time of production, and EPA is adopting standards for a specified period of time in use. All of the standards for these trucks, as well as details about the final provisions for certification and implementation of these standards, are discussed in more detail later in this notice and in the RIA. EPA did not propose, nor is it adopting A/C refrigerant leakag e standards for Class 2b
- 8 vocational vehicles, primarily because of the number of entities involved in their manufacture and thus the potential for different entities besides the chassis manufacturer to be involved in the A/C sy stem production and install ation. (d ) What Manufacturers Are Not Covered by the Final Standards? The NPRM proposed to defer temporaril y greenhouse gas emissions and fuel consumption standards for an y manufacturers of heav y - dut y engines, manufacturers of combination tractors, and chassis manufacturers for vocational vehicles that meet the “small business” size criteria set b y the Small Business Administration (SBA). 13 CFR 121.201 defines a small business by the maximum number of employees; for example, this is currently

1,000 for heav y - dut y vehicle manufacturing and 750 for engine manufacturing. 37 The agencies stated that they would instead consider appropriate GHG and fuel consumption standards for these entities as part of a future regulatory action. This includes both U.S.
- b ased and foreign small
- volume heav y - dut y manufacturers. To ensure that the agencies are aware of which companies would be ex cluded , the agencies proposed to require that such entities submit a declaration descri bing how it qualifies as a small entity

under the provisions of 13 CFR 121.201 to EPA and NHTSA as prescribed in Section V below
. EPA and NHTSA were not aware of an y manufacturers of HD pickups and vans that meet these criteria. For each of the other categories and for engines, the agencies identified a small number of manufacturers that would appear to qualify as small businesses under the SBA size criterion, which were estimated to com prise a negligible percentage of the U.S. market. 38 Therefore, the agencies believed that deferring the standards for these companies at this time would have a negligible impact on the GHG emission reductions and fuel consumption reductions that the program would otherwise achieve. The agencies proposed to consider appropriate GHG emissions and fuel consumption standards for these entities as part of a future regulatory action.

37 See § 1036.150 and § 1037.150 38 Two heavy
- duty

com bination tractor and ten chassis manufacturers each comprising less than 0.5 percent of the total tractor and vocational market based on Polk Registration Data from 2003 through 2007, and three engine manufacturing entities based on comp any information included in Hoover’s, comprising less than 0.1 percent of the total heavy
- duty engine sales in the United States based on 2009 and 2010 EPA certification information.******* **E.O. 12866 Review**

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38 of The Institute for Policy

I ntegrit y ( IP I ) commented that the small business exclusion proposed in the NPRM was based on the improper framework of whether the exclusion would have a negligible impact, and did not adequatel y explain why the regulation of small businesses would face special compliance and administrative burdens. IP I argued that the onl y proper basis for this exclusion would be if the agencies cou ld explain how these burdens create costs that exceeded the benefits of regulation. NHTSA believes that developing standards that are “appropriate, cost
- effective, and technologicall y feasible” under 49 USC 32902(k)(2) includes the authority to ex clude certain manufacturers if their inclusion would work against these statutory factors. Similarly , under section 202 (a) of the CAA, EPA may reasonabl y choose to defer regulation of industry segments based on considerations of cost, cost
- effectiveness and available lead time for standards. As noted above, small businesses make up a very small percentage of the market and are estimated to have a negligible impact on the emissions and fuel consumption goals of this program . The short lead time to develop th e proposal, the extremely small fuel savings and emissions contribution of these entities, and the potential need to develop a program that would be structured differentl y for them (which would require more time), all led to the determination that the inclusion of small businesses would not be appropriate at this time. Therefore, the final rule ex cludes small business es as proposed
. Volvo and EMA stated that by ex cluding small busi nesses based on the definition from SBA, the rule s would create a competitive advantage for small businesses over larger entities. EMA commented that the exclusion should not apply to market segments where a small business has a significant shar e of a particular HD market. Volvo argued that the ex cluded businesses could expand their product offerings or sell vehicles on behalf of larger entities, thereb y inappropriatel y increasing the scope of the exclusion
. The agencies anticipate that the gain a manufacturer might achieve b y restructuring its practices and products to circumvent the standard (which for vocational vehicles simply means installing low rolling resistance tires) in the first few years of this pr ogram will be outweighed b y the costs, particularl y as small businesses anticipate their potential inclusion in the next rulemaking. Volvo also commented that the agencies should elaborate on the requirements for the exclusion . The agencies agree that this may help to clarify

the process. As suggest ed by Volvo, the agencies will consider affiliations to other companies and evidence of spin
offs for the purpose of circumventing the standards in determining whether a business qualifies as a small entity for this ex clu sion . Each declaration mu st be submitted in writing to EPA and NHTSA as prescribed in Section V below, and a manufacturer would not be considered excluded until EPA and NHTSA have made a formal determination as to their status in writing. As the agencies gain more experien ce with this exclusion , these clarifications may be codified in the regulatory te x t of a future rulemaking. Volvo further commented that the agencies were adopting a n exclusion of “small business es ” in order to avoid doing a S mall Business Regulatory Enforcement Fairness Act (S BREFA ) and Regulatory Flexibility

Act ( RFA ) anal ys is. The agencies would like******* **E.O. 12866 Review**

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39 of to reiterate that they

have decided not to include small businesses at this time due to the factors described above. The discussi on on an RFA anal ys is is laid out in Section IX(4). The agencies continue to believe that deferring the standards for these companies at this time will have a negligible impact on the GHG emission reductions and fuel consumption reductions that the progr am would otherwise achieve. Therefore, the final rule s include the small business exemption as proposed
. The specific deferral provisions are discussed more detail in Section II. The agencies will consider appropriate GHG emissions and fuel consumption standards for these entities as part of a future regulatory action. (e) Light
- duty Vehicle CH 4 and N

2 O Standards Flexibility After finalizing the N 2 O and CH 4 standards for light
- duty vehicles as part of the 2012
- 2016 MY program, some manufacturers raised co ncerns that they may have difficulty meeting those standards across their light
- duty vehicle fleets. In response to these concerns, as part of the same Federal Register notice as the heav y - duty proposal, EPA requested comments on additional options for manufacturers to comply with light
duty vehicle N 2 O and CH 4 standards to provide additional near
- term flexibility
. Commenters providing comment on this issue supported additional flexibility for manufacturers. EPA is finalizing provisions allowing manufacturers to use CO 2 credits, on a CO 2 - equivalent basis, to meet the N 2 O and CH 4 standards, which is consistent with many commenters’ preferred approach. Manufacturers will have the opti on of using CO 2 credits to meet N 2 O and CH 4 standards on a test group basis as needed for MYs 2012
- 2016. (f ) Alternative Fuel Engines and Vehicles The agencies believe that it is also appropriate to take steps to recognize the benefits of flexible
- fueled vehic les (FFVs) and dedicated alternative
- fueled vehicles. In the NPRM, EPA proposed to determine the emissions performance of dedicated alternative fuel engines and pickup trucks and vans by measuring tailpipe CO 2 emissions. NHTSA proposed to determine fuel consumption performance of non
- electric dedicated alternative fuel engines and pickup trucks and vans by measuring fuel consumption with the alternative fuel and then calculating a petroleum equivalent fuel consumption using a Petroleum Equivalency

Factor (PEF) that is determined by the Department of Energy
. NHTSA proposed to treat electric vehicles as having zero fuel consumption, comparable to the EPA proposal. Both agencies proposed to determine FFV performance in the same way as for GHG emissions for light
- dut y vehicles, with a 50
- 50 weighting of alternative and conventional fuel test results through MY 2015, and a weighting based on demonstrated fuel use in the real world after MY 2015 (defaulting to an assumption of 100 percent conventional fuel use). This approach was considered to be a reasonable and logical way

to properly

credit alternative fuel use in FFVs in the real world without imposing a difficult burden of proof on manu f ac turers. However, unlike in th e light
- dut y rule, the agencies do not believe it is appropriate to create a provision for additional incentives similar to the 2012
- 2015 light
- dut y incentive program (see 49 USC 32904)******* **E.O. 12866 Review**

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40 of because the HD sector does not have the incentives mandated in EI SA for light
- dut y FFVs, and so has not relied on the existence of such credits in devising compliance strategies for the early

model years of this program. See 74 FR at 49531. In fact, manufacturers have not in the past produced FFV heav y - dut y vehicles. On the other hand, the agencies sought comment on how to properly recognize the impact of the use of alternative fuels, and E85 in particular, in HD pickups and vans, including the proper accounting for alternative fuel use in FFVs in the real world. 39 See 75 FR at 74198. T he agencies received several comments from natural gas vehicle (NGV) interests arguing for greater crediting of NGVs than the proposed approach would have provided. Clean Energy , Hayday

Farms, Border Valley , AGA, Ryder, Encana, and a group of NGV interests commented that the NPRM ignored Congress’ intent to incentivize the use of NGVs by not including the conversion factor that exists in the light
- duty statutory language. The commenters argued that Congress’ intent to incentivize NGV s is evident in the formula contained in 49 U.S.C. 32905, which deems a gallon equivalent of gaseous fuel to have a fuel content of 0.15 gallon of fuel. The commenters also argued that Congress implicitly

intended NGVs to be incentivized in th is rulemaking , as evidenced by the incentives in the light
- dut y statutory text. AGA and Hayday

suggested that the agencies were not including the NGV incentive from light
- duty because Congress did not explicitly include it in 49 U.S.C. 32902(k), and argued that this w ould contradict the agencies’ inclusion of other incentives similar to the light
- dut y rule. The American Trucking Association expressed support for estimating natural gas fuel efficiency

by using carbon emissions from natural gas rather than energy content to estimate fuel consumption. ATA explained that two vehicles can achieve the same fuel efficiency , yet one operated on natural gas would have a lower carbon dioxide emissions rate. A natural gas conversion factor that uses carbon content versus energy content is a more appropriate method for calculating fuel consumption. A number of other groups commented on the appropriate method to use in establishing fuel consumption from alternative fueled vehicles. A group of NGV interests , Ryder, Border Valley Trading, Waste Management, Robert Bosch and the Blue Green Alliance encouraged the agencies to adopt the 0.15 conversion factor in estimating fuel consumptio n for FFVs and alternative fuel vehicles finalized in the light
- duty 2012
- 2016 MY vehicle standards. The incentive effectivel y reduces the calculated fuel consumption for FFVs and alternative fuel vehicles b y a factor of 85 percent. T he commenters argue d that the incentive is needed for heav y - dut y vehicles to encourage the use of natural gas and to reduce the nation’s dependence on petroleum. The agencies reassessed the options for treating the CO 2 and fuel consumption performance of alternative fuel v ehicles in response to comments and because the agencies recognized that the treatment of alternate fuel vehicles was one of the few provisions in the proposal where the EPA and NHTSA programs were not aligned. The agencies conducted an analy sis comparing fuel consumption calculated based on CO 2

39 E85 is a blended fuel consisting of nominally 15 percent gasoline and 8 5 percent ethanol.******* **E.O. 12866 Review**

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41 of emissions 40 to fuel consumption calculated based on gasoline or diesel energy equivalency to evaluate impacts of a consistent consumption measurement for all vehicle classes covered b y this program and to furthe r understand how alternative fuels would be impacted b y this measurement methodology. In particular the agencies evaluated how measuring consumption via CO 2 emissions would hinder or benefit the application of alternative fuels versus following similar al ternative fuel incentivizing programs provided via statute for the Agency’s light
- dut y programs. The anal ys is showed measuring a vehicle’s CO 2 output converted to fuel consumption provided a fuel consumption measurement benefit to those vehicles operating on fuels other than gasoline or diesel. For CNG, LNG and LPG the benefit is approximately 19 percent to 24 percent, for biodiesel and ethanol blends the benefit is approximately 1 percent to 3 percent, and for electricit y and h ydrogen fuels the benefit i s 100 percent benefit, as fuel consumption is zero. The agencies also considered that the EPA Renewable Fuel Standard, 41 a separate program, requires an increase in the volume of renewable fuels used in the U.S. transportation sector. For the fuels covere d by the Renewable Fuels Standard additional incentives are not needed in this regulation given the large volume increases required under RFS. The agencies continue to believe that alternative
- fueled vehicles , including NGVs , provide fuel consumption benef its that should be accounted for in this program. However, the agencies do not agree with the commenters’ claim that the NGV incentive contained in the light
- duty program is an explicit Congressional directive that must also be applied to the heav y - duty p rogram, nor that the light
- duty incentive for NGVs should be interpreted as an implicit Congressional intent for NGVs to be incentivized in the heav y - dut y program. Further, the agencies believe that the fuel consumption benefits that alternative fuel vehi cles w ould obtain through measuring CO 2 emissions for the EPA program and converting CO 2 emissions to fuel consumption for the NHTSA program accuratel y reflect s their energy benefits . T h is, in conjunction with the volumetric increases required b y the Rene wable Fuels Standard, provide s sufficient incentives for these vehicles. The agencies continue to believe that the light
- dut y conversion factor is not appropriate for this program . Instead, the agencies are finalizing measuring the performance of alternative fueled vehicles b y measuring CO 2 emissions for the EPA program and converting CO 2 emissions to fuel consumption for the NHTSA program. The agencies are also finalizing measuring FFV performance with a 50
- 50 weighting of alternative and convent ional fuel test results through MY 2015, and an ag ency - or manufacturer
- determined weighting based on demonstrated fuel use in the real world after MY 2015 (defaulting to an assumption of 100 percent conventional fuel use).

40 Fuel consumption calculated from measured CO 2 using conversion factors of 8,887 g CO 2 /gallon for gasoline (for alternative fuel engines that are derived from gasoline engines), and 10,180 g CO 2 /gallon for diesel fuel (for alternative f uel engines that are derived from diesel engines). 41 EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The RFS program was created unde r the Energy Policy Act (EPAct) of 2005, and expanded under the Energy Independence and Security Act (EISA) of 2007.******* **E.O. 12866 Review**

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42 of The agencies believe this stru cture accuratel y reflects the fuel consumption of the vehicles while at the same time providing a n incentive for the alternative fuel use. We believe this is a substantial enough advantage to spur the market for these vehicles. The calculation at the sam e time does not overestimate the benefit from th ese technolog ies , which could reduce the effectiveness of the regulation. Therefore, the final rule s do not include the light
- dut y 0.15 conversion factor for NGVs. The agencies would like to clarify that the decision not to include an NGV incentive was based on this determination, not on a belief that incentives present in the light
- duty rule could not be developed for the heav y - duty program if they were not explicitly

included in Section 32902(k). [ **NHTSA is drafting language to insert here on the energy security fuel benefits that would result from increased incentives for natural gas, but that these**  **benefits are outweighed by the need for a harmonized program**  **.** ] 

### D. **Summary of Costs and Benefits of the H D National Program**  This section summarizes the projected costs and benefits of the final NHTSA fuel consumption and EPA GHG emissions standards. These projections help ed to 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 the agencies’ respective statutory criteria. NHTSA and EPA have used common projected cost s and benefits as the bases for our respective standa rds. The agencies have anal yzed in detail the projected costs and benefits of the final GHG and fuel consumption standards. Table I
- 4 shows estimated lifetime disc ounted program cost s (including technological outlay s) , fuel saving s, and benefits for all heav y duty vehicles projected to be sold in model years 2014
- 2018. The benefits include impacts such as climate
- related economic benefits from reducing emissi ons of CO 2 (but not other GHGs) and reductions in energy security externalities caused by

U.S. petroleum consumption and imports. The anal ys is also includes economic impacts stemming f rom additional heav y - dut y vehicle use, such as the economic damages caused by accidents, congestion and noise. Note that benefits depend on estimated values for the social cost of carbon (SCC) , as described in Section VIII.G. The costs and benefits summarized here are slightly higher than at proposal, reflecting the use of 2009 (versus 2008) dollars, some minor changes to our cost estimates in response to comments, and a change to the 2011 Annual Energy Outlook (AEO) estimate of economic gro wth and future fuel prices. In aggregate, these changes lead to an increased estimate of the net benefits of the final action compared to the proposal.******* **E.O. 12866 Review**

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43 of **Table I**  **- 4**  **: Estimated Lifetime Discounted Costs, Benefits, and Net Benefits**  **for 2014**  **- 2018 Model**  **Year HD Vehicles**  **assuming the Model Average, 3% Discount Rate**  **SCC Value a,b**  **(200 9**  **dollars)**

Lifeti me Present V alue c

– 3% Discount Rate Program Costs $ 8.1 Fuel Savings $ 50 Benefits $ 7.3 Net Benefits d $49

Annualized V alue e

– 3% Discount Rate Annualized benefits $2.6 Annualized costs $0.4 Net benefits $2.2

Lifetime Present V alue c
- 7% Discount Rate Program Costs $ 8.1 Fuel Savings $ 34 Benefits $6.7 Net Benefits d $ 33

Annualized V alue e

– 7% Discount Rate Annualized benefits $3.1 Annualized costs $0. 6 Net benefits $ 2.5 Note s: a The agencies estimated the benefits associated with four different values of a one ton CO 2 reduction ( mo del average at 2.5% discount rate, 3%, and 5%; 95 th percentile at 3% ), which each increase over time. F or the purposes of this overview presentation of estimated costs and benefits , however, we are showing the benefits associated with the marginal value deeme d to be central by the interagency working group on this topic: the mo del average at 3% discount rate , in 200 9 dollars. Section VIII.F provides a complete list of values for the 4 estimates
. 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 VIII.F for more detail
. c Present value is the total, aggregated amount that a series of monetized costs or benefits that occur over time is worth now (in year 2009 dollar terms), discounting future values t o the present. d Net present benefits reflect the fuel savings plus benefits minus costs. e T he annualized value is the constant annual value through a given time period (2012 through 2050 in this analysis) whose summed present value equals the present value from which it was derived
. Table I
- 5 shows the estimated lifetime reductions in CO 2 emissions (in million metric tons (MMT)) and fuel consumption for all heavy
- dut y vehicles sold in the model ye ars 2014
- 2018. The values in Table I
- 5 are projected lifetime totals for each model ye ar and are not discounted. The two agencies’ standards together comprise the HD National Program, and the age ncies’ respective GHG emissions and fuel consumption standards, jointly , are the source of the benefits and costs of the HD National Program.******* **E.O. 12866 Review**

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44 of **Table I**  **- 5**  **: Estimated Lifetime**  **Reductions in Fuel Consumption and**  **CO 2**  **Em issions**  **f or 2014**  **- 2018**  **Model Year HD Vehicles** All Heavy
- Duty Vehicles 2014 MY 2015 MY 2016 MY 2017 MY 2018 MY Total Fuel (billion gallons) 4.0 3.6 3.6 5.1 5.8 22. 1 Fuel (billion barrels) 0.10 0.09 0. 0 8 0.12 0.14 0.5 3 CO 2 (MMT) a 50.2 44.8 44. 0 6 2.8 7 1.7 27 3 Note: a Includes upstream and downstream CO 2 reductions . Table I
- 6 shows the estimated lifetime discounted benefits for all heav y - duty vehicles sold in model y ears 2014
- 2018. Although the agencies estimated the benefits associated with four different values of a one ton CO 2 reduction ($5, $22, $36, $66), for the purposes of this overview presentation of estimated benefits the agencies are showing the benefits associated with one of these marginal values, $22 per ton of CO 2 , in 200 9 dollars and 2010 emissions
. Table I
- 6 presents benefits based on the $22 per ton of CO 2 value. Section VIII.F presents the four marginal values used to estimate monetized benefits of CO 2 r eductions and Section VIII presents the program benefits using each of the four marginal values, which represent onl y a partial accounting of total benefits due to omitted climate change impacts and other factors that are not readil y monetized. The values in the table are discounted values for each model year of vehicles throughout their projected lifetimes. The anal ys is include s other economic impacts such as fuel savings, energy securit y , and other externalities such as impacts on accidents, congestion and noise. However, the model y ear lifetime anal ys is supporting the program omits other impacts such as benefits related to non
- GHG emission reductions. 42 The lifetime discounted benefits are shown for one of four different SCC valu es considered b y EPA and NHTSA. The values in Table I
- 6 do not include costs associated with new technology

required to meet the GHG and fuel consumption standard s . **Table I**  **- 6**  **: Estimated Lifetime Discounted Benefits**  **for 2014**  **- 2018 Model Year**  **HD Vehicles Assuming** 

**the Model Average, 3% Discount Rate**  **SCC Value a,b**  **,c (billions**  **of 200 9**  **dollars)** Discount Rate Model Year

2014 2015 2016 2017 2018 Total 3% $10.7 $9. 4 $9.2 $13.2 $14.9 $5 7 7% $8. 3 $ 6.9 $6.6 $9.2 $10.1 $41 Notes: a The analysis includes impacts such as the economic value of reduced fuel consumption and accompanying climate
- related economic benefits from reducing emissions of CO 2 (but not other GHGs), and reductions in energy security externalities caused by U.S. petroleum consumption and im ports. The analysis also i ncludes economic impacts stemming from additional heavy
- duty vehicle use, such as the economic damages caused by accidents, congestion and noise. b Note that net present value of reduced CO 2 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,

42 Non
- GHG emissions and health
- related impacts were estimated for the calendar year analysis. See Section VII for more information about non - GHG emission impacts and Section VIII for more information about non
- GHG
- related health impacts.******* **E.O. 12866 Review**

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45 of and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section VIII.F for more detail , including a list of all four SCC va lues, which increase over time
. c Benefits in this table include fuel savings. Table I
- 7 shows the agencies’ estimated lifetime fuel savings, lifetime CO 2 emission reductions, and the monetized net present values of those fuel savings and CO 2 emission reductions. The gallons of fuel and CO 2 emission reductions are projected lifetime values for all vehicles sold in the model years 2014
- 2018. The estimated fuel savings in billions of barrels and the GHG reductions in million metric tons of CO 2 shown in Table I
- 7 are totals for the five model ye ars throughout their projected lifetime and are not discounted. The monetized values shown in Table I
- 7 are the summed values of the discounted monetized
- fuel consumption and monetized
- CO 2 reductions for the five model years 2014
- 2018 throughout their lifetimes. The monetized values in Table I
- 7 reflect both a 3 percent and a 7 percent discount rate as noted. **Table I**  **- 7**  **: Estimated Lifetime**  **Reductions and Associated Discounted Monetized Benefits**  **for 2014**  **-**

**2018 Model Year HD Vehicles**  **(m onetized values in 200**  **9 dollars)**  Amount $ value (billions) Fuel Consumption Reductions 0.5 3 billion barrels $50. 1 , 3% discount rate $34. 4 , 7% discount rate CO 2 Emission Reductions a V alued assuming $22/ton CO 2 in 2010 27 3 MMT CO 2 $5.8 b Notes: a Includes both upstream and downstream CO 2 emission reductions. b Note that net present value of reduced CO 2 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 S ection VIII.F for more detail. Table I
- 8 shows the estimated incremental and total technology outlay s for all heav y - dut y vehicles for each of the model ye ars 2014
- 2018. The technology outlay s shown in Table I
- 8 are for the industry as a whole and do not account for fuel saving s associated with the program. **Table I**  **- 8**  **: Estimated Incremental Technology Outlays**  **for 2014**  **- 2018 Model Year**  **HD Vehicles (billions of 200**  **9 dollars)**  2014 MY 2015 MY 2016 MY 2017 MY 2018 MY Total All Heav y Duty Vehicles $ 1. 6 $ 1.4 $ 1.5 $ 1.6 $ 2.0 $ 8. 1 Table I
- 9 shows the agencies’ estimated incremental cost increase of the average new heav y - dut y vehicle for each model year 2014
- 201 8
. The values shown are incremental to a baseline vehicle and are not cumulative.******* **E.O. 12866 Review**

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46 of **Table I**  **- 9**  **: Estimated Incremental Increase in Average Cost**  **for 2014**  **- 2018 Mod**  **el Year HD Vehicles**  **(200 9**  **dollars per unit)** 2014 MY 2015

MY 2016 MY 2017 MY 2018 MY Combination Tractors $6,019 $5,871 $5,677 $6,413 $6,215 HD Pickups &Vans $165 $215 $422 $631 $1,048 Vocational Vehicles $329 $320 $397 $387 $378 Both costs and benefits presented in this section are in comparison to a reference case with no improvements in fuel consumption or greenhouse gas emissions in model ye ars 2014 to 2018. 

### E. **Program Flexibilities** For each of the heav y - duty vehicle and heavy
- duty

engine categories for which we are adopting respective standards, EPA and NHTSA are also finalizing provisions designed to give manufacturers a degree of flexibility in compl yi ng with the standards. These final provisions have enabled the agencies to consider overall standards that are more stringent and that will become effective sooner than we could consider with a more rigid program, one in which all of a manufacturer’s similar vehicles or engines would be required to a chieve the same emissions or fuel consumption levels, and at the same time. 43 We believe that incorporating carefull y structured regulatory flexibility

provisions into the overall program is an important way to achieve each agency ’s goals for the program. NHTSA’s and EPA’s flexibility provisions are essentially identical to each other in structure and function. For combination tractor and vocational vehicle categories and for heav y - dut y engines, we are finalizing four primary t yp es of flexibility : aver aging, banking, and trading (ABT) provisions; earl y credits; advanced technology credits (including h ybrid powertrains); and innovative technology credit provisions. The final ABT provisions are patterned on existing EPA and NHTSA ABT programs and will al low a vehicle manufacturer to reduce CO 2 emission and fuel consumption levels further than the level of the standard for one or more vehicles to generate ABT credits. The manufacturer can use those credits to offset higher emission or fuel consumption lev els in other similar vehicles, “bank” the credits for later use, or “trade” the credits to another manufacturer. For HD pickups and vans, we are finalizing a fleet averagin g sy stem very similar to the light
- duty

GHG and CAFE fleet averaging s ys tem. At proposal, we restricted the use of the ABT provisions of the program to vehicles or engines within the same regulatory subcategory . This meant that credit exchanges could only happen between similar vehicles meeting the same standards. We proposed this approach for two reasons. First, we were concerned about a level playing

43 NHTSA notes that it has greater flexibility in the HD program to include consideration of credits and other flexibilities in determining appropriate and feasible levels of stringency than it does in the light
- duty CAFE program. Cf. 49 U.S.C. 32902(h), which applies to light
- duty CAFE but not heavy
- duty fuel efficiency under 49 U.S.C. 32902(k).******* **E.O. 12866 Review**

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47 of field between different manufacturers who may not participate equally

in the various truck and eng ine markets covered in the regulation. Second, we were concerned about the uncertainties inherent in credit calculations that are based on projections of lifetime emissions for different vehicles in wholly different vehicle markets. In response to comments, we have revised our ABT provisions to provide greater flexibility while continuing to provide assurance that the projected reductions in fuel consumption and GHG emissions will be achieved. We are relaxing the restriction on averaging, banking, and tr ading of credits between the various regulatory subcategories, by

defining three HD vehicle averaging sets: Light Heav y - Dut y (Classes 2b
- 5); Medium Heav y - Duty (Class 6
- 7); and Heav y Heavy
- Duty (Class 8). This allows the use of credits between vehicles within the same weight class. This means that a Class 8 day cab tractor can exchange credits with a Class 8 high roof sleeper tractor but not with a smaller Class 7 tractor. Also, a Class 8 vocational vehicle can exchange credits with a Class 8 tractor. We are adopting these revisions based on comments from the regulated industry that convinced us these changes would allow the broadest trading possible while maintaining a level playing field among the various market segments. By restricting trading to w ithin the same vehicle weight categories as EPA’s existing criteria pollutant program, we are convinced that the lifetime vehicle performance between different vehicles within these defined categories will be similar enough for us to be confident the estim ated credit calculations will fairl y ensure the expected fuel consumption and GHG reductions. This program does not allow credits to be exchanged between heav y - duty vehicles and light
- dut y vehicles, nor can credits be traded from heav y - dut y vehicle f leets to light
- duty vehicle fleets and vice versa. The engine ABT provisions are also changed from the proposal and now are the same as the existing criteria pollutant emission provisions. The agencies have broadened the averaging sets to include both FT P
- certified and SET
- certified engines in the same averaging set. For example, a SET
- certified engine intended for a Class 8 tractor can exchange credits with a FTP
- certified engine intended for a Class 8 vocational vehicle. The agencies are finalizing d eficit carry
- forward provisions for heav y - duty engines and vehicles within a limited time frame. This flexibility is expected to provide an opportunity for manufacturers to make necessary technological improvements and reduce the overall cost of the program without compromising overall environmental and fuel econom y objectives. This flexibility , similar to the flexibility the agencies have offered under the light
- duty program, is intended to assist the broad goal of harmonizing the two agencies’ proposed standards while preserving the flexibility of manufacturers of vehicles and engines in meeting the standards, to the extent appropriate and required b y l aw. During the MYs 2014

–2018 manufacturers are expected to go through the normal business cycle of redesigning and upgrading their h eav y - dut y engine and vehicle products, and in some cases introducing entirel y new vehicles and engines not on the market today . This provision will allow manufacturers the time needed to incorporate technology

to achieve GHG reductions and improve fuel economy during the vehicle redesign process.******* **E.O. 12866 Review**

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48 of We have received comments from (Center for Biological Div ersity) against the need to offer the deficit carry
- forward flexibility . (CBD) has stated that allowing manufacturers the ability to carry
- forward deficits for up to three ye ars would incentiv iz e delay s in investment and technological innovation and allow for the generation of additional tons of GHG emissions that may be prevented today
. However, the deficit carry - forward flexibility

has enabled the agencies to consider overall standards that are more stringent and that will become effective at an earlier period than we could consider with a more rigid program. The agencies also believe this flexibility is an important aspect of the program , 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, i.e. the cost of adopting a new engine or vehicle platform mid
- production or mid
- design. This time period would also provide manufacturers the opportunity to plan for compliance using a multi
- year time frame, aga in consistent with normal business practice. Over these four model years, there would be an opportunity for manufacturers to evaluate practically

all of their vehicle and engine model platforms and add technology in a cost effective way

to control GHG emis sions and improve fuel economy
. As noted above, beyond ABT, the other primary flexibility

provisions in this program involve opportunities to generate earl y credits, advanced technology credits (including h ybrid powertrains), and innovative technology credits. For the earl y credits and advanced technology credits, the agencies sought comment on the appropriateness of providing a 1.5x multiplier as an incentive for their use. We received a number of comments supporting the idea of a credit multiplier, arguing it was an appropriate means to incentivize the earl y compliance and advanced technologies the agencies sought. We received other comments suggesting a multiplier was unnecessary . After considering the comments, the agencies have decided to finalize a 1.5x multiplier consistent with our request for comments. We believe that given the very short lead time of the program and the nascent nature of the advanced technologies identified in the proposal, that a 1.5x multiplier is an effective means to bring technology forward into the heav y - duty sector sooner than would otherwise occur. For other technologies which can reduce CO 2 and fuel consumption, but for which there do not yet exist established methods for quantifying reductions, the agencies still wish to encourage the development of such innovative technologies, and are therefore adopting special “innovative technology” credits. These innovative technology credits will apply

to technologies that are shown to produce emission and fuel consumption reductions that are not adequatel y recognized on the current test procedures and that are not yet in widespread use. Manufacturers will need to quantify the reductions in fuel consumption and CO 2 emissions that the technology is expected to achieve, above and beyond those achieved on the e xisting test procedures. As with ABT, the use of innovative technology credits will only be allowed for use among vehicles and engines of the same defined averaging set generating the credit , as described above. The credit multiplier will not be used fo r innovative technology credits. CBD argued that including an y opportunities for manufacturers to earn credits in the final rule would violate NHTSA’s statutory mandate to implement a program designed to achieve the maximum feasible improvement.******* **E.O. 12866 Review**

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49 of NHTSA strongl y believes that creating credit flexibilities for manufacturers for this first phase of the HD National Program is fully consistent with the agency ’s obligation to develop a fuel efficiency improvement program designed to achieve the maximum feasibl e improvement. EI SA gives NHTSA broad authorit y to develop “compliance and enforcement protocols” that are “appropriate, cost
- effective, and technologicall y feasible,” and the agency believes that compliance flexibilities such as the opportunity

to earn and use credits to meet the standards are a reasonable and appropriate interpretation of that authority , along with the other compliance and enforcement provisions developed for this final rule. Unlike in NHTSA’s light
- dut y program, where the agency is res tricted from considering the availability of credits in determining the maximum feasible level of stringency for the fuel economy

standards, 44 in this HD National Program, NHTSA and EPA have based the levels of stringency in part on our assumptions of the u se of available flexibilities that have been built into the program to incentivize over
- compliance in some respects, to balance out potential under
compliance in others. By assuming the use of credits for compliance, the agencies were able to set the fue l consumption/GHG standards at more stringent levels than would otherwise have been feasible. Greater improvements in fuel efficiency will occur under more stringent standards; manufacturers will simply have greater flexibility

to determine where and how to make those improvements than they would have without credit options. Further, this is consistent with EO s 12866 and 13563, which encourage agencies to design regulations that promote innovation and flexibility where possible. 45 A detailed discussion o f each agency ’s ABT, early credit, advanced technology , and innovative technology provisions for each regulatory category of heavy
- dut y vehicles and engines is found in Section IV below. 

### F. **EPA and NHTSA Statutory**  **Authorities (1)**  **EPA Authority**  Title II of the CAA provides for comprehensive regulation of mobile sources, authorizing EPA to regulate emissions of air pollutants from all mobile source categories. When acting under Title II of the CAA, EPA considers such issues as technology effectiveness, its cost (bo th per vehicle, per manufacturer, and per consumer), the lead time necessary

to implement the technology , and based on this the feasibility and practicabilit y of potential standards; the impacts of potential standards on emissions reductions of both GHGs and non
- GHGs; the impacts of standards on oil conservation and energy

securit y; the impacts of standards on fuel savings by customers ; the impacts

44 49 U.S.C. 32902(h). 45 EO 12866 states that an agency must “design its regulations in the most cost
- effective manner to achieve the regulatory objective... consider[ing] incentives for innovation... [and] flexibility,” among other factors ; EO 13563 directs agencies to “seek to identify, as appropriate, means to achie ve regulatory goals that are designed to promote innovatio n,” and “ identify and consider regulatory approaches that... maintain flexibility.”******* **E.O. 12866 Review**

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50 of of standards on the truck industry ; other energy impacts; as well as other relevant factors such as impacts on safety
. This final action implements a specific provision from Title II, section 202(a). 46 S ection 202(a)(1) of the CAA states that “ the Administrator shall by regulation prescribe (and from time to time revise)...standards applicable to the emission of any air pollutant from an y class or classes of new motor vehicles ..., which in his judgment cause, or contribute to, air pollution which may reasonabl y be anticipated to endanger public health or welfare. ” With EPA ’ s December 2009 final findings that certain greenhouse gases may reasonably

be anticipated to endanger public health and welfare and that emissions of GHGs from section 202 (a) sources cause or contribute to that endangerment , section 202(a) requires EPA to issue standards applicable to emissions o f those pollutants from new motor vehicles. Any standards under CAA section 202(a)(1) “ shall be applicable to such vehicles ... for their useful life. ” Emission standards set by the EPA under CAA section 202(a)(1) are technology
- based, as the levels chosen must be premised on a finding of technological feasibility . Thus, standards promulgated under CAA section 202(a) are to take effect onl y “ after prov iding such period as the Administrator finds necessary to permit the development and application of the requisite technology , giving appropriate consideration to the cost of compliance within such period ” (section 202(a)(2); see also NRDC v. EPA , 655 F. 2d 318, 322 (D.C. Cir. 1981)). EPA is afforded considerable discretion under section 202(a) when assessing issues of technical feasibility and availability

of lead time to implement new technology . Such determinations are “ subject to the restraints of reas onableness ” , which “ does not open the door to ‘ crys tal ball ’ inquiry
. ” NRDC , 655 F. 2d at 328, quoting International Harvester Co. v. Ruckelshaus , 478 F. 2d 615, 629 (D.C. Cir. 1973). However, “ EPA is not obliged to provide detailed solutions to every

en gineering problem posed in the perfection of the trap
- oxidizer. In the absence of theoretical objections to the technology , the agency need only

identify the major steps necessary

for development of the device, and give plausible reasons for its belief th at the industry

will be able to solve those problems in the time remaining. The EPA is not required to rebut all speculation that unspecified factors may hinder ‘ real world ’ emission control. ” NRDC , 655 F. 2d at 333
- 34. In developing such technology
bas ed standards, EPA has the discretion to consider different standards for appropriate groupings of vehicles ( “ class or classes of new motor vehicles ” ), or a single standard for a larger grouping of motor vehicles (NRDC , 655 F. 2d at 338). Although standards under CAA section 202(a)(1) are technology
- based, they are not based exclusively

on technological capability . EPA has the discretion to consider and weigh various factors along with technological feasibility , such as the cost of compliance (see section 2 02(a) (2)), lead time necessary for compliance (section 202(a)(2)), safet y
46 See 42 U.S.C. 7521 (a) . A number of commenters believed that the GHG program was being adopted pursuant to secti on 202 (a)(3)(A) and that the lead time requirements of section 202 (a)(3)(C) therefore apply. This is mistaken. Section 202 (a)(3)(A) applies to standards for emissions of hydrocarbons, carbon mo noxide, oxides of nitrogen, and particulate matter from he avy - duty vehicles and engines. This does not include the GHGs regulated under the standards in today’s action. This comment is addressed further in EPA’s Response to Comment document.******* **E.O. 12866 Review**

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51 of (see NRDC , 655 F. 2d at 336 n. 31) and other impacts on consumers, and energy impacts associated with use of the technology
. See George E. Warren Corp. v. EPA , 159 F.3d 616, 623
- 62 4 (D.C. Cir. 1998) (ordinaril y permissible for EPA to consider factors not specificall y enumerated in the CAA). See also Entergy Corp. v. Riverkeeper, Inc. , 129 S.Ct. 1498, 1508
- 09 (2009) (congressional silence did not bar EPA from employing cost
benefit anal ys is under Clean Water Act absent some other clear indication that such anal ys is was prohibited; rather, silence indicated discretion to use or not use such an approach as the agency

deems appropriate). In addition, EPA has clear authority to set stand ards under CAA section 202(a) that are technology

forcing when EPA considers that to be appropriate, but is not required to do so (as compared to standards set under provisions such as section 202(a)(3) and section 213(a)(3)). 47 EPA has interpreted a simil ar statutory provision, CAA section 231, as follows: While the statutory

language of section 231 is not identical to other provisions in title II of the CAA that direct EPA to establish technology
- based standards for various ty pes of engines, EPA interpre ts its authorit y under section 231 to be somewhat similar to those provisions that require us to identify a reasonable balance of specified emissions reduction, cost, safet y, noise, and other factors. See , e.g. , Husqvarna AB v. EPA, 254 F.3d 195 (D
. C
. Cir. 2001) (upholding EPA ’ s promulgation of technology
- based standards for small non
- road engines under section 213(a)(3) of the CAA). However, EPA is not compelled under section 231 to obtain the ‘‘ greatest degree of emission reduction achievable ’’ as pe r sections 213 and 202 of the CAA, and so EPA does not interpret the Act as requiring the agency to give subordinate status to factors such as cost, safet y, and noise in determining what standards are reasonable for aircraft engines. Rather, EPA has greate r flexibility

under section 231 in determining what standard is most reasonable for aircraft engines, and is not required to achieve a ‘‘ technology forcing ’’ result ( 70 FR 69664 and 69676, November 17, 2005 )
. This interpretation was upheld as reasonable i n NACAA v. EPA , 489 F.3d 1221, 1230 (D.C. Cir. 2007). CAA section 202(a) does not specify the degree of weight to apply to each factor, and EPA accordingl y has discretion in choosing an appropriate balance among factors. See Sierra Club v. EPA , 325 F.3d 374, 378 (D.C. Cir. 2003) (even where a provision is technology
- forcing, the provision “ does not resolve how the Administrator should weigh all [the statutory] factors in the process of finding the ‘ greatest emission reduction achievable ’ ” ). Also see Hus qvarna AB v. EPA , 254 F. 3d 195, 200 (D.C. Cir. 2001) (great discretion to balance statutory factors in considering level of technology
- based standard, and statutory requirement “ to [give appropriate] consideration to the cost of applying ... technology” doe s not mandate a specific method of cost anal ys is); see also Hercules Inc. v. EPA , 598 F. 2d 91, 106 (D.C. Cir. 1978) ( “ In reviewing a numerical standard the agencies must ask whether the agency ’ s numbers are within a zone of reasonableness, not whether its numbers are precisely right ” ); Permian
47 One commenter mistakenly stated that section 202 (a) standards must be technology
- forcing, but the provision plainly does not require EPA to adopt technology
- forcing standards
. See further discussion in Section III.A below
.******* **E.O. 12866 Review**

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52 of Basin Area Rate Cases , 390 U.S. 747, 797 (1968) (same); Federal Power Commission v. Conway Corp. , 426 U.S. 271, 278 (1976) (same); Exxon Mobil Gas Marketing Co. v. FERC , 297 F. 3d 1071, 1084 (D.C. Cir. 2002) (same). (a ) EPA Testing Authority Under section 203 of the CAA, sales of vehicles are prohibited unless the vehicle is covered b y a certificate of conformity . EPA issues certificates of conformity pursuant to section 206 of the Act, based on (necessarily) pre
- sale te sting conducted either by EPA or by the manufacturer. The Heav y - dut y Federal Test Procedure (Heav y - duty FTP) and the Supplemental Engine Test (SET) are used for this purpose. Compliance with standards is required not only at certification but throughout a vehicle ’ s useful life, so that testing requirements may continue post
- certification. Useful life standards may apply an adjustment factor to account for vehicle emission control deterioration or variability

in use (section 206(a)). EPA established the Li ght
- duty FTP for emissions measurement in the earl y 1970s. In 1976, in response to the Energy Policy and Conservation Act, EPA extended the use of the Li ght
- dut y FTP to fuel econom y measurement ( See 49 U.S.C. 32904(c) )
. EPA can determine fuel efficien cy of a vehicle by

measuring the amount of CO 2 and all other carbon compounds ( e.g., total hydrocarbons and carbon monoxide (CO)), and then, by mass balance, calculating the amount of fuel consumed. (b ) EPA Enforcement Authority Section 207 of the CAA grants E PA broad authority to require manufacturers to remed y vehicles if EPA determines there are a substantial number of noncomplying vehicles. In addition, section 205 of the CAA authorizes EPA to assess penalties of up to $37,500 per vehicle for violations of various prohibited acts specified in the CAA. In determining the appropriate penalty, EPA must consider a variety of factors such as the gravity of the violation, the economic impact of the violation, the violator ’ s history of compliance, and “ such other matters as justice may require. ” **(2) NHTSA Authority**  In 1975, Congress enacted the Energy Policy and Conservation Act (EPCA), mandating a regulatory

program for motor vehicle fuel econom y to meet the various facets of the need to conserve energy . In December 2007, Congress enacted the Energy Independence and Securities Act (EISA), amending EPCA to require, among other things, the creation of a me dium
- and heav y - duty fuel efficiency program for the first time. This mandate in EISA represents a major step forward in promoting EPCA’s goals of energy independence and securit y, and environmental and national security. NHTSA has primary

responsibility for fuel economy and consumption standards, and assures compliance with EI SA through rulemaking, including standard
- setting; technical reviews, audits and studies; investigations; and enforcement of implementing regulatio ns including penalty actions. Th is final action implements Section 32902(k)(2)******* **E.O. 12866 Review**

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53 of of EI SA, which instructs NHTSA to create a fuel efficiency improvement program for “commercial medium
- and heav y - dut y on - highway vehicles and work trucks” 49 by rulemaking, which is to include standards, test me thods, measurement metrics, and enforcement protocols. See 49 U.S.C. 32902(k)(2). Congress directed that the standards, test methods, measurement metrics, and compliance and enforcement protocols be “appropriate, cost
- effective, and technologically feasib le” for the vehicles to be regulated, while achieving the “maximum feasible improvement” in fuel efficiency
. NHTSA has clear authority to design and implement a fuel efficiency program for vehicles and work trucks under EISA, and was given broad discreti on to balance the statutory factors in 32902(k)(2) in developing fuel consumption standards to achieve the maximum feasible improvement. Since this is the first rulemaking that NHTSA has conducted under 49 U.S.C. 32902(k)(2), the agency interpreted these elements and factors in the context of setting standards, choosing metrics, and determining test methods and compliance/enforcement mechanisms. Discussion of the application of these factors can be found in Section III below. Congress also gave NHTSA the authority to set separate standards for different classes of these vehicles, but required that all standards adopted provide not less than four full model y ears of regulatory lead
- time and three full model ye ars of regulatory stability
. In E IS A, Congress required NHTSA to prescribe separate average fuel economy standards for passenger cars and light trucks in accordance with the provisions in 49 U.S.C. Section 32902(b), and to prescribe standards for work trucks and commercial medium
- and heav y - duty vehicles in accordance with the provisions in 49 U.S.C. 32902(k). See 49 U.S.C. Section 32902(b)(1). Congress also added in EISA a requirement that NHTSA shall issue regulations prescribing fuel econom y s tandards for at least 1, but not more than 5, model years. See 49 U.S.C. Section 32902(b)(3)(B). For purposes of the fuel efficiency standards that the agency proposed for HD vehicles and engines, the NPRM stated an interpretation of the statute that the 5
- year maximum limit did not apply

to standards promulgated in accordance with 49 U.S.C. Section 32902(k), given the language in Section 32902(b)(1). Based on this interpretation, NHTSA proposed that the standards ultimately finalized for HD vehicles and engines woul d remain in effect indefinitely at their 2018 or 2019 model y ear levels until amended by a future rulemaking action. In any future rulemaking action to amend the standards, NHTSA would ensure not less than four full model years of regulatory lead
- time and three full model ye ars of regulatory stability . NHTSA sought comment on its interpretation of EISA. Robert Bosch LLC (Bosch) commented that the absence of an expiration date for the standards proposed in the NPRM could violate 49 U.S.C. Section 32902, wh ich it interpreted as requiring the MD/HD program to have standards that expire in f ive ye ars. Section 32902(k)(3), which lay s out the requirements for the MD/HD program, specifies the minimum regulatory

lead and stability

times, as described above, but do es not specify a maximum duration period. In contrast, Section 32902(b)(3)(B) lay s out the minimum

49 “Co mmercial medium
- and heavy
- duty on - highway vehicles” are defined at 49 U.S.C. 32901(a)(7), and “work trucks” are defined at (a)(19).******* **E.O. 12866 Review**

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54 of and maximum durations of standards to be established in a rulemaking for the light
- dut y program, but prescribes no minimum lead or stability time. Bosch argued that as 49 U.S.C. Section 32902(k)(3) does not require a maximum duration period, Congress intended that NHTSA take the maximum duration period specified for the light
- duty program in Section 32902(b)(3)(B), five y ears, and apply it to Section 32902(k)(3). Bosch also argued, however, that the minimum duration period should not be carried over from the light
- dut y to the heav y - dut y section, as a minimum duration period for HD was specified in Section 32902(k)(3). NHTSA has revisited this issue an d continues to believe that it is reasonable to assume that if Congress intended for the HD/MD regulatory program to be limited by the timeline prescribed in Subs ection (b)(3)(B), it would have either mentioned HD/MD vehicles in that subsection or included the same timeline in Subs ection (k). 50 Inaddition, in order for S ubs ection (b)(3)(B) to be interpreted to apply to S ubs ection (k), the agency would need to give less than full weight to the earlier phrase in the statute directing the Secretary to prescri be standards for “work trucks and commercial medium
- duty or heav y duty on - highway

vehicles in accordance with Subsection (k).” 49 U.S.C. 32902(b)(1)(C). Instead, this direction would need to be re ad to mean “in accordance with S ubse ction (k) and the rema inder of S ubsection (b).” NHTSA believes this interpretation would be inappropriate. Interpreting “in accordance with S ubsection (k)” to mean something indistinct from “in accordance with this S ubsection” goes against the canon that statutes should not be interpreted in a way that “render[s] language superfluous.” Dobrova v. Holder , 607 F.3d 297, 302 (2d Cir. 2010), quoting Mendez v. Holder , 566 F. 3d 316, 321
- 22 (2d Cir. 2009). Based on this reasoning, NHTSA believes the more reasonable and appropriate approach is reflected in the propos al , and the final rule s therefore follow this approach. Another commenter, CBD, expressed concern that lack of an expiration date meant that the standards would remain indefinitely, thus forgoing the possibility of incr eased stringency

in the future. CBD argued that this violated NHTSA’s statutory duty to set maximum feasible standards. NHTSA disagrees that the indefinite duration of the standards in this rule would prevent the agency from setting future standards at t he maximum feasibl e level in future rulemakings. The absence of an expiration date for these standards should not be interpreted to mean that there will be no future rulemakings to establish new MD/HD fuel efficiency standards for MYs 2019 and beyond

– th e agencies have already previewed the possibility of such a rulemaking in other parts of this final rule preamble. Therefore, NHTSA believes this concern is unnecessary .

50 “[W]h ere Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. United Sta tes , 464 U.S. 16, 23 (1983), quoting U.S. v. Wong Kim Bo , 472 F.2d 720, 722 (5 th Cir 1972)
. , See also Mayo v. Questech, Inc. , 727 F.Supp. 1007, 1014 (E.D.Va. 1989) (conspicuous absence of provision from section where inclusion would be most logical signals Congress did not intend for it to be implied).******* **E.O. 12866 Review**

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55 of (a ) NHTSA Testing Authority 49 U.S.C. Section 32902(k)(2) states that NHTSA must adopt and implement appropriate, cost
- effective, and technologically feasible test methods and measurement metrics as part of the fuel efficiency improvement program. For this program, manufacturers will test and conduct modeling to determine GHG emis sions and fuel consumption performance, and EPA and NHTSA will perform validation testing. The results of the validation tests will be used by EPA to create a finalized reporting that confirms the manufacturer’s final model ye ar GHG emissions and fuel con sumption results, which each agency will use to enforce compliance with its standards. (b ) NHTSA Enforcement Authority (i ) Overview The NPRM proposed a compliance and enforcement program that included civil penalties for violations of the fuel efficiency standards
. 49 U.S.C. 32902(k)(2) states that NHTSA must adopt and implement appropriate, cost
- effective, and technologically feasible compliance and enforcement protocols for the fuel efficiency improvement program. Congress gave DOT broad discretion to fashion its fuel efficiency improvement program and thus necessaril y did not speak directly or specifically as to the nature of the compliance and enforcement protocols that would be best suited for effectivel y supporting the yet - to - be
- designed
- and
- established program
. In stead, it left the matter generally

to the Secretary
. Congress’ approach is unlike CAFE enforcement for passenger cars and light trucks, where Congress specified the precise details of a program and provided that a manufacturer either complies with standards or pay s civil penalties. The statute is silent with respect to how “protocol” should be interpreted. The term “protocol” is imprecise and thus Congress’ choice of that term affords the agency substantial breadth of discretio n . For example, in a case interpreting section 301(c)(2) of the Comprehensive Environmental Response, Compensation, and L iability Act (CERCLA), the D.C. Circuit noted that the word “protocols” has man y definitions that are not much help. Kennecott Utah C opper Corp., Inc. v. U.S. Dept. of Interior , 88 F.3d. 1191, 1216 (D.C. Cir. 1996). Section 301(c)(2) of CERCLA prescribed the creation of two ty pes of procedures for conducting natural resources damages assessments. The regulations were to specify (a) “s tandard procedures for simplified assessments requiring minimal field observation” (the “Ty pe A” rules), and (b) “alternative protocols for conducting assessments in individual cases” (the “Ty pe B” rules). 51 The court upheld the challenged provisions, whic h were a part of a set of rules establishing a step
- by
- step procedure to evaluate options based on certain criteria, and to make a decision and document the results. Taking the considerations above into account, including Congress’ instructions to adopt an d implement compliance and enforcement protocols, and the Secretary ’s authority to formulate policy

and make rules to fill gaps left, implicitly or explicitly , by

51 State of Ohio v. U.S. Dept. of Interior , 880 F.2d 432, 439 (D.C. Cir. 1989).******* **E.O. 12866 Review**

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56 of Congress, the agency

interpreted “protocol” in the context of EI SA as authorizing the agency to determine both whether manufacturers have complied with the standards, and to establish suitable and reasonable enforcement mechanisms and decision criteria for non - compliance. Therefore, NHTSA interpreted its authority to develop an enforcement prog ram to include the authority to determine and assess civil penalties for non
compliance. Several commenters disagreed with this interpretation. Volvo commented that the penalties proposed b y NHTSA exceeded the authority granted to the agency b y Congress, and that the fact that Congress did not adopt an entirely new statute for the HD program should be interpreted to mean that provisions adopted for the light
- duty program should apply to the HD program as well. Daimler argued that it was likely that EISA d id not give NHTSA the authority to assess civil penalties, and Navistar argued that NHTSA could not have the authority as Congress did not expressly grant it. NHTSA continues to believe that it is reasonable to interpret “compliance and enforcement protoco ls” to include authority to impose civil penalties. Where a statute does not specify

an approach, the discretion to do so is left to the agency . When Congress has “explicitly

left a gap for an agency

to fill, there is an express delegation of authority to the agency

to elucidate a specifi c provision of the statute by regulation.” U nited States . v. Mead, 533 U.S. 218, 227 (2001), quoting Chevron v. NRDC, 467 U.S. 837, 843
- 44 (1984). The delegation of authorit y may be implicit rather than express. Id
. at 229. NHTSA believes it would be unreasonable to assume that Congress intended to create a hollow regulatory program without a mechanism for effective enforcement. Further, interpreting “enforcement protocols” to mean not more than “compliance protocols” would go against the canon noted a bove that statutes should not be interpreted in a way that “render[s] language superfluous.” Dobrova v. Holder , 607 F.3d 297, 302 (2d Cir. 2010), quoting Mendez v. Holder 566 F. 3d 316, 321
- 22 (2d Cir. 2009). The interpretation urged b y the commenters wo uld render an entire program superfluous. Further, NHTSA believes that Congress would have anticipated that compliance and enforcement protocols would include civil penalties for the HD sector, given that penalties are an integral part of a product standar ds program and given the long precedent of civil penalties for the light
- dut y sector. The agency disagrees with the argument that the HD program would have appeared in a wholl y separate statute if Congress had not intended the penalt y program for light
- duty to apply to it. The inclusion of the MD/HD program in Title 329 does not mean that Congress intended for the boundaries and differences between the separate sections to be ignored. Rather, this argument leads to the opposite conclusion that the fact th at Congress created a new section for the HD program, instead of simply amending the existing light
- duty program to include “work trucks and other vehicles” in addition to automobiles, means the agency should assume that Congress acted intentionally when i t created two wholly separate programs and respect their distinctions. Therefore, consistent with the statutory interpretation proposed in the NPRM, the final rule includes penalties for non
- compliance with the fuel efficiency standards.******* **E.O. 12866 Review**

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57 of (ii) Penalty Levels N HTSA proposed to adopt penalty levels equal to those in EPA’s existing heavy
duty program, in order to provide adequate deterrence as well as consistency with the GHG regulation. The proposed maximum penalty levels were $37,500.00 per vehicle or engine. Several manufacturers commented that the penalty levels should be limited to those mandated in the light
- duty program. Volvo and Daimler argued that Congress intended lower penalties for the HD program than were proposed in the NPRM, because they believed that Congress had expressly or implicitly

intended for the HD program to be included in the penalty calculation of Section 32912(b). That section prescribes penalty levels for violators under Section 32902 of “$5 multiplied by each tenth ( 0 .1 ) of a mile a gallon by

which the applicable average fuel econom y standard under that section exceeds the average fuel econom y,” 52 calculated and applied to automobiles. Volvo further argued that NHTSA was rel yi ng upon the CAA as the statutory basis for the penalty lev els. NHTSA recognizes that Section 329 contains a detailed penalty s cheme, for light
duty vehicle CAFE standards. However, Section 32902(k)(2) explicit ly directs NHTSA to “adopt and implement appropriate test methods, measurement metrics, fuel economy st andards, and compliance and enforcement protocols,” in the creation of the new HD program. NHTSA continues to believe that this broad Congressional mandate should be interpreted based on a plain text reading, which includes the authority to determine comp liance and enforcement protocols that will be effective and appropriate for this new sector of regulation. NHTSA also believes that reading Section 32912 to apply to the new HD program would contradict Congress’ broad mandate for the agency to establish n ew measurement metrics and a compliance and enforcement program. Further, interpreting the requirement to create “enforcement protocols” for HD vehicles to mean that NHTSA should rel y on the enforcement provisions for light
- dut y vehicles would go against the canon noted above that statutes should not be interpreted in a way that “render[s] language superfluous.” Dobrova v. Holder , 607 F.3d 297, 302 (2d Cir. 2010), quoting Mendez v. Holder 566 F. 3d 316, 321
- 22 (2d Cir. 2009). NHTSA believes that Section 3 2912 does not apply to the new HD program for several other reasons. First, this section uses a fuel economy metric, miles/gallon, while the HD program is built around a fuel consumption metric, per the requirement to develop a “fuel efficiency improvement program” and the agencies’ conclusion, supported by

NAS, that a fuel consumption metric is a much more reasonable choice than a fuel economy

metric for HD vehicles given their usage as work vehicles. Second, this section specifies a calculation for auto mobiles, a vehicle class which is confined to the

52 This fine was increased by 49 CFR Part 578.6, w hich provides that “Except as provided in 49 U.S.C. 32912(c), a manufacturer that violates a standard prescribed for a model year under 49 U.S.C. 32902 is liable to the United States Government for a civil pe nalty of $5.50 multiplied by each 0 .1 of a mile a gallon by which the applicable average fuel economy standard under that section exceeds the average fuel economy.”******* **E.O. 12866 Review**

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58 of light
- duty rule. In addition, the HD program prescribes fuel consumption standards, not average fuel econom y standards. Finally , NHTSA believes that if Congress had intended for a pre
- determined penalty scheme to appl y t o the new HD program, it would have been specific. Instead, Congress explicitly

directed the agency

to develop a new measurement, compliance, and enforcement scheme. Consistent with the statutory interpretation of the duration of the st andards, NHTSA believes that if Congress intended for particular penalty levels to be used in 32902(k)(3), it would have either included a reference to those levels or included a reference in 32912 to the vehicles and metrics regulated b y 32902(k)(3). SeeRussello v. United States , 464 U.S. 16, 23 (1983), quoting U nited States . v. Wong Kim Bo , 472 F.2d 720, 722 (5th Cir 1972) (“[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generall y presumed that Congress acts intentionally and purposel y in the disparate inclusion or exclusion.”) Instead, the absence of such language could mean either that Congress did not contemplate the specific penalty levels to be used, or that Congr ess left the choice of specific penalty

levels to the agency . See Alliance for Community Media v. F.C.C. 529 F. 3d 763, 779 (6 th Cir. 2008) (absence of a statutory deadline in one section but not others meant that Congress authorized but did not require i t in that section). Therefore, the final rule retains the maximum penalty level proposed in the NPRM. 

### G. **Future HD GHG and Fuel Consumption Rulemakings** This final action represents a first regulatory step by NHTSA and EPA to address the multi
- faceted challenges of reducing fuel use and greenhouse gas emissions from these vehicles. By

focusing on existing technologies and well
- developed regulatory tools, the agencies are able to adopt rules that we believe will produce real and important reductions in GHG emissions and fuel consumption within only a few years. Within the context of this regulatory time frametime frame , our program is very aggress ive
- with limited lead time compared to historic heav y - dut y regulations
- but pragmatic in the context of technologies that are available and that can be reasonably implemented during the regulatory time frametime frame
. While we are now onl y finalizing this first step, it is worthwhile to consider how the next regulatory

step may be designed. Technologies such as hy brid drivetrains, advanced bottoming cycle engines, and full electric vehicles are promoted in this first step through incentive concepts as discussed in Section IV, but we believe that these advanced technologies will not be necessary to meet the final standards. Today ’s standards are premised on the use of existing technologies given the short lead time, as discussed in Section II I, below. When we begin work to develop a possible next set of regulatory

standards, the agencies expect these advanced technologies to be an important part of the regulatory

program and will consider them in setting the stringency of any standards beyond the 2018 model y ear.******* **E.O. 12866 Review**

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59 of We will not only

consider the progress of technology in our future regulatory efforts, but the agencies are also committed to fully considering a range of regulatory approaches. To more completely capture the complex interactions of the total vehicle and the potential to reduce fuel consumption and GHG emissions through the optimization of those interactions may require a more sophisticated approach to vehicle testing than we are adopting today for the largest heav y - dut y vehicles. In future regulations, the agencies expect to fully evaluate the potential to expand the use of vehicle compliance models to reflect engine and drivetrain performance. Similarly , we intend to consider the potential for complete vehicle testing using a chass is dy namometer, not only as a means for compliance, but also as a complementary tool for the development of more complex vehicle modeling approaches. In considering these more comprehensive regulatory approaches, the agencies will also reevaluate whether separate regulation of trucks and engines remains necessary. In addition to technology and test procedures, vehicle and engine drive cycles are an important part of the overall approach to evaluating and improving vehicle performance. EPA, working through the WP.29 Global Technical Regulation process, has activel y participated in the development of a new World Harmonized Duty C ycle for heav y - dut y engines. EPA is committed to bringing forward these new procedures as part of our overall comprehensive approa ch for controlling criteria pollutant and GHG emissions. However, we believe the important issues and technical work related to setting new criteria pollutant emissions standards appropriate for the World Harmonized Duty C ycle are significant and beyond the scope of this rulemaking. Therefore, the agencies are not adopting these test procedures in this action, but we are ready to work with interested stakeholders to adopt these procedures in a future action. As with this program, our future efforts will b e based on collaborative outreach with the stakeholder community and will be focused on a program that delivers on our energy securit y and environmental goals without restricting the industry’s ability to produce a very

diverse range of vehicles serving a wide range of needs. 

## II. **Final GHG and Fuel Consumption Standards for Heavy**  **** **duty Engines**  **and Ve**  **hicles** This section describes the standards and implementation dates that the agencies are finalizing for the three categories of heav y - duty vehicles and engines. The agencies have performed a technology anal ys is to determine the level of standards that we believe will be cost - effective, feasible , and appropriate in the lead time provided. This analy sis, described in Section III and in more d etail in the RIA Chapter 2, considered for each of the regulatory

categories:

 the level of technology that is incorporated in current new engines and trucks,  forecasts of manufacturers’ product redesign schedules ,******* **E.O. 12866 Review**

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60 of  the available data on corresponding CO 2 emissions and fuel consumption for these engines and vehicles,  technologies that would reduce CO 2 emissions and fuel consumption and that are judged to be feasible and appropriate for these vehicles and engines through the 2018 model year,  the effectiven ess and cost of these technologies, and  projections of future U.S. sales for trucks and engines
. 

### A. **What V ehicles**  **Will B**  **e A**  **ffected?** EPA and NHTSA are finalizing standards for heavy
- dut y engines and also for what we refer to generally as “heavy
- dut y vehicles.” In general, these standards will apply for the model year 201 4 and later engines and vehicles , although some are delayed until 2016 or 2017. They will apply throughout the useful life engine or vehicle , just as existing criteria emission standards appl y through out the useful life. As noted in Section I, for purposes of this preamble and rules, the term “heav y - dut y or “HD” applies to all highway vehicles and engines that are not regulated by the light
- dut y vehicle, light
- dut y truck and medium
- dut y passenger vehicle greenhouse gas an d CAFE standards issued for MYs 2012
- 2016. Thus, in this notice, unless specified otherwise, the heav y - duty category incorporates all vehicles rated with GVWR greater than 8,500 pounds, and the engines that power these vehicles, except for MDPVs. The CAA defines heavy
- duty vehicles as trucks, buses or other motor vehicles with GVWR exceeding 6,000 pounds. See CAA section 202(b)(3). In the context of the CAA, the term HD as used in these final rules thus refers to a subset of these vehicles and engines. EI SA section 103(a)(3) defines a ‘commercial medium
- and heav y - dut y on - highway vehicle’ as an on
- highway vehicle with GVWR of 10,000 pounds or more. 53 EISA section 103(a)(6) defines a ‘work truck’ as a vehicle that is rated at between 8,500 and 10,000 poun ds gross vehicle weight and is not a medium
- duty passenger vehicle. 54 Therefore, the term “heav y - dut y vehicles ” in this rulemaking refers to both work trucks and commercial medium
- and heav y - dut y on - highway

vehicles as defined by

EISA. Heav y - dut y engines affected b y the standards are those that are installed in commercial medium
- and heav y - duty vehicles, except for the engines installed in vehicles certified to a complete vehicle emissions standard based on a chassis test, which would be addressed as a pa rt of those complete vehicles, and except for engines used exclusively for stationary

power when the vehicle is parked. The agencies’ scope is the same with the exception of recreational vehicles (or motor homes), as discussed above. The standards that E PA is finalizing

53 Codified at 49 U.S.C. 32901(a)(7). 54 EISA Section 103(a)(6) is codified at 49 U.S.C. 3290 1(a)(19). EPA defines medium
- duty passenger vehicles as any complete vehicle between 8,500 and 10,000 pounds GVWR designed primarily for the transportation of persons which meet the criteria outlined in 40 CFR 86.1803
- 01. The definition specifically exclu des any vehicle that (1) has a capacity of more than 12 persons total or, (2) is designed to accommodate more than 9 persons in seating rearward of the driver’s seat or, (3) has a cargo box ( e.g., pickup box or bed) of six feet or more in interior l ength. ( See the Tier 2 final rulemaking, 65 FR 6698, February 10, 2000.)******* **E.O. 12866 Review**

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61 of today cover recreational on
- highway vehicles, while NHTSA limited its scope in the propos al to not include these vehicles. The NPRM proposed to include all segments of the heav y - dut y category above, except that NHTSA proposed not to include recreational vehicles (RVs), based on an interpretation of the term “commercial medium
- and heav y duty on - highway” vehicles. NHTSA stated in the NPRM that recreational vehicles were non - commercial, and therefore outside of the term and the scope of its rule. Oshkosh Corporation commented that this interpretation did not match the statutory definition of the term in EI SA, which defines “commercial medium
- and heav y - dut y on - highway vehicle” b y weight only, 55 and that theref ore the agency ’s interpretation of the term should be explicitly

broadened to include all vehicles , and more than only vehicles that are engaged in interstate commerce as defined by the Federal Motor Carrier Safet y Administration in 49 CFR § 202. Alternat ively , Oshkosh suggested that if NHTSA followed the definition provided in EI SA, which makes no direct reference to the concept of “commercial,” there would be no logical reason to exclude RVs based on that definition. NHTSA has considered Oshkosh’s comm ent and reconsidered its interpretation that effectively

read words into the statutory definition. G iven the very wide variet y of vehicles contained in the HD fleet, reading those words into the definition and thereb y exclud ing certain ty

pes of vehicles c ould create illogical results , i.e., treating similar vehicles differentl y . However, a s RVs were not included by NHTSA in the proposed regulation in the NPRM, they are not within the scope and must be excluded in NHTSA’s portion of the final program . Acc ordingl y, NHTSA will address this issue in the next rulemaking
. The NPRM did not include an export exclusion in NHTSA’s fuel consumption standards. Oshkosh Corporation commented that NHTSA should add an export exclusion in order to accommodate the testing and delivery needs of manufacturers of vehicles intended for export. NHTSA agrees with this comment and Section 535.3 of the final rule specifies such an exclusion. EPA and NHTSA are finalizing standards for each of the following categories, which together comprise all heav y - dut y vehicles and all engines used in su ch vehicles. 56 In order to most appropriately regulate the broad range of heavy
- dut y vehicles and engines, the agencies are setting separate engine and vehicle standards for the combination tractors and Class 2b through 8 vocational vehicles . The engine standards and test procedures for engines installed in the tractors and vocational vehicles are discussed within the applicable vehicle sections. The agencies are establishing standards
55 See above note. 56 Both agencies have authority to develop separate standards for vehicle and engine categories, as appropriate. See CAA section 202(a)(1) (authority to establish standards for “any class or classes of new mo tor vehicles or engines” and 49 U.S.C 32902(k)(2) (authority to establish standards for HD vehicles that are “appropriate, cost
- effective, and technologically feas ible” that are designed to achieve the “maximum feasible improvement” in fuel efficiency; authority to establish “separate standards for different classes of vehicles under this subsection.” NHTSA interprets 49 U.S.C. 32902(k)(2) to include a grant of auth ority to establish engines standards pursuant to the broader statement of authority to establish standards that achieve the maximum feasible improvement in fuel efficiency. The agencies did not receive any comments questioning this interpretation.******* **E.O. 12866 Review**

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62 of for heav y - dut y pickups and van s that apply to the entire vehicle

– there are no separate engine standards. As discussed in Section IX, the agencies are not adopting GHG emission and fuel consumption standards for trailers at this time. In addition, the agencies ar e not adopting standards at this time for engine, chassis, and vehicle manufacturers which are small businesses (as defined b y the Small Business Administration). More detailed discussion of each regulatory

category is included in the subsequent sections below. 

### B. **Class 7 and**  **8 Combination Tractors** EPA is finalizing CO 2 standards and NHTSA is finalizing fuel consumption standards for new Class 7 and 8 combination tractors. The standards are for the tractor cab, with a separate standard for the engine that is installed in the tractor. Together these standards would achieve reductions of up to 23 percent compared to the model 2010 baseline level . As discussed below, EPA is finalizing its proposal to adopt the existing useful life definitions for Class 7 and 8 tractors and the heav y - dut y engines installed in them. NHTSA and EPA are finalizing revised fuel consumption and GHG emissions standards for tractors , and finalizing as proposed engine standards for heavy
- dut y engines in Class 7 and 8 trac tors . The agencies' analy ses, as discussed briefl y below and in more detail later in this preamble and in the RIA Chapter 2, show that these standards are feasible and appropriate under each agency ’s respective statutory authorities. EPA is also finalizing standards to control N 2 O, CH 4 , and HFC emissions from Class 7 and 8 combination tractors. The final heavy
- dut y engine standards for both N 2 O and CH 4 and details of the standard are included in the discussion in Section II.E.1.b and II.E.2 .b, respectivel y. The final air conditioning leakage standards appl yi ng to tractor manufacturers to address HFC emissions are discussed in Section II.E.5. The agencies are finalizing CO 2 emissions and fuel consumption standards for the combination tracto rs that reflect reductions that can be achieved through improvements in the tractor (such as aerodynamics), tires, and other vehicle s ys tems. The agencies are also finalizing heav y - duty engine standards for CO 2 emissions and fuel consumption that reflect technological improvements in combustion and overall engine efficiency
. The agencies have anal yzed the feasibility of achieving the CO 2 and fuel consumption standards, and have identified means of achieving the standards that are technicall y feasible in the lead time afforded, economically practicable and cost
- effective. EPA and NHTSA present the estimated costs and benefits of the standards in Section III. In developing the final rules, the agencies have evaluated the kinds of technologies that could b e utilized by

engine and tractor manufacturers, as well as the associated costs for the industry

and fuel savings for the consumer and the magnitude of the national CO 2 and fuel savings that may

be achieved. The agencies received comments from multiple stakeholders regarding the definition and classification of “combination tractors.” The commenters raised three key issues. First, EMA/TMA, Navistar and DTNA requested that both agencies use the same******* **E.O. 12866 Review**

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63 of definition for “tractor” or “truck tractor” in the final rule s . EPA proposed a definition for “tractor” in § 1037. 801 as : Tractor means a vehicle capable of pulling trailers that is not intended to carry significant cargo other than cargo in the trailer, or any other vehicle intended for the primary

purpose of p ulling a trailer. For purposes of this definition, the term ‘‘cargo’’ includes permanently attached equipment such as fire
- fighting equipment. (1) The following vehicles are tractors: (i) An y vehicle sold to an ultimate purchaser with a fifth wheel coup ling installed. (ii) Any vehicle sold to an ultimate purchaser with the rear portion of the frame exposed where the length of the exposed portion is 5.0 meters or less. See § 1037.620 for special provisions related to vehicles sold to secondary vehicle manufacturers in this condition. (2) The following vehicles are not tractors: (i) An y vehicle sold to an ultimate purchaser with an installed cargo carryi ng feature. For example, this would include dump trucks and cement trucks. (ii) Any vehicle lacking a fi fth wheel coupling sold to an ultimate purchaser with the rear portion of the frame exposed where the length of the exposed portion is more than 5.0 meters. NHTSA proposed a definition of “truck tractor” in 49 CFR 571.3 as : Truck tractor means a truck desi gned primaril y for drawing other motor vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and the load so drawn. Second, EMA/TMA, NTE A and Navistar expressed concerns over, and requested the removal of, the proposed language that all vehicles with sleeper cabs would be classified as tractors. The commenters argued that because there are vocational vehicles manufactured with sleeper cabs that operate as vocational vehicles and not as tractors, those vehicles sh ould be treated the same as all other vocational vehicles. Third, eleven different commenters requested that the agencies subdivide tractors into line
- haul tractors and vocational tractors and treat each based upon their operational characteristics : vocat ional tractors , which operate at lower speeds offroad or in stop
- and
- go city driving as vocational vehicles ; and line
- haul tractors , which operate at highway speeds on interstate roadway s over long distances , as line
- haul tractors. In response to the first comment, the agencies have decided to standardize the definition of tractor b y using the long
- standing NHTSA definition of “truck tractor”******* **E.O. 12866 Review**

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64 of established in 49 CFR 571.3. 49 CFR 571.3(b) states that a “truck tractor means a truck designed primaril y for drawing other motor vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and the load so drawn.” EPA’s proposed definition for “tractor” in the NPRM was similar to the NHTSA definition, but included some addit ional language to require a fifth wheel coupling and an exposed frame in the rear of the vehicle where the length of the exposed portion is 5.0 meters or less. EMA and Navistar argued that these two different definitions could lead to confusion if the agencies applied their requirements for truck tractors differently from each other. The commenters suggested that the EPA definition was more complicated than necessary , and that the simpler NHTSA definition should be used by both agencies as the base def

inition of truck tractor. The agencies agree that the definitions should be standardized and that the NHTSA definition is sufficient and includes the essential requirement that a truck tractor is a truck designed “primarily for drawing other motor vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and the load so drawn .” EPA’s proposed tr actor definition was intended to be functionall y equivalent to NHTSA’s definition based on design, but to be more objective b y including the criteria related to “fifth wheels” and exposed rear frame. However, EPA no longer believe s that such additional criteria are needed for implementation. NHTSA established the definition for truck tractor in 49 CFR 571.3(b) ye ars ago , 57 and has not encountered an y notable problems with its application. Nevertheless , because the NHTSA definition relies more on design intent than EPA’s proposed definition, we recognize that there may be some questions regarding how the agencies would apply the NHTSA definition being finalized to certain unique vehicles. For example, many of the common automobile and boat transport trucks may look similar to tractors, but the agencies would not consider them to meet the definition, because they have the capability

to carry one or several vehicles as cargo with or without a trailer attached, and therefore are not “constructed as to carry a load other than a part of the weight of the vehicle and the load so drawn.” Similarly , a “dromedary” style truck that has the capability to carry a large load of cargo with or without drawing a trailer would also not qualify as a tractor. 59 Even though these particular vehicles identified could potentially draw other motor vehicles like a trailer, they have also been designed to carry cargo with or without the trailer attached. NHTSA has previousl y interpreted its definition for “truck tractor” as exclu ding these specific vehicles like the dromedary and automobile/boat transport vehicles. Tow trucks have also been excluded from the category of truck tractor. On the other hand, it is worth clarifying that designs that allow cargo to be carried in the p assenger compartment, the sleeper compartment, or external toolboxes would not exclude a vehicle from the tractor category . The agencies plan to continue with this approach for the HD fuel efficiency and GHG standards, which means that these particular ve hicles w ill be subject to the vocational vehicle standards and not the tractor standards, but vehicles that did meet the definition above for “tractor” w ill be subject to the combination tractor standards.

57 33 FR 19703, December 25, 1968. 59 A dromedary is a box, deck or plate mounted behind the cab to carry freight or cargo.******* **E.O. 12866 Review**

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65 of In response to the second comment, the agencies have decided not to classify vocational vehicle s with sleeper cabs as tractors. In the NPRM, the agencies proposed that vocational vehicle s with sleeper cabs be classified as tractors out of concern that a v ehicle could initially

be manufactured as a straight truck vocational vehicle with a sleeper cab and, soon after introduction into commerce, be converted to a combination tractor as a means to circumvent the Class 8 sleeper cab regulations. Commenters who addressed this issue generally disagreed with the agencies’ concern. EMA/TMA, for example, argued that it is expensive and difficult for a manufacturer to change a vehicle from a straight truck to a tractor, because of modifications required to the vehic le, such as to the vehicle’s air brake sy stem, and also because of the manufacturers ultimate responsibility

for recertification to NHTSA’s safety standards. EMA/TMA also argued that straight trucks are often built with sleeper cabs to perform the functio ns of a vocational ty

pe vehicle and not the functions of a line
- haul tractor. NTE A also provided an example of a straight truck (Expediter Cab) that can be built with a sleeper cab and a cargo - carrying body , which it argued should be classified as a vocational vehicle and not a tractor. Upon further consideration, the agencies agree that vocational vehicles with sleeper cabs would more appropriatel y be classified as vocational vehicles than as tractors. The comments discussed above help to illustrate the reasons for building a vocational vehicle with a sleeper cab and the difficulties of converting a straight truck to a tractor. Moreover, 49 U.S.C. Chapter 301 requires any service organization making such modifications to be responsible for recertification to all applicable Federal motor vehicle safet y standards, which should act as a further deterrent to an yone contemplating making such a conversion. Together these two items address the agencies’ primary reason for proposing the require ment that all vehicles with sleeper cabs be treated as tractors

– the concern of circumvention of the tractor standards. However, the agencies will continue to monitor whether it appears that the definitions are creating unintended consequences, and may

c onsider revising the definitions in a future rulemaking to address such issues sho uld any

arise
. NHTSA and EPA have concluded that the engine and tire improvements required in the vocational category are appropriate for this set of vehicles based on the t ypical operation of these vehicles. The agencies did not intend to include vocational vehicles with sleeper cabs, such as an Expediter vehicle, into the tractor category in either the NPRM or in this final action, and the agencies’ anal yses at proposal re flected this intention. T herefore the agencies did not make an y adjustments to the program costs and benefits due to this classification change. In response to the third comment, the agencies have decided to allow manufacturers to exclude certain vocat ional
- ty pe of tractors from the combination tractor standards and instead be subject to the vocational vehicle standards
. We discuss below the reasoning underlying this decision, the criteria manufacturers would use in asserting a claim that a vocational tractor should be classified as a vocational vehicle, and the procedures the agencies will use to accept or reject manufacturers’ claims
. Multiple commenters (Allison Transmission, ATA, CAL START, Eaton, EMA/TMA, National Solid Waste Management Association, MEMA, Navistar, NADA, RMA, and Volvo) argued that the proposed classification failed to recognize genuine******* **E.O. 12866 Review**

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66 of differences between vocational tractors, which ty pically operate at lower speeds in stop
and
- go cit y driving, and line
- haul tractors, which ty pically operate at highway speeds on interstate roadway s over long distances. Commenters argued that the proposed tractor standards and associat ed tractor GEM test cycles were derived based primarily upon the operational characteristics of the line
- haul tractors, and that technologies that apply to these line
- haul tractors, such as improved aerod yn amics, vehicle speed limiters and automatic engine shutdown, as well as engine performance for improving emissions and fuel consumption, do not have the same positive impact on fuel consumption when used on tractors In today ’s market , as mentioned b y Volvo and ATA, we understand that approximately

15 per cent, or approximately 15,000 to 20,000, of the C lass 7 and 8 tractors could be classified as vocational tractors based upon the work they perform. The agencies agree that the overall operation of these vocational
- ty pes of tractors resembles other vocatio nal vehicles’ operation: lower average speed and more stop and go activity

than line
- haul tractors. Due to their operation style, a FTP certified engine is a better match for these tractors than a SET certified engine, because the FTP cycle uses a lower average speed and more stop and go activit y than the SET cycle. In addition, the limited high speed operation leads to minimal opportunities for fuel consumption and CO 2 emissions reductions due to aerodyn amic improvements. Conversel y, the additional wei ght of the aerodynam ic components could cause an unintended consequence of increasing gram per ton
- mile emissions by reducing the amount of payload the vehicle can carry in those applications which are weight
- limited. Similarly , the vocational tractors t y

picall y do not hotel overnight and therefore will have little to no benefit through the installation of an idle reduction technology
. The agencies received several oth er comments that described criteria that could be used to distinguish between vocational and non
- vocational tractors. Volvo suggested that a tractor could be a vocational tractor if it meets three of five specified features:

(1) a frame Resisting Bending Moment (RBM) greater than or equal to 2,000,000 in
- lbs per rail, or rail and liner combination; (2) an approach angle greater than or equal to 20 degrees nominal design specification, to exclude extended front rails/bumpers for additional equipment (e.g.

– pumps, winch, front engine PTO); (3) ground clearance greater than or equal to 14 inches as measured unladen from the lowest point of any frame rail or body

mounted components, excluding axles and suspension (for HHD and MHD vehicles this is usually con sidered as the lowest point of the fuel tank/mounting or chassis aerodyn amic devices); (4) a total reduction in high gear greater than or equal to 3.00 : 1; and (5) a total reduction in low gear greater than or equal to 57:1.******* **E.O. 12866 Review**

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67 of The approach proposed by Vol vo is somewhat similar to the approach NHTSA has for determining if a vehicle is a light truck under the light vehicle CAFE program, in which a vehicle must either have a GVWR greater than 6,000 pounds or have 4
- wheel drive, and meet four of the five speci fied suspension characteristics (approach angle, break
- over angle, axle clearance, etc.) to be classified as a light truck. Although w e do not believe that the criteria suggested b y Volvo are workable for all manufacturers and all applications, we agree that these criteria would reflect a reasonable basis for allowing manufacturers to reclassify their vehicles as vocational tractors. Two other commenters, EMA/TMA and Navistar, suggested simpl y that the manufacturer should have the burde n of establishing that a tractor is a vocational tractor to the agencies’ reasonable satisfaction. The commenter s also suggested some factors that could be used to establish that a tractor is actually a “vocational tractor” , including : (1) a vehicle speed limiter set at 55 mph or less; (2) power take
- off (PTO) controls; (3) extended front frame; (4) ground clearance greater than 14 in.; (5) an approach angle greater than 20 degrees; (6) frame RBM greater than 2,000,000 in
- lbs.; and (7) a total gear reduction in low gear greater than 57 and a total gear reduction in top gear greater than 3. The agencies believe that both suggested approaches have some merit. A rule based on specific criteria as suggested b y Volvo could h elp to minimize the burden on both the manufacturers and the agencies , as manufacturer
- written requests for approval and agency

approvals of those requests w ould not be required for each vocational tractor determination whereas the EMA/TMA and Navistar app roach requires the opposite namely that each manufacturer would have to justify the determination of each vocational tractor based upon its related design features in a separate petition to the agencies. Neither of the two approaches, which are based on s pecific criteria, could be used to identify all the tractors that should be classified as vocational tractors. An urban beverage delivery

tractor, for example, may not be designed with an y of the features mentioned but is used in a voc ational vehicle manner. Also, the agencies were concerned about the possibility

of manufacturers circumventing the s ys tem by incorporating design changes to their line
- haul tractors in order to classify them a s vocational tractors required to meet less stringent emission and fuel consumption standards. However, at this time the agencies do not believe that circumventing the sy stem is likely , as most of these vocational tractors are built to order and will incorporate the design features required by the customer. Manufacturer vehicle offerings are designed or tailored to suit the particular task of the consumer. The vehicle transport mission including vehicle ty pe, gross vehicle weight, gross combi n atio n weight, body st yl e and load handling characteristics , must be considered in the design process . Further, how the vehicle will******* **E.O. 12866 Review**

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68 of be utilized , including operating cycles, operating environment and road conditions , is another important consideration in designing a vehicle to accomplish a particular task. The agencies agree that these criteria could also be used as part of a basis for classification. We also note that many of these vehicles have front axle weight ratings greater than 14,600 pounds
. Although the agencies agree that these vocational tractors are operated differently than line
- haul tractors and therefore fit more appropriately into the vocational vehicle category , we need to ensure that only tractors that are truly vocational tractors are classified as such. Upon further consideration of the comments received the agencies have decided to allow manufacturers to exclude certain vocational
- ty pe tractors from the combinat ion tractor standards , and instead be subject to the standards for vocational vehicles
. A vehicle determined by the manufacturer to be a HHD vocational tractor would fall into the HHD vocational vehicle subcategory and be regulated as a vocational vehicle. Similarly , MHD vocational tractors will be regulated as a MHD vocational vehicle. Specifically , under the provision being finalized at 1037.630 and NHTSA’s regulation 523.2 of today’s rules only the followin g three t ypes of vocational tractors are eligible for reclassifi cation :

(1) Low
- roof tractors intended for intra
- cit y pickup and delivery, such as those that deliver bottled beverag es to retail stores. (2) Tractors intended for off
- road operation (including mixed service operation), such as those with reinforced frames and increased ground clearance. (3) Tractors with a GCWR over 120,000 pounds. As adopted in 40 CFR 1037.230, manufacturers will be required to group vocational tractors into a unique family , separate from other combination tractors or vocational vehicles. The provision being adopted in 40 CFR 1037.630 and 49 CFR Part 535.8 requires the manufacturers to summarize in their applications their bas i s for believing that the vehicles qualify as vocational tractors. EPA and NHTSA could ask for a more detailed description of the bas i s and EPA would deny an application for certification where it determine s the manufacturer lacks an adequate basis. The manufacturer would then have to resubmit its application to certify the vehicl es in question to the tractor standards. The agencies plan to monitor how manufacturers classify

their tractor fleets and would re consider the issue of vocational tractor classification in a future rulemaking if necessary
. Because the difference between s ome vocational tractors and line
- haul tractors is potentially

somewhat subjective, we are also including an annual sales limit of 7,000 vocational tractors per manufacturer, based on a three ye ar rolling average, that would apply in most circumstan ces. It is important to note, however, that we do not expect it to be common for manufacturers to be able to justify classifying 7,000 ve hicles as vocational tractors in a given model year. Under the regulations being promulgated in 40 CFR 1037.630 and 49 CFR Part 523.2 , manufacturers will be required to keep records of how they determined that such vehicles qualify

as vocat ional
. These records would be more detailed than the description******* **E.O. 12866 Review**

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69 of submitted in the applications. Ty pically , this would be a combination of records of the design features and/or purchasers of th e vehicles. The agencies have anal yzed the design features that reflect the special needs of these vocational tractors in the three areas noted above

– mixed service, heavy haul, and urban delivery . Mixed service applications, such as construction trucks, ty

pically require higher ground clearance and approach angle to accommodate non
- paved roads. In addition, they often require frame rails with greater resisting bending moment (RBM) because of the terrain where they operate . 60 The mixed service applicatio ns also sometimes require higher front axle weight ratings to accommodate extra loads and/or power take off s ystems for additional capability . Heavy haul tractors are t ypicall y designed with frame rails with extra strength (greater RBM) and higher front axle weight ratings to accommodate the heavy payloads. Often the heav y haul tractors will also have higher ground clearance and greater approach angle for similar reasons as the mixed service applications. L astl y, heav y haul vehicles require a total gear reduction of 57:1 or greater to provide the torque necessary to start the vehicle moving. Urban delivery

tractors, such as beverage haulers, have less defined design features that reflect their operational needs. These vehicles offer options which includ e high RBM rails and front axle weight ratings, but not all beverage trucks are specified with these options. The primary differentiation of these urban delivery tractors is their operation. Where we determine that a manufacturer is not applying this all owance in good faith, we may

require that manufacturer to obtain preliminary approval before using this allowance. This would mean that a manufacturer would need to submit its detailed records to EPA and receive formal approval before submitting its appli cation for certification. For this final rulemaking, the agencies projected the costs and benefits of the program considering this provision. As detailed in RIA Section 5.3.2.2.1, the agencies assumed that approximately 20 percent of short
- haul tractors sold in 2014 model year and beyond will be vocational tractors. As such, these vehicles will experience benefits reflective of a FTP
- certified engine and tire rolling resistance improvement at the technology

costs projected in the rules for vocational ve hicles. **(1) What**  **is the**  **form of the Class**  **7 and 8 Tractor**  **CO 2**  **Emissions and Fuel**  **Consumption S**  **tandards?** As proposed, EPA and NHTSA are finaliz i ng different standards for different subcategories of these tractors with the basis for subcategorization being particular tractor attributes. Attribute
- based standards in general recognize the variety of functions performed b y vehicles and engines, which in turn can affect the kind of technology that is available to control emissions and reduce fuel consumption, or its effectiveness. Attributes that characterize differences in the design of vehicles, as well as differences in how the vehicles will be employed in
- use, can be key factors in evaluating technological

60 The agencies have found based on standard truck specifications, that vehicles designed for significant off
- road applications, such as concrete pumper and logging trucks have resisting bending moment greater than 2,100,000 lb
- in. (ranging up to 3,580,000 lb
- in.). The typical on highway tractors have resisting bending moment of 1,390,000 lb
- in. An example line haul truck is the Mack Pinnacle which has a RBM of 1,390,000 lb
- in, as shown at http://www.macktrucks.com/assets/MackMarketing/Specifications/CXU6124 x2PinAxleBack.pdf
.******* **E.O. 12866 Review**

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70 of improvements for reducing CO 2 emissions and fuel con sumption. Developing an appropriate attribute
- based standard can also avoid interfering with the ability of the market to offer a variet y of products to meet consumer demand. There are several examples of where the agencies have utilized an attribute
- bas ed standard. In addition to the example of the light
- duty 2012
- 16 MY vehicle rule, in which the standards are based on the attribute of vehicle “ footprint, ” the existing heavy
- dut y highway engine standards for criteria poll utant s have for man y ye ars been based on a vehicle weight attribute (L ight Heav y, Medium Heav y, Heav y Heav y) with different useful life periods, which is a similar approach finalized for the engine GHG and fuel consumption standards discussed below. Heav y - dut y combination tractors are built to move freight. The ability of a vehicle to meet a customer’s freight transportation requirements depends on three major characteristics of the tractor: the gross vehicle weight rating (which along with gross combin ation weight rating (GCWR) establishes the maximum carrying capacity of the tractor and trailer), cab t ype (sleeper cabs provide overnight accommodations for drivers), and the tractor roof height (to mate tractors to trailers for the most fuel
- efficient configuration). Each of these attributes impacts the baseline fuel consumption and GHG emissions, as well as the effectiveness of possible technologies, like aerodynamics, and is discussed in more detail below. The first tractor characteristic to consider is p ayload which is determined by a tractor’s GVWR and GCWR relative to the weight of the tractor, trailer, fuel, driver, and equipment. Class 7 trucks, which have a GVWR of 26,001
- 33,000 pounds and a t ypical GCWR of 65,000 pounds, have a lesser payload capac ity than Class 8 trucks. Class 8 trucks have a GVWR of greater than 33,000 pounds and a typical GCWR of greater than 80,000 pounds, the effective weight limit on the federal highway s ys tem except in states with preexisting higher weight limits. Consistent with the recommendation in the National Academ y of Sciences 2010 Report to NHTSA, 61 the agencies are finalizing a load
- specific fuel consumption metric (g/ton
- mile and gal/1,000 ton
- mile) where the “ton” represents the amount of payload. Generally , highe r payload capacity vehicle s have better specific fuel consumption and GHG emissions than lower payload capacit y vehicle s. Therefore, since the amount of payload that a Class 7 vehicle can carry is less than the Class 8 vehicle ’s payloa d capacit y, the baseline fuel consumption and GHG emissions performance per ton
- mile differs between the categories. It is consequently reasonable to distinguish between these two vehicle categories, so that the agencies are finalizing separate standards for Class 7 and Class 8 tractors. The agencies are not finalizing a single standard for both Class 7 and 8 tractors based on the payload carryingcapabilities and assumed ty pical payload levels of Class 8 tractors alone, as that would quite likely have the perverse impact of increasing fuel consumption and greenhouse gas emissions. Such a single standard would penalize Class 7 vehicles in favor of Class 8 vehicles. However, the greater capabilities of Class 8 tractors and their related greater efficienc y when measured on a per ton
- mile basis are only relevant in the context of operations where that greater capacity is needed. For

61 See 2010 NAS Report, Note **24** , Recommendation 2
- 1.******* **E.O. 12866 Review**

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71 of many applications such as regional distribution, the trailer payloads dictated by the goods being carried are lower than the average Class 8 tractor payload. In those situations, Class 7 tractors are more efficient than Class 8 tractors when measured b y t on - mile of actual freight carried. This is because the extra capabilities of Class 8 tractors add additional weight to vehic le that is only beneficial in the context of its higher capabilities. The existing market already selects for vehicle performance based on the projected payloads. By

setting separate standards the agencies do not advantage or disadvantage Class 7 or 8 tr actors relative to one another and continue to allow trucking fleets to purchase the vehicle most appropriate to their business practices. The second characteristic that affects fuel consumption and GHG emissions is the relationship between the tractor cab roof height and the ty pe of trailer used to carry the freight. The primary

trailer ty pes are box, flat bed, tanker, bulk carrier, chassis, and low boy s. Tractor manufacturers sell tractors in three roof heights

– low, mid, and high. The manufacturers d o this to obtain the best aerodyn amic performance of a tractor
- trailer combination, resulting in reductions of GHG emissions and fuel consumption, because it allows the frontal area of the tractor to be similar in size to the frontal area of the trailer. In other words, high roof tractors are designed to be paired with a (relatively tall) box trailer while a low roof tractor is designed to pull a (relatively low) flat bed trailer. The baseline performance of a high roof, mid roof, and low roof tractor dif fers due to the variation in frontal area which determines the aerody namic drag. For example, the frontal area of a low roof tractor is approximately 6 square meters, while a high roof tractor has a frontal area of approximately 9.8 square meters. Theref ore, as explained below, the agencies are using the roof height of the tractor to determine the trailer type required to be used to demonstrate compliance of a vehicle with the fuel consumption and CO 2 emissions standards. As with vehicle weight clas ses, setting separate standards for each tractor roof height helps ensure that all tractors are regulated to achieve appropriate improvements, without inadvertentl y leading to increased emissions and fuel consumption by

shifting the mix of vehicle roof hei ghts offered in the market away from a level customaril y tied to the actual trailers vehicles will haul in
- use. Tractor cabs t ypicall y can be divided into two configurations

– day cabs and sleeper cabs. Line haul operations ty picall y require overnight acc ommodations due to Federal Motor Carrier Safety Administration hours of operation requirements. 62 Therefore, some truck buyers purchase tractor cabs with sleeping accommodations, also known as sleeper cabs, because they do not return to their home base nightly . Sleeper cabs tend to have a greater empt y curb weight than day cabs due to the larger cab volume and accommodations, which lead to a higher baseline fuel consumption for sleeper cabs when compared to day

cabs. In addition, there are specific techno logies, such as extended idle reduction technologies, which are appropriate onl y for tractors which hotel

62 The Federal Motor Carrier Safety Administration’s Hours
- of
- Service regulat ions put limits in place for when and how long commercial motor vehicle drivers may drive. They are based on an exhaustive scientific review and are designed to ensure truck drivers get the necessary rest to perform safe operations. See 49 CFR part 395, and see also http://www.fmcsa.dot.gov/rules
- regulations/topics/hos/index.htm (last accessed August 8, 2010).******* **E.O. 12866 Review**

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72 of -- such as sleeper cabs. To respect these differences, the agencies are finalizing separate standards for sleeper cabs and day cabs. 63 The agencies received comments from industry stakeholders (EMA, Allison Transmission, Bosch, and the Heav y - Dut y Fuel Efficiency Leadership Group) and ICCT supporting the nine tractor regulatory subcategories proposed and did not receive any comments which supported an alternate classification. Thus, to account for the relevant combinations of these attributes, the agencies are adopting the classification scheme proposed, segmenting combination tractors into the following nine regulatory subcategories:

 Class 7 Day

Cab w ith L ow Roof  Class 7 Day

Cab with Mid Roof  Class 7 Day

Cab with High Roof  Class 8 Day

Cab with L ow Roof  Class 8 Day

Cab with Mid Roof  Class 8 Day

Cab with High Roof  Class 8 Sleeper Cab with L ow Roof  Class 8 Sleeper Cab with Mid Roof  Class 8 Sleeper Cab with High Roof Adjustable roof fairings are used today on what the agencies consider to be low roof tractors. The adjustable fairings allow the operator to change the fairing height to better match the t ype of trailer that is being pulled which can reduc e fuel consumption and GHG emissions during operation. As proposed, the agencies are treating tractors with adjustable roof fairings as low roof tractors that will test with the fairing down. **(2) What are the**  **Final Class**  **7 and 8 Tractor**  **and Engine CO 2**  **Em issions**  **and Fuel Consumption**  **S tandards and**  **T heir**  **T iming?**  In developing the final standards for Class 7 and 8 tractors and for the engines used in these tractors, the agencies have evaluated the current levels of emissions and fuel consumption, the kinds of technologies that could be utilized by truck and engine manufacturers to reduce emissions and fuel consumption from tractors and associated engines, the necessary

lead time, the associated costs for the industry , fuel savings for the consumer, and the magnitude of the CO 2 and fuel savings that may be achieved. The technologies on whose performance the final tractor standards are predicated are improvements in aerodyn amic design, lower rolling resistance tires, extended idle reduction technologies, and lightweighting of the tractor. The technologies on whose performance the final tractor standards are predicated are engine friction reduction, aftertreatment optimization, and turbocompounding, among others , as described in RIA Chapter 2.4 . The agencies’ evaluation showed that these technologies are available

63 The agencies note , as discussed in the previous section, that som e day cabs and sleeper cabs will qualify as vocational tractors and will not be subject to the combination tractor standards.******* **E.O. 12866 Review**

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73 of today , but have very low application rates on current vehicles and engines . EPA and NHTSA also present the estimated costs and benefits of the Class 7 and 8 combination tractor and engine standards in Section III and in RIA Chapter 2, explaining as well the basis for the agencies’ conclusion not to adopt standards which are less stringent or more stringent. (a ) Tractor Standards The agencies are finalizing the following standards for Class 7 and 8 combination tractors in Table II
- 1 , using the subcategorization approach that was proposed. As explained below in Section III, EPA has determined that there is sufficient lead time to introduce various tractor and engine technologies int o the fleet starting in the 2014 model ye ar, and is finalizing standards starting for that model year predicated on performance of those technologies. EPA is finalizing more stringent tractor standards for the 2017 model ye ar which reflect the CO 2 emissio ns reductions required for 2017 model year engines. (As explained in Section II.B(3)(h)(v) below, engine performance is one of the inputs into the compliance model, and that input will change in 2017 to reflect the 2017 MY engine standards.) The 2017 MY vehicle standards are not premised on tractor manufacturers installing additional vehicle technologies. EPA’s final standards appl y throughout the useful life period as described in Section V. As proposed, and as discussed further in Section IV below, manufacturers may generate and use credits from Class 7 and 8 combination tractors to show compliance with the standards. NHTSA is finalizing Class 7 and 8 tractor fuel consumption standards that are voluntary standards in the 2014 and 2015 model years and become mandatory beginning in the 2016 model year, as required b y the lead time within EI SA
. The 2014 and 2015 model year standards are voluntary in that manufacturers are not subject to them unless they opt - in to the standards. 64 NHTSA is also adopting new tractor standards for the 2017 model year which reflect additional improvements in only the heavy
- duty

engines. As proposed, NHTSA is not implementing an in
- use compliance program for fuel consumption because it does not anticipate th ere will be notable deterioration of fuel consumption over the useful life of the vehicle
. As explained more fully

in Section III and Chapter 2 of the RIA, EPA and NHTSA are not adopting more stringent tractor standards for 2014
- 2017 MY. The final tractor standards are based on the maximum application rates of available technologies considering the available lead time , and we explain in Section III and Chapter 2 of the RIA that use of additional technologies , or further appl ication of the technologies already mentioned would be either infeasible in the lead time afforded, or uneconomical.

64 Once a manufacturer opts into the NHTSA program it must stay in the program for all the optional MYs.******* **E.O. 12866 Review**

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74 of **Table II**  **- 1**  **: Heavy -**  **duty Combination Tractor Emissions and Fuel Consumption Standards** 2014 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 107 81 68 Mid Roof 119 88 76 High Roof 124 92 75 2014
- 2016 Model Year Gallons of Fuel per 1,000 Ton
- Mile 65

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10.5 8.0 6.7 Mid Roof 11. 7 8.7 7.4 High Roof 12. 2 9.0 7.3 2017 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 104 80 66 Mid Roof 115 86 73 High Roof 120 89 72 2017 Model Year and Later Gallons of Fuel per 1,000 Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10. 2 7.8 6.5 Mid Roof 11.3 8.4 7.2 High Roof 11. 8 8. 7 7. 1 The standard values shown above differ somewhat from the proposal, reflecting refinements made to the GEM in response to comments. For example, the agencies received comments from stakeholders concerned that the 2017 MY tractor standards appeared to be ba cksliding because the reductions were not in line with the reductions expected from the 2017 MY engine standards. The agencies reviewed the issue and found that the engine maps we created in the GEM for the 2017 model ye ar for the proposal did not appr opriately reflect the engine improvements. Therefore, the agencies developed new fuel maps for GEM v2.0 which fully reflect the engine improvements due to the 2017 MY standards. 66 These changes to the GEM did not impact our estimates of the relative ef

fectiveness of the greenhouse gas emissions and fuel consumption improving technologies modeled in this final action nor the overall cost or benefits estimated for these final vehicle standards.

65 As noted above, manufacturers may voluntarily opt
- in to the NHTSA fuel consumption program in 2014 or 2015. Once a manufacturer opts into the NHTSA program it must stay in the program for all the optional MYs. 66 See RIA Chapter 4 for the engine fuel maps used in GEM v2.0.******* **E.O. 12866 Review**

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75 of Based on our analy sis, the 2017 model y ear standards for combination tractors and engines represent up to a 23 percent reduction in CO 2 emissions and fuel consumption over a 2010 model year baseline, as detailed in Section III.A.2. (b ) Standards for Engines Installed in Combination Tractors EPA is adopting GHG standards and NHTSA is adopting fuel consumption standards for new heav y - duty engines. This section discusses the standards for engines used in Class 7 and 8 combination tractors and also provides some overall background information. We als o note that the agencies are adopting standards for heavy
- dut y engines used in vocational vehicles. However, as explained further below, compliance with the standards would be measured using different test procedures, corresponding with actual vehicle use , depending on whether the vehicle is a Class 7 and 8 combination tractor or a vocational vehicle. The heav y - duty

engine standards vary

depending on the ty

pe of vehicle in which they are used, as well as whether the engines are compression i gnition or spark ignition
. The agencies are adopting separate engine fuel consumption and GHG emissions standards for engines installed in combination tractors versus engines installed in vocational vehicles. Also, for the purposes of the GHG engi ne emissions and engine fuel consumption standards, the agencies are adopting engine subcategories that match EPA’s existing criteria pollutant emissions regulations for heav y - dut y highway engines which establish ed four regulatory service classes that represent the engine’s intended and primary vehicle application. 67 The L ight Heavy
- Duty (LHD) diesel engines are intended for application in Class 2b through Class 5 trucks (8,501 through 19,500 pounds GVWR). The Medium Heav y - Duty (MHD) diesel engines are intended for C lass 6 and Class 7 trucks (19,501 through 33,000 pounds GVWR). The Heav y Heav y - Dut y (HDD) diesel engines are primaril y used in Class 8 trucks (33,001 pounds and greater GVWR). Lastly, spark ignition engines (primarily gasoline
- powered engines) installed in incomplete vehicles less than 14,000 pounds GVWR and spark ignition engines that are installed in all vehicles (complete or incomplete) greater than 14,000 pounds GVWR are grouped into a single engine service class. The engines in these four regulatory service classes range in size between approximately five liters and sixteen liters. This subcategory structure enables the agencies to set standards that appropriatel y reflect the technology available for engines for use in each t ype of vehicle, and that are therefore technologicall y feasible f or these engines. This is the same engine classification scheme the agencies proposed, and there were no adverse comments in response to the proposal
. Heav y heavy
- dut y diesel and medium heav y - dut y diesel engines are used today in combination tractors. Th e following section refers to the engine standards for these types of engines. This section does not cover gasoline or light heav y - dut y diesel engnes because they

are not used in combination tractors.

67 See 40 CFR 86.90
- 2.******* **E.O. 12866 Review**

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76 of In the NPRM, the agencies proposed CO 2 and fuel consumption standards for HD diesel engines to be installed in Class 7 and 8 combination tractors as shown in Table II
2. 69 **Table II**  **- 2**  **: Proposed**  **Heavy -**  **duty Diesel Engine Standards for Engines Installed in Tractors**

Effective 2014 Model Year Effective 2017 Model Year CO 2 standard (g/bhp
- hr) Voluntary Fuel Consumption Standard (gal/100 bhp
- hr) CO 2 standard

(g/bhp
- hr) Fuel

Consumption Standard (gal/100 bhp
- hr) MHD diesel engine 502 4.93 487 4.78 HHD diesel engine 475 4.67 460 4.52 The agencies proposed to require diesel engine manufacturers to achieve , on average , a three percent reduction in fuel consumption and CO 2 emissions for the 2014 standards over the baseline MY 2010 performance for the engines. 70 The agen cies’ preliminary assessment of the findings of the 2010 NAS Report and other literature sources indicate d that there are technologies available to reduce fuel consumption by this amount in the time frame in the lead time provided by the rule s . These technologies include improved turbochargers, aftertreatment optimization, and low temperature exhaust gas recirculation. The agencies also proposed to require diesel engine manufacturers to achieve, on average , a six percent reduction in fuel c onsumption and CO 2 emissions for the 2017 MY standards over the baseline MY 2010 performance for MHD and HHD diesel engines required to use the SET
- based standard. The agencies stated that additional reductions could likely

be achieved through the increas ed refinement of the technologies projected to be implemented for 2014, plus the addition of turbocompounding , which the agencies’ anal ys is showed would require a longer development time and would not be available in MY 2014
. The agencies therefore proposed to provid e additional lead time to allow for the introduction of this additional technology , and to wait until 2017 to increase stringency

t o levels reflecting application of this technology
. The agencies proposed that the M HD and HHD diesel engine CO 2 standards for Class 7 and 8 combination tractors would become effective in MY 2014 for EPA, with more stringent CO 2 standards becoming effectiv e in MY 2017, while NHTSA’s fuel consumption standards would become effective in MY 2017, which would be both

69 The agencies note that the CO 2 and fuel consumption standards for Class 7 and 8 combination tractors do not cover gasoline or LHDD engines , as those are not used in Class 7 and 8 combination tractors
. 70 The baseline HHD diesel engine performance in MY 2010 on the SET is 490 g CO 2 /bhp
- hr (4.81 gal/100 bhp
- hr), as determined from confidential data provided by manufacturers and data submitted for the non
GHG emissions certification process. T he baseline MHD diesel engine performance on the SET cycle is 518 g CO 2 /bhp
- hr (5.09 gallon/100
- bhp
- hr) in MY 2010. Further discussion of the derivation of the baseline can be found in Section III.******* **E.O. 12866 Review**

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77 of consistent with the EI SA four
- ye ar minimum lead
- time requirements and harmonized with EPA’s timing. The agencies explained that the three
- year ti ming, besides being required b y E IS A, made sense because EPA’s heavy
- dut y highway engine program for criteria pollutants had begun to provide new emissions standards for the industry in three ye ar increments , which had caused the heavy
- dut y engine product plans to fall largel y into three year cycles reflect ing this regulatory environment. To further harmonize with EPA, NHTSA proposed voluntary fuel consumption standards for M HD and HHD diesel engines that are equivalent to EPA CO 2 standards for MYs 2014
- 2016, allowing manufacturer s to opt into the voluntary standards in any

of those model y ears . 71 NHTSA proposed that manufacturers could opt into the program by declaring their intent to opt in to the program at the same time they submit the Pre
- Certification Compliance Report , and that a manufacturer opting into the program would begin tracking credits and debits beginning in the m odel year in which they opt into the program. Both agencies proposed to allow manufacturers to generate and use credits to achieve compliance with the HD diesel engine standards, including averaging, banking, and trading (ABT) and deficit carry
- forward. The agencies sought comment on the proposed M HD and HHD engine standards and timing. The agencies received comments from EMA, Navistar, Cummins, ACEEE, Center for Biological Diversity , Detroit Diesel Corporation, American Lung Association, and the Union of Concerned Scientists. Comments were divided with respect to the proposed levels of stringency . While Cummins and DDC expressed support for the CO 2 and fuel consumption standards for diesel engines, and EMA and Navistar stated the standards could be met if the flexibilities outlined in the NPRM are finalized as proposed, Navistar also stated that the model year 2017 standard may not be feasible since what the agencies characterized as existing technologies are not in production for all manufacturers In c ontrast, environmental groups and NGOs stated that the standards did not reflect the potential reductions outlined in the 2010 NAS study and should be more stringent
. CBD argued that the standards were not set at the maximum feasible level, because the agencies had said that they were based on the use of existing technologies. In addition, the Center for Neighborhood Technology encouraged the agencies to implement the rules as soon as possible, beginning in the 2012 model year. In light of the above comments, the agencies re
- evaluated the technical basis for the heav y - dut y engine standards. The baseline HHD diesel engine performance in 2010 model year on the SET is e stimated at 490 g CO 2 /bhp
- hr (4.81 gal/100 bhp
- hr), based on our anal ys is of confidential data provided b y manufacturers and data submitted for the non - GHG emissions certification process. Similarly , the baseline MHD diesel engine performance on the SET c yc le is estimated to be 518 g CO 2 /bhp
- hr (5.09 gallon/100
- bhp
hr) for the 2010 model year. Further discussion of the derivation of the baseline can be found in Section III. The agencies believe that the MY 2014 standards can be achieved by most manufacturers through the use of technologies time frame such as improved aftertreatment s ys tems, friction reduction, improved auxiliaries, turbochargers, pistons , and other components
. These standards will require diesel engine manufacturers to

71 Once a manufacturer opts into the NHTSA program it must stay in the program for all the optional MYs and remain standardized with the implementation approach being used to meet the EPA emission program.******* **E.O. 12866 Review**

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78 of achieve on average a three percent reduction in fuel consumption and CO 2 emissions over the baseline 2010 model year levels. C ommenter s noted that the National Academ y of Sciences (NAS) study indicates that additional technology improvements can be made to heav y - dut y engines in MY 2014 and 2017. For diesel engine standards, the agencies evaluated the following technologies: combustion sy stem optimization, turbocharging and air handling s ys tems, engine parasitic and friction reduction, integrated aftertreatment sy stems, electrification, and waste heat recovery
. The agencies carefully

evaluated the research supporting the NAS report and i ts recommendations and incorporated them to the extent practicable in the development of the HD p rogram. While the NAS report suggests that greater engine improvements c ould be achieved b y the use of technologies such as improved emission control sy stems and turbo
- compounding than do the agencies in this final action , we believe the standards being finalized represent the most stringent technically feasible for diesel engines used in tractors and vocational vehicles in the 2014 to 2017 model year time frametime frame
. The NAS study

concluded that tractor engine fuel consumption can be reduced by approximately

15 percent in the 2015 to 2020 time frametime frame and vocational engine fuel consumption can be reduced b y approximately 10 to 17 percent in the same time frametime frame
. 73 Based on a review of existing studies, NAS study authors found a range of reduction potential exists for improvements in c ombustion efficiency , electrification of accessories; improved emission control sy stems; and turbocompounding. The study found that improvements in combustion efficiency can provide reductions of 1 percent to 4 percent; electrification of accessories can provide reductions of 2 percent to 5 percent in a h yb ridized vehicle; improved emission control sy stems can provide a 1 percent to 4 percent improvement (depending on whether the improvement is to the EGR or SCR sy stem); and a 2.5 percent to 10 percent red uction is possible with mechanical or electrical turbocompounding. While the reductions being finalized in this regulation are lower than tho se published in the NAS study, the agencies believe that the percent reductions being finalized in th e s e rule s ar e co n sistent with the findings of the NAS study. The reasons for this are as follows. First, some technologies cannot be used b y all manufacturers. For example, improved SCR conversion efficiency was projected by

NAS to provide a 3 percent to 4 percent improvement in fuel consumption. Conversely , low temperature EGR was found to provide o nly

a 1 percent improvement. While the majority of manufacturers do use SCR sy stems and will be able to realize the 3 percent to 4 percent improvement, not all manufacturers use SCR for NOx aftertreatment. Manufacturers that do not use SCR aftertreatment sy stems would only be able to realize the 1 percent improvement from low temperature EGR. The agencies need to take into consideration the entire market in setting the stringency

of the standards and thus cannot assume that all manufacturers will be able to use all technologies.

73 National Research Council, "Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heavy
- Duty Vehicles Figure S
- 1, page 4, National Acedemies Press, 2011******* **E.O. 12866 Review**

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79 of Second, significant technical advances may be needed in order to realize the upper end of estimates for some technologies. For example, studies evaluated by NAS on turbocompounding found that a 2.5 percent to 10 percent reductio n is feasible. However, only one s ys tem is available commerciall y and this sy stem provides reductions on the low end of this range. Little technical information is available on the s ys tems that achieve reductions in the upper range for turbocompounding. These s ys tems are based on proprietary

designs the improvement results for which have not y et been replicated b y other companies or organizations. The agencies are assuming that all tractor engine manufacturers will use turbocompounding b y 201 7 model year . This will require a significant change in the design of heav y - duty tractor engines, one that represents the maximum technically

feasible standard even at the low end of the assumed improvement spectrum. Finally , different duty

cy cles used in the evaluation of medium
- and heav y - duty engine technologies can affect reported fuel consumption improvements. For example, some technologies are dependent on high load conditions to provide the greatest reductions. The dut y c yc les used to evaluate some of the technologies considered b y NAS differed significantly from that used b y the agencies in the modeling for this rulemaking. Maximum and average speed was higher in some of the cycles used in the studies, for example, and one result was demonstrated on a nonroad engine cycle. The effectiveness of turbocompounding when evaluated on a duty c ycl e with higher engine load can show a greater reduction potential than when evaluated with a lower engine load. Inaddition, technologies such as improvements to cooling fans, air compressors, and air conditioning s ys tems will not be demonstrated using the engine dy namometer test procedures being adopted in this final action because those components are not installed on the engine during the testing. The agencies selected the dut y c yc les for the anal ys is that we believed best suited tractor engines. The agencies selected engine technologies and the estimated fuel reduction percentages for setting the standards. For the reasons stated above, the agenc ies believ e the technologies and required improvements in fuel consumption represent the maximum feasible improvement, and are appropriate, cost
- effective , and technologically feasible. However, in recognizing that some manufacturers have engines that would not me et the standard even after appl yi ng technologies that improve GHG emissions and fuel consumption by

three percent, the agencies are finalizing both the proposed ABT provisions for these engines and also an optional alternate engine standard for 2014 model year, described in more detail below. We believe that concern s expressed by Navis tar regarding the 2014 MY standards will be addressed b y this alternative. The agencies also continue to believe that the 2017 MY standards are achievable using the above approaches and, in the case of SET certified engines, turbocompounding. While Navis tar commented that the 2017 MY standard may be challenging because not all manufacturers are producing the technologies that may be required to meet the standards, the agencies believe that since manufacturers that may require turbocompounding to meet the standards will not have to do so until 2017 MY, there will be sufficient lead time for all manufacturers to introduce this technology . We note that we are finalizing these standards as proposed based on the assessment that most manufacturers will need to******* **E.O. 12866 Review**

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80 of make improvements to existing engine s ys tems in order to meet the standards. EPA’s HD diesel engine CO 2 emission standards and NHTSA’s HD diesel engine fuel consumption standards for engines installed in tractors are presented in Table II
- 3
. As explained above, the first set of standards take effect with MY 2014 (mandatory standards for EPA, voluntary standards for NHTSA), and the second set take effect with MY 2017 (mandatory

for both agencies). **Table II**  **- 3**  **Final Heavy -**  **duty Diesel Engine Standards for Engines Installed in Tractors**

Effective 2014 Model Year Effective 2017 Model Year CO 2 standard (g/bhp
- hr) Voluntary Fuel Consumption Standard (gal/100 bhp
- hr) CO 2 standard

(g/bhp
- hr) Fuel

Consumption Standard (gal/100 bhp
- hr) MHD diesel engine 502 4.93 487 4.78 HHD diesel engine 475 4.67 460 4.52 The agencies have also decided to remove the NHTSA’s Pre
- Certification Compliance Report requirement. Instead, manufacturers must submit their decision to opt into NHTSA’s voluntary

standards for the 2014 through 2016 model y ears as part of its certificati on process with EPA and noting their intent to comply with standards, with noting that once a manufacturer opts into the NHTSA program it must stay in the program for all the subsequent optional model years. The declaration statement must be entered prio r to or at the same time the manufacturer submits its first application for a certificate of conformity . NHTSA w ill begin tracking credits and debits beginning in the model year in which a manufacturer opt s into its program. Compliance with the CO 2 emiss ions and fuel consumption standards will be evaluated based on the SET engine test cycle. In the NPRM, the agencies proposed standards based on the SET cycle for MHD and HHD engines used in tractors due to these engines’ primary

use in stead y state operating conditions ( ty pified by highway cruising) . Tractors spend the majority of their operation at steady state conditions, and will obtain in
- use benefit of technologies such as turbocompounding and other waste heat recovery technologies during this kind of ty pical engine operation. Therefore, the engines installed in tractors will be required to meet the standard based on the SET, which is a steady state test cycle. The agencies gave full consideration to the need for engine manufacturers to redesign and upgrade their engine s during the MYs 2014
- 2017 to meet standards, and fully considered the cost
- effectiveness of the standards and the available lead time . The final two
- step CO 2 emission and fuel consumption standards recognize the opportunity for technology

improvements over the rulemaking time frametime frame , while reflecting the ty pical engine manufacturers’ product plan cycles. Over these four model y ears there will be an opportunity

for manufacturers to evaluate almost every one of their engine models and add technology in a cost
- effective way , consistent with existing redesign******* **E.O. 12866 Review**

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81 of schedules, to control GHG emissions and reduce fuel consumption. The time
- frame and levels for the standards, as well as the ability to average, bank and trade credits and carry a deficit forward for a limited time, are expected to provide manufacturers the time and fl exibilities needed to incorporate technology that will achieve the final GHG and fuel consumption standards within the normal engine redesign process. This is an important aspect of the final rules, as it will avoid th e much higher costs that would occur if manufacturers needed to add or change technology at times other than these scheduled redesigns. 74 This time period will also provide manufacturers the opportunity to plan for compliance using a multi
- ye ar time frame, again in alignment with their normal business practice. Further details on lead time, redesigns and technical feasibility can be found in Section III. The agencies continue to believe the standards for MHD and HHD diesel engines installe d in combination tractors are the most stringent technicall y feasible in the time frametime frame established in this regulation. The standards will require a 3 percent reduction in engine fuel consumption and GHG emissions in 2014 MY based on improvements to engine components and aftertreatment sy stems. The 2017 MY standards will require a 6 percent reduction in fuel consumption and GHG emissions over a 2010 model year baseline and assumes the introduction, for some engines, of technologies such as turbocompounding . The standards will not, however, require the introdu ction of technologies that are still in development

– such as rankine bottoming cycle
- since these approaches cannot be introduced without further technical development or engine re
- design. 75 Additional discussion on technical feasibility is included in Section III below and in Chapter 2 of the RIA
. The agencies recognize, however, that the schedule of c hanges for the final standards may

not be the most cost
- effective one for all manufacturers. The agencies also sought comment whether an alternate phase
- in schedule for the HD diesel engine standards for combination tractors should be consider ed
. In developing the proposal, heav y - dut y engine manu facturers stated that the phase
- in of the GHG and fuel consumption standards should be aligned with the On Board Diagnostic (OBD) 76 phase
in schedule , whic h includes new requirements for heavy
- dut y vehicles in the 2013 and 2016 model years . The agencies did not adopt this suggestion in the proposal, explaining that the credit averaging, banking and trading provisions would provide manufacturers with conside rable flexibility to manage their GHG and fuel efficiency standard compliance plans

– including the phase
- in of the new heav y - dut y OBD requirements

– b ut requested comment on whether EPA and NHTSA should provide an alternate phase
in schedules that would more explicitly accommodate this request in the event that

74 See 75 FR at 25467
- 68 for further discussion of the negative cost implications of establishing requirements outside of the redesign cycle
. 75 See RIA Chapter 2.4.2.7
. 76 On
- b oard diagnostics (OBD) is a computer
- based emissions monitoring system that was first required in 2007 for vehicles under 14,000 pounds (65 FR 59896, Oct. 6, 2000) and in 2010 for vehicles over 14,000 pounds (74 FR 8310, Feb. 24, 2009).******* **E.O. 12866 Review**

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82 of manufacturers did not agree that the ABT provisions mitigated their concern about the GHG/fuel consumption standard phase
- in. See 75 FR at 74178. In response , Cummins, Engine Manufacturers Association, and DTNA commented that their first choice was a delay in the OBD effective date for one y ear to the 2014 model y ear. The industry ’s second choice was to provide manufa cturers with an optional GHG and fuel consumption phase
- in that align s their product development plans with their current plans to meet the OBD regulations for EPA and California in the 2013 and 2016 model ye ars . These commenters argued that meeting the OBD regulation in the 2013 model year already poses a significant challenge, and that having to meet GHG and fuel consumption standards beginning in 2014 could require them to redesign and recertify their pr oducts just one year later. They argued that bundling design changes where possible can reduce the burden on industry for compl yi ng with regulations, so aligning the introduction of the OBD, GHG, and fuel consumption standards could help reduce manufactur ers’ burden for product development, validation and certification. In order to provide additional flexibility for manufacturers looking to align their technology

changes with multiple regulatory requirements, the agencies are finalizing an alternate “OBD phase
- in ” option for meeting the standards for M HD and HHD diesel engine s installed in tractors , which delivers equivalent CO 2 emissions and fuel consumption reductions as the primary standards for the engines built in the 2013 through 2017 model years, as shown in Table II
- 4 . The optional OBD phase
- in schedule requires that engines built in the 2013 and 2016 model y ears to achieve greater reductions than the engines built in those model years under the primary p rogram, but requires less reductions for the engines built in the 2014 and 2015 model y ears.******* **E.O. 12866 Review**

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83 of **Table II**  **- 4**  **: Comparison of**  **CO 2**  **reductions for the HHD and MHD Tractor Standards**  **Under the**  **Alternative OBD Phase -**  **in and**  **Primary Phase**  **- In**  HHD Tractor Engines MHD Tractor Engines Primary Phase
in Standard (g/bhp
- hr) Optional

Phase
- in Standard (g/bhp
- hr) Difference

in L ifetime CO 2 Engine Emissions (MMT) Primary

Phase
- in Standard (g/bhp
- hr) Optional

Phase
- in Standard (g/bhp
hr) Difference in Lifetime CO 2 Engine Emissions (MMT) Baseline 490 490
-- 518 518
-- 2013 MY Engine 490 485 14 518 512 17 2014 MY Engine 475 485
- 28 502 512
- 28 2015 MY Engine 475 485
- 28 502 512
- 28 2016 MY Engine 475 460 42 502 487 42 2017 MY Engine 460 460 0 487 487 0 Net Reductions (MMT) 0 3

The technologies for the 2013 model year optional standard include a subset of technologies that could be used to meet the primary 2014 model year standard. The agencies believe this approach is appropriate because the shorter lead time provided for manufacturers selecting this option limits the technologies which can be applied. However, in order to maintain equivalent CO 2 emissions and fuel consumption reductio n over the 2013 through 2017 model y ear period, it is necessary for the 2016 model y ear standard to be equal to the 2017 model y ear standard, using the same technology paths described for the primary engine program. If a manufacturer selects this optional phase
in, then the engines must be certified starting in the 2013 model y ear and continue using this phase
- in through 2016 model year. That is, once electing this compliance path, manufacturers must adhere to it
. 77 Manufacturers may opt into the optional OBD phase
in through the voluntary

NHTSA program, but must opt in the 2013 model y ear and continue using this phase
- in through the 2016 model y ear. Manufacturers that opt in to the voluntary

NHTSA program in 2014 and 2015 will be required to meet the prim ary phase
- in schedule and may not adopt the OBD phase
- in option
. Table II
- 5 below presents the final HD diesel engine CO 2 emission standards under the “OBD phase
- in” option.

77 See §1036.150(e)
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84 of **Table II**  **- 5**  **: Optional Heavy**  **- Duty Engine Standard Phase**  **- in Schedule for Tractor Engines**  Effective 2013 Through 2015 Model Year MHD Diesel Engine HHD Diesel

Engine CO 2 Standard (g/bhp
- hr) 512 485 Voluntary

Fuel Consumption Standard (gallon/100 bhp
- hr) 5.03 4.76 Effective 2016 Model Year and Later MHD Diesel Engine HHD Diesel

Engine CO 2 Standard (g/bhp
- hr) 487 460 Fuel Consumption (gallon/100 bhp
- hr) 4.78 4.52 Although the agencies believe that the standards for the HD diesel engines installed in combination tractors are generally appropriate, cost - effective, and technologicall y feasible in the rulemaking time frametime frame , we also recognize that when regulating a category of engines for the first time, there will be individual products that may deviate significantly from the baseline level of performance, whether because of a specific approach to criteria pollution control, or due to engine calibration for specific applications or duty

cycles
. In the current fleet of 2010 and 2011 model year engines used in combination tractors , NHTSA and EPA understand that there is a relatively small group of engines that are up to approximately 25 per cent worse than the average baseline for other engines. For this group of MHD and HHD diesel engines used in tractors , when compared to the t ypical performance levels of the majority of the engines in the fleet and the fuel consumption/GHG emissions reduc tions that the majority of engines would achieve through increased application of technology , the same reduction from the industry baseline may

not be possible at reasonably comparable cost given the same amount of lead
- time, because these products may require a total redesign in order to meet the standards. Manufacturers of the MHD and HHD diesel engines used in tractors with aty pically high baseline CO 2 and fuel consumption levels may also, in some instances, have a limited line of engines across which to average performance to meet the generally
applicable standards
. To account for this possibility , the agencies requested comment in the NPRM on the establishment of an optional alternative MHD and HHD engine standard for those engines installed in combination tractors which would be set at 3 percent below a manufacturer’s 2011 engine baseline emissions and fuel consumption , or alternativel y, at 2 percent below a manufacturer’s 2011 baseline. T he agencies also requeste d comment on extending this optional standard one ye ar (to the 2017 MY ) for a single engine famil y at a 6 percent level below the 2011 baseline. 78 This option would not be available unless and until a manufacturer had exhausted all available credits and cr edit opportunities, and engines under the optional standard could not generate credits.

78 See 75 FR at 74178
- 74179.******* **E.O. 12866 Review**

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85 of In comments to the NPRM, Navistar supported the alternative engine standard, but asked that it be set at 2 percent below the manufacturer’s 2011 baseline. They also supported the extension to 2017 MY at 6 percent. Navistar provided CBI in support of its comments. Volvo, DTNA, environmental groups, NGOs, and the New York State Department of Environmental Conservation opposed the optional engine standard , arguing that existing flexibilities are sufficient to allow compliance with the standards and that all manufacturers should be held to the same standards. Based on the CBI submitted by Navistar, the agencies found that a large majority of the HD diesel engines used in Class 7 and 8 combination tractors were relatively close to the average baseline, with some above and some below , but also that some of these M HD and HDD diesel engines were far enough away from the baseline that they could not meet the generally
- appli cable standards with any application of technology that would be reasonabl y cost - effective
. The agencies continue to believe that an interim alternati ve standard is needed for these products, and reflects a legitimate differentiation between products starting from different fuel consumption/GHG emitting baselines
. A s explained in the proposal, it is legally permissible to accommodate short term lead time constraints with alternative standards. C ommenters did not dispute that there are l egacy engine families with significantly higher CO 2 emissions and fuel consumption baselines, and that these engines require longer lead time to meet the principal standards in the earl y model years of the program. Although the agencies acknowledge the view that all manufacturers should be subject to the same burden for meeting the primary standards, the agencies believe that, in the initial years of a new program, additiona l flexibilities should be provided . The GHG standards and fuel consumption standards are first
- time standards for these engines, so the possibility of significantly

different baselines is not unexpected. 79 Moreover, the agencies do not believe that the alternative standard affords a relative competitive advantage to the higher emitting legacy engines: the same level of improvement at the same cost will be r equired of those tractor engines, and in addition, by 2017 MY, those tractor engines will be required to make the additional improvements to meet the same standards as other engines
. We believe that the concern expressed by Navistar regarding the 2014 MY standards will be addressed b y this alternative. The agencies also continue to believe the 2017 MY standards are achievable using the above approaches and, in the case of MHD and HHD engines installed in tractors , turbocompounding. While Navistar commented that the 2017 MY standard may be challenging because not all manufacturers are using the technologies that may be required to meet the standards, the agencies believe that since manufacturers which may need to use turbocompounding to meet the standards will not have to do so until 2017 MY, there will be sufficient lead time for everyone to introduce this technology
. Thus, the agencies are finalizing a regulatory alternative whereby

a manufacturer , for an interim period of the 2014
- 2016 model years, w ould have the option to comply with a unique standard based on a three percent reduction from an individual engine’ s own 2011 model year baseline level. Our assessment is that this three percent reduction is appropriate given the potential for manufacturers to apply similar technology

packages with similar cost to

79 See 75 FR at 74178.******* **E.O. 12866 Review**

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86 of what we h ave estimated for the primary program. 80 This is similar to EPA’s approach in the light
- dut y rule for handling a certain subset of vehicles that were deemed unable to meet the generall y - applicable GHG standards during the 2012
- 2015 time frametime frame due to higher initial baseline conditions , and which therefore needed alternate standards in those model years. 81 The agencies stress that this option is a temporary and limited option being implemented to address diverse manufacturer needs associated with complyingwith this first phase of the regulations. As will be codified in 40 CFR 1036. 620 and 49 CFR Part 535.5(d) , this optional standard will be available only for the 2014 through 2016 model ye ars, because we believe that manufacturers will have had ample opportunity to make appropriate changes to bring their product performance into line with the rest of the industry after that time
. As proposed, the final rule s require that manufacturers making use of thes e provisions for the optional standard would need to exhaust all credits within this averaging set prior to using this flexibility and would not be able to generate emissions credits from other engines in the same regulatory averaging set as the engines co mplying using this alternate approach. The agencies note again that manufacturers choosing to utilize this option in MYs 2014
- 2016 will have to make a greater relative improvement in MY 2017 than the rest of the industry , since they

will be starting from a worse level

– for compliance purposes, emissions from engines certified and sold at the three percent level will be averaged with emissions from engines certified and sold at more stringent levels to arrive at a weighted average emissions for all engine s in the subcategory
. Again, this option can only be taken if all other credit opportunities have been exhausted and the manufacturer still cannot meet the primary

standards. If a manufacturer chooses this option to meet the EPA emission standards i n the MY 2014

– 2016, and wants to opt into the NHTSA fuel consumption program in these same MYs it must follow the exact path followed under the EPA program utilizing equivalent fuel consumption standards. Since the NHTSA standards are optional in 2014, manufacturers may choose not to adopt either the alternative engine standard or the regular voluntary standard b y not participating in the NHTSA program in 2014 and 2015. Some commenters argued that manufacturers could game the standard by establishing an artificially high 2011 baseline emission level. This could be done, for example, by

certifying an engine with high fuel consumption and GHG emissions that is either: 1) not sold in significant quantities ; or 2) later altered to emit fewer GHGs and consume less fuel through service changes. In order to mitigate this possibility , the agencies are requiring that the 2011 model year baseline must be developed by averaging emissions over all engines in an engine famil y certified and sold for that model y ear so as to prevent a manufacturer from developing a single high GHG output engine solely for the purpose of establishing a high baseline
. As an alternative, i f a manufacturer does not certify all engine families in an averaging set to the alternate standards, then the tested
80 The CBI submitted by Navistar demonstrates that in order to meet the 2 percent reduction from the individual manufacturer 2011 baselines, technolo gies such as improved aftertreatment efficiency will be required in the 2014 time frame and turbocompounding in the 2016 time frame on tractor engines in order to meet the standards. These same technologies will be used by other manufacturers to meet the standards. 81 See 75 FR 25414
- 25419******* **E.O. 12866 Review**

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87 of configuration of the engine certified to the alternate standard must have the same engine d isplacement and its rated power within 5 percent of the highest rated power of the baseline tested configuration
. Inaddition, the tested configuration of the engine certified to the alternate standard must be a configuration sold to customers
. These three requirements will prevent a manufacturer from producing an engine with an artificially high power rating and therefore produce artificially low grams of CO 2 emissions and fuel consumption per brake horsepower . In addition, the tested configurations must have a BSFC equivalent to or better than all other configurations within the engine family which will prevent a manufacturer from creating a baseline configuration with artificially high CO 2 emissions and fuel consumption
. (c) In
- use Standards Section 202(a)(1) of the CAA specifies that EPA is to adopt emissions standards that are applicable for the useful life of the vehicle. The in
- use standards that EPA is finalizing would apply

to individual vehicles and engines. NHTSA is adopting an approach which does not include in
- use standards. EPA proposed that the in
- use standards for heav y - duty engines installed in tractors be established b y adding an adju stment factor to the full useful life emissions and fuel consumption results projected in the EPA certification process. The agency proposed a two percent adjustment factor and requested comments and additional data during the proposal to assist in develo ping an appropriate factor level. The agency received additional data during the comment period which identified production variability

which was not accounted for at proposal. Details on the development of the final adjustment factor are included in RIA Chapter 3. Based on the data received, EPA determined that the adjustment factor in the final rules should be higher than the proposed level of two percent. EPA is finalizing a three percent adjustment factor for the in
- use standard to pro vide a reasonable margin for production and test
- to - test variability that could result in differences between the initial emission test results and emission results obtained during subsequent in
- use testing. We are finalizing regulatory text (in §1036.150) to allow engine manufacturers to used assigned deterioration factors (DFs) without performing their own durability emission tests or engineering anal ys is. However, the engines would be still be required to meet the standards in actual use without regard to whether the manufacturer used the assigned DFs. This allowance is being adopted as an interim provision applicable only for this initial phase of standards. Manufacturers will be allowed to use an assigned a dditive DF of 0.0 g/bhp
- hr for CO 2 emissions from any conventional engine (i.e., an engine not including advance or innovative technologies). Upon request, we could allow the assigned DF for CO 2 emissions from engines including advance or innovative techn ologies, but only if we determine that it would be consistent with good engineering judgment. We believe that we have enough information about in
- use CO 2 emissions from conventional engines to conclude that they

will not increase as the engines age. Howe ver, we lack such information about the more advanced technologies.******* **E.O. 12866 Review**

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88 of EPA is also finalizing the proposed provisions requiring that the useful life for these engine and vehicles with respect to GHG emissions be set equal to the respective useful life perio ds for criteria pollutants. EPA is adopting provisions where the existing engine useful life periods, as included in Table II
- 6 , be broadened to include CO 2 emissions for both engines (see 40 CFR 1036.108(d)) and tractors (see 40 CFR 1037.105). **Table II**  **- 6**  **: Tractor and Engine Useful Life Periods**  Years Miles Medium Heav y - Dut y Diesel Engines 10 185,000 Heav y Heav y - Duty

Diesel Engines 10 435,000 Class 7 Tractors 10 185,000 Class 8 Tractors 10 435,000 **(3) Test Procedures and Related Issues**  The agencies are finalizing a complete set of test procedures to evaluate fuel consumption and CO 2 emissions from Class 7 and 8 tractors and the engines installed in them. Consistent with the proposal, the test procedures related to the tractors are all new, while the engine test procedures already established were built substantially on EPA’s current non - GHG emissions test procedures, except as noted. This section discusses the final simulation model developed for demonstrating compliance with the tractor standard and the final engine test procedures. (a ) Vehicle Simulation Model We are finali zing as proposed separate engine and vehicle
- based emission standards to achieve the goal of reducing emissions and fuel consumption for both combination tractors and engines. Engine manufacturers are subject to the engine standards while th e Class 7 and 8 tractor manufacturers are required to install certified engines in their tractors. The tractor manufacturer is also subject to a separate vehicle
based standard which utilizes a vehicle simulation model to evaluate the impact of the tracto r cab design to determine compliance with the tractor standard. A simulation model, in general, uses various inputs to characterize a vehicle’s properties (such as weight, aerodynamics, and rolling resistance) and predicts how the vehicle would behave on the road when it follows a driving cycle (vehicle speed versus time). On a second
- by
- second basis, the model determines how much engine power needs to be generated for the vehicle to follow the driving cycle as closely as possible. The engine power is th en transmitted to the wheels through transmission, driveline, and axles to move the vehicle according to the driving cycle. The second
- by
- second fuel consumption of the vehicle, which corresponds to the engine power demand to move the vehicle, is then cal culated according to a fuel consumption map in the model. Similar to a chassis d ynamometer test, the second
- by
- second fuel consumption is aggregated over the complete drive cycle to determine the fuel consumption of the vehicle.******* **E.O. 12866 Review**

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89 of Consistent with the propos al, NHTSA and EPA are finalizing a procedure to evaluate fuel consumption and CO 2 emissions respectivel y through a simulation of whole
- vehicle operation, consistent with the NAS recommendation to use a truck model to evaluate truck performance. 82 The EPA developed the Greenhouse gas Emissions Model (GEM) for the specific purpose of this r ulemaking to evaluate truck performance. The GEM is similar in concept to a number of vehicle simulation tools developed b y commercial and government entities. The model developed b y the EPA and finalized here was designed for the express purpose of vehic le compliance demonstration and is therefore simpler and less configurable than similar commercial products. This approach gives a compact and quicker tool for vehicle compliance without the overhead and costs of a more sophisticated model. Details of th e model are included in Chapter 4 of the RIA. The agencies are aware of several other simulation tools developed by universities and private companies. Tools such as Argonne National Lab oratory 's Autonomie, Gamma Technologies' GT
- Drive, AVL ’ s CRUI SE, Ric ardo's VSIM, Dassault ’ s DYMOLA, and University of Michigan's HE
- VESIM codes are publicly available. In addition, manufacturers of engines, vehicles, and trucks often have their own in
- house simulation tools. The agencies sought comments regarding other s oftware packages which would better serve the compliance purposes of the rules than the GEM , but did not receive an y recommendations. The GEM is designed to focus on the inputs most closely associated with fuel consumption and CO 2 emissions
- i.e., on those which have the largest impacts such as aerod ynamics, rolling resistance, weight, and others. EPA has validated the GEM based on the chassis test results from two combination tractor s tested at Southwest Research Institute . The validation work conducted on this vehicle wa s representative of the other Class 7 and 8 tractors. Many aspects of one tractor configuration (such as the engine, transmission, axle configuration, tire sizes, and control sy stems) are similar to those used on the manufacturer’s sister models. For example, the powertrain configuration of a sleeper cab with any roof height is similar to the one used on a day cab with any

roof height. Overall, the GEM predicted the fuel consumption and CO 2 emiss ions within 2 percent of the chassis test procedure results for three test cycles

– the California ARB Transient cycle, 65 mph cruise cycle, and 55 mph cruise cycle. These cycles are the ones the agencies are utilizing in compliance testing. Since the ti me of the proposal, the EPA also conducted a validation of the GEM relative to a commonly used vehicle simulation software, GT
- Power. The results of this validation found that the two software programs predicted the fuel econom y of each subcat egory of tractor to be within 2 percent. Test to test variation for heav y - dut y vehicle chassis testing can be higher than 4 percent due to driver variation alone. The final simulation model is described in greater detail in Chapter 4 of the RIA and is av ailable for download by at ( http://www.epa.gov/otaq/ climate/regulations.htm ). After proposal, the agencies conducted a peer review of GEM version 1.0 which was proposed. In addition, we requested comment on all aspects of this approach to compliance det ermination in general and to the use of the GEM in particular. The

82 See 2010 NAS Report. Note **24** Recommendation 8
- 4. Page 190.******* **E.O. 12866 Review**

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90 of agencies received comments from stakeholders and made changes to GEM v2.0 to address concerns raised in the comments, along with the comments received during the peer review process. The most noticeable changes to the GEM include improvements to the graphical user interface (GUI). In response to comments, the agencies have reduced the amount of information required in the Identification section; linked the inputs to the selected subcategory

while graying
- out the items that are not applicable to the subcategory ; and added batch modeling capability to reduce the compliance burden to manufacturers. In addition, s ubstantial work went into model validations and benchmarking against vehicl e test data and other commonly used vehicle simulation models. The model also includes a new driver model, a simplified electric s ys tem model, and revised engine fuel maps to better reflect the 2017 model year engine standards. The model in the final ru lemaking uses the targeted vehicle driving speed to estimate vehicle torque demand at an y given time, and then the power required to drive the vehicle is derived to estimate the required accelerator and braking pedal positions. If the driver misses the veh icle speed target, a speed correction logic controlled b y a PID controller is applied to adjust necessary accelerator and braking pedal positions in order to match targeted vehicle speed at every simulation time step. The enhanced driver model used in the final rulemaking with its feed
- forward driver controls more realisticall y models driving behavior. The GEM v1.0, the proposed version of the model, had four individual components to model the electric s ys tem

– starter , electrical energy s ys tem, alternator , and electrical accessory . For the final rulemaking, the GEM v2.0 has a single electric sy stem model with a constant power consumption level
. Based on comments received, the agencies revisited the 2017 model year proposed fuel maps, specificall y the low load area, which was extrapolated during the proposal and produced negative improvements. The agencies redeveloped the fuel maps for the final rulemaking to better predict the fuel consumption of engines in this ar ea of the fuel consumption map. Details of the changes are included in RIA Chapter 4. To demonstrate compliance, a Class 7 and 8 tractor manufacturer will measure the performance of specified tractor s ys tems (such as aerody namics and tire rolling resistan ce), input the values into the GEM , and compare the model’s output to the standard. The rules require that a tractor manufacturer provide the inputs for each of following factors for each of the tractors it wishes to certify under CO 2 standards and for establishing fuel consumption values: Coefficient of Drag, Tire Rolling Resistance Coefficient, Weight Reduction, Vehicle Speed Limiter, and Extended I dle Reduction Technology . These are the technologies on which the agencies’ own feasibility anal ys is f or these vehicles is predicated. An example of the GEM input screen is included in Figure II
- 1
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For the aerodyn amic assessment, tire rolling resistance, and tractor weight r eduction, the input values for the simulation model will be determined by the manufacturer through conducting tests using the test procedures finalized by the agencies in this action and described below. The agencies are allowing several testing alternati for aerodynamic assessment referenced back to a coastdown test procedure, a single procedure for determination of prescribed method to determine tractor weight reduction. The agencies defined model inputs for determining vehicle speed limiter and extended idle reduction technology

benefits. The other aspects of vehicle performanc as defined b y the agencies and are not varied for the purpose of compliance. (b ) Metric Test metrics which are quantifiable and meaningful are critical for a regulatory program. The CO 2 and fuel consumption metric should reflect wh (CO 2 or fuel consumption) relative to the clearest value of its use: in this case, carry ing freight. It should encourage efficiency improvements that will lead to reductions in emissions and fuel consumption during real world operati standards for Class 7 and 8 combination tractors that would be expressed in terms of moving a ton (2,000 pounds) of freight over one mile. Thus, NHTSA’s final fuel consumption standards for these trucks would be represente move one ton of freight 1,000 miles, or gal/1,000 ton standards would be represented as grams of CO **Revised Version**

**– Do Not Cite, Quote, or Release During Review** 

91 of **Figure II**  **- 1**  **: GEM Input Screen** For the aerodyn amic assessment, tire rolling resistance, and tractor weight eduction, the input values for the simulation model will be determined by the manufacturer through conducting tests using the test procedures finalized by the agencies in this action and described below. The agencies are allowing several testing alternati for aerodynamic assessment referenced back to a coastdown test procedure, a single

determination of the coefficient of rolling resistance ( RR C ) prescribed method to determine tractor weight reduction. The agencies have finalized defined model inputs for determining vehicle speed limiter and extended idle reduction technology

benefits. The other aspects of vehicle performanc e are fixed within the model as defined b y the agencies and are not varied for the purpose of compliance. Test metrics which are quantifiable and meaningful are critical for a regulatory

and fuel consumption metric should reflect wh at we wish to control or fuel consumption) relative to the clearest value of its use: in this case, carry ing freight. It should encourage efficiency improvements that will lead to reductions in emissions and fuel consumption during real world operati on. The agencies are finalizing standards for Class 7 and 8 combination tractors that would be expressed in terms of moving a ton (2,000 pounds) of freight over one mile. Thus, NHTSA’s final fuel consumption standards for these trucks would be represente d as gallons of fuel used to move one ton of freight 1,000 miles, or gal/1,000 ton
- mile. EPA's final CO standards would be represented as grams of CO 2 per ton - mile. The model converts CO **Do Not Cite, Quote, or Release During Review** *******

For the aerodyn amic assessment, tire rolling resistance, and tractor weight eduction, the input values for the simulation model will be determined by the manufacturer through conducting tests using the test procedures finalized by the agencies in this action and described below. The agencies are allowing several testing alternati ves for aerodynamic assessment referenced back to a coastdown test procedure, a single ) for tire s , and a have finalized defined model inputs for determining vehicle speed limiter and extended idle reduction e are fixed within the model as defined b y the agencies and are not varied for the purpose of compliance. Test metrics which are quantifiable and meaningful are critical for a regulatory at we wish to control or fuel consumption) relative to the clearest value of its use: in this case, carry ing freight. It should encourage efficiency improvements that will lead to reductions in

on. The agencies are finalizing standards for Class 7 and 8 combination tractors that would be expressed in terms of moving a ton (2,000 pounds) of freight over one mile. Thus, NHTSA’s final fuel d as gallons of fuel used to mile. EPA's final CO 2 vehicle mile. The model converts CO 2******* **E.O. 12866 Review**

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92 of emissions to fuel consumption using the CO 2 grams per ton mile estimated by GEM and an assumed 10,180 grams of CO 2 per gallon of diesel fuel. This approach tracks the recommendations of the NAS report. The NAS panel concluded, in their report, that a load
- specific fuel consumption metric is appropriate for HD trucks. The panel spent considerable time explaining the advantages of and recommending a load
- specific fuel consumption approach to regulating the fuel efficiency of heav y - dut y trucks. See NAS Report pages 20 through 28. The panel first points out that the nonlinear relationship between fuel econom y and fuel consumption has led consumers of light
- duty vehicles to have difficulty in judging the benefits of replacing the most inefficient vehicles. The panel describes an example where a light
- duty vehicle can save the same 107 gallons per y ear (assuming 12,000 miles travelled per y ear) by improving one vehicle’s fuel efficiency from 14 to 16 mpg or improving another vehicle’s fuel efficiency

from 35 to 50.8 mpg. The use of miles per gallon leads consumers to undervalue the importance of small mpg improvements in vehicles with lower fuel econom y. Therefore, the NAS panel recommends the use of a fuel consumption metric over a fuel economy metric. The panel also describes the primary purpose of most heav y - duty vehicles as moving freight or passengers (the payload). Therefore, they

concluded that the most appropriate way to represent an attribute
- based fuel consumption metric is to normalize the fuel consumption to the payload. With the approach to compliance NHTSA and EPA are adopting, a default payload is specified for each of the tractor categories suggesting that a gram per mile metric with a specified payload and a gram per ton
- mile metric would be effectivel y equivalent. The primary

difference between the metrics and approaches relates to our treatment of mass reductions as a means to reduce fuel consumption and greenhouse gas emissions. In the case of a gram per mile metric, mass reductions are reflected only in the calculation of the work necessary to move the vehicle mass through the drive cycle. As such it directly

reduces the gram emissions in the numerator since a vehicle with less mass will require less energy to move through the drive cycle leading to lower CO 2 emissions. In the case of Class 7 and 8 tractors and our gram/ton
- mile metric, reductions in mass are reflected both in less mass moved through the drive cycle (the numerator) and greater payload (the denominator). We adjust the payload based on vehicle mass reductions because we estimat e that approximately one third of the time the amount of freight loaded in a trailer is limited not by volume in the trailer but by the total gross vehicle weight rating of the tractor. By reducing the mass of the tractor the mass of the freight loaded in the vehicle can go up. Based on this general approach, it can be estimated that for every

1,200 pounds in mass reduction across all Class 7 and 8 tr actors on the road, that total vehicle miles traveled, and therefore trucks on the road, could be reduced b y one percent. Without the use of a per ton
- mile metric it would not be clear or straightforward for the agencies to reflect the benefits of mass reduction from large freight carryi ng vehicles that are often limited in the freight they carry by the gross vehicle weight rating of the vehicle . There was strong consensus in the public comments for adopting the proposed metrics for tractors.******* **E.O. 12866 Review**

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93 of (c) Vehicle Aerodynamic Assessment Th e aerod ynamic drag of a vehicle is determined by the vehicle’s coefficient of drag (Cd), frontal area, air density and speed. As noted in the NPRM, quantifying truck aerod ynamics as an input to the GEM presents technical challenges because of the prolifer ation of vehicle configurations, the lack of a clearly preferable standardized test method, and subtle variations in measured aerodynamic values among various test procedures. Class 7 and 8 tractor aerodynamics are currently developed b y manufacturer s using a range of techniques, including wind tunnel testing, computational fluid dy namics, and constant speed tests. Consistent with our discussion at proposal, we believe a broad approach allowing manufacturers to use these multip le different test procedures to demonstrate aerodynamic performance of its tractor fleet is appropriate given that no single test procedure is superior in all aspects to other approaches. Allowing manufacturers to use multiple test procedures and modeling coupled with good engineering judgment to determine aerod ynamic performance is consistent with the current approach used in determining representative road load forces for light
- dut y vehicle testing (40 CFR 86.129
- 00(e)(1)). However, we also recognize the need for consistency and a level playing field in evaluating aerodynamic performance. The agencies are retaining an aerodyn amic bin structure for the final rulemaking, but are adjusting the method used to determine the bins. To address the consistency and level playing field concerns , NHTSA and EPA proposed that manufacturers use a two
part screening approach for determining the aerodynamic inputs to the GEM. The first part would have required the manufacturers to assign each vehicle aerodynami c configuration based on descriptions of vehicle characteristics to one of five aerodynamics bins created b y EPA and NHTSA. The proposed assignment b y bin would have fixed (by rule) the aerodynamic characteristics of the vehicle. However, the agencies, while working with industry , concluded for the final rulemaking that an approach which identified a reference aerody namic test method and a procedure to align results from other aerodynamic test procedures with the reference method is a simpler, more accurate approach than deciphering written descriptions of aerodynamic components. Therefore, we are finalizing an approach, as described in Section V.B.3.d and §1037.501 , which uses an enhanced coastdown procedure as a reference method and defines a process for manufacturers to align drag results from each of their own test methods to the reference method results. Manufacturers will be able to use any aerod ynamic evaluation method in demonstrating a vehicle’s aerodyn amic performance as long as the me thod is aligned to the reference method. The results from the aerod ynamic testing will be the single determining factor for aerodynamic bin assignments. EPA and NHTSA recognize that wind conditions, most notably wind direction, have a greater impact on real world CO 2 emissions and fuel consumption of heav y - dut y******* **E.O. 12866 Review**

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94 of trucks than of light
- duty

vehicles. As noted in the NAS report, 83 the wind average drag coefficient is about 15 percent higher than the zero degree coefficient of drag. In addition, the agencies received comments that supported the use of wind averaged drag results for the aerodynam ic determination. The agencies considered finalizing the use of a wind averaged drag coefficient in this regulatory program, but ultimately

decided to finalize drag values which represent zero yaw ( i.e., representing wind from directly in front of the vehicle, not from the side) instead. We are taking this approach recognizing that the reference method is coastdown testing which is not capable of determining wi nd averaged yaw. Wind tunnels are currently the only tool which can accurately assess the influence of wind speed and direction on a vehicle ’s aerod ynamic performance. The agencies recognize, as NAS did, that the results of using the zero yaw app roach may result in fuel consumption predictions that are offset slightly from real world performance levels, not unlike the offset we see today between fuel econom y test results in the CAFE program and actual fuel economy performance observed in
- use. We b elieve this approach will not impact overall technology effectiveness or change the kinds of technology decisions made b y the tractor manufacturers in developing equipment to meet our final standards. However, the agencies are adopting provisions which al low manufacturers to g enerate credit s reflecting performance of technologies which improve the aerodynamic performance in crosswind conditions, similar to those experienced b y vehicles in use through innovative technologies, as described in Section IV. The agencies are adopting an approach for this final action where the manufacturer would determine a tractor’s aerod yn amic drag force using their own aerod ynamic assessment tools and correlating the results back to the reference aero dy namic test method of enhanced coastdown testing . The manufacturer determine s the appropriate predefined aerodynamic bin based on the correlated test results and then input s the predefined Cd value into the GEM. Coefficient of drag and frontal area of the tractor - trailer combination go hand
- in
- hand to determine the force required to overcome aerod ynamic drag. The agencies proposed that the Cd value would be a GEM input derived b y the manufacturer and that the agencies would specify the vehicle ’s frontal area for each regulatory

subcategory . The agencies sought and received comment recommending an alternate approach where the aerody namic input tables (as shown in Table II
- 7 and Table II
- 8 ) represent the drag force as defined as Cd multiplied by the frontal area. Because both approaches are essentially equivalent and the use of CdA more directly relates back to the aerody namic testing, the agencies are finalizing the use of CdA as recommended b y manufacturers. The agencies are fin alizing aerod ynamic technology bins which divide the wide spectrum of tractor aerody namics into five bins (i.e., categories) for high roof tractors
. The first high roof category , Bin I, was designed to represent tractor bodies which prioritize appearance or special dut y capabilities over aerodynamics. The se Bin I trucks incorporate few, if an y, aerod ynamic features and may have several features which detract from aerodynamics, such as bug deflectors, custom sunshades, B
- pillar exhaust stacks, and others. The second high roof aerodyn amics category is Bin II which roughl y represents the aerod ynam ic performance of the average new tractor sold today . The
83 See 2010 NAS Report, Note **24** , Finding 2
- 4 on pag e 39.******* **E.O. 12866 Review**

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95 of agencies developed this bin to incorporate c onventional tractors which capitalize on a generall y aerod yn am ic shape and avoid classic features which increase drag. High roof tractors within Bin III build on the basic aerodyn amics of Bin II tractors with added components to reduce drag in the most significant areas on the tractor, such as integral roof fairings , side extending gap reducers, fuel tank fairings, and streamlined grill/hood/mirrors/bumpers , similar to SmartWay trucks today . The Bin IV aerod ynamic category for high roof tractors builds upon the Bin III tractor body with additional aerod ynamic treatm ents such as underbod y airflow treatment, down exhaust, and lowered ride height , among other technologies
. And finally , Bin V tractors incorporate advanced technologies which are currentl y in the prototype stage of development, such as advanced gap reduct ion, rearview cameras to replace mirrors, wheel s ys tem streamlining, and advanced body designs. The agencies had proposed five aerodynamic bins for each tractor regulatory subcategory . The agencies received comments from ATA , EMA/TMA , and Volvo indicating that this approach was not consistent with the aerodynamics of low and mid roof tractors. High roof tractors are consistently paired with box trailer designs, and therefore manufacturers can design the tractor aerody namics as a tracto r - trailer unit and target specific areas like the gap between the tractor and trailer. In addition, the high roof tractors tend to spend more time at high speed operation which increases the impact of aerod ynamics on fuel consumption and GHG emissions. O n the other hand, low and mid roof tractors are designed to pull variable trailer loads and shapes. They may pull trailers such as flat bed, low bo y, tankers, or bulk carriers. The loads on flat bed trailers can range from rectangular cartons with tarps, to a single roll of steel, to a front loader. Due to these variables, manufacturers do not design unique low and mid roof tractor aerod ynamics but instead use derivatives from their high roof tractor designs. The aerod ynamic improvements to the bumper, hood, windshield, mirrors, and doors are developed for the high roof tractor application and then carried over into the low and mid roof applications. As mentioned above, the types of designs that would move high roof tractors from a Bin III to Bins IV an d V include features such as gap reducers and integral roof fairings which would not be appropriate on low and mid roof tractors. The agencies considered and largel y agree with the comments provided by stakeholders and are finalizing only

two aerody

namic bins for low and mid roof tractors. The agencies are reducing the number of bins to reflect the actual range of aerodynamic technologies effective in low and mid roof tractor applications. Thus, the agencies are differentiating the aerodyn amic performanc e for low and mid roof applications into two bins

– conventional and aerodynamic. 84 For high roof combination tractor compliance determination, a manufacturer would use the aerodynamic results determined through testing to establish the appropriate bin. Th e manufacturer would then input into GEM the Cd value specified for each bin as defined in Table II
- 7 and Table II
- 8 . For example, if a manufact urer tests a Class 8 sleeper cab high roof tractor and the test produces a CdA value of 6.0, then the

84 As explained in S ection IV, there are no ABT implications to this change from proposal, since all combination tractors are considered to be a single averaging set for ABT purposes.******* **E.O. 12866 Review**

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96 of manufacturer would assign this tractor to the Class 8 Sleeper Cab High Roof Bin III. The manufacturer would then use the Cd value of 0. 60 as the input to GEM. The Cd values in Table II
- 7 and Table II
- 8 differ from proposal based on a change in the reference method (enhanced coastdown procedure) and additional testing conducted b y EPA. Details of the test program and results are included in RIA Chapter 2. 5.1.4
. **Table II**  **- 7**  **: Aerodynamic Input Definitions to GEM for High Roof Tractors**

Class 7 Class 8 Day Cab Day Cab Sleeper Cab High Roof High Roof High Roof Aerod ynamic Test Results (CdA in m 2 ) Bin I ≥ 8.0 ≥ 8.0 ≥ 7. 6 Bin II 7.1
- 7.9 7.1
- 7.9 6. 7
- 7. 5 Bin III 6.2
- 7.0 6.2
- 7.0 5. 8
- 6. 6 Bin IV 5.6
- 6.1 5.6
- 6.1 5. 2
- 5. 7 Bin V ≤ 5.5 ≤ 5.5 ≤ 5.1 Aerod ynamic Input to GEM (Cd) Bin I 0. 7 9 0.7 9 0. 7 5 Bin II 0. 7 2 0.7 2 0. 6 8 Bin III 0. 6 3 0.6 3 0. 60 Bin IV 0. 5 6 0.5 6 0. 5 2 Bin V 0. 5 1 0.5 1 0. 4 7 The CdA v alues in Table II
- 8 are based on testing using the enhanced coastdown test procedures adopted for the final rulemaking, which include s aerody namic assessment of the low and mid roof tractor s without a trailer. The removal of the trailer significantly reduces the CdA value o f mid roof tractors with tanker trailers because of the poor aerod ynamic performance of the tanker trailer. The agencies developed the Cd input for each of the low and mid roof tractor bins to represent the Cd of the tractor, its frontal area, and the imp a ct of the Cd value due to the trailer such that the GEM value is representative of a tractor
- trailer combination, as it is for the high roof tractors.******* **E.O. 12866 Review**

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97 of **Table II**  **- 8**  **: Aerodynamic Input Definitions to GEM for Low and Mid Roof Tractors**  Class 7 Class 8 Day Cab Day Cab Sleeper Cab Low Roof Mid Roof Low Roof Mid Roof Low Roof Mid Roof Aerod ynamic Test Results (CdA in m 2 ) Bin I ≥ 5.1 ≥ 5.6 ≥ 5.1 ≥ 5.6 ≥ 5.1 ≥ 5.6 Bin II ≤ 5.0 ≤ 5.5 ≤ 5.0 ≤ 5.5 ≤ 5.0 ≤ 5.5 Aerod ynamic Input to GEM (Cd) Bin I 0.77 0.87 0.77 0.87 0.77 0.87 Bin II 0.71 0.82 0.71 0.82 0.71 0.82 (d ) Tire Rolling Resistance Assessment NHTSA and EPA are finalizing as proposed that the tractor’s tire rolling resistance input to the GEM be determined b y either the tire manufacturer or tractor manufacturer using the test method adopted by the International Organization for Standardization, I SO 28580:2009. 85 The agencies believe the ISO test procedure is appropriate to propose for this pro gram because the procedure is the same one used by NHTSA in its fuel efficiency tire labeling program 86 and is consistent with the testing direction being taken b y the tire industry both in the United States and Europe. The rolling resistance from this tes t would be used to specify the rolling resistance of each tire on the steer and drive axle of the vehicle. The results would be expressed as a rolling resistance coefficient ( RR C ) and measured as kilogram per metric ton (kg/metric ton). The agencies are finalizing as proposed that three tire samples within each tire model be tested three times each to account for some of the production variability and the average of the nine tests would be the rolling resistance coefficient for the tire. The GEM will use the steer and drive tire rolling resistance inputs and distribute 15 percent of the gross weight of the tractor and trailer to the steer axle, 42.5 percent to the drive axles, and 42.5 percent to the trailer axles. 87 The trailer tires’ rolling resistance is prescribed by the agencies as part of the standardized trailer used for demonstrating compliance at 6 kg/metric ton, which was the average trailer tire rolling resistance measured during the SmartWay

tire testing. 88 EPA and NHTSA conducted additional evaluation testing on HD trucks tires used for tractors and vocational vehicles. The agencies also received several commenters on
85 ISO, 2009, Passenger Car, Truck, and Bus Tyres

– Methods of Meas uring Rolling Resistance

– Single Point Test and Correlation of Measurement Results: ISO 28580:2009(E), First Edition, 2009
- 07
- 01 86 NHTSA, 2009. “NHTSA Tire Fuel Efficiency Consumer Information Program Development: Phase 1

– Evaluation of Laboratory Test Protocols.” DOT HS 811 119. June. (www.regulations.gov, Docket ID: NHTSA
- 2008
- 0121
- 0019). 87 This distribution is equivalent to the federal over
- axle weight limits for an 80,000 GVWR 5
- axle tractor
trailer: 12,000 pounds over the steer axle, 34,000 pounds o ver the tandem drive axles (17,000 pounds per axle) and 34,000 pounds over the tandem trailer axles (17,000 pounds per axle). 88 US E nvironmental Protection Agency. SmartWay Transport Partnership July 2010 e
- update accessed July 16, 2010, from http://www.epa.gov/smartwaylogistics/newsroom/documents/e
- update
- july
- 10.pdf******* **E.O. 12866 Review**

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98 of the suitability

of low rolling resistance tires for various HD vehicle applicatio ns. The summary of the agencies finding and a response to issues raised by commenters is presented in Section II.D(1)(a). (e) Weight Reduction Assessment In the NPRM, the agencies proposed that the tractor standards reflect improved CO 2 emissions and fuel consumption performance of a 400 pound weight reduction in Class 7 and 8 tractors through the substitution of single wide tires and light
- weight wheels for dual tires and steel wheels. This approach was taken since there is a large variation in the baseline weight among trucks that perform roughl y similar functions with roughl y similar configurations . Because of this , the only effective way to quantify

the exact CO 2 and fuel consumption benefit of mass reduction using GEM is to estimate baselin e weights for specific components that can be replaced with light weight components . I f the weight reduction is specified for light weight versions of specific components, then both the baseline and weight differentials for these are readily quantifiable and well
- understood. Li ghtweight wheels are commercially available as are single wide tires and thus data on the weight reductions attributable to these two approaches ar e readil y available. The agencies received comments on this approach from Volvo, ATA, MEMA, Navistar, American Chemistry Council, the Auto Policy Center, Iron and Steel Institute, Arvin Meritor, Aluminum Association, and environmental groups and NGOs. V olvo and ATA stated that not all fleets can use single wide tires and if this is the case the 400 pound weight reduction target cannot be met. Volvo stated that without the use of single wide drive tires, a 6x4 tractor will have a maximum weight reductio n of 300 pounds if the customer selects all ten wheels to be outfitted with light weight aluminum wheels. A number of additional commenters

– including American Chemistry Council, The Auto Policy Center, Iron and Steel Institute, Aluminum Association, Ar vin Meritor, MEMA, Navistar, Volvo, and environmental and nonprofit groups

– stated that manufacturers should be allowed to use additional light weight components in order to meet the tractor fuel consumption and CO 2 emissions standards. These groups stat ed that weight reductions should not be limited to wheels and tires. They asked that cab doors, cab sides and backs, cab underbodies, frame rails, cross members, clutch housings, transmission cases, axle differential carrier cases, brake drums, and other components be allowed to be replaced with light
- weight versions. Materials suggested for substitution included aluminum, light
- weight aluminum, high strength steel, and plastic composites. The American Iron and Steel Institute stated there are opportuni ties to reduce mass by replacing mild steel

– which currently dominates the heavy
- dut y industry

– with high strength steel. In addition, The American Auto Policy Center asked that manufacturers be allowed to use materials other than aluminum and high strength steel to comply with the regulations. DTNA asked that weight reduction due to engine downsizing be allowed to receive credit. Volvo requested that weight reductions due to changes in axle configuration be credited. They used the example of a cust omer selecting a 4 X 2 over a******* **E.O. 12866 Review**

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99 of 6 X 4 axle tractor. In this case, they assert there would be a 1,000 pound weight savings from removing an axle. As proposed, man y of the material substitutions could have been considered as innovative technologies and hence eligible for off cycle credits (so that the commenters overstated that these technologies were ‘disallowed’). Nonetheless
. i n response to the above summarized comments, the agencies evaluated whether additional materials and components could be used directly for compliance with the tractor weight reduction through the primary

program. The agencies reviewed comments and data received in response to the NPRM and additional studies cited by commenters. A summary of this review is provided in the following paragraphs. TIAX, in their report to the NAS, cited information from Alcoa identifying several mass reduction opportunities from material substitution in the tractor cab components which were similar to the ones identified by the Aluminum Asso ciation in their comments to this rulemaking. 89 TIAX included studies submitted by Alcoa showing the potential to reduce the weight of a tractor
- trailer combination by 3,500 to 4,500 pounds. 90 Inaddition, The U.S. Department of Energy has several projects underway to improve the freight efficiency of Class 8 trucks which provide relevant data: 91 DOE reviewed prospective lightweighting alternative materials and found that aluminum has a potential to reduce mass by 40 to 60 percent, which is in line with the estimates of mass reductions of various components provided by Alcoa, and b y the Aluminum Association in their comments and as cited in the TIAX report. These combined studies, comments, and additional data provided information on specific components that could be replaced with aluminum components. With regard to high strength steel, the Iron and Steel Institute found that the use of high strength steel and redesign can reduce the weight of light
- duty trucks by 25 percent. 92 Approximately 10 per cent of this reduction results from material substitution and 15 percent from vehicle re
- design. While this study evaluated light
- duty

trucks, the agencies believe that a similar reduction could be achieved in heav y - dut y trucks since the reductions from m aterial substitution would likely be similar in heavy
- trucks as in light
trucks. U.S. DOE, in the report noted above, identified opportunities to reduce mass b y 10 percent through high strength steel. 93 This study was also for light
- dut y vehicles. The age ncies considered other materials such as plastic composites and magnesium substitutes but were not able to obtain weights for specific components made
89 TIAX, LLC. “Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles,” Novembe r 19, 2009. Pages 4
- 62 through 4
- 64. 90 Alcoa. “Improving Sustainability of Transport: Aluminum is Part of the Solution.” 2009 91 Schutte, Carol. U.S. Department of Energy, Vehicle Technologies Program. “Losing Weight

– an enabler for a Systems Level Tec hnology Development, Integration, and Demonstration for Efficient Class 8 Trucks (SuperTruck) and Advanced Technology Pow ertrains for Light
- Duty Vehicles” 92 American Iron and Steel Institute. “A Cost Benefit Analysis Report to the North American Steel I ndustry on Improved Materials and Powertrain Architectures for 21st Century Trucks.” 93 Schutte, Carol. U.S. Department of Energy, Vehicle Technologies Program. “Losing Weight

– an enabler for a Systems Level Technology Development, Integration, and Demon stration for Efficient Class 8 Trucks (SuperTruck) and Advanced Technology Pow ertrains for Light
- Duty Vehicles”******* **E.O. 12866 Review**

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100 of from these materials. We have therefore not included components made from these materials as possible su

bstitutes in the primary

program, but they

may be considered through the innovative technology /off
- cycle credits provision . We may consider including these materials as part of the primary compliance option in a subsequent regulation if data become avail able. Based on this analy sis, the agencies developed an expanded list of weight reduction opportunities for the final rulemaking, as listed in Table II
- 9 . The list includes additional components, but not materials, from those proposed in the NPRM. For high strength steel, the weight reduction value is equal to 10 percent of the presumed baseline component weight, as the agencies used a conservative value based on the DOE report. We recognize that there may be additional potential for weight reduction in new high strength steel components which combine the reduction due to the material substitution along with improvements in redesign, as evidenced by the studies done for light
- duty vehicles. In the development of the high strength steel component weights, we are only assuming a reduction from material substitution and no weight reduction from redesign, since we do not have an y data specific to r edesign of heav y - dut y components nor do we have a regulatory

mechanism to differentiate between material substitution and improved design. We are finalizing for wheels that both aluminum and light weight aluminum are eligible to be used as light - weight materials. A luminum , but not light
- weight aluminum, can be used as a light
- weight material for other components. The reason for this is data was available for light weight aluminum for wheels but was not available for other components. The agencies received comments on the proposal from the American Chemistry Council highlighting the role of plastics and composites in heavy
- duty vehicles. As they stated, composites can be low density while having high strength and are currentl y used in app lications such as oil pans and buses. The DOE mass reduction program demonstrated for heav y vehicles proof of concept designs for h ybrid composite doors with an overall mass savings of 40 percent; 30 percent mass reduction of a hood sy stem with carbon fib er sheet molding compound; 50 percent mass reduction from composite tie rods, trailing arms, and axles; and superplastically formed aluminum body

panels. 94 While the agencies recognize these opportunities, we do not believe the technologies have advanced f

ar enough to quantify

the benefits of these materials because they are very dependent on the actual composite material. The agencies may consider such lightweighting opportunities in future actions, but are not including them as part of this primary progr am. Manufacturers which opt to pursue composite and plastic material substitutions may

pursue credits through the innovative technology provisions. With regard to Volvo’s request that manufacturers be allowed to receive credit for trucks with fewer axles, the agencies recognize that vehicle options exist today which have less mass than other options. However, we believe the decisions to add or subtract such components will be made based on the intended use of the vehicle and not based on

94 Schutte, Carol. U.S. Department of Energy, Vehicle Technologies Program. “Losing Weight

– an enabler for a Systems Level Technology Develo pment, Integration, and Demonstration for Efficient Class 8 Trucks (SuperTruck) and Advanced Technology Pow ertrains for Light
- Duty Vehicles”******* **E.O. 12866 Review**

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101 of a crediting f

or the mass difference in our compliance program. It is not our intention to create a tradeoff between the right vehicle to serve a need (e.g. one with more or fewer axles) and compliance with our final standards. Therefore, we are not including pro visions to credit (or penalize) vehicle performance based on the subtraction (or addition) of specific vehicle components. Table II
- 9 provides weight reduction value s for different components and materials. **Table II**  **- 9**  **: Weight**  **Reduction Values** Weight Reduction Technology Weight Reduction ( lb per tire/wheel) Single Wide Drive Tire with ..
. Steel Wheel 84

Aluminum Wheel 139 Li ght Weight Aluminum Wheel 147 Steer Tire or Dual Wide Drive Tire with ... High Strength Steel

Wheel 8 Aluminum Wheel 21 Li ght Weight Aluminum Wheel 30 Weight Reduction Technolog ies Aluminum Weight Reduction (lb.) High Strength Steel

Weight Reduction (lb.) Door 20 6 Roof 60 18 Cab rear wall 49 16 Cab floor 56 18 Hood Support Structure 15 3 Fairing Support Structure 35 6 Instrument Panel Support Structure 5 1 Brake Drums

– Drive (4) 140 11 Brake Drums

– Non Drive (2) 60 8 Frame Rails 440 87 Crossmember
- Cab 15 5 Crossmember

– Suspension 25 6 Crossmember

– Non Suspension (3) 15 5 Fifth Wheel 100 25 Radiator Support 20 6 Fuel Tank Support Structure 40 12 Steps 35 6******* **E.O. 12866 Review**

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102 of Weight Reduction Technology Weight Reduction ( lb per tire/wheel) Bumper 33 10 Shackles 10 3 Front Axle 60 15 Suspension Brackets, Hangers 100 30 Transmission Case 50 12 Clutch Housing 40 10 Drive Axle Hubs (8) 160 4 Non Drive Front Hubs (2) 40 5 Driveshaft 20 5 Transmission/Clutch Shift Levers 20 4 EPA and NHTSA are specifying the baseline vehicle weight for each regulatory vehicle subcategory

(including the tires, wheels, frame, and cab components) in GEM in aggregate based on weight of vehicles used in EPA’s aerody namic test program, but allow manufacturers to specify the use of light
- weight components. GEM then quantifies the weight reductions based on the pre
- determined weight of the baseline component minus the pre
- determined weight of the component made from light
- weight material. Manufacturers cannot specify the weight of the light
- weight component themselves, only the material used in the substitute component. The agencies assume the baseline wheel and tire configuration contains dual tires with steel wheels, along with steel frame and cab components, because these represent the vast majority of new vehicle configurations today . The weight reduction due to replacement of components with light weight versions will be reflected partially in the payload tons and partiall y in reducing the overall weight of the vehicle run in GEM. The specified payl oad in GEM will be set to the prescribed payload plus one third of the weight reduction amount to recognize that approximately

one third of the truck miles are travelled at maximum payload, as discussed below in the payload discussion. The other two third s of the weight reduction will be subtracted from the overall vehicle weight prescribed in GEM. The agencies continue to believe that the 400 pound weight target is appropriate for setting the final combination tractor CO 2 emissions and fuel consumption st andards. The agencies agree with the commenter that 400 pounds of weight reduction without the use of single wide tires may not be achievable for all tractor configurations. The agencies have extended the list of weight reduction components in order to provide the manufacturers with additional means to comply with the combination tractors and to further encourage reductions in vehicle weight. The agencies considered increasing the target value beyond 400 pounds given the additional reduction potential identified in the expanded technology

list ; however, lacking information on the capacity for the industry to change to these lightweight components across the board b y the 2014 model year , we have decided to maintain the 400 pound target. The agencies intend to continue to study the potential for additional weight reductions in our future work c onsidering a second phase of vehicle fuel efficiency and GHG regulations. Inthe context of the current rulemaking for HD fuel consumption and GHG standards, one would expect that******* **E.O. 12866 Review**

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103 of reducing the weight of medium
- duty trucks similarly

would, if any

thin g, have a positive impact on safet y. However, given the large difference in weight between light
- dut y and medium
- duty vehicles , and even larger difference between light
- dut y vehicles and heav y duty vehicles with loads, the agencies believe that the impact of weight reductions of medium
- and heav y - duty vehicles would not have a noticeable impact on safety for any of these classes of vehicles. 95 (f ) Extended Idle Reduction Technology Assessment Extended idling from Class 8 heav y - dut y long haul combination tractors contributes to significant CO 2 emissions and fuel consumption in the United States. The Federal Motor Carrier Safety Administration regulations require a certain amount of driver rest for a corresponding period of driving hours. 96 Extended idle occurs when Class 8 long haul drivers rest in the sleeper cab compartment during rest periods as drivers find it both convenient and less expensive to rest in the tr actor cab itself than to pull off the road and find accommodations. 97 During this rest period a driver will idle the tr actor engine in order to provide heating or cooling, or to run on
- board appliances. In some cases the engine can idle in excess of 10 hours. During this period, the engine will consume approximately 0.8 gallons of fuel and emit over 8,000 grams of CO 2 per hour. An average tractor engine can consume 8 gallons of fuel and emit over 80,000 grams of CO 2 during overnight idling in such a case. Idling reduction technologies (IRT) are available to all ow for driver comfort while reducing fuel consumptions and CO 2 emissions. Auxiliary power units, fuel operated heaters, battery

supplied air conditioning, and thermal storage s ys tems are among the technologies available today . The agencies are adopting a provision for use of extended idle reduction technology as an input to the GEM for Class 8 sleeper cabs. As discussed further in Section III, if a manufacturer wishes to receive credit for using IRT to meet the standard, then an automatic main engine shut off must be programmed and enabled, such that engine shutdown occurs after 5 minutes of idling, to help ensure the reductions are realized in
- use. A discussion of the provisions the agencies are adopting for allowing an override of this automatic shutdown can be found in RIA Chapter 2. As with all of the technology inputs discussed in this section, the agencies are not mandating the use of idle reductions or idle shutdown, but rather allowing their use as one part of a suite of technologies feasible for re ducing fuel consumption and meeting the final standards and using these technologies as the inputs to the GEM. The default value (5 g CO 2 /ton
- mile or 0.5 gal/1,000 ton
- mile) for the use of automatic engine shutdown (AES) with idle reduction technologies w as determined as the difference between a baseline main engine with idle fuel consumption of 0.8 gallons per hour that idles 1,800 hours and travels 125,000 miles per year, and a diesel auxiliary power unit operating in lieu of main engine during those sam e idling hours. The agencies received various comments from ACEEE and MEMA regarding the assumptions used to derive the idle reduction value.
95 For more information on the estimated safety effects of this rule, see Chapter 9 of the RIA. 96 Federal Motor Carrier Safety Administration. Hours of Service Regulations. Last accessed on August 2, 2010 at http://www.fmcsa.dot.gov/rules
- regulations/topics/hos/ 97 The agen cies note that some sleeper cabs may be classified as vocational tractors and therefore are exp ected to primarily travel locally and would not benefit from an idle reduction technology.******* **E.O. 12866 Review**

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104 of ACEEE argued that the agencies should us e a fuel consumption rate of 0.47 gallon/hour for main engine idling based on a paper written b y Kahn. MEMA argued that the agencies should use a main engine idling fuel consumption rate of 0.87 gal/hr , which is the midpoint of a DOE calculator r eporting fuel consumption rate s from 0.64 to 1.15 gal/hr at idling conditions , and between 800 and 1200 rpm with the air conditioning on and off , respectivel y . The agencies respectfull y disagree with the 0.47 gal/hr recommendation because the same paper b y Kahn shows that while idling fuel consumption is 0.47 gal/hr on average at 600 rpm, CO 2 emissions increase by 25 percent with A/C on at 600 rpm, and increase b y 165 percent between 600 rpm and 1 , 100 rpm with A/C on. 98 MEMA recommend ed using 2,500 hours per ye ar for APU operation
. Th ey cite d the SmartWay

website which uses 2,400 hours per year (8 hours per day and 300 day s per y ear). Also, they cite d an Argonne study

which assumed 7 hours per day and 303 day s per ye ar, which equals 2,121 hours per y ear. Lastl y, they refer red to the FMCSA 2010 driver guidelines which reduce the number of hours driven per day by one to two hours, which would lead to 2,650 to 2,900 hours per ye ar. The agencies reviewed other studies to quantify

idling operations, as discussed in greater detail in RIA S ection 2.5.4.2 , and believe that the entiret y of the research does not support a change from the proposed calculation. Therefore, the agencies are finalizing the calculation as proposed. Additional details regarding the comments , calculations , and agency decisions are included in RIA Section 2.5.4.2. The agencies are adopting a provision to allow manufacturers to provide an AES sy stem which is active for only a portion of a vehicle’s life. In this case, a discounted idle reduction value would be entered into GEM. A discussion of the calculation of a discounted IRT credit can be found in Section III. Additional details on the emission and fuel consumption reduction values are included in RIA Section 2.5.4.2. (g ) Vehicle Speed Limiters The NPRM pr oposed to allow combination tractors that use vehicle speed limiters (VSL) to include the maximum governed speed value as an input to the GEM for purposes of determining compliance with the vehicle standards. The agencies also proposed not to assume the use of a mandatory vehicle speed limiter because of concerns about how to set a realistic application rate that avoids unintended consequences. See 75 FR at 74223. Governing the top speed of a vehicle can reduce fuel c onsumption and GHG emissions, be cause f uel consumption and CO 2 emissions increase proportional ly to the square of vehicle speed
. 100 Li miting the speed of a vehicle reduces the fuel consumed, which in turn reduces the amount of CO 2 emitted
. The specific input to the GEM would be the maximum governed speed limit of the VSLthat is programmed into the powertrain control module (PCM). The agencies stressed in the NPRM that in order to obtain a benefit in the GEM , a manufacturer must preset the limiter in such a way th at the setting will not be “ capable of being easil y overridden b y the fleet or the owner .” If

98 See Gaines, L., A. Vyas, J.Andreson. “Estimation of Fuel Used by Idling Commercial Trucks,” Page 9 (2006) 100 S ee 2010 NAS Report, Note **24** , Page 28. Road Load Force Equation defines the aerodynamic portion of the road load as 1⁄2 * Coefficient of Drag * Front al Area * air density * vehicle speed squared.******* **E.O. 12866 Review**

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105 of the top speed could be easily overridden, the fuel consumption/CO 2 benefits of the VSL might not be realized, and the agencies did not want to allow the technolo gy to be used for compliance if the technology could be disabled easily

and the real world benefits not achieved. Both the Center for Biological Diversit y (CBD) and New York State Department of Transportation and Environmental Conservation commented that the application of speed limiters should be used to set the tractor standards. 101 CBD urged the agencies to reconsider the position and adopt a speed limitation technology
. NY State commented that the technologies are cost effective, reduce emissions, and appear to be generall y acceptable to the trucking industry . They continued to say

that the vehicle speed limit could be set without compromising operational logistics. Many commenters (Cummins, Daimler, EMA/TMA, ATA, AAPC, NADA) supported the use of VSL s as an input to the GEM , but requested clarification of what the specific requirements would be to ensure the VSL setting would not be capable of being easily overridden. Cummins and Daimler re quested that the final rules explicitly allow vehicle manufacturers to access and adjust the VSL control feature for setting the maximum governed speed, arguing that the diverse needs of the commercial vehicle indus try warrant flexibility in electronic control features , and that otherwise supply chain issues 102 may

result from the use of VSLs. NADA and EMA/TMA also requested that VSL s have override features and be adjustable, citing various needs for flexibility by the fleets. EMA/TMA and ATA requested that VSLs be adjustable downward by fleets in order to obtain greater benefit in GEM, if company policies change or if a subsequent vehicle owner needs a different VSL setting. EMA/TMA stated that the agencies should prohibit tampering with VSL s, and both EMA and TRALA requested more information on how the agencies intended to address tampering with VSLs. In addition to features governing the maximum vehicle speed, commenters requested adding other programmable flexibilities to mitigate potentia l drawbacks to VSL s. Cummins, DTNA , and EMA/TMA requested that a programmable “soft top” speed be added to PCMs which would allow a vehicle to exceed the speed limit setting governed b y a VSLfor a short period of time. A “soft top” feature could be used for a limited duration in order to maneuver and pass other on
- road vehicles at speeds greater than that governed b y the VSL
. The commenters argued this was important for vehicle passing and safet y - related situations where, without a soft top feature, it c ould be possible for speed limited trucks to obstruct other vehicles on the road and cause severe road congestion. ATA and EMA/TMA also requested that manufacturers be allowed to program a mileage based expiration into the VSL control feature , in order to preserve the value of

101 One commenter mistakenly thought that the agencies were rejecting consideration of VSLs due to perceived jurisdictional obstacles. In fact, both the CAA and EISA allow consideration of VSL technology and th e agencies considered the appropriateness of basing standards on performance of the technology. 102 Commenters stated that OEMs need access for setting appropriate trims for managing the VSL , otherwise significant supply chain issues could result such as parts shortages caused by the need for unique speed governed PCMs.******* **E.O. 12866 Review**

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106 of vehicles for second owner s who may require operation at higher speeds. ATA further commented that manufacturers should be allowed to account for additional GEM input benefits if the speed governor is reprogrammed to a lower speed within the useful life of the vehicle. After carefully considering the comments, the agencies have decided, for th e s e final rule s , to retain most of the elements in the proposal. Manufacturers will be allowed to implement a fixed maximum governed vehicle s peed through a VSL feature and to use the maximum governed vehicle speed as an input to the GEM for certification. Also c onsistent with the proposal, the agencies are not premising the final standards on the use of VSL s . The comments received from stakeh olders did not address the agencies’ concerns discussed in the proposal, s pecifically the risk of requiring VSLin situations that are not appropriate from an ef ficiency perspective because it may lead to additional vehicle trips to deliver the same amount of freight. 103 The agencies continue to believe that we are not in a position to determine how many additional vehicles would benefit from the use of a VSL wi th a setting of less than 65 mph ( a VSLwith a speed set at or above 65 mph will show no CO 2 emissions or fuel consumption benefit on the drive cycles included in this program ) . We will monitor the industry ’s use of VSLin this program and may

consider using this technology in standard setting in the future. The agencies have decided to adopt commenters’ suggestions to allow adjustable lower limits that can be set and governed b y VS Ls independent of the one governing the maximum certified speed limit to provide the desired flexibility requested by

the trucking industry . We believe that this flexibility would not decrease the anticipated fuel consumption/CO 2 benefits of VSL s because the adjustable limits would be lower values. Issues identified b y the commenters including the ability to change delivery routes requiring lower governed speeds or when a fleet’s business practices change resulting in a desire for greater fuel consumption savings are not in conflict with the purpose and benefit of VSLs. As such, the agencies have decided to allow a manufacturer to install features for its fleet customers to set their own lower adjustable limits below the maximum VSLlimit specified by the agencies. However, the agencies have decided to not allow any

additional benefit in the GEM to a manufacturer for allowing a low er governed speed in
- use than the certified maximum limit for this first phase of the HD National Program because we can onl y be certain that the VSL will be at the maximum setting. Both agencies also agree that manufacturers can provide a “soft top” and expiration features to be programmed into PCMs to provide additional flexibility for fleet owners and so that fleets who purchase used vehicles have the abilit y to have different VSLpolicies than the original owner of the vehicle. Although the agencies considered limiting the soft top maximum level due to safety and fuel consumption/GHG benefit concerns, we have decided to allow the soft top maximum level to be set to any level higher than the maximum speed governed by the VSL . This approach will provid e drivers with the ability

to better navigate through traffic. However, the agencies are requiring that manufacturers providing a soft top feature must design the s ystem so it

103 See 75 FR at page 74223******* **E.O. 12866 Review**

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107 of cannot be modified b y the fleets and will not decrement the vehicle speed limit causing the vehicle to decelerate while the driver is operating a vehicle above the normal governed vehicle speed limit. For example, if a manufacturer designs a vehicle speed limiter that has a normal governed speed limiter setting of 62 mph, and a “sof t top” speed limiter value of 65 mph, the algorithm shall not cause the vehicle speed to decrement causing the vehicle to decelerate while the driver is operating the vehicle at a speed greater that 62 mph (between 62 and 65 mph). The agencies are concern ed that a forced deceleration when a driver is attempting to pass or maneuver could have an adverse impact on safet y. In using a soft top feature, a manufacturer will be required to provide to the agencies a functional description of the “soft top” control strategy including calibration values, the speed setting for both the hard limit and the soft top and the maximum time per day the control strategy

could allow the vehicle to operate at the “soft top” speed limit at the time of certification. This in formation will be used to derive a factor to discount the VSLinput used in the GEM to determine the fuel consumption and GHG emissions performance of the vehicle. The agencies also agree with comments that VSL s should be adjustable so as not to potentially limit a vehicle’s resale value. However, m anufacturers choosing th e option to override the VSL after a specified number of miles would be required to discount the benefit of the VSL relative to the tractor’s full lifetime miles. The VSLdi scount benefits for using soft
- top and expiration features must be calculated using Equation II
- 1
. 104 Additional details regarding the derivation of the discounted equation are included i n RIA Chapter 2
. The agencies are also requiring that any vehicle that has a “soft top” VSL to identify the use of the “soft top” VSL on the vehicle emissions label. **Equation II**  **- 1**  **: Discounted Vehicle Speed Limiter Equatio n**  VSLinput for GEM = Expiration Factor * [Soft Top Factor* Soft Top VSL + (1
- Soft

Top Factor) * VSL ] + (1
- Expiration Factor)*65 mph The agencies will require that the VSLalgorithm be designed to assure that over the useful life of the vehicle that the ve hicle will not operate in the soft top mode for more miles than would be expected based on the values used in Equation II
- 1 , as specified b y the expiration factor and the soft top factor. In addition, any time the cumulative percenta ge of operation in the soft top mode (based on miles) exceeds the maximum ratio that could occur at the full lifetime mileage, or at the expiration mileage if used, the algorithm must not allow the vehicle to exceed the VSL value. In this case, the soft to p feature remain disabled until the vehicle mileage reaches a point where the ratio no longer meets this condition
. In response to the comments about how the agencies will evaluate tampering, NHTSA and EPA have added a number of requirements in these final rules relating to the VSLcontrol feature. VSL control features should be designed so they cannot be easily overridden. M anufacture r s must ensure that the governed speed limit programmed into the VSL must also be verifiable through on
- board diagnostic scanning tools , and must
104 See §1037. 640******* **E.O. 12866 Review**

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108 of provide a description of the coding to identify the governed maximum speed limit and the expiration mileage both at the time of the initial vehicle certification and in
- use. The agencies believe both manufacturers and fleets shoul d work toward maintaining the integrit y of VSLs, and the agencies may conduct new
- vehicle and in
- use random audits to verify that inputs into GEM are accurate. The agencies are aware that some fleets/owners make changes to vehicles, such as installing di fferent diameter tires, changing the axle (final drive) ratio and transmission gearing, such that a vehicle could travel at speeds higher than the speed limited by its VSL . Vehicles subject to FMCSA requirements must be in compliance with 49 CFR § 393.82
. The requirements apply to s peedometer s and s tates as follows: Each bus, truck, and truck
- tractor must be equipped with a speedometer indicating vehicle speed in miles per hour and/or kilometers per hour. The speedometer must be accurate to within plus o r minus 8 km/hr (5 mph) at a speed of 80 km/hr (50 mph). To facilitate adjustments for component changes affecting vehicle speed, manufacturers should provide a fleet/owner with the means to do so unless the adjustments would affect the VSLsetting or oper ation
. DTNA and ATA additionally requested that the agencies ensure that an y VSL provisions adopted under the GHG emissions and fuel efficiency rule s align with existing NHTSA standards. T he agencies agree and note that there are no existing standards for a VSLoutside of this current rulemaking activity . However, NHTSA has announced its intent to publish a proposal in 2012 for a VSL. While both agencies have taken steps to avoid potential conflicts between the rulemaking being finalized today for fue l consumption and GHG emissions and the anticipated safet y rulemaking, different conclusions may

be reached in a safety
- based rulemaking on VSLs, particularly in the approach to specifying soft top parameters and VSLexpiration. (h ) Defined Vehicle Configurat ions in the GEM As discussed above, the agencies are adopting methodologies that manufacturers will use to quantify

the values input into the GEM for these factors affecting vehicle efficiency : Coefficient of Drag, Tire Rolling Resistance Coefficient , Weight Reduction, Vehicle Speed Limiter, and Extended I dle Reduction Technology . The other aspects of the vehicle configuration are fixed within the model and are not varied for the purpose of compliance. The defined inputs include the tractor
- trailer combination curb weight, payload, engine characteristics, and drivetrain for each vehicle t ype, and others
. (i ) Vehicle Drive Cycles The GEM simulation model uses various inputs to characterize a vehicle’s configuration (such as weight, aerod ynamics, and rolling resistance) and predicts how the vehicle would behave on the road when it follows a driving cycle (vehicle speed versus******* **E.O. 12866 Review**

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109 of time). As noted by

the 2010 NAS Report, 105 the choice of a drive cycle used in compliance testing has significant consequences on the technology that will be employed to achieve a standard as well as the ability of the technology

to achieve real world reductions in emissions and improvements in fuel consumption. Manufacturers naturally will design vehicles to ensure they satisfy regulatory

standards. An ill
- suited drive cycle for a regulatory

category could encourage GHG emissions and fuel consumption technologies which satisfy the test but do not achieve the same benefits in use. For example, requiring all truck s to use a constant speed highway drive cycle will drive significant aerodyn amic improvements. However, in the real world a combination tractor used for local delivery

may spend little time on the highway , reducing the benefits achieved b y this technology . In addition, the extra weight of the aerody namic fairings will actually

penalize the GHG and fuel consumption performance in urban driving and may reduce the freight carrying capability . The unique nature of the kinds of CO 2 emissions control and fuel c onsumption technology means that the same technology can be of benefit during some operation but cause a reduced benefit under other operation. 106 To maximize the GHG emissions and fuel consumption benefits and avoid unintended reductions in benefits, the drive cycle should focus on promoting technology that produces benefits during the primary operation modes of the application. Consequently , drive cycles used in GHG emissions and fuel consumption compliance testing should reasonabl y represent the primary actual use, notwithstanding that every vehicle has a different drive cycle in
- use. The agencies proposed a modified version of the California ARB Heav y Heav y duty Truck 5 Mode C ycl e 107 , using the basis of three of the cycles which best mirror Class 7 and 8 combination tractor driving patterns, based on information from EPA’s MOVES model
. 108 The key advantage of the California ARB 5 mode cycle is that it provides the flexibility

to use several different modes and weight the modes to fit s pecific vehicle application usage patterns. For the proposal, EPA anal yz ed the five cycles and found that some modifications to the cycles were required to allow sufficient flexibility in weightings. The agencies proposed the use of the Transient mode, as defined by California ARB, because it broadly covers urban driving. The agencies also proposed altered versions of the High Speed Cruise and Low Speed Cruise modes which reflected only constant speed cycles at 65 mph and 55 mph respectivel y. In the NPRM, the agencies proposed to use three cycles which were the ARB transient cycle, a 55 mph steady state cruise, and a 65 mph steady state cruise. The agencies received comment from NACAA recommending an increase in the high speed cruise cycle speed from the proposed value of 65 mph to 75 mph because trucks travel at higher speeds. The agencies anal yzed the urban and rural interstate truck

105 See 2010 NAS Report, Note **24** , Chapters 4 and 8. 106 This situation does not typically occur for heavy
- duty emission control technology designed to control criteria pollutants such as PM and NO X . 107 California Air Resources Board. Heavy Heavy
- duty Diesel Truck chassis dynamometer schedule, Transient Mode. Last accessed on August 2, 2010 at http://www.dieselnet.com/standards/cycles/hhddt.html 108 EPA’s MOVES (Motor Vehicle Emission Simulator). See http://www.epa.gov/otaq/models/moves/index.htm for additional information.******* **E.O. 12866 Review**

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110 of speed limits in each state to determine the national average truck speed limit. State interstate speed limits for trucks vary between 55 and 75 mph, depending on the state. 109 Based on this information, the national median truck spe ed limit is 65 mph. The agencies also anal yz ed the national average truck speed limit weighted by VMT for each state based on VMT data b y state from the Federal Highway Administration as described in RIA S ection 3.4.2. Based on this information, the nat ional average VMT
- weighted truck speed limit is 63 mph. The agencies continue to believe that the appropriate high speed cruise speed should be set at the national average truck speed limit to appropriately balance the evaluation of technologies such as a erody namics, but not overstate the benefits of these technologies. Therefore, the agencies are adopting as proposed a speed of 65 mph for the high speed cruise cycle. The agencies also received comments from Allison which disagreed with proposed drive cycles for combination tractors because the cycles did not account for external factors such as grades, wind, traffic condition, etc. Allison also believe s that the acceleration rates are too low. The agencies recognize that the proposed drive cycl es do not incorporate the external factors described b y Allison. Parallel to the approach used to evaluate light
- dut y vehicles, the drive cycles do not incorporate either grade or wind which can be difficult to simulate in chassis dy namometer cells. In the final rules, the agencies are defining an approach that manufacturers may take to evaluate their aerod ynamic packages in a wind
- averaged condition and use a modified Cd value in GEM. 110 Similarly , the agencies are adopting provisions for the innovative t echnology demonstration that allows for the use of on
- road testing which includes grades for technologies whose benefits are reflected with grade. Lastly , the agencies’ final drive cycles for highway

operation contain a constant speed, as proposed. The a cceleration and deceleration rates are only used to bring the vehicle to the cruising speed and the CO 2 emissions and fuel consumption from these portions of the drive cycle are not included in the composite emissions and fuel consumption results. The age ncies did not include the speed dithering, which is representative of actual driving and traffic conditions, in the proposed constant speed portion of the cycles because the dithering does not provide any additional distinction between technologies but onl y added complexity to the cycle. The agencies believe this approach is still appropriate for the final action. Allison referred the agencies to the Oak Ridge National L aboratory and SmartWay

program to review the amount of time long
- haul vehicles spend on the highway . They

believe the steady state highway speeds are overestimated. Data provided b y Allison indicates that day cabs spend only 14 percent of miles traveling at speeds greater than 60 mph. NHTSA and EPA recognize that there is a variation in t he amount of miles day

cabs travel under different operations. As described above, the agencies are adopting an approach where tractors which operate like vocational vehicles will be regulated as such in the HD program. Thus, these day cabs will have a drive cycle weighting representative of vocational vehicles with more weighting on the transient operation and less on the highway speed operation.

109 Governors Highway Safety Association. Speed Limit Laws May 2011. Last viewed on May 9, 2011 at http://www.ghsa.org/html/stateinfo/laws/speedlimit_laws.html 110 See Section IV.B.3.b******* **E.O. 12866 Review**

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111 of For proposal, EPA and NHTSA relied on the EPA MOVES anal ys is of Federal Highway Administration data t o develop the mode weightings to characterize ty pical operations of heav y - dut y trucks, per Table II
- 10 below. 111 A detailed discussion of drive cycles is included in R IAChapter 3. 112 The agencies are adopting the proposed drive cycle weightings for combination tractors. **Table II**  **- 10**  **: Drive Cycle Mode Weightings** Transient 55 mph Cruise 65 mph Cruise Day Cabs 19% 17% 64% Sleeper Cabs 5% 9% 86% (ii) Standardized Trailers (iii) As proposed, NHTSA and EPA are adopting provisions so that the tractor performance in the GEM is judged assuming the tractor is pulling a standardized trailer. The agencies did not receive any adverse comments related to this approach. The agencies believe that an assessment of the tractor fuel consumption and CO2 emissions should be conducted using a tractor- trailer combination. We believe this approach best reflects the impact of the overall weight of the tractor
- trailer and the aerodynamic technologies in actual use, where tractors are designed and used with a trailer. GEM will continue to use a predefined typical trailer in assessing overall performance. The high roof sleeper cabs are paired with a standard box trai ler; the mid roof tractors are paired with a tanker trailer; and the low roof tractors are paired with a flat bed trailer. Empty Weight and Payload The total weight of the tractor
- trailer combination is the sum of the tractor curb weight, the trailer curb weight, and the payload. The total weight of a vehicle is important because it in part determines the impact of technologi es, such as rolling resistance, on GHG emissions and fuel consumption. In this final action, the agencies are specifying each of these aspects of the vehicle, as proposed. In use, trucks operate at different weights at different times during their operations. The greatest freight transport efficiency (the amount of fuel required to move a ton of payload) would be achieved b y operating trucks at the maximum load for which they are designed all of the time. However, logistics such as delivery demands whi ch require that trucks travel without full loads, the density of payload, and the availability of

111 The Environmental Protection Agency. Draft MOVES2009 Highway Vehicle Population and Activity Data. EPA
- 420
- P
- 09
- 001, August 2009 http://www.epa.gov/otaq/models/moves/te chdocs/420p09001.pdf 112 In the light
- duty

vehicle rule, EPA and NHTSA based compliance with tailpipe standards on use of the FTP and HFET, and declined to use alternative tests. See 75 FR 25407. NHTSA is mandated to use the FTP and HFET tests for CAFE standards, and all relevant data was obtained by FTP and HFET testing in any case. Id. Neither of these constraints exists for Class 7
- 8 tractors. The little data w hich exist on current performance are principally measured by the ARB Heavy Heavy
- duty Truck 5 Mode Cycle testing, and NHTSA is not mandated to use the FTP to establish heavy
- duty fuel economy standards. See 49 U.S.C. 32902(k)(2) authorizing NHTSA, among other things, to adopt and implement appropriate “test methods, measurement metrics, ... and c om pliance protocols”.******* **E.O. 12866 Review**

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112 of full loads of freight limit the ability of trucks to operate at their highest efficiency all the time. M.J. Bradley

anal yzed the Truck Inventory and Use Surv ey

and found that approximately

9 percent of combination tractor miles travelled empty, 61 percent are “cubed
- out” (the trailer is full before the weight limit is reached), and 30 percent are “weighed out” (operating weight equal 80,000 pounds which is the gross vehicle weight limit on the Federal Interstate Highway S ys tem or greater than 80,000 pounds for vehicles traveling on roads outside of the interstate sy stem). 113 As described above, the amount of payload that a tractor can carry depends on the categ ory (or GVWR and GCWR) of the vehicle. For example, a t ypical Class 7 tractor can carry less payload than a Class 8 tractor. For proposal, the agencies used the Federal Highway Administration Truck Payload Equivalent Factors using Vehicle Inventory and U se Survey

(VIUS) and Vehicle Travel Information Sy stem data to determine the proposed payloads. FHWA’s results found that the average payload of a Class 8 vehicle ranged from 36,247 to 40,089 pounds, depending on the average distance travelled per day
. 114 The same results found that Class 7 vehicles carried between 18,674 and 34,210 pounds of payload also depending on average distance travelled per day . Based on this data, the agencies proposed to prescribe a fixed payload of 25,000 pounds for Class 7 tractors and 38,000 pounds for Class 8 tractors for their respective test procedures. The agencies proposed a common payload for Class 8 day cabs and sleeper cabs as predefined GEM input because the data available do not distinguish based on typ e of Class 8 tractor. These payload values represent a heavil y loaded trailer, but not maximum GVWR, since as described above the majority of tractors “ cube
- out ” rather than “ weigh
- out.” The agencies developed the proposed tractor curb weight inputs from actual tractor weights measured in two of EPA’s test programs and based on information from the manufacturers. The proposed trailer curb weight inputs were derived fr om actual trailer weight measurements conducted b y EPA and weight data provided to I CF International b y the trailer manufacturers. 115 The agencies received comments from UMTRIand ATA regarding the values assumed for the combination tractor weights. UMTRI recommended using 80,000 pounds for the total weight for tractor
- trailer combinations. ATA based on their anal ys is of the Federal Highway

Administration’s L ong Term Pavement Database, recommended 5,000 to 10,000 pound payload for Class 7 tractors and 25 ,000 to 30,000 pounds for Class 8 tractors. ATA also determined from the same database that 20 percent of tractor miles are empt y, 67 percent cube
- out, and 13 percent weigh
- out. The agencies are adopting the proposed tractor
- trailer weights because the c hanges suggested b y the commenters will

113 M.J. Bradley & Associates. Setting the Stage for Regulation of Heavy
- Duty Vehicle Fuel Economy and GHG Emissions: Issues and Opportunities. February 2009. Page 35. Analysis based on 1992 Truck Inventory and Use Survey data, wher e the survey data allowed developing the distribution of loads instead of merely the average loads. 114 The U.S. Federal Highway Administration. Development of Truck Payload Equivalent Factor. Table 11. Last viewed on March 9, 2010 at http://ops.fhwa.dot. gov/freight/freight_analysis/faf/faf2_reports/reports9/s510_11_12_tables.htm 115 ICF International. Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy
- Duty On
- road Vehicles. July 2010. Pages 4
- 15. Docket Number EPA
- HQ
- OAR
- 2010
- 0162
- 0044.******* **E.O. 12866 Review**

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113 of not change the impact on GHG emissio ns or fuel consumption of the technologies included in this phase of the HD program. NHTSA and EPA will evaluate additional sources of weight information in future phase s of the program. Details of the final individual weight inputs by regulatory

category , as shown in Table II
- 11 , are included in RIA Chapter 3. **Table II**  **- 11**  **: Final**  **Combination Tractor Weights** Model Type Regulatory

Subcategory Tractor Tare

Weight (lbs) Trailer

Weight (lbs) Payload (lbs) Total Weight (lbs) Class 8 Sleeper Cab

High Roof 19,000 13,500 38,000 70,500 Class 8 Sleeper Cab

Mid Roof 18,750 10,000 38,000 66,750 Class 8 Sleeper Cab

Low Roof 18,500 10,500 38,000 67,000 Class 8 Day Cab

High Roof 17,500 13,500 38,000 69,000 Class 8 Day Cab

Mid Roof 17,100 10,000 38,000 65,100 Class 8 Day Cab

Low Roof 17,000 10,500 38,000 65,500 Class 7 Day Cab

High Roof 11,500 13,500 25,000 50,000 Class 7 Day Cab

Mid Roof 11,100 10,000 25,000 46,100 Class 7 Day Cab

Low Roof 11,000 10,500 25,000 46,500 (iv) Standardized Drivetrain The agencies’ assessment at proposal of the current vehicle configuration process at the truck dealer’s level was that the truck companies provide tools to specify the proper drivetrain matched to the buyer’s specific circumstances. These dealer tools allow a signif icant amount of customization for drive cycle and payload to provide the best specification for each individual customer. The agencies are not seeking to disrupt this process. Optimal drivetrain selection is dependent on the engine, drive cycle (includin g vehicle speed and road grade), and payload. Each combination of engine, drive cycle, and payload has a single optimal transmission and final drive ratio. The agencies received comment s from ArvinMeri tor and ICCT which suggested that the agencies incorpo rate the actual driv e train configuration (axle configuration, driveline efficiency , and transmission ) into the GEM. The agencies continue to believe, and therefore a re adopting a s proposed, that it is appropriate to specify the engine’s fuel consumption map, drive cycle, and payload; therefore, it makes sense to also specify the drivetrain that matches.******* **E.O. 12866 Review**

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114 of (v) Engine Input to GEM for Tractors As proposed, the agencies are defining the engine characteristics used in GEM, including the fuel consumption map which provides the fuel consumption at hundreds of engine speed and torque points. I f the agencies did not standardize the fuel map, then a tractor that uses an engine with emissions and fuel consumption better than the standards wou ld require fewer vehicle reductions than those technicall y feasible reductions reflected in the final standards. The agencies are finalizing two distinct fuel consumption maps for use in GEM. The first fuel consumption map would be used in GEM for the 20 14 through 2016 model years and represents an average engine which meets EPA’s final 2014 model year engine CO 2 emissions standards. The same fuel map would be used for NHTSA’s voluntary standards in the 2014 and 2015 model years, as well as its mandatory program in the 2016 model year. A second fuel consumption map will be used beginning in the 2017 model year and represents an engine which meets the 2017 model year CO 2 emissions and fuel consumption standards and accounts for the increased stringency

in the final MY 2017 standard. The agencies have modified the 2017 MY fuel map used in GEM for the final rulemaking to address comments received. Details regarding this change can be found in RIA Chapter 4.4.4. Effectivel y there is no change in stringency of the tractor vehicle (not including the engine standards for the full rulemaking period. 118 These inputs are appropriate given the separate regulatory requirement that Class 7 and 8 c ombination tractor manufacturers use only certified engines. No commenter disagreed with this approach. (i ) Heavy
-Duty Engine Test Procedure for Engines Installed in Combination Tractors The HD engine test procedure consists of two primary aspects

– a duty

cy cle and a metric to evaluate the emissions and fuel consumption. EPA proposed that the GHG emission standards for heav y - dut y engines under the CAA would be expressed as g/bhp
- hr while NHTSA’s proposed fuel consumption standards under EI SA, in turn, be repr esented as gal/100 bhp
- hr. The NAS panel did not specificall y discuss or recommend a metric to evaluate the fuel consumption of heav y duty engines. However, as noted above they did recommend the use of a load
- specific fuel consumption metric for the evaluation of vehicles. 119 An analogous metric for engines is the amount of fuel consumed per unit of work. The g/bhp
- hr metric is also consistent with EPA’s current standards for non
- GHG emissions for these engines. The agencies did not receive any adverse c omments related to the metrics for HD engines; therefore, we are adopting the metrics as proposed. T he agencies believe it is appropriate to set standards based on a single test procedure, either the H eavy - dut y FTP or SET, depending on the primary expected use of the engine. This approach differs from EPA’s criteria pollutant standards for engines which currently

require that manufacturers demonstrate compliance over the transient FTP cycle; over the steady
- state SET procedure; and during not
- to - exceed testing. EPA

118 As noted earlier, use of the 2017 model year fuel consumption map as a GEM input results in numerically more stringent final vehicle standards for MY 2017. 119 See NAS Report, Note **24** , at page 39.******* **E.O. 12866 Review**

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115 of created this multi
- layered approach to criteria emissions control in response to engine de signs that optimized operation for lowest fuel consumption at the expense of very high criteria emissions when operated off the regulatory cycle. EPA’s use of multiple test procedures for criteria pollutants helps to ensure that manufacturers calibrate en gine sy stems for compliance under all operating conditions. We are not concerned if manufacturers further calibrate engines off
- cycle to give better in
- use fuel consumption while maintaining compliance with the criteria emissions st andards as such calibration is entirely consistent with the goals of our joint program. Further, we believe that setting GHG and fuel consumption standards based on both transient and steady - state operating conditions for all engines could lead to undesirable outcomes. It is c ritical to set standards based on the most representative test cycles in order for performance in
- use to obtain the intended (and feasible) air qualit y and fuel consumption benefits. Tractors spend the majority of their operation at steady state condition s, and will obtain in
- use benefit of technologies such as turbocompounding and other waste heat recovery technologies during this kind of ty pical engine operation. Turbocompounding is a very effective approach to lower fuel consumption under steady drivin g conditions ty

pified by combination tractor trailer operation and is well reflected in testing over the SET test procedure. However, when used in driving ty pified by transient operation as we expect for vocational vehicles and as is represented by the He av y - dut y FTP, turbocompounding shows very little benefit. Setting an emission standard based on the Heavy
- duty FTP for engines intended for use in combination tractor trailers could lead manufacturers to not apply turbocompounding even though it can be a highl y cost effective means to reduce GHG emissions and lower fuel consumption. The agencies proposed that engines installed in tractors demonstrate compliance with the CO 2 emissions and fuel consumption standards over the SET cycle. Commenters such as Cummins, Bosch, Daimler, and Honey well supported the proposed approach. ACEEE recommended adopting a new test cycle, such as the World Harmonized Duty

C ycl e which was developed using newer data, to evaluate HD engines. Daimler also supported the WHDC for future phases of the program. The agencies continue to believe the important issues and technical work related to setting new criteria pollutant emissions standards appropriate for the World Harmonized Duty Cycle are significant and beyond the scope of this rulemaking. Therefore, the agencies are adopting the SET cycle to evaluate CO 2 emissions and fuel consumption of HD engines installed in tractors, as proposed. The current non
- GHG emissions engine test procedures also require the development of regene ration emission rates and frequency factors to account for the emission changes during a regeneration event (40 CFR 86.004
- 28). EPA and NHTSA proposed not to include these emissions from the calculation of the compliance levels over the defined test proce dures. Cummins and Daimler supported this approach and stated there already exist s sufficient incentives for manufacturers to limit regeneration frequency . Conversely , Volvo opposed the omission of IRAF requirements for CO 2 emissions because emissions fro m regeneration can be a significant portion of the expected improvement and a significant variable between manufacturers******* **E.O. 12866 Review**

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116 of For proposal, we considered including regeneration in the estimate of fuel consumption and GHG emissions and decided not to do so for two reasons. First, EPA’s existing criteria emission regulations already provide a strong motivation to engine manufacturers to reduce the frequency and duration of infrequent regeneration events. The very stringent 2010 NO X emission standards cannot be m et b y engine designs that lead to frequent and extend regeneration events. Hence, we believe engine manufacturers are already reducing regeneration emissions to the greatest degree possible. In addition to believing that regenerations are already control led to the extent technologically possible, we believe that attempting to include regeneration emissions in the standard setting could lead to an inadvertentl y lax emissions standard. In order to include regeneration and set appropriate standards, EPA and NHTSA would have needed to project the regeneration frequency and duration of future engine designs in the time frametime frame of this program. Such a projection would be inherentl y difficult to make and quite likel y would underestimate the pro gress engine manufacturers will make in reducing infrequent regenerations. If we underestimated that progress, we would effectivel y be setting a more lax set of standards than otherwise would be expected. Hence in setting a standard including regeneratio n emissions we faced the real possibility that we would achieve less effective CO 2 emissions control and fuel consumption reductions than we will achieve b y not including regeneration emissions. Therefore, the agencies are finalizing an approach as propos ed which does not include the regenerative emissions. (j ) Chassis
- based Test Procedure In the proposal, the agencies considered proposing a chassis
- based vehicle test to evaluate Class 7 and 8 tractors based on a laboratory test of the engine and vehicle tog ether. A “ chassis d yn amometer test ” for heavy
- duty vehicles would be similar to the Federal Test Procedure used today for light
- dut y vehicles. However, the agencies decided not to propose the use of a chassis test procedure to demonstrate compliance for tractor standards due to the significant technical hurdles to implementing such a program by the 2014 model year. The agencies recognize that such testing requires expensive, specialized equipment that is not yet widespread within the industry . The agen cies have onl y identified approximately 11 heavy
- dut y chassis sites in the United States today

and rapid installation of new facilities to comply with model year 2014 is not possible. 120 In addition, and of equal if not greater importance, because of the e normous numbers of vehicle configurations that have an impact on fuel consumption, we do not believe that it would be reasonable to require testing of man y combinations of tractor model configurations on a chassis dynamometer. The agencies evaluated the options available for one tractor model (provided as confidential business information from a truck manufacturer) and found that the compan y offered three cab configurations, six axle configurations, five front axles, 12 rear axles, 19 axle ratios, ei ght engines, 17

120 For comparison, engine manufacturers typically own a large number of engine dynamometer test cells for engine development and durability (up to 100 engine dynamometers per manufacturer).******* **E.O. 12866 Review**

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117 of transmissions, and six tire sizes

– where each of these options could impact the fuel consumption and CO 2 emissions of the tractor. Even using representative grouping of tractors for purposes of certification, this presents the potential f or man y different combinations that would need to be tested if a standard w ere adopted based on a chassis test procedure. The agencies received comments from ACEEE and UCS supporting a full vehicle testing approach, but these commenters recognized the difficulties in doing this in the first phase of the HD program. The agencies maintain that the full vehicle testing on chassis dy

namometers is not feasible in th e time frame of th is rulemaking , although we believe such an approach may be appropriate in the future, if more testing facilities become available and if the agencies are able to address the complexity of tractor configurations issue described above. **(4) Summary of**  **F lexibility and**  **C redit**  **P rovisions**  **for Tractors and Engine**  **Used in These Tractors** EPA and NHTSA are finalizing four flexibility provisions specifically

for heavy
duty tractor and engine manufacturers, as discussed in Section IV below. These are an averaging, banking and trading program for emissions and f uel consumption credits, as well as provisions for early credits, advanced technology credits, and credits for innovative vehicle or engine technologies which are not included as inputs to the GEM or are not demonstrated on the engine SET test cycle. With the exception of the advanced technology

credits, credits generated under these provisions can only be used within the same averaging set which generated the credit (for example, credits generated by HD engines used in tractors can only be used by

HD engi nes). EPA is also adopting a N 2 O emission credit program, as described in Section IV below. **(5) Deferral**  **of Standards for Tractor and Engine M**  **anufacturing C**  **ompanies T**  **hat A**  **re S**  **mall B**  **usinesses** EPA and NHTSA are not adopting greenhouse gas emissions and fuel consumption standards for small tractor or engine manufacturers meeting the Small Business Administration (SBA) size criteria of a small business as described in 13 CFR 121.201. 121 The agencies will instead consider appropriate GHG and fuel consumption stan dards for these entities as part of a future regulatory action. This includes both U.S.
- based and foreign small volume heav y - dut y tractor and engine manufacturers. The agencies have identified two entities that fit the SBA size criterion of a small business. 122 The agencies estimate that these small entities comprise less than 0.5 percent of the total heav y - dut y combination tractors in the United States based on Polk Registration Data from 2003 through 2007, 123 and therefore that the exemption will have a negligible impact on the GHG emissions and fuel consumption improvements from the final standards.
121 See § 1036.150 and § 1037.150 122 The agencies have identified Ottawa Truck, Inc. and Kalmar Industries USA as two potential small tractor manufacturers. 123 M.J. Bradley. Heavy
- duty Vehicle Market Analysis. May 2009.******* **E.O. 12866 Review**

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118 of To ensure that the agencies are aware of which companies would be exempt, we are requiring that such entities submit a declaration to EPA and NHTSA containing a detailed written description of how that manufacturer qualifies as a small entity under the provisions of 13 CFR 121.201. 

### C. **Heavy -**  **Duty Pickup Trucks and Vans**  The primary

elements of the EPA and NHTSA programs for complete HD pickups and vans are pre sented in this section. These provisions also cover optional chassis certification of incomplete HD vehicles and of Class 4 and 5 vehicles , as discussed in detail in Section V.B(1)(e). Section II.C(1) explains the form of the CO 2 and fuel consumption standards, the numerical levels for those standards, and the approach to phasing in the standards over time. The measurement p rocedure for determining compliance is discussed in Section II.C(2), and the EPA and NHTSA compliance programs are discussed in Section II.C(3). Sections II.C(4) discusses implementation flexibility provisions. Section II.E discusses additional standards and provisions for N 2 O and CH 4 emissions, for vehicle air conditioning leakage , and for ethanol
- fueled and electric vehicles. HD pickup and van air conditioning efficiency is not being regulated, for reasons discussed in Section II.E
. **(1) What**  **A re the**  **Levels and T iming of**  **HD Pickup and Van S tandards**  **?** (a ) Vehicle
-Based Standards About 90 percent of Class 2b and 3 vehicles are pickup trucks, passenger vans, and work vans that are sold by the original equipment manufacturers as complete vehicles, ready for use on the road. In addition, most of these complete HD pickups and vans are covered b y CAA vehicle emissions standards for criteria pollutants today (i.e., they are chassis tested similar to light
- duty), expressed in grams per mile. This distinguish es this category from other, larger heavy
- dut y vehicles that t ypically have onl y the engines covered b y C AA engine emission standards, expressed in grams per brake horsepower
- hour. As a result, Class 2b and 3 complete vehicles share much more in common w ith light
- duty

trucks than with other heavy
- duty vehicles. Three of these commonalities are especiall y significant: (1) over 95 percent of the HD pickups and vans sold in the United States are produced b y Ford, General Motors, and Chry sler

– three companie s with large light
- duty vehicle and light
- duty

truck sales in the United States, (2) these companies t ypicall y base their HD pickup and van designs on higher sales volume light
- duty truck platforms and technologies, often incorporating new light
- duty truc k design features into HD pickups and vans at their next design cycle, and (3) at this time most complete HD pickups and vans are certified to vehicle
- based rather than engine
- based EPA standards. There is also the potential for substantial GHG and fuel c onsumption reductions from vehicle design improvements beyond engine changes (such as through optimizing aerodynamics, weight, tires, and accessories), and the manufacturer is generall y responsible for both engine and vehicle design. All of these factors together suggest that it is appropriate and reasonable to set standards for the vehicle as a whole, rather than to establish separate engine and vehicle GHG and fuel******* **E.O. 12866 Review**

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119 of consumption standards, as is being done for the other heav y - dut y categories. This approac h for complete vehicles is consistent with Recommendation 8
- 1 of the NAS Report, which encourages the regulation of “the final stage vehicle manufacturers since they have the greatest control over the design of the vehicle and its major subsy stems that aff ect fuel consumption.” There was consensus in the public comments supporting this approach. (b ) Weight
-Based Attributes In setting heav y - dut y vehicle standards it is important to take into account the great diversit y of vehicle sizes, applications, and featur es. That diversity reflects the variet y of functions performed by heav y - duty vehicles, and this in turn can affect the kind of technology

that is available to control emissions and reduce fuel consumption, and its effectiveness. EPA has dealt with this d iversity in the past by

making weight
- based distinctions where necessary , for example in setting HD vehicle standards that are different for vehicles above and below 10,000 lb GVWR, and in defining different standards and useful life requirements for light - , medium
- , and heav y - heavy
- dut y engines. Where appropriate, distinctions based on fuel ty pe have also been made, though with an overall goal of remaining fuel
- neutral. The joint EPA GHG and NHTSA fuel economy rules for light
- dut y vehicles accounted for vehicle diversity in that segment by

basing standards on vehicle footprint (the wheelbase times the average track width). Passenger cars and light trucks with larger footprints are assigned numericall y higher target levels for GHGs and numericall y lower target levels for fuel econom y in acknowledgement of the differences in technology

as footprint gets larger, such that vehicles with larger footprints have an inherent tendency

to burn more fuel and emit more GHGs per mile of travel. Using a footprint
- bas ed attribute to assign targets also avoids interfering with the ability of the market to offer a variet y of products to maintain consumer choice. In developing this rulemaking, the agencies emphasized creating a program structure that would achieve reduc tions in fuel consumption and GHGs based on how vehicles are used and on the work they perform in the real world, consistent with the NAS report recommendations to be mindful of HD vehicles’ unique purposes. Despite the HD pickup and van similarities to l ight
- duty vehicles, we believe that the past practice in EPA’s heav y - duty program of using weight
- based distinctions in dealing with the diversity

of HD pickup and van products is more appropriate than using vehicle footprint. Weight
- based measures such a s payload and towing capabilit y are key among the things that characterize differences in the design of vehicles, as well as differences in how the vehicles will be used. Vehicles in this category have a wide range of payload and towing capacities. These weight
- based differences in design and in
- use operation are the key factors in evaluating technological improvements for reducing CO 2 emissions and fuel consumption. Payload has a particularl y important impact on the test results for HD pickup and van emi ssions and fuel consumption, because testing under existing EPA procedures for criteria pollutants is conducted with the vehicle loaded to half of its******* **E.O. 12866 Review**

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120 of payload capacit y (rather than to a flat 300 lb as in the light
- dut y program), and the correlation between test weight and fuel use is strong. 125 Towing, on the other hand, does not directl y factor into test weight as nothing is towed during the test. Hence onl y the higher curb weight caused b y heavier truck components would play

a role in affecting measured test results. However towing capacity can be a significant factor to consider because HD pickup truck towing capacities can be quite large, with a correspondingly large effect on design. We note too that, from a purchaser perspective, payload and towing capability ty picall y pla y a greater role than phy sical dimensions in influencing purchaser decisions on which heav y - duty

vehicle to buy . For passenger vans, seating capacit y i s of course a major consideration, but this correlates closely with payload weight. Although heav y - dut y vehicles are traditionally classified by their GVWR, we do not believe that GVWR is the best weight
- based attribute on which to base GHG and fuel consumption standards for this group of vehicles. GVWR is a function of not only payl oad capacit y but of vehicle curb weight as well; in fact, it is the simple sum of the two. Allowing more GHG emissions from vehicles with higher curb weight tends to penalize lightweighted vehicles with comparable payload capabilities by making them meet more stringent standards than they would have had to meet without the weight reduction. The same would be true for another common weight
- based measure, the gross vehicle combin ation weight, which adds the maximum combined towing and payload weight to th e curb weight. Similar concerns about using weight
- based attributes that include vehicle curb weight were raised in the EPA/NHTSA proposal for light
- dut y GHG and fuel econom y standards: “footprint
- based standards provide an incentive to use advanced lightweight materials and structures that would be discouraged by weight
- based standards”, and “there is less risk of ‘gaming’ (artificial manipulation of the attribute(s) to achieve a more favorable target) b y increasing footprint under footprint
- based standards than by increasing vehicle mass under weight
- based standards

—it is relativel y eas y for a manufacturer to add enough weight to a vehicle to decrease its applicable fuel econom y target a significant amount, as compared to increasing vehicle footprint” (7 4 FR 49685, September 28, 2009). The agencies believe that using payload and towing capacities as the weight
- based attributes avoids the above
- mentioned disincentive for the use of lightweighting technology by taking vehicle curb weight out of the standar ds determination. After taking these considerations into account, EPA and NHTSA proposed to set standards for HD pickups and vans based on the proposed “work factor” attribute that combines vehicle payload capacity and vehicle towing capacity , in pounds, with an additional fixed adjustment for four
- wheel drive (4wd) vehicles. This adjustment accounts for the fact that 4wd, critical to enabling the many off
- road heav y - duty

work

125 Section II.C(2) discusses our decision that GHGs and fuel consumption for HD pickups and vans be measured using the same test conditions as in the existing EPA program for criteri a pollutants.******* **E.O. 12866 Review**

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121 of applications, adds roughly 500 lb to the vehicle weight. There was consensus in the public comments supporting this attribute, and the agencies are adopting it as proposed. Target GHG and fuel consumption standards will be determined for each vehicle with a unique work factor (analogous to a target for each discrete vehicle footprint in the light
duty vehicle rules). These targets will then be production weighted and summed to derive a manufacturer’s annual fleet average standard for its heavy
- dut y pickups and vans. Widespread support for the proposed work fac tor - based approach to standards and fleet average approach to compliance was expressed in the comments we received. To ensure consistency

and help preclude gaming, we are finalizing the proposed provision that payload capacity be defined as GVWR minus curb weight, and towing capacity as GCWR minus GVWR. For purposes of determining the work factor, GCWR is defined according to SAE Recommended Practice J2807 APR2008, GVWR is defined consistent with EPA’s criteria pollutants program, and curb weight is define d as in 40 CFR 86.1803
- 01. Based on anal ys is of how CO 2 emissions and fuel consumption correlate to work factor, we believe that a straight line correlation is appropriate across the spectrum of possible HD pickups and vans, and that vehicle distinctions such as Class 2b versus Class 3 need not be made in setting standards levels for these vehicles. 126 This approach was supported by commenters. We note that payload/towing
- dependent gram per mile and gallon per 100 mile standards for HD pickups and vans para llel the gram per ton
- mile and gallon per 1,000 ton - mile standards being finalized for Class 7 and 8 combination tractors and for vocational vehicles. Both approaches account for the fact that more work is done, more fuel is burned, and more CO 2 is emitted in moving heavier loads than in moving lighter loads. Both of these load
- based approaches avoid penalizing vehicle designers wishing to reduce GHG emissions and fuel consumption by reducing the weight of their trucks. However, the sizeab le diversity in HD work truck and van applications, which go well beyond simpl y transporting freight, and the fact that the curb weights of these vehicles are on the order of their payload capacities, suggest that setting simple gram/ton
- mile and gallon/to n - mile standards for them is not appropriate. Even so, we believe that our setting of payload
- based standards for HD pickups and vans is consistent with the NAS Report’s recommendation in favor of load
- specific fuel consumption standards. Again, commente rs agreed with this approach to setting HD pickup and van standards. These attribute
- based CO 2 and fuel consumption standards are meant to be relativel y consistent from a stringency perspective. Vehicles across the entire range of the HD pickup and van se gm ent have their respective target values for CO 2 emissions and fuel consumption, and therefore all HD pickups and vans will be affected by the standard. With this attribute
- based standards approach, EPA and NHTSA believe there should be no significant e ffect on the relative distribution of vehicles with differing capabilities in the fleet, which means that buyers should still be able to purchase the vehicle that meets their needs.

126 Memorandum from Anthony Neam and Jeff Cherry, U.S.EPA, to docket EPA
- HQ
- OAR
- 2010
- 0162 , October 18, 2010.******* **E.O. 12866 Review**

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122 of (c) Standards The agencies are finalizing standards based on a technology ana ly sis performed by EPA to determine the appropriate HD pickup and van standards. This analy sis, described in detail in RIA Chapter 2, considered:

 the level of technology that is incorporated in current new HD pickups and vans,  the available data on corre sponding CO 2 emissions and fuel consumption for these vehicles,  technologies that would reduce CO 2 emissions and fuel consumption and that are judged to be feasible and appropriate for these vehicles through the 2018 model y ear,  the effectiveness and cost of these technologies for HD pickup and vans,  projections of future U.S. sales for HD pickup and vans, and  forecasts of manufacturers’ product redesign schedules. Based on this analy sis, EPA is finalizing the proposed CO 2 attri bute
- based target standards shown in Figure II
- 2 and II
- 3, and NHTSA is finalizing the equivalent attribute
- based fuel consumption target standards, also shown in Figure II
- 2 and II
- 3, applicable in model year 2018
. Th ese figures also shows phase
- in standards for model ye ars before 2018, and their derivation is explained below, along with alternative implementation schedules to ensure equivalen cy between the EPA and NHTSA programs while meeting statutory

obligations. Also , f

or reasons discussed below, separate targets were proposed and are being established for gasoline
- fueled (and any other Otto
- cycle) vehicles and diesel
- fueled (and any other Diesel
- cycle) vehicles. The targets will be used to determine the production
- weighted fleet standards that apply to the combined diesel and gasoline fleet of HD pickups and vans produced by a manufacturer in each model ye ar.******* **E.O. 12866 Review**

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123 of **Figure II**  **- 2**  **: EPA CO**  **2 Target Standards and NHTSA Fuel Consumption Ta**  **rget Standard**  **s for Diesel**  **HD Pickups and Vans 127** 

127 The NHTSA program provides voluntary standards for model years 2014 and 2015. Target line functions for 2016
- 2018 are for the second NHTSA alternative described in Section II.C(d)(ii). 300 350 400 450 500 550 600 650 700 750 800

0 1000 2000 3000 400 0 500 0 6000 7000 80 00 9000 10000 **Wor k**  **Fa cto**  **r (p ou**  **nds) C** **O 2** **( g** **r a** **m s** **p e** **r m** **i l** **e )** 

2. 95 3. 95 4. 95 5. 95 6. 95**F u** **e l** **C o** **n s** **u m** **p t** **i o** **n (** **g a** **l l** **o n** **s p** **e r** **1 0** **0 m** **i l** **e s** **)** Di es el Veh ic le s

20 18 20 17 20 15 20 14

20 16

300 350 400 450 500 550 600 650 700 750 800

0 1000 2000 3000 400 0 500 0 6000 7000 80 00 9000 10000 **Wor k**  **Fa cto**  **r (p ou**  **nds) C** **O 2** **( g** **r a** **m s** **p e** **r m** **i l** **e )** 

2. 95 3. 95 4. 95 5. 95 6. 95**F u** **e l** **C o** **n s** **u m** **p t** **i o** **n (** **g a** **l l** **o n** **s p** **e r** **1 0** **0 m** **i l** **e s** **)** Di es el Veh ic le s

20 18 20 17 20 15 20 14

20 16******* **E.O. 12866 Review**

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124 of **Figure II**  **- 3**  **: EPA CO 2**  **Target Standards and NHTSA Fuel Consumption Ta rget**  **Standard s**  **for Gasoline HD Pickups**  **and Vans 128**  Described mathematically , EPA’s and NHTSA’s target standards are defined by the following formulae: EPA CO **2** Target (g/mile) = [a x WF ] + b NHTSA Fuel Consumpti on Target (gallons/100 miles) = [c x WF] + d Where: WF = Work Factor = [0.75 x (Payload Capacity + xwd)] + [0.25 x Towing Capacity] Payload Capacit y = GVWR (lb)

– Curb Weight (lb ) xwd = 500 lb if the vehicle is equip ped with 4wd, otherwise equals 0 lb Towing Capacit y = GCWR (lb)

– GVWR (lb ) Coefficients a, b, c, and d are taken from Table II
- 12 or Table II
- 13
.

128 The NHTSA program provides voluntary standards for model years 2014 and 2015. Target line functions for 2016
- 2018 are for the second NHTSA alternative described in Section II.C(d)(ii). 300 350 400 450 500 550 600 650 700 750 800

0 1000 2000 3000 4000 5000 60 00 7000 8000 9000 10000 **Work Fact**  **or (**  **pou nds)** **C O** **2 (** **g r** **a m** **s p** **e r** **m i** **l e** **)**

3.3 8 4.3 8 5.3 8 6.3 8 7.3 8 8.3 8**F u** **e l** **C o** **n s** **u m** **p t** **i o** **n (** **g a** **l l** **o n** **s p** **e r** **1 0** **0 m** **i l** **e s** **)** Gas ol in e Veh ic le s

201 8 20 17 201 5 20 14

20 16

300 350 400 450 500 550 600 650 700 750 800

0 1000 2000 3000 4000 5000 60 00 7000 8000 9000 10000 **Work Fact**  **or (**  **pou nds)** **C O** **2 (** **g r** **a m** **s p** **e r** **m i** **l e** **)**

3.3 8 4.3 8 5.3 8 6.3 8 7.3 8 8.3 8**F u** **e l** **C o** **n s** **u m** **p t** **i o** **n (** **g a** **l l** **o n** **s p** **e r** **1 0** **0 m** **i l** **e s** **)** Gas ol in e Veh ic le s

201 8 20 17 201 5 20 14

20 16******* **E.O. 12866 Review**

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125 of **Table II**  **- 12**  **: Coef** 

**ficients for HD Pickup and Van Target Standards 129**  **Diesel Vehicles** Model Year a b c d 2014 0.0478 368 0.000470 3.6 1 2015 0.0474 366 0.000466 3. 60 2016 0.0460 354 0.000452 3.48 2017 0.0445 343 0.000437 3.37 2018 and later 0.0416 320 0.00040 9 3.1 4 **Gasoline Vehicles** Model Year a b c d 2014 0.0482 371 0.000542 4.17 2015 0.0479 369 0.000539 4.15 2016 0.0469 362 0.000528 4.07 2017 0.0460 354 0.000518 3.98 2018 and later 0.0440 339 0.000495 3.81
**Table II**  **- 13**  **: Coef** 

**ficients for NHTSA’s First Alternative and EPA’s Alternative HD Pickup and Van Target Standards**  **Diesel Vehicles** Model Year a b c d 2014 a 0.0478 368 0.000470 3.6 1 2015 a 0.0474 366 0.000466 3. 60 2016
- 2018 0.0440 339 0.000432 3.33 2019 and later 0.0416 320 0.00040 9 3.1 4 **Gasoline Vehicles** Model Year a b c d 2014 a 0.0482 371 0.000542 4.17 2015 a 0.0479 369 0.000539 4.15 2016
- 2018 0.0456 352 0.000513 3.96 2019 and later 0.0440 339 0.000495 3.81 Notes: a NHTSA standards will be voluntary in 2014 and 2015 These targets are based on a set of vehicle, engine, and transmission technologies assessed b y the agencies and determined to be feasible and appropriate for HD pickups and vans in the 2014
- 2018 time frame
. See Section III. B for a detailed analy sis of these

129 The NHTSA pro gram provides voluntary standards for model years 2014 and 2015. Target line functions for 2016
- 2018 are for the second NHTSA alternative described in Section II.C(d)(ii).******* **E.O. 12866 Review**

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126 of vehicle, engine and transmission technologies, including their feasibil ity , costs, and effectiveness in HD pickups and vans
. To calculate a manufacturer’s HD pickup and van fleet average standard, the agencies are requiring that separate target curves be used for gasoline and diesel vehicles. The agencies estimate that in 201 8 the target curves will achieve 15 and 10 percent reductions in CO 2 and fuel consumption for diesel and gasoline vehicles, respectively, relative to a common baseline for current (model year 2010) vehicles. An additional two percent reduction in GHGs wil l be achieved b y the EPA program from a direct air conditioning leakage standard. These reductions are based on the agencies’ assessment of the feasibility

of incorporating technologies (which differ significantly for gasoline and diesel powertrains) in the 2014
- 2018 model years, and on the differences in relative efficiency in the current gasoline and diesel vehicles. The resulting reductions represent roughl y equivalent stringency levels for gasoline and diesel vehicles, which is important in ensuring o ur program maintains product choices available to vehicle bu yers. In written comments on the proposal, Cummins objected to setting separate diesel and gasoline vehicle standards, on the basis that it increases the burden for diesel engine manufacturers more than for gasoline engine manufacturers, and thereby could shift market share away

from diesels. EMA argued for fuel
- neutrality based on historical precedent and the fact that GHGs emitted b y one type of engine are no different than those emitted by

another ty

pe of engine. We believe that both engine t ypes have roughl y equivalent redesign burdens as evidenced b y the feasibility and cost anal ys is in RIA Chapter 2. Also, even though the emissions and fuel consumption reductions are expressed from a common diesel/gasoline baseline in these final rules, the actual starting base for diesels is at a lower level than for gasoline vehicles. Other industry commenters, including those with sizeable diesel sales, expressed general support for the standards. The agencies a gree that standards that do not distin guish between fuel ty pes are generall y preferable where technological or market
- based reasons do not strongl y argue otherwise
. These technological differences exist presently between gasoline and diesel eng ines for GHGs, as described above. The agencies emphasize, however, that they are not committed to perpetuating separate GHG standard s for gasoline and diesel heav y - dut y vehicles and engines , and expect to reexamine the need for separate gasoline/diesel s tandards in the next rulemaking. Environmental groups and others commented that the proposed standards were not stringent enough, citing the heav y - dut y vehicle NAS study finding that technologies such as h ybridization are feasible. However, in the ambit ious time frame we are focusing on for these rules, targeting as it does technologies implementable in the HD pickup and van fleet starting in 2014 and phasing in with normal product redesign cycles through 2018, our assessment shows that the stan dards we are establishing are appropriate. More advanced technologies considered in the NAS report would be appropriate for consideration in future rulemaking activity . Additional conventional technologies identified by

commenters as promising in light
- d uty applications and potentially useful for HD applications are discussed in RIA Chapter 2.******* **E.O. 12866 Review**

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127 of The NHTSA fuel consumption target curves and the EPA GHG target curves are equivalent. The agencies established the target curves using the direct relationship between fuel consumption and CO 2 using conversion factors of 8,887 g CO 2 /gallon for gasoline and 10,180 g CO 2 /gallon for diesel fuel. It is expected that measured performance values for CO 2 will generally be equivalent to fuel consumption. However, as explained below in Section II. E. (3) , EPA is finalizing a provision for manufacturers to use CO 2 c redits to help demonstrate compliance with N 2 O and CH 4 emissions standards, by expressing an y N 2 O and CH 4 undercompliance in terms of their CO 2 - equivalent and appl yi ng the needed CO 2 credits. For test families that do not use this compliance alternative, the measured performance values for CO 2 and fuel consumption will be equivalent because the same test runs and measurement data will be used to determine both values, and calculated fuel consumption will be based on the same conversion factors that are use d to establish the relationship between the CO 2 and fuel consumption target curves (8,887 g CO 2 /gallon for gasoline and 10,180 g CO 2 /gallon for diesel fuel). For manufacturers that choose to use the EPA provision for CO 2 credit use in demonstrating N 2 O an d CH 4 compliance, compliance with the CO 2 standard will not be directl y equivalent to compliance with the NHTSA fuel consumption standard. (d ) Implementation Plan (i ) EPA Program Phase
- in MY 2014
- 2018 EPA is finalizing the proposed provision that the GHG standards be phased in graduall y over the 2014
- 2018 model years, with full implementation effective in the 2018 model year. Therefore, 100 percent of a manufacturer’s vehicle fleet will need to meet a fleet
- average standard that will become increasingl y more stringent each year of the phase
- in period. For both gasoline and diesel vehicles, this phase
- in will be 15
- 20
- 40
- 60
- 100 percent of the model year 2018 stringency in model years 2014
- 2015
- 2016
- 2017
- 2018, respectivel y. These percentages reflect stringency increases from a baseline performance level for model year 2010, determined by the agencies based on EPA and manufacturer data. Because these vehicles are not currentl y regulated for GHG emission s, this phase
- in takes the form of target line functions for gasoline and diesel vehicles that become increasingl y stringent over the phase
- in model years. These y ear by
- ye ar functions have been derived in the same way as the 2018 function, by

taking a percent reduction in CO 2 from a common unregulated baseline. For example, in 2014 the reduction for both diesel and gasoline vehicles will be 15% of the full y - phased
- in reductions
. Figures II
- 2 and II
- 3, and Table II
- 12 , reflect this phase
- in approach. EPA is also providing manufacturers with an optional alternative implementation schedule in model years 2016 through 2018, equivalent to NHTSA’s first alternative for standards that do not ch ange over these model years, described below. Under this option the phase
- in will be 15
- 20
- 67
- 67
- 67
- 100 percent of the model year 2019 stringency in model years 2014
- 2015
- 2016
- 2017
- 2018
- 2019, respectivel y. Table II
- 13 , above, provides the coefficients “a” and “b” for this manufacturer’s alternative. As explained below, this alternative will provide roughl y equivalent overall CO 2 reductions and fuel consumption improvements as the 15
- 20
- 40
- 60
- 100 percent phase
- in. In addition, as******* **E.O. 12866 Review**

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128 of explained below, the stringency of this alternative was established by NHTSA such that a manufacturer with a stable production volume and mix over the m odel year 2016
- 2018 period could use Averaging, Banking and Trading to comply with either alternative and have a similar credit balance at the end of model year 2018. Under the above
- described alternatives, each manufacturer will need to demonstrate compli ance with the applicable fleet average standard using that year’s target function over all of its HD pickups and vans starting with its MY 2014 fleet of HD pickups and vans
. No comments were received in support of an alternative approach that EPA requeste d comment on, involving phasing in an annuall y increasing percentage of each manufacturer’s sales volume. (ii) NHTSA Program Phase
- in 2016 and Later NHTSA is finalizing the proposed provision to allow manufacturers to select one of two fuel consumption standard alternatives for model years 2016 and later. Each m anufacturer will select an alternative in its joint pre
- model year report, discussed below, that is now required to be electronically submitted to the agencies ; and, once selected, the alternative will appl y for model years 2016 and later, and c annot be reversed. T he first alternative will define a fuel consumption target line function for gasoline vehicles and a target line function for diesel vehicles that will not change for model ye ars 2016 to 2018
. The target line function coefficients are provided in Table II
- 13
. The second alternative will be equivalent to the EPA target line functions in each model year starting in 2016 and continuing afterwards . Stringency of fuel consumption standards will increase gradually for the 201 6 and later model years . Relative to a model ye ar 2010 unregulated baseline, f or both gasoline and diesel vehicles, stringency will be 40 , 60 , and 100 percent of the 2018 target line function in model years 2016 , 2017 , and 2018, respectivel y. The stringency of the target line functions in the first alternative for model years 2016
- 2017
- 2018
- 2019 is 67
- 67
- 67
- 100 percent, respectively , of the 201 9 stringency

in the second alternative. The stringency of the first alternative was established so that a manufacturer with a stable production volume and mix over the model year 2016
- 2018 period, could use Averaging, Banking and Trading to comply with either alternative and have a similar credit balance at the end of model ye ar 2018 under the EPA and NHTSA programs. (iii) NHTSA Voluntary Standards Period NHTSA is finalizing the proposed provision that manufacturers may voluntarily opt into the NHTSA HD pickup and van program i n model years 2014 or 2015. If a manufacturer elects to opt into the program, it must stay in the program for all the optional model years . To opt into the program, a manufacturer must declare its intent to opt in to the program in its Pre
- Model Year Report. The agencies have finalized new requirements for manufacturers to provide all early model declarations as a part of the pre - model year reports. . See regulatory text for 49 CFR 535.8 for information related to the Pre
- Model Year Report. A manufacturer would begin tracking credits and debits beginning in the model year in which they opt into the program. The handling of credits and debits would be the same as for the mandatory program.******* **E.O. 12866 Review**

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129 of For manufacturers that opt into NHTSA’s HD pickup and van fuel consumption program in 2014 or 2015, the stringency would increase gradually each model year. Relative to a model year 2010 unregulated baseline, f or both gasoline and diesel vehicles, stringe ncy would be 15
- 2 0 percent of the model year 201 9 target line function stringency (under the NHTSA first alternative) and 15
- 20 percent of the model ye ar 2018 target line function stringency

(under the NHTSA second alternative) in model years 201 4
- 201 5, respectivel y. The corresponding absolute standards targets levels are provided in Figure II
- 2 and II
- 3, and the accompanying equations. **(2) What**  **A re the**  **HD Pickup and Van T est**  **C ycles and**  **P rocedures?**  EPA and NHTSA are finalizing the proposed provision that HD pickup and van testing be conducted using the same heav y - dut y chassis test procedures currently used b y EPA for measuring criteria pollutant emissions from these vehicles, but with the addition of the highway

fuel economy

test cycle (HFET) currentl y required onl y for light
- duty vehicle GHG emissions and fuel econom y testing. Although the highway cycle driving pattern is identical to that of the light
- d ut y test, other test parameters for running the HFET, such as test vehicle loaded weight, are identical to those used in running the current EPA Federal Test Procedure for complete heav y - dut y vehicles. The GHG and fuel consumption results from vehicle test ing on the Li ght
- duty FTP and the HFET will be weighted b y 55 percent and 45 percent, respectively, and then averaged in calculating a combined cycle result. This result corresponds with the data used to develop the work factor
- based CO 2 and fuel consump tion standards, since the data on the baseline and technology efficiency

was also developed in the context of these test procedures. The addition of the HFET and the 55/45 cycle weightings are the same as for the light
- dut y CO 2 and CAFE programs, as we be lieve the real world driving patterns for HD pickups and vans are not too unlike those of light
- dut y trucks, and we are not aware of data specifically on these patterns that would lead to a different choice of cycles and weightings, nor did any commenters provide such data. More importantly , we believe that the 55/45 weightings will provide for effective reductions of GHG emissions and fuel consumption from these vehicles, and that other weightings, even if they were to more precisely

match real world patt erns, are not likely to significantl y improve the program results. Another important parameter in ensuring a robust test program is vehicle test weight. Current EPA testing for HD pickup and van criteria pollutants is conducted with the vehicle loaded to its Adjusted L oaded Vehicle Weight (ALVW), that is, its curb weight plus 1⁄2 of the payload capacit y. This is substantially more challenging than loading to the light
- duty

vehicle test condition of curb weight plus 300 pounds, but we believe that this loadi ng for HD pickups and vans to 1⁄2 payload better fits their usage in the real world and will help ensure that technologies meeting the standards do in fact provide real world reductions. The choice is likewise consistent with use of an attribute based in co nsiderable part on payload for the standard. We see no reason to set test load conditions differentl y for GHGs and fuel consumption than for criteria pollutants, and we are not aware of an y new information (such as real world load patterns) since the ALVW was originally

set this way

that would support a change in test loading conditions, nor did******* **E.O. 12866 Review**

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130 of any commenters provide such information. We are therefore using ALVW for test vehicle loading in GHG and fuel consumption testing. Additional provisions for our f inal testing and compliance program are provided in Section V.B. **(3) How**  **A re the**  **HD Pickup and Van Standards S**  **tructured?** EPA and NHTSA are finalizing the proposed fleet average standards for new HD pickups and vans , based on a manufacturer’s new vehicle fleet makeup. In addition, EPA is finalizing proposed in
- use standards that appl y t o the individual vehicles in this fleet over their useful lives. The compliance provisions for these fleet average and in
- use standards for HD pickups and vans are largely base d on the recentl y promulgated light
duty GHG and fuel economy

program, as described in detail in the proposal. (a ) Fleet Average Standards In the programs we are finalizing, each manufacturer will have a GHG standard and a fuel consumption standard unique to its new HD pickup and van fleet in each model year, depending on the load capacities of the vehicle models produced by that manufacturer, and on the U.S.
- directed production volume of each of those models in that model year. Vehicle models with larger pa yl oad/towing capacities have individual targets at numerically

higher CO 2 and fuel consumption levels than lower payload/towing vehicles, as discussed in Section II.C(1). The fleet average standard for a manufacturer is a production
- weighted average of th e work factor
- based targets assigned to unique vehicle configurations within each model t ype produced b y the manufacturer in a model ye ar. The fleet average standard with which the manufacturer must compl y is based on its final production figures for the model year, and thus a final assessment of compliance will occur after production for the model ye ar ends. Because compliance with the fleet average standards depends on actual test group production volumes, it is not possible to determine compliance at the time the manufacturer applies for and receives an EPA certificate of conformity

for a test group. Instead, at certification the manufacturer will demonstrate a level of performance for vehicles in the test group, and make a good faith demonstration that its fleet, regrouped b y unique vehicle configurations within each model ty pe, is expected to comply with its fleet average standard when the model year is over. EPA will issue a certificate for the vehicles covered b y the test group based on this demonstration, and will include a condition in the certificate that if the manufacturer does not comply

with the fleet average, then production vehicles from that test group will be treated as not covered b y the certificate to the extent needed to bring the manuf acturer’s fleet average into compliance. As in the light
- duty program, additional “model ty pe” testing will be conducted by the manufacturer over the course of the model y ear to supplement the initial test group data
. T he emissions and fuel consumption l evel s of the test vehicles will be us ed to calculate the production
- weighted fleet average s for the manufacturer , after application of the appropriate deterioration factor to each result to obtain a full useful life value. See generally 75 FR 25470
- 25472.******* **E.O. 12866 Review**

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131 of EPA and NHTSA do not currentl y anticipate notable deterioration of CO 2 emissions and fuel consumption performance, and are therefore requiring that an assigned deterioration factor be applied at the time of certification: an additive assigned deterioratio n factor of zero, or a multiplicative factor of one will be used. EPA and NHTSA anticipate that the deterioration factor may be updated from time to time, as new data regarding emissions deterioration for CO 2 are obtained and analyzed. Additionally , EPA and NHTSA may

consider technology
- specific deterioration factors, should data indicate that certain control technologies deteriorate differently than others. See also 75 FR 25474. (b ) In
- Use Standards Section 202(a)(1) of the CAA specifies that EPA set emissions standards that are applicable for the useful life of the vehicle. The in
- use standards that EPA is finalizing apply to individual vehicles. NHTSA is not adopting in
- use standards because they are not required under EISA, and because it is not c urrently anticipated that there will be any notable deterioration of fuel consumption. For the EPA program, compliance with the in
use standard for individual vehicles and vehicle models will not impact compliance with the fleet average standard, which wi ll be based on the production
- weighted average of the new vehicles
. EPA is finalizing the proposed provision that the in
- use standards for HD pickups and vans be established by adding an adjustment factor to the full useful life emiss ions and fuel consumption results used to calculate the fleet average. EPA is also finalizing the proposed provision that the useful life for these vehicles with respect to GHG emissions be set equal to their useful life for criteria pollutants: 11 years or 120,000 miles, whichever occurs first (40 CFR 86.1805
- 04(a)). As discussed above, we are finalizing the proposed provision that certification test results obtained before and during the model ye ar be used directly to calculate the fleet average emissio ns for assessing compliance with the fleet average standard. Therefore, this assessment and the fleet average standard itself do not take into account test
- to - test variability

and production variability that can affect measured in
- use levels. For this rea son, EPA is finalizing the proposed adjustment factor for the in
- use standard to provide some margin for production and test
- to - test variability that could result in differences between the initial emission test results used to calculate the fleet average and emission results obtained during subsequent in
- use testing. EPA is finalizing the proposed provision that each model’s in
- use CO 2 standard be the model
- specific level used in calculating the fleet average, plus 10 percent. This is the same as the app roach taken for light
- dut y vehicle GHG in
- use standards ( See 75 FR 25473
- 25474). No adverse comments were received on this proposed provision. As it does now for heav y - duty vehicle criteria pollutants, EPA will use a variety of mechanisms to conduct asses sments of compliance with the in
- use standards, including pre - production certification and in
- use monitoring once vehicles enter customer service. The full useful life in
- use standards appl y to vehicles that have entered customer service.******* **E.O. 12866 Review**

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132 of The same stand ards apply to vehicles used in pre
- production and production line testing, except that deterioration factors are not applied. **(4) What**  **HD Pickup and Van F lexibility**  **Provisions A re**  **B eing**  **Established ?**  This program contains substantial flexibility in how manufacturers can choose to implement the EPA and NHTSA standards while preserving their timel y benefits for the environment and energy

securit y. Primary among these flexibilities are the gradual phase
- in schedule, alternative compliance paths, and corporate flee t average approach described above. Additional flexibility provisions are described briefl y here and in more detail in Section IV. As explained in Section II.C(3), we are finalizing the proposed provision that, at the end of each model ye ar, when producti on for the model y ear is complete, a manufacturer calculate its production
- weighted fleet average CO 2 and fuel consumption. Under this approach, a manufacturer’s HD pickup and van fleet that achieves a fleet average CO 2 or fuel consumption level better than its standard will be allowed to generate credits. Conversel y, if the fleet average CO 2 or fuel consumption level does not meet its standard, the fleet would incur debits (also referred to as a shortfall). A manufacturer whose fleet generates credits i n a given model ye ar will have several options for using those credits to offset emissions from other HD pickups and vans. These options include credit carry
- back, credit carry
- forward, and credit trading. These provisions exist in the light
- dut y 2012
- 201 6 MY vehicle rule , and similar provisions are part of EPA’s Tier 2 program for light
- dut y vehicle criteria pollutant emissions, as well as many 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 ye ar and was subsequentl y carried over to the current model year, with a limitation on the carry
- back of credits to three model ye ars, consistent with the light
- dut y program. We are finalizing the proposed provision that, after satisfying any need to offset pre
- existing deficits, a manufacturer may bank remaining credits for use in future ye ars , with a limitation on the carry
- forward of credits to five model years . We are als o finalizing the proposed provision that manufacturers may certify their HD pickup and van fleet a ye ar earl y, in MY 2013, to generate credits against the MY 2014 standards. This averaging, banking, and trading program for HD pickups and vans is discussed in more detail in Section IV.A. For reasons discussed in detail in that section, we are not finalizing an y credit transferability to or from other credit programs or averaging sets. Consistent with the President’s May 21, 2010 directive to promote advanc ed technology

vehicles and with the agencies’ respective statutory authorities, we are adopting flexibility

provisions that parallel similar provisions adopted in the light
- dut y program. These include credits for advance technology vehicles such as electric vehicles, and credits for innovative technologies that are shown by the manufacturer to provide GHG and fuel consumption reductions in real world driving, but not on the test cycle. See Section IV.B.******* **E.O. 12866 Review**

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133 of 

### D. **Class 2b -**  **8 Vocational Vehicle**  **s** Heav y - dut y vehicles serve a vast range of functions including service for urban delivery , refuse hauling, utility service, dump, concrete mixing, transit service, shuttle service, school bus, emergency , motor homes, 131 and tow trucks to name onl y a small subset of the full range of vehicles. The vehicles designed to serve these functions are as unique as the jobs they

do. They

are vastly

different

– one from the other

– in size, shape and function. The agencies were unable to develop a specific vehicle definition based on the characteristics of these vehicles. Instead at proposal, we proposed to define that Class 2b
- 8 vocational vehicles as all he av y - dut y vehicles which are not included in the Heav y duty Pickup Truck and Van or the Class 7 and 8 Tractor categories. In effect, we said every thing that is not a combination tractor or a pickup truck or van is a vocational vehicle. We are finalizing that definition as proposed reflecting the same challenges we faced at proposal regarding defining the full range of heav y - dut y vehicles. As at proposal, recreational vehicles are included under EPA’s standards but are not included under NHTSA’s final stan dards. The agencies note that we are adding vocational tractors to the vocational vehicle category in the final rulemaking, as described above in Section II.B. The agencies proposed that Class 4 pickup trucks although similar to Class 2b and 3 vehicles be included in the vocational vehicle category . Comments from EMA, Cummins , NTEA and Navistar supported the premise that Class 4 vehicles belong as part of the vocational vehicle program because they are specifically

designed and engineered to meet vocation al requirements. They stated that components such as transmissions, axles, frames, and tires differ from the similar pickup truck s and vans in the Class 2b and 3 market. We agree with commenters’ arguments that there are a number of important differences between the Class 4 and Class 3 trucks that make such regulation inappropriate at this time. Furthermore, we think it likely that some of the efficiency improving measures taken by manufacturers in response to the new standards for Class 3 pickup trucks, such as aerody namic and accessory improvements, will find their way into complete Class 4 vehicle designs as well. As a result, we are keeping Class 4 vehicles in the vocational vehicle category , but are allow ing the optional chassis certification of Class 4 and 5 vehic les
. (See Section V.B(1)( e))
. As mentioned in Section I, vocational vehicl es undergo a complex build process. Often an incomplete chassis is built by a chassis manufacturer with an engine purchased from an engine manufacturer and a transmission purchased from another manufacturer. A body manufacturer purchases an incomplete ch assis which is then completed by attaching the appropriate features to the chassis. The diversity

in the vocational vehicle segment can be primaril y attributed to the variet y of vehicle bodies rather than to the chassis. For example, a body builder can build either a Class 6 bucket truck or a Class 6 delivery truck from the same Class 6 chassis. The aerod ynamic difference between these two vehicles due to their bodies will lead to different baseline fuel consumption and GHG emissions. However, the base line fuel

131 See above for discussion of applicability of NHTSA’s standards to non
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134 of consumption and emissions due to the components included in the common chassis (such as the engine, drivetrain, frame, and tires) will be the same between these two ty pes of complete vehicles. The agencies face difficulties in establishing the baseline CO 2 and fuel consumption performance for the wide variety of complete vocational vehicles because of the very

large number of vehicle t ypes and the need to conduct testing on each of the vehicle t ypes to establish the baseline. To establish standards for a complete vocational vehicle, it would be necessary to assess the potential for fuel consumption and GHG emissions improvement for each of these vehicle ty pes and to establish standards for each vehicle t ype. Because of the size and complexity of this task, the agencies judged it was not practical to regulate complete vocational vehicles for this first fuel consumption and GHG emissions program. To overcome the lack of baseline information from the different vehicle t ypes and to still achieve improvements fuel consumption and GHG emissions, the agencies proposed to set standards for the chassis manufacturers of vocational vehicles (instead of the body builders) and the engine manufacturers. Chassis manufacturers represent a limited number of companies as compared to body manufacturers, which are made up of a diverse set of companies that are typ ically small businesses. These companies would need to be regulated if whole vehicle standards were established. Similar to combination tractors, the agen cies proposed to set separate vehicle and engine standards for vocational vehicles. A number of comments were received on the proposal to regulate chassis and engine manufacturers
. The agencies received comments from DTNA supporting the proposal to regulate the chassis manufacturer but not body manufacturers
. While organizations like Cummins and I CCT expressed support for separate engine and vehicle standards ; Navistar, Pew, and Volvo , in contrast, opposed separate engine and chassis standards , stat ing that separate engine standards disadvantages integrated truck/engine manufacturers and full vehicle standards should be required. Volvo asked that the standards include an alternative integrated standard as well as complete vehicle modeling and testin g beginning in 2017. ACEEE and Sierra Club stated that the proposed standards and test procedures should move the agencies closer to full vehicle testing. Although the agencies understand that full vehicle standards would allow integrated truck/e ngine manufacturers potentially wider array

of compliance options without needing to make demonstrations through the off
- cycle credit provisions

– such as electrified accessories and weight reduction
-- the agencies are finalizing separate standards for vocational vehicles that appl y to chassis manufacturers and engine standards that appl y to engine manufacturers. The agencies continue to believe that it is not practical to regulate complete vocational vehicles for this first fuel consumption and GHG emissions program because of the size and complexity of the task associated with assessing the potential for fuel consumption and GHG emissions impro vement for each of the my riad ty pe s of vocational vehicle s . Thus, the agencies are finalizing a set of standards for the chassis manufacturers of vocational vehicles (but not the body builders) and for the manufacturers of HD engines used in vocational vehicles
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135 of **(1) What A**  **re the Vocational Vehicle and Engine**  **CO 2**  **and Fuel Consumption S**  **tandards and T**  **heir T**  **iming?** In the NPRM, the agencies proposed vehicle standards based on the agencies’ assessment of the availability of low rolling resistance tires that could be applied generall y to vocational vehicles as a category . The agencies considered the possibility of including other technologies in determining the proposed stringency of the vocational vehicle standards, such as aerodynamic improvements, but as discussed in the NPRM, tentatively

concluded that such improvements would not be appropriate for basing vehicle standard stringency in this phase of the rulemaking. 132 For example, the aerod ynamics of a r ecovery vehicle are impacted significantl y b y the equipment such as the arm located on the exterior of the truck. 133 The agencies found little opportunity to improve the aerodynamics of the equipment on the truck. The agencies also evaluated the aerodyn ami c opportunities discussed in the NAS report. The panel found that there was minimal fuel consumption reduction opportunity through aerodynamic technologies for bucket trucks, transit buses, and refuse trucks 134 primarily due to the low vehicle speed in norm al operation. The panel did report that there are opportunities to reduce the fuel consumption of straight trucks b y approximately 1 percent for trucks which operate at the average speed t ypi cal of a pickup and delivery truck (30 mph), although the opportunity

is greater for vehicles that operate at higher speeds. 135 The agencies received comments f rom the Motor Equipment Manufacturers Association, Eaton, NRDC, NESCAUM, NACAA, ACEEE, I CCT, Navistar, Arvin Meritor, the Union of Concerned Scientists and others that technologies such as idle reduction, advanced transmissions, advanced drivetrains, weight reduction, hy brid powertrains, and improved auxiliaries provide opportunities to reduce fuel consumption from vocational vehicles. Commenters asked that the agencies establish regulations that would reflect performance of these technologies and essentially force their utilization
. The agencies assessed these technologies and have concluded that they may have the potential to reduce fuel consumption and GHG emissions from at least certain vocational vehicles , but the agencies have not been able to estimate baseline fuel consumption and GHG emissions levels for each type of vocational vehicle and for each ty pe of technology , given the wide variet y of models and uses of vocational vehicles. For example, idle re duction technologies such as APUs and cabin heaters can reduce workday idling associated with vocational vehicles. However, characterizing idling activity for the vocational segment in order to quantify the benefits of idle reduction technology

is complic ated by

the variet y of dut y cycles found in the sector. I dling in school buses, fire trucks, pickup trucks, delivery trucks, and other t ypes of vocational vehicles varies significantly . Given the great variety of dut y c ycl es and operating conditio ns of vocational vehicles and the timing of these rules, it is not feasible at this time to establish an accurate baseline for quantifying the expected improvements which could result from use of idle reduction technologies . Similarly , f or advanced drivetrains

132 See 75 FR at 74241 133 A recovery vehicle removes or recovers vehicles that are disabled (broken down). 134 See 2010 NAS Report, Note **24** , page 133. 135 See 2010 NAS Report, Note **24** , page 110.******* **E.O. 12866 Review**

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136 of and advanced transmissions determining a baseline configuration, or a set of baseline configurations, is extremely difficult given the variety of trucks in this segment. The agencies do not believe that we can legitimately base standard stringency on the use of technologies for which we cannot identify baseline configurations , because absent baseline emissions and baseline fuel consumption, the emissions reductions achieved from introduction of the technology cannot be quantified. For some technologies, such as weight reduction and improved auxiliaries

– such as electrically driven power steering pumps and the vehicle’s air cond itioning s ys tem -- the need to limit technologies to those under the control of the chassis manufacturer f urther restricted the agencies’ options for incorporating the technologies into the final rules. For example, lightweight components that are under the control of chassis manufacturers are limited to a very few components such as frame rails. Considering the fuel efficiency and GHG emissions reduction benefits that will be achieved b y finalizing these rules in the time frame proposed, rather than delaying in order to gain enough information to include additional technologies, the agencies have decided to finalize standards that do not assume the use of these technologies and will consider incorporating them in a later action applicable to late r model years . As the program progresses and the agencies gather more information, we expect to reconsider whether vocational vehicle standards for MYs 2019 and beyond should be based on the use of additional technologies besides low rolling resistance tir es. EPA is adopting CO 2 standards and NHTSA is finalizing fuel consumption standards for manufacturers of chassis for new vocational vehicles and for manufacturers of heav y - dut y engines installed in these vehicles. The final heav y - dut y engine standards for CO 2 emissions and fue l consumption focus on potential technological improvements in fuel combustion and overall engine efficiency and those controls would achieve most of the emission reductions. Further reductions from the Class 2b
- 8 vocational vehicle itself are possible within the time frame of these final regulations. Therefore, the agencies are also finalizing separate standards for vocational vehicles that will focus on additional reductions that can be achieved through improvements in vehicle tires. The agencie s ’ anal ys es, as discussed briefly below and in more detail later in this preamble and in the RIA Chapter 2 , show that these final standards a ppear appropriate under each agency ’s respective statutory authoritie s. Together these standards are estimated to achieve reductions of up to 10 percent from most vocational vehicles. EPA is also adopting standards to control N 2 O and CH 4 emissions from Class 2b
8 vocational vehicles through controlling these GHG emissions fro m the HD engines. The final heav y - dut y engine standards for both N 2 O and CH 4 and details of the standard are included in the discussion in Section II.E.1.b and II.E.2.b. EPA neither proposed nor is adopting air conditioning leakage standards applying to v ocational vehicle chassis manufacturers. As discussed further below, the agencies are setting CO 2 and fuel consumption standards for the chassis based on tire rolling resistance improvements and for the engines based on engine technologies. The fuel co nsumption and GHG emissions impact of tire rolling resistance is impacted by the mass of the vehicle. However, the impact of******* **E.O. 12866 Review**

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137 of mass on rolling resistance is relativel y small so the agencies proposed to aggregate several vehicle weight categories under a sin gl e category for setting the standards. The agencies proposed to divide the vocational vehicle segment into three broad regulatory subcategories
- Li ght Heavy
- Dut y (Class 2b through 5), Medium Heav y - Duty (Class 6 and 7), and Heav y Heav y - Duty (Class 8) whi ch is consistent with the nomenclature used in the diesel engine classification. The agencies received comments supporting the division of vocational vehicles into three regulatory categories from DTNA. The agencies also received comments from Bosch, Clea n Air Task Force, and National Solid Waste Management Association supporting a finer resolution of vocational vehicle subcategories. Their concerns include that the agencies’ vehicle configuration in GEM is not representative of a particular vocation al application, such as refuse trucks. Another recommendation was to divide the category by both GVWR and by

operational characteristics. Upon further consideration, the agencies are finalizing as proposed three vocational vehicle subcategories because w e believe this adequatel y balances simplicity while still obtaining reductions in this diverse segment. Finer distinctions in regulatory subcategories would not change the technolog y basis for the standards or the reductions expected from the vocational vehicle category . As the agencies move towards future heav y - dut y fuel consumption and GHG regulations for post
- 2017 model years, we intend to gather GHG and fuel consumption data for specific vocational applications which could be used to establish application
- specific standards in the future. The agencies received comments supporting the exclusion of recreational vehicles, emergency

vehicles, school buses from the vocational vehicle standards . The commenters argued that these individual vehicle ty pes were small contributors to overall GHG emissions and that tires meeting their particular performance needs might not be available b y 2014. The agencies considered these comments and the a gencies have me t with a number of tire manufacturers to better understand their expectations for product availability

for the 2014 model y ear. Based on our review of the information shared, we are convinced that tires with rolling resistance consistent with our final ve hicle standards and meeting the full range of other performance characteristics desired in the vehicle market will be broadl y available by the 2014 model year. 136 Absent regulations for the vast majority

of vehicles in this segment, feasible cost
- effective reductions available at reasonable cost in the 2014
- 2018 model years will be needlessl y foregone. Therefore, the agencies have decided to finalize the vocational vehicle standards as proposed with recreational vehicles, emergency vehicles and school buses included in the vocational vehicle category
. As RVs were not included b y NHTSA for proposed regulation, they are not within the scope of the NPRM and are therefore excluded in NHTSA’s portion of the final program. NHTSA will revisit this issue in the ne xt rulemaking. In developing the final standards, the agencies have evaluated the current levels of emissions and fuel consumption, the kinds of technologies that could be utilized by manufacturers to reduce emissions and fuel consumption and the associated lead time, the associated costs for the industry , fuel savings for the consumer, and the magnitude of the CO 2 and fuel savings that may be achieved. After examining the possibility of vehicle improvements based on use of the technologies underl yi ng the standards for Class 7 and 8 tractors, including

136 Bachman, Joseph. Memorandum to the Docket. Heavy
- Duty Tire Evaluation. . See Docket #EPA
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138 of improved aerodyn amics, vehicle speed limiters, idle reduction technologies, tire rolling resistance, and weight reduction, as well as use of hy brid technologies, the agencies ultimately

determined t o base the final vehicle standards on performance of tires with superior rolling resistance. For standards for diesel engines installed in vocational vehicles, the agencies examined performance of engine friction reduction, aftertreatment optimization, ai r handling improvements, combustion optimization, turbocompounding, and waste heat recovery , ultimately deciding to base the final standards on the performance of all of the technologies except turbocompounding and waste heat recovery sy stems. The standards for gasoline engine installed in vocational vehicles are based on technologies such as gasoline d irect injection, friction reduction, and variable valve timing. The agencies’ evaluation indicates that these technologies, as described in Se ction III.C, are available today in the heavy
- duty

tractor and light
- dut y vehicle markets, but have very

low application rates in the vocational vehicle market. The agencies have anal yz ed the technical feasibility of achieving the CO 2 and fuel consumption standards, based on projections of what actions manufacturers would be expected to take to reduce emissions and fuel consumption to achieve the standards, and believe that the standards are cost
- effective and technologically feasible and appropriate withi n the rulemaking time frame. EPA and NHTSA also present the estimated costs and benefits of the vocational vehicle standards in Section III. (a ) Vocational Vehicle Chassis Standards In the NPRM, the agencies defined tire rolling resistance as a frictional l oss of energy , associated mainly with the energy

dissipated in the deformation of tires under load that influences fuel efficiency and CO 2 emissions. Tires with higher rolling resistance lose more energy in response to this deformation, thus using more fu el and producing more CO 2 emissions in operation, while tires with lower rolling resistance lose less energy , and save more fuel and CO 2 emissions in operation. Tire design characteristics ( e.g. , materials, construction, and tread design) influence durabi lity , traction (both wet and dry grip), vehicle handling, ride comfort, and noise in addition to rolling resistance. The agencies explained that a ty pical Low Rolling Resistance (LRR) tire’s attributes, compared to a non
- LRR tire, would include increased tire inflation pressure; material changes; and tire construction with less hy steresis, geometry changes ( e.g. , reduced height to width aspect ratios), and reduction in sidewall and tread deflection. When a manufacturer applies LRR tires to a vehicle, the manufacturer generally also make s changes to the vehicle’s suspension tuning and/or suspension design in order to maintain vehicle handling and ride comfort. The agencies also explained that while LRR tires can be applied to vehicles in all MD/HD classes, they

may have special potential for improving fuel efficiency and reducing CO 2 emissions for vocational vehicles. According to an energy audit conducted by Argonne National Lab, tires are the second largest contributor to energy losses of******* **E.O. 12866 Review**

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139 of vocatio nal vehicles, after engines. 137 Given this finding, the agencies considered the availability

of LRR tires for vocational applications by examining the population of tires available, and concluded that there appeared to be few LRR tires for vocational applic ations. The agencies suggested in the NPRM that this low number of LRR tires for vocational vehicles could be due in part to the fact that the competitive pressure to improve rolling resistance of vocational vehicle tires has been less than in the line ha ul tire market, given that line haul vehicle s generally drive significantly more miles and therefore have significantly higher operating costs for fuel than vocational vehicles, and much greater incentive to improve fuel consumption . The small number of LRR tires for vocational vehicles may

perhaps also be due in part to the fact that vocational vehicles generall y operate more frequently on secondary roads, gravel roads and roads that have less frequent winter maintenance, which leads vocational vehicle buyers to value tire traction and durability

more heavil y than rolling resistance. The agencies recognized that this provided an opportunity to improve fuel consumption and GHG emissions by creating a regulatory

program that encourages improvements in tire r olling resistance for both line haul and vocational vehicles. The agencies proposed to base standards for all segments of HD vehicles on the use of LRR tires. The agencies estimated that a 10 percent reduction in average tire rolling resistance would be attainable between model ye ars 2010 and 2014 based on the tire development achievements over the last several ye ars in the line haul truck market. This reduction in tire rolling resistance would correlate to a two percent reduction in fuel consumption as m odeled by the GEM. 138 (i ) Summary of Comments The agencies received many comments on the subject of tire rolling resistance as applied to vocational vehicles
. Comments included suggestions for alternative test procedures ; whether LRR tires should be applied to certain t ypes of vocational vehicles and whether certain vehicles should be exempted from the vocational vehicle standards if the standards are based on the ability to use LRR tires ; the appropriateness of the proposed standards ; and compliance issues (discussed below in Section II.D.2.b
. Regarding whether LRR tires should be applied to certain t ypes of vocational vehicles, the agencies received m an y comments from stakeholders, such as Daimler Trucks North America, Fire Apparatus Manufacturers Association (FAMA), International Association of Fire Chiefs, National Ready Mix, National Solid Wastes Management Association (NSWMA), Spartan Motors, National Automobile Dealers Association, among others. There were comments regarding applicability of low rolling resistance tires to vocational vehicles based on LRR tire availability , suitability of the tires for the applications, fuel consumption and GHG emissions benefits and the appropriateness of standards. Man y of these commenters focused particularly on the whether LRR tires would compromise the capability of emergency

vehicles.

137 A Class 6 pick up and delivery truck at 50% load has tires as the second largest contributor at speeds up to 35 mph, a typical average speed of urban delivery vehicles. See Argonne National Laboratory. “E valuation of Fuel Consumption Potential of Medium and Heavy Duty Vehicles through Modeling and Simulation.” October 2009. Page 91. 138 See 75 FR at 74241.******* **E.O. 12866 Review**

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140 of Regarding whether LRR tire s are availab le in the market for certain vocational vehicles and whether the vocational vehicle standards were therefore appropriate and feasible , both Ford and AAPC stated that the proposed model
- ba sed requirement for Class 2b
- 8 vocational chassis appear ed to require tires with rolling resistance values of approximately

8.0
- 8.1 kg/metric ton or better , and that l imited data available for smaller diameter tires , such as light
- truck (LT) tires used o n many light heav y - duty

trucks and vans , suggest ed that there exist few if an y choices for tires that would comply
. Given this concern about the availability of compliant tires, particularl y in the case of tires smaller than 22.5 ” , during the proposed re gulatory time frame , AAPC and Ford request ed revisions to the requirement, or the modeling method, to establish different standards for vehicles that use different tire class es, with separate requirements for LT tires, 19.5 ” tires, and 22.5 ” tires. AAPC argu ed that standards should be set based on data collected on high volume in
- use tires , and that they should be set at a level that ensures the availability of multiple compliant tires. (ii) Summary of Research Done Since the Notice of Proposed Rulemaking Since the NPRM , the agencies have conducted additional research on tire rolling resistance for m edium
- and heav y - d ut y applicatio ns. This research involved direct discussions with tire suppliers, 139 assessment of the comments received, additional review of tire products available, and a more thorough review of tire use in the field. 140 In addition, EPA has conducted tire rolling resist ance testing to help inform the final rulemaking. 141 The agencies discussed many aspects of low rolling resistance tire technologies and their application to vocational vehicles with tire suppliers since publication of the NPRM
. Several tire suppliers indicated to the agencies that low rolling resistance tires are currentl y available for vocational applications that would enable compliance with the proposed vocational vehicle standards , such as delivery vehicles, refuse vehicles, and other vocations
. However, the se conversations also made the agencies aware that availability

of low rolling resistance tires varies by supplier. Some suppliers stated they focused their compan y resources on areas of the medium
- and heav y - dut y vehicle spectrum where fleet operators would see the most fuel efficie ncy benefits for the application of low rolling resistance technologies; specificall y the long
- haul, on
- highway applications that drive many miles and use large amounts of fuel. These suppliers stated that this choice w as driven by the significant capital investment that would be needed to improve tire rolling resistance across the relativel y large number of product offerings in the vocational vehicle segment, based on the wide range of tire sizes, load ratings, and speed ratings, compared to the much narrower range of offerings for long
- haul applications. 142 Other suppliers stated that they have made conscious efforts to reduce

139 Records of these communications, and additional information submitted by the supplier companies and not CBI, are available at Docket No. EPA
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141 of the rolling resistance of all of their medium
- and heav y - dut y vehicle tire offerings, including vocational applications, in an effo rt to become leaders in this technology
. The agencies also discussed with tire suppliers the potential tire attribute tradeoffs that may be associated with incorporating designs that improve tire rolling resistance, given the driving patterns, environmenta l conditions, and on
- road and off
- road surface conditions that vocational vehicles are subjected to. Some vehicle manufacturer commenters had suggested that c hanges in tire tread block design that improve rolling resistance may

adversel y affect tire perfo rmance characteristics such as traction, resistance to tearing, and resistance to wear and damage from scrubbing on curbs and frequent tight radius turns that are important to customers for vocational vehicle performance
. The suppliers agreed that providi ng tires unable to withstand these conditions or meet the vehicle application needs would adversel y affect customer satisfaction and warrant y expenses, and would have detrimental financial effects to their businesses. One supplier indicated th at in some cases, tread
- wear (tire life) could be compromised if suppliers choose to reduce the initial tire tread depth without any offsetting tire compound or design enhancements as the means to achieve rolling resistance reductions. T hat supplier argued that t aking this approach could lead to more frequent tire replacements or re
- treading of existing tire carcasses , and that the agencies should therefore take a total lifecycle view when evaluating the effects of driving rolling resistance reductions. Th at supplier also indicated that a correlation of a 20 percent reduction in rolling resistance achieved through tread depth reduction could lead to a 30 percent decrease in tread
- life and 15 percent reduction in wet traction. The agencies note that when they inquired about potential ‘safet y’ related tradeoffs, such as traction (braking and handling) and tread wear when applyinglow rolling resistance technologies , tire suppliers which remain subject to safet y standards regardless of this pr ogram , consistently

responded that they

would not produce a tire that compromises safet y when fitted in its proper application. In addition to the supplier discussions and evaluation of comments to the Notice of Proposed Rulemaking, EPA conducted a series of tire rolling resistance tests on medium
- and heav y - duty vocational vehicle tires. The testing measured the RR C of tires representing 16 different vehicle applications for C lass 4

– 8 vocational vehicles . The testing included approximately 5 samples each of both steer and drive tires for each application. The tests were conducted b y two independent tire test labs, Standards Testing Lab (STL) and Smithers
- Rapra (Smithers). Overall, a total of 156 medium
- and heav y - dut y tires were included in this testing, which was comprised of 88 tires covering various commercial vocational vehicle types, such as bucket trucks, school buses, city delivery vehicles, cit y transit buses and refuse haulers among others; 47 tires intended for application to tracto rs; and 21 tires classified as LT tires intended for Class 4 vocational vehicles such as delivery vans. In addition, approximately

20 of the tires tested were exchanged between the labs to assess inter
laboratory

variability
. there may be 8
- 10 different tire sizes. In contrast, a line
- haul application may have only 2
- 3 tire designs with a fewer range of sizes.******* **E.O. 12866 Review**

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142 of The test results for 88 commercial vocational vehicle tires (19.5” and 22.5” sizes) showed a test average RR C of 7.4 kg/metric ton , with results ranging from 5.4 to 9.8 . To comply with the proposed vocational vehicle fuel consumption and GHG emissions standards using improved tire rolling resistan ce as the compliance strategy , a manufacturer would need to achieve an average tire RR C value of 8.1 kg/metric ton
. 143 The measured average RR C of 7.4 kg/metric ton is thus better than the average value that would be need ed to meet vocational vehicle standards. Of th ose eight y - eight tires tested, twenty tires had RR C values worse than 8.1 kg/metric ton, two were at 8.1 kg/metric ton, and sixty
- six tires were better than 8.1 kg/metric ton. Additional data anal yses examinin g the tire data b y tire size to determine the range and distribution of RRC values within each tire size showed each tire size generall y had tires rang ing from approximately 6.0 to 8.5 kg/metric ton, with a small number of tires in the 5.3

– 5.7 kg/metric ton range and a small number of tires in a range as high as 9.3

– 9.8 kg/ton. Review of the data showed that for each tire size and vehicle type, the majo rity of tires tested would enable compliance with vocational vehicle fuel consumption and GHG emission standards. The test results for the 47 tires intended for tractor application showed an overall average of 6.9 kg/ton, the lowest overall average rollin g resistance of the differ ent tire applications test ed
. 144 This is consistent with what the agencies heard through comment s and meetings with tire suppliers wh ose efforts have focused on tractor applications , particularl y for long
- haul applications, which yi eld the highest fuel efficiency benefits from LRR tire technology
. Finally , the 21 LT tires intended for Class 4 vocational vehicles were comprised of two sizes; L T225/75R16 and LT245/75R16 with 11 and 10 samples tested, respectivel y. Some auto manufactur ers have indicated that RR C values for tires fitted to these Class 4 vehicles t ypically have a higher RR C value s than tires found on commercial vocational vehicles because of the smaller diameter wheel size and the I SO testing protocol. 145 The test data show ed the average RR C for L T225/75R16 tires was 9.1 kg/metric ton and the average for LT245/75R16 tires was 8.6 kg/metric ton. The range for the LT225/75R16 tires spanned 7.4 to 11.0 146 and the range for the LT245/75R16 tires ranged from 6.6 to 9.8 kg/metric to n. Overall, the average for the tested LT tires was 8. 9 kg/metri c ton. Analy sis of the EPA test data for all vocational vehicles, including LT tires, shows the test average RR C is 7. 7 kg/metri c ton and with a standard deviation of 1. 2 kg/metric ton. R eview of the data thus shows that for each tire size and vehicle ty pe, the re are man y tires available that would enable compliance with the proposed standards for vocational vehicles and tractors except for LT tires for Class 4 vocational vehicles where test results show the majority of these tires are worse than 8.1 kg/metri c ton.

143 See 75 FR at 74244. 144 The RRC values for these applications ranged from 5. 4 to 9. 2 kg/metric ton. 145 See comments to docket EPA
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- 1761; Ford Motor Company 146 The agency notes the highest RRC values recorded for LT tires, of 11.0 and 10.9, were for two tires of the same size and brand. The nearest recorded values to these two tires were 9.8; substantially beyond the differences between other tires tested.******* **E.O. 12866 Review**

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143 of The agencies also reviewed the RRC data from the tires that were tested at both the STLand Smithers laboratories to assess inter
- laboratory and test machine v ariability
. The agencies conducted statistical analy sis of the data to gain better understanding of lab
to - lab correlation and developed an adjustment factor for data measured at each of the test labs . When applied, this correction factor showed that fo r 77 of the 80 tires tested, the difference between the original RRC and a value corrected RR C was 0.01 kg/metric ton. The values for the remaining three tires were 0.03 kg/metric ton, 0.05 kg/metric ton and 0.07 kg/metric ton. Based on these results, the agencies believe the lab
- to - lab variation for the STL and Smithers laboratories would have very small effect on measured RR C values. Further, in anal yz ing the data, the agencies considered both measurement variability

and the value of the measurements rel ative to proposed standards. The agencies concluded that although laboratory
- to - laboratory and test machine
- to - test machine measurement variability exists, the level observed is not excessive relative to the distribution of absolute measured RRC performan ce values and relative to the proposed standards. Based on this, the agencies concluded that the test protocol is reasonable for this program , but are making some revisions to the vehicle standards
. . The agencies also conducted a winter traction test of 28 tires to evaluate the impact of low rolling resistance designs on winter traction. The results of the study indicate that there was no statistical difference between rolling resistance and snow traction. 147 (iii) Summary of Final Rules For vocational vehicles, the agencies intend to keep rolling resistance as an input to the GEM but with modifications to the proposed targets as a result of the testing completed b y EPA since the NPRM and information from tire suppliers. The a gencies continue to believe that LRR tires, which are an available, cost
- effective, and appropriate technology

with demonstrated fuel efficiency and GHG reduction benefits, are reasonable for all on
- highway

vehicles. The agencies acknowledge there can be tradeoffs when designing a tire for reduced rolling resistance. These tradeoffs can include characteristics such as wear resistance, cost and scuff resistance. However, the agencies have continued to review this issue and do not believe that LRR tires a s specified in the rule s present safet y issues. As described above , the agencies conducted independent testing of current tires available to assist confirming the finalized rolling resistance standards. The tire test samples were selected from those currently available on the market and therefore have no known safet y issues and meet all current requirements to allow availability in commerce ; including wear, scuff resistance, braking, traction under wet or icy condition s, and other requirements
. These tires included a wide array of sizes and designs intended for most all vocational applications, including those used for school buses, refuse haule rs, emergency vehicles, concrete mixers, and recreational vehicles
. As the test results revealed, there

147 Memo to Docket. Winter Tire Traction Evaluation. Docket EPA
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144 of are a significant number of tires available that meet or exceed the rolling resistance targets for vocational vehi cles; both l ight
- truck (with an adjustment factor) and non
- LT tire ty pes , while meeting all applicable safet y standards
. The agencies also recognize the extreme conditions fire apparatus equipment must navigate to enable firefighters to perform their duties. As described below , the agencies provided provisions to allow for exemption of specific off
- road capable vocational vehicles from the f

uel efficiency

and greenhouse gas standards. In cluded in the exemption criteria are provisions for vehicles equipped with specific tire types which would fitted to a vehicle to meet extreme demands, including those designed for off
- road capability
. As fo llow
- up to the final rule s and in support for development of a separate FMVSS rule, NHTSA plans to conduct additional performance
- focused testing (beyond rolling resistance) for medium
- and heav y - dut y trucks. This testing is targeted for completion toward the end of this year. The agencies will review th e s e performance data when available , in concert with any subsequent proposed rulemakings regarding fuel consumption and GHG emissions standards for medium
- and heav y - dut y vehicles. For vocational vehicles, the rolling resistance of each tire will be measured using the I SO 28850 test method for drive tires and steer tires planned for fitment to the vehicle being certified. Once the test RR C values are obtained, a manufacturer will input the RR C values for the drive and steer tires separately into the GEM where, for vocational vehicles, the vehicle load is distributed equally over the steer and drive tires
. Once entered, the amount of GHG reduction attributed to tire rolling resistance will be incorporate d into the overall vehicle compliance value. The following table provides the revised target RR C values for vocational vehicles for 2014 and 2017 model y ears that are used to determine the vehicle standards
.

**Table II**  **- 14**  **: Vocational Vehicle**

**– Target RR**  **C Values for GEM Input**  2014 MY 2017 MY Tire Rolling Resistance (kg/metric ton) 7.7 kg/metric ton 7.7 kg/metric ton These target values are being revised based on the significant availability of tires for vocational vehicles applications which have performance better than the originally proposed 8.1 kg/metric ton target. As just discussed, 63 of the 88 tires tested for vocational applications had RR C values better than the proposed target. The tires tested covered fitment to a wide rang e of vocational vehicle ty pes and classes; thus agencies believe the original target value of 8.1 kg/metric ton was possibly too lenient after reviewing the testing data. Therefore, the agencies believe it is appropriate to reduce the proposed vehicle standard bas ed on performance of an RR C target value of 7.7 kg/metric ton for non
- LT tire t ype. As discussed previousl y, this value is the test average of all vocational tires tested (including LT) which takes a conservative approach over setting a target based on the average of onl y the non
- LT v ocational tires tested. For LT tires, based on both the test data and the comments from AAPC and Ford Motor Company , the******* **E.O. 12866 Review**

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145 of agencies recognize the need to provide an adjustment . In lieu of having two sets of L ight Heav y - Duty

vocational vehicle standards, the agencies are finalizing an adjustment factor which applies to the RRC test results for L T tires. The agencies develope d an adjustment factor dividing the overall vocational test average RR C of 7.7 by the LT v ocational average of 8.9. This yi elds an adjustment factor of 0.87. For LT vocational vehicle tires, the measured RR C values will be multiplied by the 0.87 adjustment factor before entering the values in the GEM for compliance. Based on the tire rolling resistance inputs noted above EPA is finalizing the following CO 2 standards for the 2014 model ye ar for the Class 2b through Class 8 vocational vehicle chassis, as shown in Table II
- 15 . Similarly , NHTSA is finalizing the following fuel consumption standards for the 201 6 model year, with voluntary standards beginning in the 2014 model y ear. For the EPA GHG program, the standard applies throughout the useful life of the vehicle. The agencies note that both the baseline performance and standards derived for the final rule s slightly differ from the values derived for the NPRM. The first difference is due to the change in the target rolling resistance from 8.1 to 7.7 kg/metric ton based on the agencies’ test results. Second, there are minor differences in the fuel cons umption and CO 2 emissions due to the small modifications made to the GEM, as noted in RIA Chapter 4. Lastl y , the final HHD vocational vehicle standard uses a revised payload assumption of 15,000 pounds instead of the 38,000 pounds used in the NPRM , as described in Section II.D.3.c.iii. As a result, the emission standards shown in Table II
- 15 for vocational vehicles have changed from the standards published in the NPRM. The changes for light heav y and medium heavy
duty vehicle s are modest. The change for heav y - heavy dut y vocational vehicles is larger, due to the difference in assumed payload. As with the 2017 MY standards for Class 7 and 8 tractors, EPA and NHTSA are adopting more stringent vocational vehi cle standards for the 2017 model year which reflect the CO 2 emissions reductions required through the 2017 model ye ar engine standards. See also Section II.B.2 explaining the same approach for the standards for combination tractors . As explained in Secti on II. D. (2) (c)(iv) below, engine performance is one of the inputs into the compliance model that has a pre
- defined (or fixed) value that is established by the a gencies , and that input will change in 2017 MY to reflect the 2017 MY engine standards. The 2017 MY vocational vehicle standards are not premised on manufacturers installing additional vehicle technologies , and a vocational vehicle that complies with the standards in MY 2016 will also comply in MY 2017 with no vehicle (tire) changes . Thus, although chassis manufacturers will not be required to make further improvements in the 2017 MY to meet the standards, the standards will be more stringent to reflect the engine improvements required in that y ear. This is because in 2017 MY GEM vehicle modeling outputs (in grams per ton mile and gallons per 1,000 ton mile) will automaticall y decrease since engine efficiency will improve in that year.******* **E.O. 12866 Review**

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146 of **Table II**  **- 15**  **: Final Class 2b -**  **8 Vocational Vehicle CO 2**  **and Fuel Consumption Standards** EPA CO 2 (gram/ton
- mile) Standard Effective 2014 Model Year

Li ght Heav y - Dut y Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 CO 2 Emissions 388 234 226 NHTSA Fuel Consumption (gallon per 1,000 ton - mile) Standard Effective 2016 Model Year 148 Li ght Heav y - Dut y

Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 Fuel Consumption 38. 1 23.0 22.2 EPA CO 2 (gram/ton
- mile) Standard Effective 2017 Model Year

Li ght Heav y - Dut y Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 CO 2 Emissions 373 225 222 NHTSA Fuel Consumption (gallon per ton
- mile) Standard Effective 2017 Model Year

Li ght Heav y - Dut y Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 Fuel Consumption 36. 7 22.1 21.8 (iv) Off
-Road and Low
- Speed Vocational Vehicle Standards Some vocational vehicles, because they are primarily

designed for off

- road use, may not be good candidates for low rolling resistance tires. These vehicles may trave l on - road for very

limited periods of time, such as in traveling on an urban road, or if they are off
- loaded from another vehicle onto a road and then are driven off
- road. The infrequent and limited exposure to on
- road environments makes these vehicles suitable candidates for providing an exemption from the CO 2 emissions and fuel consumption standards for vocational vehicles (although the standards for HD engines used in vocational vehicles would still ap ply)
. 149 The agencies are also targeting o ther vehicles that travel at low
- speeds and that are meant to be used both on
- and off
- road
. T he application of certain technologies to these vehicles may not provide the same level of benefits as it would for pure on
- road vehicles, and mor eover, could even reduce the functionality

of the vehicle . In this case, the agencies want to ensure that vehicle functionality

is maintained to the maximum extent possible , while avoiding the possibility

that achievable benefits are not realized because of the structure of the regulations. The sections below explain this issue in more detail as it applies to tractors and vocational vehicles. The agencies explained in the NPRM that certain vocational vehicles have very limited on
- road usage, and that although they would be defined as “motor vehicles” per 40 CFR 85.1703, the fact that they spend the most of their operations off
- road might be

148 Manufacturers may voluntarily opt
- in to the NHTSA fuel consumption program in 2014 or 2015. Once a manufa cturer opts into the NHTSA program it must stay in the program for all the optional MYs. 149 See 75 FR at 74199.******* **E.O. 12866 Review**

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147 of reason for excluding them from the vocati onal vehicle standards. Vocational vehicles, such as those used on oil fields and construction sites 150 , experience very little benefit from LRR tires or from any other technologies to reduce GHG emissions and fuel consumption. The agencies proposed to all ow a narrow range of these de facto off
- road vehicles to be excluded from the proposed vocational vehicle standards if equipped with special off

- road tires having lug ty

pe treads. The agencies stated in the NPRM that on/off road traction is the onl y t ire performance parameter which trades off with TRR so significantl y that tire manufacturers could be unable to develop tires meeting both a TRR standard while maintaining or improving the characteristic allowing them to perform off
road. Therefore , the agencies proposed to exempt these vehicles from the standards while requiring them to use certified engines, which would provide fuel consumption and CO 2 emission reductions in all vocational applications. To ensure that these vehicles were in fact used chiefl y off
- road, the agencies proposed requirements that would allow exemption of a vehicle provided the vehicle and the tires were speed limited. As mentioned, the agencies were aware that the majority of off road trucks primarily use off
road tires and are low speed vehicles as well. Based upon this understanding, the agencies specifically

proposed that a vehicle must meet the following r equirements to qualify for an exemption from vocational vehicle standards:

 Tires which are lug tires or contain a speed rating of less than or equal to 60 mph; and

 A vehicle speed limiter governed to 55 mph. In response to the NPRM, EMA/TMA, Navistar and Volvo agreed with excluding off
- road vocational vehicles from the standards because these vehicles primarily operate off
- road, but requested broadening the exclusion to cover other ty pes of vocational vehicles. Several manufacturers (IAFC, FAMA, NTEA, NSW MA, AAPC, RMA, Navistar and DTNA) requested the exemption of specific vehicle t ypes, such as on/off
road emergency

vehicles, refuse vehicles , low speed transit buses or school buses, because their usage was viewed as being incompatible with LRR tire s. Navistar oppose d the application of the proposed regulations to school buses , arguing that LRR tires may impact the ride qualit y for children in school buses . However, Navistar also acknowledged that a significant portion of the national fleet of school buses already utilize s off

- road tires designed with lug t ype tread patterns (e.g., Kentucky)
. IAFC, FAMA and NTEA commented that fire trucks and ambulances should also be exempted due to their part
- time off

- road use such as in responding to a wildland fir e or hazardous materials incidents which would require operations on dirt and gravel roads, fields or other off
- road environments. Commenters also contended that by requiring a 55
- mph limitation, the proposed exemption would be impractical for emergency v ehicles due to the need to respond quickly to life
- threatening events. The refuse truck manufacturers and trade associations, NSWMA and AAPC, commented that the solid waste industry operates a variet y of vocational vehicles that perform solely off
- road at landfills. These comments also requested an exemption for certain refuse trucks (i.e., roll
- off container trucks) that frequentl y go off
- road at construction sites. Other commenters (FAMA,

150 Vehicles such as c oncrete m ixer s , off
- road dump trucks, backhoes and wheel l oaders
.******* **E.O. 12866 Review**

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148 of IA FC and Oshkosh) opposed compliance with the LRR standard fo r vocational vehicles for on/off road mixed service tires with aggressive or lug treads, stating that up to this point the industry

has had very

little interest in improving the LRR aspects of these tires or even to conducting testing to determine val ues for the coefficient of rolling resistance
. For the final rules, the agencies have considered the issues raised b y commenters and have decided to adopt different criteria for exempting vocational vehicles and vocational tractors that primarily travel off
- road than proposed . The agencies believe that the reasons for proposing the exemption are equally applicable to a wider class of vocational vehicles operating mostly off
- road so that the proposals were either unsuitable for the industry

or too restrictive to capture all the vehicles intended for the exemption. For example, the NPRM proposal, by using tire tread patterns and VSLs as the basis for qualifying vehicles for the exemption, was too restrictive because other non
- lug t ype tread patterns exist in the market as well as other technologies which are equally capable of limiting the speed of the vehicle, as mentioned by Volvo. Therefore, the proposed exemption for off

- road vocational vehicles will be replaced with new criteria based on the vehicle application, whether it operates at low speed and whether the vehicle has speed restricted tires. The exemption is in part based on existing industry standards established by

NHTSA. 151 As such, an y vocational vehicle including vocational tractors primarily used off
- road or at low speeds must meet the following criteria to be exempted from GHG and fuel consumption vehicle standards:

 Any vehicle primarily

designed to perform work off
- road such as in oil fields, forests, or construction sites and having permanently or temporaril y affixed components designed to work in an off
- road environment (i.e., hazardous material equipment or off
- road drill equipment) or vehicles operating at low speeds making them unsuitable for normal highway operation ; and meeting one or more of the following criteria:

 Any vehicle equipped with an axle that has a gro ss axle weight rating (GAWR) of 29,000 pounds ; or  Any truck or bus that has a speed attainable in 2 m iles of not more than 33 mph; or  Any truck that has a speed attainable in 2 miles of not more than 45 mph, an unloaded vehicle weight that is not less than 95 percent of its gross vehicle weight rating (GVWR), and no capacity to carry occupants other than the driver and operating crew. The agencies are also adopting in the final rules requirements to exempt any vocational vehicle that can operate in both on and off
- road environments and having speed restricted tires rated at 55 mph or below. 152 The agencies ’ reasoning in adopting a speed restricted exemption for tires is that the majority of mixed service tires used for off
- road use w as identified as being restricted at 55 mph or less. Also, as identified by FMVSS No. 119, speed restricted tires at a rat ing of 55 mph or less are incapable of

151 XXX Cite needed from NHTSA 152 See 1037.631******* **E.O. 12866 Review**

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149 of meeting the same on
- road performance standards as convention al tires
. The agencies acknowledge that using a speed restriction criteria could allow certain vehicles to be exempted inappropriately (i.e., low speed city delivery tractors) but the agencies believe this is preferable to creating a situation where a segment of vehicles are precluded from performing their intended applications. Therefore, the final rule s include an exemption for an y mixed service (on and off road) vocational vehicle equipped with off
- road tire s that are speed restricted at 55 mph or less. Manufacturers choosing to exempt vehicles based on the above criteria will be required to provide a description of how they meet the qualifications for each vehicle family group in their end
- of

- the ye ar and final ye ar reports (see Section V). A manufacturer having an off
- road vehicle failing to me et the criteria under the agencies’ off

- road exemptions will be allowed to submit a petition describing how and why their vehicles should qualify for exclusion. The process of petitioning for an exemption is explained in Standards 1037.630 and 535.8. For each request, the manufacturer will be required to describe wh y it believes an exemption is warranted and address following factors which the agencies will consider in granting its petition:

 The agencies provide an exemption based on o ff road capability of the vehicle or if the vehicle is fitted with speed restricted tires. Which exemption does your vehicle qualify under; and  Are there an y comparable tires that exist in the market to carry out the desired application both on and off ro ad for the subject vehicle(s) of the petition which have LLR values that would enable compliance with the standard? (b ) Heavy
- duty Engine Standard s for Engines Installed in Vocational Vehicles EPA is finalizing GHG standards 153 and NHTSA is finalizing fue l consumption standards for new heav y - duty engines installed in vocational vehicles. The standards will vary depending on whether the engines are diesel or gasoline powered since emissions and fuel consumption profiles differ significantly depending on wh ether the engine is gasoline or diesel powered. The agencies ’ anal ys es, as discussed briefl y below and in more detail later in this preamble and in the RIA Chapter 2 , show that these standards are appropriate and feasible under each agency ’s respective st atutory authorities. The agencies have anal yzed the feasibility of achieving the GHG and fuel consumption standards, based on projections of what actions manufacturers are expected to take to reduce emissions and fuel consumption. EPA and NHTSA also pre sent the estimated costs and benefits of the heav y - dut y engine standards in Section III below
. In developing the final rules, the agencies have evaluated the kinds of technologies that could be utilized by

engine manufacturers compared to a baseline engin e, as well as the

153 Specifically, EPA is finalizing CO 2 , N 2 O, and CH 4 emissions standards for new heavy
- duty engines over an EPA specified useful life period (see Section II. E. for the N 2 O and CH 4 standards ).******* **E.O. 12866 Review**

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150 of associated costs for the industry and fuel savings for the consumer and the magnitude of the GHG and fuel consumption savings that may be achieved. EPA’s existing criteria pollutant emissions regulations for heav y - dut y highway engines est ablish four service classes (three for compression
- ignition or diesel engines and one for spark ignition or gasoline engines) that represent the engine’s intended and primary vehicle application, as shown in Table II
- 16 (40 CFR 1036.140 and NHTSA’s 49 CFR Part 535.4 ). The agencies proposed to use the existing service classes to define the engine subcategories in this HD GHG emissions and fuel consumption program. The agencies did not receive any adverse comments to using this approach. Thus, the agencies are adopting the four engine subcategories for this final action. **Table II**  **- 16**  **: Engine Regulatory Subcategories** Engine Category Intended Application Li ght Heav y - dut y (LHD) Diesel Class 2b through Class 5 trucks (8,501 through 19,500 pounds GVWR) Medium Heav y - dut y (MHD) Diesel Class 6 and Class 7 trucks (19,501 through 33,000 pounds GVWR) Heav y Heav y - dut y (HHD) Diesel Class 8 trucks (33,001 pounds and greater GVWR Gasoline In complete vehicles less than 14,000 pounds GVWR and all vehicles (complete or incomplete) greater than 14,000 pounds GVWR (i ) Diesel Engine Standards for Engines Installed in Vocational Vehicles In the NPRM, the agencies proposed the following CO 2 and fuel consumption standards for HD diesel engines to be installed in vocational vehicles, as shown in Table II
- 17
. **Table II**  **- 17**  **: Vocational Diesel Engine Standards over the Heavy**  **- Duty FTP Cycle**  Model Year Standard Li ght Heav y Duty Diesel Medium

Heav y Duty Diesel Heav y

Heav y Duty Diesel 2014
- 2016 CO 2 Standard (g/bhp
- hr) 600 600 567

Voluntary

Fuel Consumption Standard (gallon/100 bhp
- hr) 5.89 5.89 5.57 2017 and Later CO 2 Standard (g/bhp
- hr) 576 576 555

Fuel Consumption (gallon/100 bhp
- hr) 5. 66 5. 66 5.45 The agencies explained in the NPRM that the standards were based on our assessment of the findings of the 2010 NAS report and other literature sources that there******* **E.O. 12866 Review**

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151 of are technologies available to reduce fuel consumption in all these engines by this level in the final time frame in a cost
- effective manner. Similar to the technology basis for HD engines used in combination tractors, these technologies include improved turbochargers, aftertreatment optimization, low temperature exhaust gas recirculation, and engine friction reductions. The agencies proposed that the HD diesel engine CO 2 standards for vocationa l vehicles would become effective in MY 2014 for EPA, with more stringent CO 2 standards becoming effective in MY 2017, while NHTSA’s fuel consumption standards would become effective in MY 2017, which would be both consistent with the EI SA four
- ye ar minimum lead
- time requirements and harmonized with EPA’s timing for stringency

increases. The agencies explained that the three
- ye ar timing, besides being required b y E IS A, made sense because EPA’s heavy
- dut y highway engine program for criteria pollutants had b egun to provide new emissions standards for the industry in three ye ar increments, which had caused the heav y - dut y engine and vehicle manufacturer product plans to fall largely into three year cycles reflecting this regulatory environment. 154 To further harmonize with EPA, NHTSA proposed voluntary fuel consumption standards for HD diesel engines for vocational vehicles in MYs 2014
- 2016, allowing manufacturers to opt into the voluntary standards in any

of those model years . 155 Manufacturers opting into the program must declare b y statement their intent to comply prior to or at the same time they submit their first applicatio n for a certificate of conformity . A manufacturer opting into the program would begin tracking credits and debits beginning in the model year in which they opt in. Both agencies proposed to allow manufac turers to generate and use credits to achieve compliance with the HD diesel engine standards for vocational vehicles, including averaging, banking, and trading (ABT), and deficit carry
- forward. The agencies proposed to require HD diesel engine manufacturer s to achieve, on average, a three percent reduction in fuel consumption and CO 2 emissions for the 2014 standards over the baseline MY 2010 performance for the HHD diesel engines , and a five percent reduction for the LHD and MHD diesel engines. The standard s for the LH D and MH D engine categories were proposed to be set at the same level because the agencies found that there is an overlap in the displacement of engines which are currently certified as LHDD or MHDD. The agencies developed the baseline 2010 m odel year CO 2 emissions from data provided to EPA by manufacturers during the non
- GHG certification process. Analy sis of CO 2 emissions from 2010 model y ear LHD and MHDD diesel engines showed little difference between LHD and MHD diesel engine baseline CO 2 performance in the 2010 model y ear, which overall averaged 630 g CO 2 /bhp
- hr (6.19 gal/100 bhp
- hr)
. 157 Furthermore, the technologies available to reduce fuel consumption and CO 2 emissions from these two categories of engines are similar. The agencies considered combining these engine categories into a single category , but decided to

154 See generally 75 FR at 74200
- 201. 155 Once a manufacturer opts into the NHTSA program it must stay in the program for all the optional MYs and remain standardized with the implementation approach being used to meet the EPA emission program. 157 Calculated using the conversion 10,180 g CO 2 /gallon for diesel fuel.******* **E.O. 12866 Review**

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152 of maintain these two separate engine categories with the same standard level to respect the different useful life periods associated with each category
. For vocational engi nes certified on the FTP cycle, the agencies proposed to require a five percent reduction for HHD engines and nine percent for LHD and MHD engines. For LHD and MHD engines in 2017 MY, the nine percent reduction is based on the assumption that valvetra in friction reduction can be achieved in LHD and MHD engines in addition to turbo efficiency and accessory

(water, oil, and fu e l pump) improvements, improved EGR cooler, and other approaches being used for HHD engines. Commenters who discussed the HD diesel engine standards generall y did not differentiate between the standards for engines used in combination tractors and the engines used in vocational vehicles. As explained above in Section II.B.2.b, some commenters, su ch as EMA/TMA, Cummins, DTNA, and other manufacturers , supported the standards proposed in the NPRM, as long as the flex ibilities proposed in the NPRM we re finalized as proposed. Volvo argued that the standards are being phased in too quickly . Environmental groups and NGOs commented that the standards should be more stringent and reflect the potential for greater fuel consumption and CO 2 emissions reductions through the use of additional technologies outlined in the 2010 NAS study
. In response to those comments, the agencies refer back to our discussion in Section II.B.2.b. The agencies believe that the additional reductions may be achieved through the increased development of the technologies evaluated for the 2014 model year standard , but the agencies ’ anal ys is indicates that this ty pe of advanced engine development will require a longer development time than MY 2014
. The agencies are therefore provid ing additio nal lead time to allow for the introduction of this additional technology , and waiting unti l 2017 to increase stringency to levels reflecting application of this technology
. See Chapter 2 of the RIA for more details. While it made sense to set standards at the same level for LHD and MHD diesel engines for vocational vehicles, the agencies found that it did not make sense to set HHD standards at the same level. Based on manufacturer
- submitted CO 2 data for the non GHG emissions certification process , the agencies found that the baseline for HHD diesel engine s was much lower than for LHD/MHD diesel engines
-- 584 g CO 2 /bhp
- hr (5.74 gal/100 bhp
- hr) on average for HHD, compared to 630 g CO 2 /bhp
- hr (6.19 gal/100 bhp
hr) on average for LHD/MHD. 158 In addition to the differences in the baseline performance , the agencies believe that there may be some technologies available to reduce fuel consumption and CO 2 emissions that may be appropriate for the HHD diesel engines but not for the LHD/MHD diesel engines, such as turbocompounding. Therefore, the agen cies are setting a different standard level for HHD diesel engines to be used in vocational vehicles
. Additional discussion on technical feasibility is included in Section III below and in Chapter 2 of the RIA
. After consideration of the comments, EPA and NHTSA are adopting as proposed the CO 2 emission standards and fuel consumption standards for heavy
- dut y diesel

158 Calculated using the conversion 10,180 g CO 2 /gallon for diesel fuel.******* **E.O. 12866 Review**

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153 of engines installed in vocational vehicles are presented i n Table II
- 17
. Consistent with proposal, the first set of standards take effect with MY 2014 (mandatory standards for EPA, voluntary

standards for NHTSA), and the second set take effect with MY 2017 (mand atory

for both agencies). Compliance with the standards for engines installed in vocational vehicles will be evaluated based on the composite HD FTP cycle. Inthe NPRM, the agencies proposed standards based on the Heav y - dut y FTP cycle for engines used in vocational vehicles reflecting their primary

use in transient operating conditions ( ty pified b y both frequent accelerations and decelerations ), as well as in some stead y cruise conditions as represented on the Heav y - duty FTP. The primary

reason the ag encies proposed two separate certification cycles for HD diesel engines

– one for HD diesel engines used in combination tractors and the other for HD diesel engines used in vocational vehicles
-- is to encourage engine manufacturers to install technologies appropriate to the intended use of the engine with the vehicle. 159 DTNA , Cummins, EMA/TMA, and Honey well commented that certain vocational vehicle applications would achieve greater fuel consumption and CO 2 emissions reductions in
- use by using an engine d esigned to meet the SET
- based standard. They stated that some vocational vehicles operate at steady
- state more frequently than in transient operation , such as motor coaches, and thus should be able to have an engine certified on a steady - state cycle to better reflect the vehicle’s real use. In response, while the agencies recognize the value to manufacturers of having additional flexibility

that allows them to meet the standards in a way most consistent with how their vehicles and engines will ultimately be used, we remain concerned about increasing flexibility

in way s that might impair fuel consumption and CO 2 emissions reductions. T he agencies are therefore providing the op tion in these final rules for some vocational vehicles , but not others, to have SET certified engines
. Heavy heavy
- dut y vocational engines will be allowed to be SET certified for vocational vehicle s , s ince SET certified HHD engines must meet more stringent GHG and fuel consumption stan dards than FTP certified engines. W e believe this will provide manufacturers additional flexibility while still achieving the expected fuel consumption and CO 2 emissions reductions
. However, medium heavy
- dut y vocational engines will not be allowed to be SET
- certified , because m edium heav y - dut y engines certified on the FTP must meet a more stringent standard than engines certified on the SET , and the agencies are not confident that fue l consumption and CO 2 emissions reduction levels would necessarily be maintained
. As discussed above in Section II.B.2.b, the agencies place important weight in making our decisions about the cost
- effectiveness of the standards and the availability of le ad time on the fact that engine manufacturers are expected to redesign and upgrade their products during MYs 2014
- 2017 . The final two
- step CO 2 emission and fuel consumption standards recognize the opportunity for technology

improvements over the rulemaking time frame , while reflecting the t ypical diesel truck manufacturers’ product plan cycles.

159 See generally 75 FR at 74201.******* **E.O. 12866 Review**

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154 of Over these four model ye ars there will be an opportunity for manufacturers to evaluate almost every

one of their engine models and add technology in a cost
- effective way , consistent with existing redesign schedules, to control GHG emissions and reduce fuel consumption. The time
- frame and levels for the s tandards, as well as the ability to average, bank and trade credits and carry a deficit forward for a limited time, are expected to provide manufacturers the time needed to incorporate technology that will achieve the final GHG and fuel consumption reducti ons, and to do this as part of the normal engine redesign process. This is an important aspect of the final rules, as it will avoid the much higher costs that would occur if manufacturers needed to add or change technology

at times other than these schedu led redesigns. 160 This time period will also provide manufacturers the opportunity to plan for compliance using a multi
- ye ar time frame, again in accord with their normal business practice. Further details on lead time, redesigns and technical feasibility can be found in Section III. The agencies recognize, however, that the schedule of changes for the final standards may

not be the most cost
- effective one for all manufacturers. For HD diesel engines for use in tractors, the agencies discussed above in Sec tion II.B.2.b our decision in this final program to allow an “OBD phase
- in” option for meeting the standards, based on comments received from several industry organizations indicating that aligning technology

changes for multiple regulatory requirements wo uld provide them with greater flexibility . In the context of HD diesel engines for use in vocational vehicles, Volvo , EMA/TMA, and DDC specifically requested an “OBD phase
- in” option in its comments to the NPRM. DDC argued that bundling design changes where possible can reduce the burden on industry for compl yi ng with regulations, so aligning the introduction of the OBD, GHG, and fuel consumption standards could help reduce the resources devoted to validation of new product designs and certification. The agencies have the same interest in providing this flexibility for manufacturers of HD diesel engines for use in vocational vehicles as in providing it for manufacturers of HD diesel engines for use in combination tractors, as long as equivalent e missions and fuel savings are maintained. Thus, in order to provide additional flexibility for manufacturers looking to align their technology changes with multiple regulatory requirements, the agencies are finalizing an alternate “OBD phase
- in ” option fo r meeting the HD diesel engine standards which delivers equivalent CO 2 emissions and fuel consumption reductions as the primary standards for the engines built in the 2013 through 2017 model years, as shown in Table II
- 18
.

160 See 75 FR at 25467
- 68.******* **E.O. 12866 Review**

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155 of **Table II**  **- 18**  **Comparison of CO**  **2 reductions for the**  **Engine Standards under the** 

**Alternative OBD Phase -**  **in and Primary Phase -**  **In** HHD FTP LHD/MHD FTP Primary Phase
- in Standard (g/bhp
- hr) Optional

Phase
- in Standard (g/bhp
- hr) Difference

in Li fetime CO 2 Engine Emissions (MMT) Primary

Phase
- in Standard (g/bhp
- hr) Optional

Phase
- in Standard (g/bhp
- hr) Difference in

Lifetime CO 2 Engine Emissions (MMT) Baseline 584 584
-- 630 630
-- 2013 MY Engine 584 577 20 630 618 14 2014 MY Engine 567 577
- 28 600 618
- 22 2015 MY Engine 567 577
- 28 600 618
- 22 2016 MY Engine 567 555 34 600 576 29 2017 MY Engine 555 555 0 576 576 0 Net Reductions (MMT) - 3 0

Table II
- 19 presents the final HD diesel engine CO 2 emission and fuel consumption standards under the optional “OBD phase
- in” option.

**Table II**  **- 19**  **: Optional Heavy -**  **Duty Engine Standard Phase -**  **in** Model Year Standard Li ght Heav y Duty Diesel Medium

Heav y Duty Diesel Heav y

Heav y Duty Diesel 2013 CO 2 Standard (g/bhp
- hr) 6 18 6 18 577

Voluntary

Fuel Consumption Standard (gallon/100 bhp
- hr) 6.07 6.07 5. 67 2016 and Later CO 2 Standard (g/bhp
- hr) 576 576 555

Fuel Consumption (gallon/100 bhp
- hr) 5. 66 5. 66 5.45 In order to ensure equivalent CO 2 and fuel consumption reductions and orderly compliance, and to avoid gaming, the agencies are requiring that i f a manufacturer selects th e OBD phase
- in option , it must certify its engines starting in the 2013 model year and continue using this phase
- in through 2016 model year. Manufacturers may opt into the OBD phase
- in option through the voluntary NHTSA program, but must opt in in the 2013 model year and continue using this phase
- in throu gh the 2016 model ye ar. Manufacturers******* **E.O. 12866 Review**

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156 of that opt in to the voluntary NHTSA program in 2014 and 2015 will be required to meet the primary

phase
- in schedule and may not adopt the OBD phase
- in option
. As discussed above in Section II.B.2.b , while the agencie s believe that the HD diesel engine standards are appropriate, cost
- effective, and technologicall y feasible in the rulemaking time frame , we also recognize that when regulating a category of engines for the first time, there will be individual pro ducts that may deviate significantly

from the baseline level of performance, whether because of a specific approach to criteria pollution control, or due to engine calibration for specific applications or duty cycles. The discussion above described HD die sel engines for use in combination tractors, but the same supporting information is relevant to the agencies’ consideration of an alternate standard for HD diesel engines installed in vocational vehicles. In the NPRM, the agencies proposed an optional engine standard for HD diesel engines installed in vocational vehicles based on a five percent reduction from the engine’s own 2011 model ye ar baseline level , but requested comment on whether a two percent reduction would be more appropri ate . 161 The comments received in response did not directly address engines for vocational vehicles, but the agencies believe that the information provided by Navistar and others is equally applicable to HD diesel engines for combination tractors and for voc ational vehicles. Our assessment for the final standards is that a 2.5 percent reduction is appropriate for LHD and MHD engines installed in vocational vehicles and 3 percent is appropriate for HHD engines installed in vocational vehicles given the techno logies available for application to legacy products by

model year 2014. 162 Unlike the majority

of engine products in this segment, engine manufacturers have devoted few resources to developing technologies for these legacy products reasoning the investment would have little value if the engines are to be substantially redesigned or replaced in the next five years. Hence while the technologies we have identified to achieve the proposed five percent reduction would theoreticall y work for these legacy products , there is inadequate leadtime for manufacturers to complete the pre application development needed to add the technology to these engines by

2014. We have concluded that if we limit the reductions to those improvements which reflect further enhancements of alread y installed sy stems rather than the addition or replacement of technologies with fully developed new on the shelf components, the potential improvement for the 2014 model ye ar will be 2.5 percent for LHD and MHD engines and 3 percent HHD engines. As for HD diesel engines used in combination tractors, the agencies stress that this option for HD engines used in vocational vehicles i s temporary and limited and is being adopted to address diverse manufacturer needs associated with complyingwith this first phase of the regulations
. T his optional standard will be available only for the 2014 through 2016 model ye ars, because we believe that manufacturers will have had ample opportunity

to make appropriate changes to bring their product performance into line with the rest of the industry after that time . This optional standard will not be available unless and until a manufacturer has exhausted all available credits and credit opportunities, and engines under the alternative standard could not generate credits.

161 See 75 FR at 74202. 162 To be codified at 40 CFR 1036.620,******* **E.O. 12866 Review**

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157 of The agencies note that manufacturers choosing to utilize this option in MYs 2014
- 2016 will have to make a greater relative improvement in MY 2017 than the rest of the industry , since they

will be starting from a worse level
. F or compliance purposes, emissions from engines certified and sold at the alternate level will be averaged with emissions from engines certified and sold at more stringent levels to arrive at aweighted average emissions level for all engines in the subcategory
. Again, this option can onl y be taken if all other credit opportunities have been exhausted and the manufacturer still cannot meet the primary

standards. If a manufacturer chooses this option to meet the EPA emission standards in MY 2014

– 2016, and wants to opt into the NHTSA fuel consumption program in these same MYs it must follow the exact path followed under the EPA program utilizing equivalent fuel consumption standards.
. As discussed above in Section II.B.2.b, Volvo argued that manufacturers could game the standard by

establishing an artificiall y high 2011 baseline emission level. This could be done, for example, by certifying an engine with high fuel consumption and GHG emissions that is either: 1) not sold in significant quantities ; or 2) later altered to emit few er GHGs and consume less fuel through service changes. In order to mitigate this possibility , the agencies are requiring either that the 2011 model year baseline must be developed b y averaging emissions over all engines in an engine averaging set certifie d and sold for that model year so as to prevent a manufacturer from developing a single high GHG output engine solely for the purpose of establishing a high baseline or meet additional criteria
. The agencies are allowing manufacturers to combine light heavy - dut y and medium heav y - dut y diesel engines into a single averaging set for this provision because the engines have the same GHG emissions and fuel consumption standards. If a manufacturer does not certify all engine families in an averaging set to the alternate standards, then the tested configuration of the engine certified to the alternate standard must have the same engine displacement and its rated power within 5 percent of the highest rated power as the baseline engine. In addition, the tested con figurations must have a BSFC equivalent to or better than all other configurations within the engine famil y and represent a configuration that is sold to customers. (ii) Gasoline Engine Standard Heav y - dut y gasoline engines are also used in vocational vehicle applications. The number of engines certified in the past for this segment of vehicles is very limited and has ranged between three and five engine models. 163 Unlike the heav y - dut y diesel engines ty pical of this segment which are built for v ocational vehicles , these gasoline engines are developed for heav y - duty pickup trucks and vans primarily , but are also sold as loose engines to vocational vehicle manufacturers , for use in vocational vehicles such as some delivery trucks. Some fleets stil l prefer gasoline engines over diesel engines. In the past, this was the case since gasoline stations were more prevalent than stations that sold diesel fuel. Because they

are developed for HD pickups and vans, the agencies evaluated these engines in par allel with the heavy
- dut y pickup truck and van standard development. As in the pickup truck and van segment, the agencies anticipate d that the manufacturers will have onl y one engine re
- design within the 2014
- 18 model years under consideration within th e proposal. The agencies therefore proposed fuel consumption and CO 2
163 EPA’s heavy
- duty

engine certification database at http://www.epa.gov/otaq/certdata.htm#largeng
.******* **E.O. 12866 Review**

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158 of emissions standards for gasoline engines for use in vocational vehicles, which represent a five percent reduction in CO 2 emissions and fuel consumption in the 2016 model year over the 2010 MY baseline through use of technologies such as coupled cam phasing, engine friction reduction, and stoichiometric gasoline direct injection. Inour meetings with all three of the major manufacturers in the HD pick up and van segment, confidential future product plans were shared with the agencies. Reflecting those plans and our estimates for when engine changes will be made in alignment w ith those product plans, we had concluded for proposal that the 2016 model year reflects the most logical model year start date for the heav y - duty gasoline engine standards. In order to meet the standards we are finalizing for heav y - duty pickups and vans, we project that all manufacturers will have redesigned their gasoline engine offerings by the start of the 2016 model year. Given the small volume of loose gasoline engine sales relative to complete heav y - duty

pickup sales, we think it is appropriate to set the timing for the heav y - dut y gasoline engine standard in line with our projections for engine redesigns to meet the heav y - duty

pickup truck standards. Therefore, NHTSA’s final fuel consumption standard and EPA’s final CO 2 standard for heav y - dut y gasoline engines are first effective in the 2016 model year. The baseline 2010 m odel year CO 2 performance of these heavy
- dut y gasoline engines over the Heav y - duty FTP cycle is 660 g CO 2 /bhp
- hr (7.43 gal/100 bhp
- hr) in 2010 based on non
- GHG certification data provided to EPA by the manufacturers. The agencies are finalizing 2016 model ye ar standards that require manufacturers to achieve a five percent reduction in CO 2 compared to the 2010 MY baseline through use of technologies such as coupled cam phasing, engine friction reduction, and stoichiometric gasoline direct injection. Additi onal detail on technology feasibility

is included in Section III and in the RIA Chapter 2. As shown in Table II
- 20 , NHTSA is finalizing as proposed a 7.06 gallon/100 bhp
- hr standard for fuel consumption while EPA is adopting as proposed a 627 g CO 2 /bhp
- hr standard tested over the Heav y - dut y FTP, effective in the 2016 model y ear. Similar to EPA’s non
- GHG standards approach, manufacturers may generate and use credits by the same engine averaging set to show compliance with both agencies’ standards. **Table II**  **- 20**  **: Heavy**  **- Duty Gasoline Engine Standards**  Model Year G asoline Engine Standard 2016 and Later CO 2 Standard (g/bhp
- hr) 627

Fuel Consumption (gallon/100 bhp
- hr) 7.06

(c) In
- Use Standards Section 202(a)(1) of the CAA specifies that emissions standards are to be applicable for the useful life of the vehicle. The in
- use standards that EPA is finalizing******* **E.O. 12866 Review**

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159 of apply to individual vehicles and engines. NHTSA is not finalizing in
- use standards that w ould apply

to the vehicles and engines in a similar fashion. EPA proposed that the in
- use standards for heav y - duty engines installed in vocational veh icles be established by adding an adjustment factor to the full useful life emissions results projected in the EPA certification process. The agency proposed a two percent adjustment factor and requested comments and additional data during the proposal to assist in developing an appropriate factor level. The agency received add itional data during the comment period which identified production variability which was not accounted for at proposal. Details on the development of the final adjustment factor are included in RIA Chapter 3. Based on the data received, E PA determined that the adjustment factor in the final rules should be higher than the proposed level of two percent. EPA is finalizing a three percent adjustment factor for the in
- use standard to provide a reasonable margin for production and test
- to - test variability that could result in differences between the initial emission test results and emission results obtained during subsequent in
- use testing. We are finalizing regulatory text (in §1036.150) to allow engine manufacturers to used assigned deterioration factors (DFs) without performing their own durability emission tests or engineering anal ys is. However, the engines would be still be required to meet the standards in actual use without regard to whether the manufacturer used the assigned DFs. This allowance is being adopted as an interim provision applicable only for this initial phase of standards. Manufacturers will be allowed to use an assigned a dditive DF of 0.0 g/bhp
- hr for CO 2 emissions from any conventional engine (i.e., an engine not including advance or innovative technologies). Upon request, we could allow the assigned DF for CO 2 emissions from engines including advance or innovative techn ologies, but only if we determine that it would be consistent with good engineering judgment. We believe that we have enough information about in
- use CO 2 emissions from conventional engines to conclude that they

will not increase as the engines age. Howe ver, we lack such information about the more advanced technologies. EPA proposed that the useful life for these engines and vehicles with respect to GHG emissions be set equal to the respective useful life periods for criteria pollutants. EPA proposed that the existing engine useful life periods, as included in Table II
- 21 , be broadened to include CO 2 emissions and fuel consumption for both engines an d vocational vehicles. The agency did not receive any

adverse comments with this approach and is finalizing the useful life periods as proposed (see 40 CFR 1036.108(d) and 1037.105). While NHTSA will use useful life considerations for establishing fuel consumption performance for initial compliance and for ABT, NHTSA does not intend to implement an in
- use compliance program for fuel consumption, because it is not required under EISA an d because it is not currently anticipated there will be notable deterioration of fuel consumption over the engines’ useful life.******* **E.O. 12866 Review**

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160 of **Table II**  **- 21**  **: Useful Life Periods** Years Miles Class 2b
- 5 Vocational Vehicles, Spark Ignited, and Li ght Heav y - Dut y Diesel Engines 10 110,000 Class 6
- 7 Vocational Vehicles and Medium Heav y - Duty

Diesel Engines 10 185,000 Class 8 Vocational Vehicles and Heav y Heavy
Duty Diesel Engines 10 435,000
**(2) Test Procedures and Related Issues**  The agencies are finalizing test procedures to evaluate fuel consumption and CO 2 emissions of vocational vehicles in a manner very similar to Class 7 and Class 8 combination tractors. This section describes the simulation model for demonstrating compliance, engine test procedures, and a test procedure for evaluating h yb rid powertrain s (a potential means of generating credits, although not part of the technology package on which the final standard for vocational vehicles is premised). (a ) Computer Simulation Model As previously

mentioned, to achieve the goal of reducing emissions and fuel consumption for both trucks and engines, we are finalizing separate engine and vehicle
based emission and fuel consumption standards for vocational vehicles and engines used in those vehicles. For the vocational vehicles, engine manufacturers are subject to the engine standards, and chassis manufacturers are required to install certified engines in their chassis. The chassis manufacturer is subject to a separate vehicle
- based standard that uses the final vehicle simulation model to evaluate the impact of the tire design to determine compliance with the vehicle standard. A simulation model, in general, uses various inputs to characterize a vehicle’s properties (such as weight, aerodynamics, and rolling resistance) and predicts how the vehicle would behave on the road when it follows a driving cycle (vehicle speed versus time). On a second
- by
- second basis, the model determines how much engine power needs to be generated for the vehicle to follow the driving cycle as closely as possible. The engine power is then transmitted to the wheels through transmission, driveline, and axles to move the vehicle according to the driving cycle. The second
- by
- second fuel consumption of the vehicle, which corresponds to the engine power demand to move the vehicle, is then calculated according to the fuel consumption map embedded in the compliance model. Similar to a chassis dynamometer test, the second
- by
- second fuel consumption is aggregated over the complete drive cycle to determine the fuel consumption of the vehicle. N HTSA and EPA are finalizing an approach consistent with the proposal to evaluate fuel consumption and CO 2 emissions respectivel y through a simulation of whole
- vehicle operation, consistent with the NAS recommendation to use a truck model to evaluate truck performance. The EPA developed the GEM for the specific purpose of******* **E.O. 12866 Review**

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this rulemak ing to evaluate number of vehicle simulation tools developed by commercial and government entities. The model developed b y purpose of vehicle compliance demonstration and is therefore simpler and less configurable than similar commercial products. This approach gives a compact and quicker tool for evaluating vehicle compliance without the overhead and costs of a more complicate d model. Details of the model address concerns of the peer reviewers and comment RIA. An example of the GEM input screen is shown in Figure II

EPA and NHTSA have validated against a commonly

used simulation tool used in industry, GT vehicle subcategory . Prior to using GT benchmarked a GT
- Drive simulation of the co Research against the experimental test results from the chassis dynamometer in the same manner as done for GEM. Then the (LHD, MHD, and HHD) and simulated them us the GEM and GT
- Drive predicted the fuel consumption and CO vocational vehicle subcategories with differences of less than 2 percent for the three test **Revised Version**

**– Do Not Cite, Quote, or Release During Review** 

161 of to evaluate vehicle performance. The GEM is similar in concept to a number of vehicle simulation tools developed by commercial and government entities. The model developed b y the EPA and finalized here was designed for the express rpose of vehicle compliance demonstration and is therefore simpler and less configurable than similar commercial products. This approach gives a compact and quicker tool for evaluating vehicle compliance without the overhead and costs of a more

d model. Details of the model , including changes made to the model to address concerns of the peer reviewers and comment ers are included in Chapter 4 of the RIA. An example of the GEM input screen is shown in Figure II
- 4.

**Figure II**  **- 4**  **: Example**  **GEM Input Screen** EPA and NHTSA have validated the GEM simulation of vocational vehicles against a commonly

used simulation tool used in industry, GT
- Drive, for each vocational vehicle subcategory . Prior to using GT
- Drive as a comparison tool, the agencies first

Drive simulation of the co mbination tractor tested at Southwest Research against the experimental test results from the chassis dynamometer in the same manner as done for GEM. Then the EPA developed three vocational vehicle models (LHD, MHD, and HHD) and simulated them us ing both GEM and GT
- Drive. Overall,

Drive predicted the fuel consumption and CO 2 emissions for all three vocational vehicle subcategories with differences of less than 2 percent for the three test **Do Not Cite, Quote, or Release During Review** ******* performance. The GEM is similar in concept to a number of vehicle simulation tools developed by commercial and government entities. and finalized here was designed for the express rpose of vehicle compliance demonstration and is therefore simpler and less configurable than similar commercial products. This approach gives a compact and quicker tool for evaluating vehicle compliance without the overhead and costs of a more , including changes made to the model to

are included in Chapter 4 of the

GEM simulation of vocational vehicles

Drive, for each vocational Drive as a comparison tool, the agencies first mbination tractor tested at Southwest Research against the experimental test results from the chassis dynamometer in the same developed three vocational vehicle models Drive. Overall, emissions for all three vocational vehicle subcategories with differences of less than 2 percent for the three test******* **E.O. 12866 Review**

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162 of cycles

– the California ARB Transient cycle , 55 mph cruise, and 65 mph cruise cycle. 164 The final simulation model is described in greater detail in RIA Chapter 4 and is available for download by interested parties at ( http://www.epa.gov/otaq/). The agencies are requiring that for demo nstrating compliance, a chassis manufacturer would measure the performance of tires, input the values into GEM, and compare the model’s output to the standard. A s explained earlier, low rolling resistance t ires are the onl y technology on which the agencies’ own feasibility anal ys is for these vehicles is predicated. An example of the GEM input screen is included in **Error! Reference source not found.**  **Error! Reference source not found.**
. The input values for the simulation model will be derived b y the manufacturer from the final tire test procedure described in this action. The remai ning model inputs w ill be fixed values pre defined b y the agencies . These are detailed in the RIA Chapter 4, including the engine fuel consumption map to be used in the simulation. (b ) Tire Rolling Resistance Assessment In terms of how tire ro lling resistance would be measured, the agencies proposed to require that the tire rolling resistance input to the GEM be determined using ISO 28580:2009(E), Passenger car, truck and bus tyres

— Methods of measuring rolling resistance

—

Single point test and c orrelation of measurement results
. 165 The agencies stated that they believed the I SO test method was the most appropriate for this program because the method is the same one used b y the NHTSA tire fuel efficiency consumer information program, 166 by European r egulations, 167 and by the EPA SmartWay

program. The NPRM also discussed the potential for tire
- to - tire variability to confound rolling resistance measurement results for LRR tires

– that is, different tires of the same tire model could turn out to have different rolling resistance measurements when run on the same test. NHTSA’s research during the development of the light
- dut y vehicle tire fuel efficiency

consumer information program identified several sources of variability including test procedures, test equipment and the tires themselves, b ut found that all of the existing test methods had similar levels of and sources of variability
. 168 The agencies proposed to address production tire
- to - tire variability by specifying that three tire samples within each tire model be tested three times each , and that the average of the nine tests would be used as the Rolling Resistance Coefficient (RR C ) for the tire , which would be the basis for the rolling resistance value for that tire that the manufacturer would enter into the GEM. The agencies requested comment on this proposed method. 169 The agencies received many comments on the subject of tire rolling resistance , including suggestions for alternative test procedures and compliance issues
. Regarding

164 See RIA Chapter 4, Table 4
- 8. 165 See http://www.iso.org/iso/iso

_ catalogue/catalogue

_ tc/catalogue

_detail.htm? csnumber=44770. 166 75 FR 15893, March 30,2010 167 http://www.energy.ca.gov/2009publications/CEC
- 600
- 2009
- 010/CEC
- 600
- 2009
- 010
- SD
- REV.PDF (last accessed May 9, 2011) 168 75 FR 15893, March 30, 2010 169 See generally 75 FR at 74204.******* **E.O. 12866 Review**

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163 of whether the agencies should base tire RRC inputs for th e GEM on the use of the I SO 28580 test procedure, the American Automotive Policy Council (AAPC) argued that the agencies should instead require the SAE J2452 Coastdown test method for calculating tire rolling resistance , which the commenter stated was pref erred b y OEMs because it simulates the use of tires on actual vehicles rather than the I SO procedure which tests the tire by itself
. The Rubber Manufacturers Association (RMA) argued, in contrast, that the agencies should use the SAE J1269 multi
- point tes t, which is currentl y the basis for the EPA SmartWayTM RR C baseline values. RMA also argued that the SAE J1269 multi
point test can be used to accuratel y predict truck/bus tire RR C at various loads and inflations , including at the I SO 28580 load and inflation conditions , and that therefore the agencies should use the SAE test, or if the agencies want to use I SO, they should accept results from the SAE test and just correlate them
. Regarding compliance obligations, RMA further argued that it was not c lear how or in what format testing information would need to be provided in order to be in compliance with the proposed requirement at §1037.125(i) The agencies analyzed many comments on the subject of tire rolling resistance
. One of the primary

concerns raised in comments was that the proposed test protocol and measurement methodology would not adequatel y address production tire variability and measurement variability
. Commenters stated that machine
- to - machine differences are a significant source of vari ation, and this variation would make it difficult for manufacturers to be confident that the agency would assign the same RR C to a tire was tested for compliance purposes. Commenters argued that the I SO 28580 test method is unique in that it specifies a p rocedure to correlate results between different test equipment ( i.e., different rolling resistance test machines), but not all aspects of the I SO procedure have been completely defined. Commenters stated that under ISO 28580, the lab alignment procedure d epends on the specification of a reference test machine to which all other labs will align their measurement results. RMA particularly emphasized the need for establishing a tire testing reference lab for use with ISO 28580, referencing the European T yr e and Rim Technical Organization (ETRTO) estimate that RRC values could vary

as much as 20 percent absent an inter
- laboratory alignment procedure. RMA stated the agencies should specify a reference laboratory

with the designation proposed in a supplemental notice that provides public comment. In addition, RMA commented that the extra burden proposed by the agencies for testing three tires, three times each is nine times more burdensome than what is required through the ISO procedure. Based on the additional tire rolling resistance research conducted by the agencies , we have decided to use the I SO 28580 test procedure , as proposed , to measure tire performance for th e s e final rule s . The agencies believe this test procedure provides two advantages over other te st methods. First, the I SO 28580 test method is unique in that it specifies a procedure to correlate results between different test equipment (i.e., different tire rolling resistance test machines). This is important because NHTSA’s research conducted for the light
- duty tire fuel efficiency

program indicated that machine
- to - machine differences are a source of******* **E.O. 12866 Review**

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164 of variation. 170 In addition, the I SO 28580 test procedure is either used, or proposed to be used, by several groups including the European Union through Regulation (EC) No 661/2009 171 and the California Air Resources Board (CARB) through a staff recommendation for a Cali fornia regulation 172 , and the EPA SmartWay program. Using the I SO 28580 may

help reduce burden on manufacturers b y allowing a single test protocol to be used for multiple regulations and programs. While we recognize that commenters recommended the use of other test procedures, like SAE J1269, the agencies have determined there is no established data conversion method from the SAE J1269 vehicle condition for vocational vehicle tires to the I SO 28580 single point condition at this time, and that given our reas onable preference for the ISO procedure, it would not be practical to attempt to include the use of the SAE J1269 procedure as an optional way of determining RR C values for GEM inputs
. The agencies received comments from the Rubber Manufacturers Associat ion, Michelin, and Bridgestone which identified the need to develop a reference lab and alignment tires. Because the I SO has not y et specified a reference lab and machine for the I SO 28580 test procedure, NHTSA announced in its March 2010 final rule conc erning the light
- dut y tire fuel efficiency consumer information program that NHTSA would specify

this laboratory

for the purposes of implementing that rule so that tire manufacturers would know the identity of the machine against which they may c orrelate their test results. NHTSA has not yet announced the reference test machine(s) for the tire fuel efficiency

consumer information program. Therefore, for the light
- duty tire fuel efficiency rule, the agencies are postponing the specification of a procedure for machine
to - machine alignment until a tire reference lab is established. The agencies anticipate establishing this lab in the future with intentions for the lab to accommodate the light
duty tire fuel efficiency

program . Under the ISO 28580 lab alignment procedure, machine alignment is conducted using batches of alignm ent tires of two models with defined differences in rolling resistance that are certified on a reference test machine. I SO 28580 specifies requirements for these alignment tires (‘‘Lab Alignment Tires’’ or LATs), but exact tire sizes or models of LATs are not specificall y identified in I SO 28580. Because the test procedure has not been finalized and heav y - dut y LATs are not currently defined , the agencies are postponing the use of these elements of I SO 28580 to a future rulemaking
. T he agencies note the lab
- to - lab comparison conducted in the most recent EPA tire test program mentioned previously
. The agencies reviewed the RR C data from the tires that were tested at both the STLand Smithers laboratories to assess inter
laboratory

and test machine variability . The agencies conducted statistical analy sis of the data to gain better understanding of lab
- to - lab correlation and developed an adjustment factor for data measured at each of the test labs. Based on these results, the agencies believe the lab
- to - lab variation for the STLand Smithers laboratories would have very small effect on measured RR C values. Based on the test data, the agencies judge th at it is
170 75 FR 15893, March 30, 2010 171 http://eur
- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:200:0001:0024:EN:PDF (last accessed May 8, 2011). 172 http://www.energy.ca.gov/2009publications/CEC
- 600
- 2009
- 010/CEC
- 600
- 2009
- 0 10
- SD
- REV.PDF (last accessed May 9, 2011)******* **E.O. 12866 Review**

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165 of reasonable to implement the HD program with current levels of variability , and allow the use of either Smithers or STLlaboratories for determining the RRc value in the HD program , or demonstrate that the test facilities will not bias results low relative to Smithers or STLlaboratories
. RMA also commented that the extra burden proposed by the agencies for testing three tires, three times each is nine times more burdensome than what is required through the I SO procedure. Since the proposal, EPA obtained replicate test data for a number of Class 8 combination tractor tires from various manufacturers. Some of these were tires submitted to SmartWay

for verification, while some were tires tested b y manufacturers for other purposes. Three tire model samples for 11 tire models were tested using the ISO 28580 test. 173 A mean and a standard deviation were calculated for each set of three replicate measurements performed on each tire of the 3
- tire sample. The coefficient of variability

(COV) of the RR C was calculated b y dividing the standard deviation by the mean. The values of COV ranged from 0 percent (no measurable variability) to six percent . In addition, d

uring the period September 2010 and June 2011, EPA contracted with Smithers
- Rapra to select and test for rolling resistance using ISO 28580 for a representative sample of Class 4
- 8 vocational vehicle tires. As part of the test, 10 tires were selected for replicate testing. 174 Three replicate tests were conducted for each of the tires, to evaluate test variability only
. The COV of the RR C resu lts ranged from nearl y 0 to 2 percent , with a mean of less than 1 percent . Based on the results of these two testing programs, the agencies determined that the impact of production variabilit y is greater than the impact of mea surement variability . Thus, the agencies concluded that the extra burden of testing a single tire three times was not necessary to obtain accurate results , but the variability

of RR C results due to manufacturing of the tires is significant to continue to require testing of three tire samples for each tire model
. Insummary , we are allowing manufacturers to determine the rolling resistance coefficient of the heav y - duty tires b y testing three tire samples one time each. For the final rules , the agencies are also including a warm up cycle as part of the procedure for bias ply

tires to allow these tires to reach a steady temperature and volume state before ISO 28580 testing. This procedure is similar to a procedure that was developed for the light
- duty tire fuel efficiency consumer information program, and was adopted from a procedure defined in Federal motor vehicle safety standard No. 109 (FMVSS No. 109). 175 Finally , the agencies are includ ing testing and reporting for ‘single
- wide’ or ‘super
- single’ ty

pe tires. These tires replace the traditional ‘dual’ wheel tire combination with a single wheel and tire that is nearl y as wide as the dual combination with similar load capabilities. These tire ty pes were developed as a fuel saving technology . The tires provide lower rolling resistance along with a reduction in weight when compared to a ty pical set of dual wheel tire combinations; and are one of the technologies included in the EPA SmartW ayTM program. The agencies have learned that there is limited testing

173 EPA Tire Testing Memo to Docket. Docket EPA
- HQ
- OAR
- 2010
- 0162. July 2011. 174 EPA Tire Testing Memo to Docket. Docket EPA
- HQ
- OAR
- 2010
- 0162. July 2011. 175 49 CFR 571.109.******* **E.O. 12866 Review**

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166 of equipment available that is capable of testing single wide tires; single wide tires require a wider test machine drum than required for conventional tires. Although the number of machi nes available is limited, the agencies believe the equipment is adequate for the testing and reporting of RR C for this program. As discuss ed above, the agencies are taking the approach of using RR C for the HD fuel efficiency

and greenhouse gas program to align with the measurement methodology already employed or proposed by the EPA SmartWay

program, the European Union Regulation (EC) No 661/ 2009 and the California Air Resources Board (CARB) through a staff recommendation for a California regulation
. 178 In the NPRM, the agencies proposed to use RR C , but for purposes of developing these final rules, the agencies also evaluated whether to use RR C or Rolling Resistance Force (RRF ) as the measurement for tire rolling resistance for the GEM input. The agencies considered RRF largel y because i n the NPRM for Passenger Car Tire Fuel Efficiency (TFE) program, NHTSA had propos ed to use RRF . A key

distin ction between these two programs, and their associated metrics, are the differences in how the measurement data are used and who uses the data. In particular, the HD fuel efficiency and GHG emissions program is a compliance program using information devel oped by and for technical personnel at manufacturers and agencies to determine a vehicle’s compliance with regulations. The TFE program , in contrast, is a consumer education program intended to inform consumers making purchase decisions regarding the fuel saving benefits of replacement passenger car tires
. The target audiences are much different for the two programs which in tur n affect how the information will be used
. The agencies believe that RRF may be more intuitive for non - technical people because tires that are larger and/or that carry higher loads will generall y have numerically higher RRF values than smaller tires and/or tires that carry lower loads. RR C values generall y follow an opposite trend, where tires that are larger and/or carry

higher loads will generall y have numericall y lower RR C values than smaller tires and/or tires that carry lower loads. The agencies believe this key distinction helps define the t ype of metrics to be used and communicated in accordance with their respective purposes. Additionally , the RR C metric for use in the MD/HD program is not susceptible to the skew associated with tire diameter. Medium
- and heav y - dut y vehicle tires are available in a small fraction of the tire sizes of the passenger market and, for the most part, are larger tires than those found on passenger cars. When viewing RRC over a larger range of sizes, small diameter tires tend to appear as having a lower performance, which is not necessarily

accurate, with the converse occurring as the diameter increases. U sing the RR C value for determining the rolling resistance also takes into account the load carrying capab ility for the tire being tested, which, i ntuitively , can lead to some potentiall y confusing results. Several vocational vehicle manufacturers argued in their comments that LRR tires were not available for, e.g. , vehicles like refuse trucks, which tend to use large diameter tires to carry very heavy loads. Based on th e agencies’ testing, in fact, the measured RR C (as opposed to the RRF ) for refuse trucks were found to be among the best tested. This finding can be explained by considering that RR C is******* **E.O. 12866 Review**

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167 of calculated b y dividing the measured rolling resistance force b y the tire ’ s load capacit y rating. Although the tire may have a relativel y high rolling resistance force, the tire load capacity rating is also very

high, resulting in an overall lower (better) RR C value than many other ty pes of tires. The amount of load tire can carry (test load) contributes to a very low reported RR C , thus confirming low rolling resistance tires meeting the standards, as measured by RR C , are available to th e industry regardless of segment or application
. Based on these considerations, the agencies have decided to use the RRC metric for the HD fuel efficiency and GHG emissions program. (c) Defined Vehicle Configurations in the GEM As discussed above, the agen cies are finalizing a methodology that chassis manufacturers w ill use to quantify the tire rolling resistance values to be input into the GEM. Moreover, the agencies are defining the remaining GEM inputs ( i.e., specifying them by rule), which dif

fer by the regulatory

subcategory

(for reasons described in the RIA Chapter 4). The defined inputs include the drive cycle, aerodyn amics, vehicle curb weight, payload, engine characteristics, and drivetrain for each vehicle t yp e, among others. (i ) Metric Based on NAS’s recommendation and feedback from the heav y - dut y truck industry , NHTSA and EPA proposed standards for vocational vehicles that would be expressed in terms of moving a ton of payload over one mile. Thus, NHTSA’s proposed fuel consumption standards for these vehicles would be represented as gallons of fuel used to move one ton of payload one thousand miles, or gal/1,000 ton
- mile. EPA’s proposed CO 2 vehicle standards would be represented as grams of CO 2 per ton - mile. The agencies receiv ed comments that a payload
- based metric is not appropriate for all ty pes of vocational vehicles, specificall y buses. The agencies recognize that a payload
- based approach may

not be the most representative of an individual vocational application; however, it best represents the broad vocational category . The metric which we proposed treats all vocational applications equall y and require s the same technologies be applied to meet the standard. Thus, the agencies are adopting the proposed metric, but will re visit the issue of metrics in any future action, if required, depending on the breadth of each standard. (ii) Drive cycle The drive cycles proposed for the vocational vehicles consist ed of the same three modes used for the Class 7 and8 combination tractors. Th e proposed cycle included the Transient mode, as defined by California ARB in the HHDDT cycle, a constant speed cycle at 65 mph and a 55 mph constant speed mode. The agencies proposed different weightings for each mode for vocational vehicles than those proposed for Class 7 and 8 combination tractors, given the known difference in driving patterns between these two categories of vehicles. The same reasoning underlies the agencies’ use of the Heav y - dut y******* **E.O. 12866 Review**

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168 of FTP cycle to evaluate compliance with the standards f or diesel engines used in vocational vehicles. The variet y of vocational vehicle applications makes it challenging to establish a single cycle which is representative of all such trucks. However, in aggregate, the vocational vehicles t ypically operate ove r shorter distances and spend less time cruising at highway

speeds than combination tractors. The agencies evaluated for proposal two sources for mode weightings, as detailed in RIA Chapter 3. The agencies proposed the mode weightings based on the vehicl e speed characteristics of single unit trucks used in EPA’s MOVES model which were developed using Federal Highway Administration data to distribute vehicle miles traveled b y road t ype. 179 The proposed weighted CO 2 and fuel consumption value consisted of 37 percent of 65 mph Cruise, 21 percent of 55 mph Cruise, and 42 percent of Transient performance. The agencies received comments stating that the proposed drive cycles and weightings are not representative of individual vocational applications, such as buse s and refuse haulers. A number of groups commented that the vocational vehicle cycle is not representative of real world driving and recommended changes to address that concern. Several organizations proposed the addition of new drive cycles to make the test more representative. Bendix suggested using the Composite International Truck Local and Commuter Cycle ( CIL CC ) as the general purpose mixed urban/f r eeway cycles and to use four representative cycles: mixed urban, f r eeway , cit y bus, refuse, and utility
. Bendix suggested using the Standardized On
- Road Test (SORT) cycles for vocational vehicles operating in the urban environment in addition to SORT cycles for 3 different vocations

– with separate weightings. They stated that SORT with an average speed of 11.2 mph, lines up most closely

with the average of transit bus duty cycles at 9.9 mph as well as the overall US National average of 12.6 mph. As alternative approaches they suggested adopting the Orange County dut y c ycl e for the urban transit bu s vocation or creating an Urban Transit Bus cycle with several possible weighting factors

– all with very high percentage transient (90% to 100%), very low 55 mph (0% to 7%), very low 65 mph (0% to 3%), and an average speed of 15 to 17 mph. Bendix support ed their assertions about urban bus vehicle speed with data from the 2010 American Public Transportation Association (APTA) 'Fact Book' and other sources. In contrast, Bendix stated, the GEM cycle average speed is currentl y 32.6 mph. Such high speeds at stead y state will penalize technologies such as h yb ridization. Clean A ir Task Force said the agencies have not adequatel y addressed the diversity of the vocational vehicle fleet since they are not distinguished b y different dut y cycles. Th ey

urged the agencies to sub
- divide vocational vehicle s by expected use, with separate test cycles for each sub
- group in order to capture the full potential benefits of hy bridization and other advanced technologies in a meaningful and acc urate way in future rulemakings for MY2019 and later trucks.

179 The Environmental Protection Agency. Draft MOVES2009 Highway Vehicle Population and Activity Data. EPA
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169 of Two groups cautioned that unintended consequences could result from the lack of diversity in dut y c ycl es. DTNA said that the single drive cycle proposed for all vehicles by the agencies woul d likely lead to unintended consequences
- such as customers being driven for regulatory

reasons to purchase a transmission that does not suit their actual operation. Similarly , Volvo said medium
- and heavy
- duty vehicles are uniquely

built for specific ap plications but it will not be feasible to develop regulatory protocols that can accuratel y predict efficiency in each application duty cycle. This trade
- off could result in unintended or negative consequences in parts of the market. Several commenters sug gested changing the weightings of the cycle to more accuratel y reflect real world driving. Allison stated that the vocational vehicle cycle includes too much steady state driving time. They suggested (with supporting data from the Oakridge National Labor atory analy sis) reducing steady state driving at 60 mph to minimal or no time on the cycle to address this problem. Allison commented that GEM contains length y accelerations to reach 55 and 65 miles per hour

– much longer than is required in real world driving. They supported this statement with data from a testing program conducted at Oakridge National Laboratory showing medium
- and heav y - dut y vehicles accelerate more rapidly than in the GEM drive cycle. According to Allison, this long acceleration time in GEM, coupled with too much steady state operation with very little variation, is not representative of vocational vehicle operation. In addition, Allison said that GEM does not adequatel y account for shift time, clutch profile, turbo lag, and other impacts on both steady state and transient operation. The impact, they state, is that the cycle will hinder proper deploy ment of technologies to reduce fuel consumption and GHG emissions. BAE focused their comments on urban transit bus operation. They stat ed the weighting factors for steady state operation are inconsistent with urban transit bus cycles. Other commenters suggested the agencies develop chassis dy namometer tests based on the engine (FTP) test. Cummins said that chassis dy namometer testing sho uld allow the use of average vehicle characteristics to determine road load and make use of the vehicle FTP and SET cycles. Others commented that the correlation between the FTP and the UDDS is poor. After careful consideration of the comments, the agenci es are adopting the proposed drive cycles. The final drive cycles and weightings represent the straight truck operations which dominate the vehicle miles travelled by vocational vehicles. The agencies do not believe that application
- specific drive cycles are required for this final action because the program is based on the generally
- applicable use of low rolling resistance tires. The drive cycles that we are adopting treat all vocational applications equally and require the same technologies be a pplied to meet the standard. The agencies are also finalizing, as proposed, the mode weightings based on the vehicle speed characteristics of single unit trucks used in EPA’s MOVES model which were developed using Federal Highway

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170 of ty pe. 180 Similar to the issue of metrics discussed above, the agencies may revisit drive cycles and weightings in any future regulatory action to develop standards specific to applications. (iii) Em pty Weight and Payload The total weight of the vehicle is the sum of the tractor curb weight and the payload. The agencies are proposed to specify each of these aspects of the vehicle. The agencies developed the proposed vehicle curb weight inputs based on industry information developed by IC F. 181 The proposed curb weights we re 10,300 pounds for the LH trucks, 13,950 pounds for the MH trucks, and 29,000 pounds for the HH trucks. NHTSA and EPA proposed payload requirements for each regulatory category developed from Federal Highway statistics based on averaging the payloads for the weight categories represented within each vehicle subcategory
. 182 The proposed payloads were 5,700 pounds for the Light Heavy
- Duty tr ucks, 11,200 pounds for Medium Heav y - Dut y trucks, and 38,000 pounds for Heav y Heav y - Dut y trucks. The agencies received comments from several stakeholders regarding the proposed curb weights and payloads for vocational vehicles. BAE said a Class 8 transi t bus has a ty

pical curb weight of 27,000 pounds and max imum payload of 15,000 pounds. Daimler commented that Class 8 buses have a GVWR of 42,000 pounds. Autocar said that Class 8 refuse trucks ty pical ly have a curb weight of 31,000 to 33,000 pounds, ty p ical average payload of 10,000 pounds, and typical maximum payload of 20,000 pounds Upon further consideration, the agencies are reducing the weight of heav y heav y duty vocational vehicle. While we still believe the proposed values are approp riate for some vocational vehicles, we reduced the total weight to bring it closer to some of the lighter vocational vehicles. The agencies are adopting final curb weights of 10,300 pounds for the LHD trucks, 13,950 pounds for the MHD trucks, and 27,000 p ounds for the HHD trucks. The agencies are also adopting payloads of 5,700 pounds for the Light Heav y - Duty

trucks, 11,200 pounds for Medium Heavy
- Dut y trucks, and 15,000 pounds for Heav y Heav y - Dut y trucks. Additional information is available in RIA Chapte r 3. (iv) Engine As the agencies are finalizing separate engine and vehicle standards, the GEM will be used to assess the compliance of the chassis with the vehicle standard. To maintain the separate assessments, the agencies are adopting the proposed approach of

180 The Environmental Protection Agency. Draft MOVES2009 Highway Vehicle Population and Activity Data. EPA
- 420
- P
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- 001, August 2009 http://www.epa.gov/otaq/models/moves/techdocs/420p09001.pdf 181 ICF International. “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy - Duty On
- Road Vehicles.” July 2010. Pages 16
- 20. Docket ID# EPA
- HQ
- OAR
- 2010
- 0162
- 0044. 182 The U.S. Federal Highway Administration. Development of Truck Payload Equivalent Factor. Table 11. Last viewed on March 9, 2010 at http://ops.fhwa.dot.gov/freig ht/freight_analysis/faf/faf2_reports/reports9/s510_11_12_tables.htm******* **E.O. 12866 Review**

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171 of using fixed values that are predefined b y the agencies for the engine characteristics used in GEM, including the fuel consumption map which provides the fuel consumption at hundreds of engine speed and torque points. If the agencies did not standardiz e the fuel map, then a vehicle that uses an engine with emissions and fuel consumption better than the standards would require fewer vehicle reductions than those being finalized. As proposed, the agencies are using diesel engine characteristics in the GE M , as most representative of the largest fraction of engines in this market. The agencies did not receive an y adverse comments to using this approach. The agencies are finalizing two distinct sets of fuel consumption maps for use in GEM. The first fu el consumption map would be used in GEM for the 2014 through 2016 model years and represent a diesel engine which meets the 2014 model year engine CO 2 emissions standards. A second fuel consumption map would be used beginning in the 2017 model year and represents a diesel engine which meets the 2017 model year CO 2 emissions and fuel consumption standards and accounts for the increased stringency in the final MY 2017 standard). The agencies have modified the 2017 MY heav y heav y duty diesel fuel map used in the GEM for the final rulemaking to address comments received. Details regarding this change can be found in RIA Chapter 4.4.4. Effectivel y there is no change in stringency of the vocational vehicle standard (not including the engine) between the 2014 M Y and 2017 MY standards for the full rulemaking period. These inputs are reasonable (indeed, seemingl y necessitated) given the separate final regulatory

requirement that vocationa l vehicle chassis manufacturers use only certified engines. (v) Drivetrain The agencies’ assessment of the current vehicle configuration process at the truck dealer’s level is that the truck companies provide software tools to specify the proper drivetrain matched to the buy er’s specific circumstances. These dealer tools allow a significant amount of customization for drive cycle and payload to provide the best specification for the customer. The agencies are not seeking to disrupt this process. Optimal dri vetrain selection is dependent on the engine, drive cycle (including vehicle speed and road grade), and payload. Each combination of engine, drive cycle, and payload has a single optimal transmission and final drive ratio. The agencies are specifying the engine’s fuel consumption map, drive cycle, and payload; therefore, it makes sense to specify

the drivetrain that matches. (d ) Engine Metrics and Test Procedures EPA proposed that the GHG emission standards for heav y - dut y engines under the CAA would be exp ressed as g/bhp
- hr while NHTSA’s proposed fuel consumption standards under EI SA, in turn, be represented as gal/100 bhp
- hr. The NAS panel did not specificall y discuss or recommend a metric to evaluate the fuel consumption of heav y duty engines. However, as noted above they did recommend the use of a load
- specific fuel consumption metric for the evaluation of vehicles. 183 An analogous metric for

183 See NAS Report, Note **24** , at page 39.******* **E.O. 12866 Review**

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172 of engines is the amount of fuel consumed per unit of work. The g/bhp
- hr metric is also consistent with EPA’s current standards for non
- GHG emissions for these engines. The agencies did not receive any adverse comments related to the metrics for HD engines; therefore, we are adopting the metrics as proposed. With regard to GHG and fuel consumption control, the agencies believe it is appropriate to set standards based on a single test procedure, either the Heavy
- dut y FTP or SE T, depending on the primary expected use of the engine. EPA’s criteria pollutant standards for engines currently require that manufacturers demonstrate compliance over the transient Heav y - dut y FTP cycle; over the steady
- state SET procedure; and during not
to - exceed testing. EPA created this multi
- layered approach to criteria emissions control in response to engine designs that optimized operation for lowest fuel consumption at the expense of very

high criteria emissions when operated off the regulatory cy cle. EPA’s use of multiple test procedures for criteria pollutants helps to ensure that manufacturers calibrate engine s ys tems for compliance under all operating conditions. We are not concerned if manufacturers further calibrate these engines off cycle to give better in
- use fuel consumption while maintaining compliance with the criteria emissions standards as such calibration is entirely consistent with the goals of our joint program. Further, we believe that setting standards based on both transient and steady
- state operating conditions for all engines could lead to undesirable outcomes. It is critical to set standards based on the most representative test cycles in order for performance in
- use to obtain the intended (and feasible) air qualit y and fuel cons umption benefits. We are finalizing standards based on the composite Heav y - duty FTP cycle for engines used in vocational vehicles reflecting these vehicles’ primary use in transient operating conditions ty pified b y frequent accelerations and decelerations as well as some steady cruise conditions as represented on the Heav y - dut y FTP. The primary reason the agencies are finalizing two separate diesel engine standards

– one for diesel engines used in tractors and the other for diesel engines used in voc ational vehicles

-- is to encourage engine manufacturers to install technologies appropriate to the intended use of the engine with the vehicle. The current non
- GHG emissions engine test procedures also require the development of regeneration emission rate s and frequency factors to account for the emission changes during a regeneration event (40 CFR 86.004
- 28). EPA and NHTSA proposed not to include these emissions from the calculation of the compliance levels over the defined test procedures. Cummins and Daimler supported and stated there already exists sufficient incentives for manufacturers to limit regeneration frequency . Conversel y, Volvo opposed the omission of IRAF requirements for CO 2 emissions because emissions from regeneration can be a significant portion of the expected improvement and a significant variable between manufacturers For the proposal, we considered including regeneration in the estimate of fuel consumption and GHG emissions and decided not to do so for two reasons. First, EPA’s exis ting criteria emission regulations already provide a strong motivation to engine manufacturers to reduce the frequency and duration of infrequent regeneration events. The very stringent 2010 NO X emission standards cannot be met b y engine designs that lead to frequent and extend regeneration events. Hence, we believe engine manufacturers are already reducing regeneration emissions to the greatest degree possible. In addition******* **E.O. 12866 Review**

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173 of to believing that regenerations are already controlled to the extent technologically possible, we believe that attempting to include regeneration emissions in the standard setting could lead to an inadvertentl y lax emissions standard. In order to include regeneration and set appropriate standards, EPA and NHTSA would have needed to pr oject the regeneration frequency and duration of future engine designs in the time frame of this program. Such a projection would be inherentl y difficult to make and quite likely would underestimate the progress engine manufacturers will make in reducing infrequent regenerations. If we underestimated that progress, we would effectivel y be setting a more lax set of standards than otherwise would be expected. Hence in setting a standard including regeneration emissions we faced the real possibility that we would achieve less effective CO 2 emissions control and fuel consumption reductions than we will achieve b y not including regeneration emissions. Therefore, the agencies are finalizing an approach as proposed which does not include the regenerati ve emissions. (e) Hybrid Powertrain Technology Although the final vocational vehicle standards are not premised on use of hy brid powertrains, certain vocational vehicle applications may be suitable candidates for use of hy brids due to the greater frequency of stop - and
- go urban operation and their use of power take
- off (PTO) s ystems. Examples are vocational vehicles used predominantly in stop - start urban driving (e.g., delivery trucks). As an incentive, the agencies are finalizing to provide credits for the u se of h ybrid powertrain technology as described in Section IV. Under the advanced technology credit provisions, c redits generated b y use of hy brid powertrains could be used to meet an y of the heav y - dut y standards, and are not restricted to the averaging set generating the credit, unlike the other credit provisions in the final rules. The agencies are finalizing that any credits generated using such advanced technologies could be applied to an y heavy
- duty vehicle or engine, and not be limited to the vehicle category generating the credit. Section IV below also details the final approach to account for the use of a h y brid powertrain when evaluating compliance with the vehicle standard. In general, manufacturers can derive the fuel consumption and CO 2 emissions reductions based on comparative test results using the final chassis testing procedures. **(3) Summary of**  **Fi nal**  **F lexibility**  **and C**  **redit P**  **rovisions** EPA and NHTSA are finalizing four flexibility provisions specifically

for heavy
duty vocational vehicle and engine manufacturers, as discussed in Section IV below. These are an averaging, banking and trading p rogram for emissions and fuel consumption credits, as well as provisions for early credits, advanced technology credits, and credits for innovative vehicle or engine technologies which are not included as inputs to the GEM or are not demonstrated on the en gine FTP test cycle. With the exception of the advanced technology

credits, credits generated under these provisions can only be used within the same averaging set which generated the credit (for example, credits generated by H HD vocational vehicles can o nl y be used b y H HD vehicles). EPA is also adopting a temporary provision whereb y N 2 O emission credit s can be used to comply with the CO 2 emissions standard , as described in Section IV below.******* **E.O. 12866 Review**

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174 of **(4) Deferral of**  **S tandards for**  **S mall**  **Chassis M**  **anufacturing and**  **Small Engine C**  **om panies**  EPA and NHTSA are finalizing an approach to defer greenhouse gas emissions and fuel consumption standards from small vocational vehicle chassis manufacturers meeting the SBA size criteria of a small business as described in 13 CFR 1 21.201 (see 40 CFR 1036.150 and 1037.150). The agencies will instead consider appropriate GHG and fuel consumption standards for these entities as part of a future regulatory action. This includes both U.S.
- based and foreign small volume heav y - dut y truck and engine manufacturers. The agencies have identified ten chassis entities that appear to fit the SBA size criterion of a small business. 184 The agencies estimate that these small entities comprise less than 0.5 percent of the total heav y - dut y vocational ve hicle market in the United States based on Polk Registration Data from 2003 through 2007, 185 and therefore that the exemption will have a negligible impact on the GHG emissions and fuel consumption improvements from the final standards. EPA and NHTSA have also identified three engine manufacturing entities that appear to fit the SBA size criteria of a small business based on company information included in Hoover’s. 186 Based on 2008 and 2009 model year engine certification data submitted to EPA for non
- GHG e missions standards, the agencies estimate that these small entities comprise less than 0.1 percent of the total heav y - dut y engine sales in the United States. The final exemption from the standards established under this rulemaking would have a negligible impact on the GHG emissions and fuel consumption reductions otherwise due to the standards. To ensure that the agencies are aware of which companies would be exempt, we are finalizing as proposed to require that such entities submit a declaration to EPA and NHTSA containing a detailed written description of how that manufacturer qualifies as a small entity

under the provisions of 13 CFR 121.201 , as prescribed in Section V below
. 

### E. **Other Standards Provisions** In addition to finalizing CO 2 emissi on standards for heav y - dut y vehicles and engines, EPA is also finalizing separate standards for N 2 O and CH 4 emissions. 187 NHTSA is not finalizing comparable separate standards for these GHGs because they are not directly

related to fuel consumption in the s ame way that CO 2 is, and NHTSA’s authority under EISA exclusively relates to fuel efficiency . N 2 O and CH 4 are important

184 The agencies have identified Lodal, In diana Phoenix, Autocar LLC, HME, Giradin, Azure Dynamics, DesignLine International, Ebus, Krystal Koach, and Millenium Transit Services LLC as potential small business chassis manufacturers. 185 M.J. Bradley. Heavy
- duty Vehicle Market Analysis. May 2009. 186 The agencies have identified Baytech Corporation, Clean Fuels USA, and BAF Technologies, Inc. as three potential small businesses. 187 NHTSA's statutory responsibilities relating to reducing fuel consumption are directly related to reducing CO 2 emissions, but not to the control of other GHGs.******* **E.O. 12866 Review**

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175 of GHGs that contribute to global warming, more so than CO 2 for the same amount of emissions due to their high Global Warming Potential (G WP). 188 EPA is finalizing N 2 O and CH 4 standards which apply to HD pickup trucks and vans as well as to all heavy
- dut y engines. EPA is not finalizing N 2 O and CH 4 standards for the Class 7 and 8 tractor or Class 2b
- 8 chassis manufacturers because these emiss ions would be controlled through the engine program. EPA requested comment in Section II.E.4 below on possible alternative CO 2 equivalent approaches to provide near
- term flexibility for 2012
- 14 MY light
- duty vehicles. As described below, EPA is finalizing alt ernative provisions allowing manufacturers to use CO 2 credits, on a CO 2 - equivalent (CO 2 eq) basis, to meet the N 2 O and CH 4 standards, which is consistent with many commenters’ preferred approach. Almost universally

across current engine designs, both g asoline
- and diesel
fueled, N 2 O and CH 4 emissions are relativel y low today and EPA does not believe it would be appropriate or feasible to require reductions from the levels of current gasoline and diesel engines . This is because for the most part, the same hardware and controls used by heavy
- dut y engines and vehicles that have been optimized for nonmethane hydrocarbon (NMHC) and NO X control indirectly result in highl y effective control of N 2 O and CH 4 . Additionally , unlike criteria pollutants, specific te chnologies beyond those presentl y implemented in heav y - dut y vehicles to meet existing emission requirements have not surfaced that specificall y target reductions in N 2 O or CH 4 . Because of this, reductions in N 2 O or CH 4 beyond current levels in most heavy
- duty applications would occur through the same mechanisms that result in NMHC and NO X reductions and would likely result in an increase in the overall stringency of the criteria pollutant emission standards. Nevertheless, it is important that future engin e technologies or fuels not currentl y researched do not result in increases in these emissions, and this is the intent of the final “cap” standards. The final standards would primarily function to cap emissions at today ’s levels to ensure that manufacturers maintain effective N 2 O and CH 4 emissions controls currently

used should they

choose a different technology path from what is currentl y used to control NMHC and NO X but also largel y successful methods for controlling N 2 O and CH 4 . As discussed below, some technologies that manufacturers may adopt for reasons other than reducing fuel consumption or GHG emissions could increase N 2 O and CH 4 emissions if manufacturers do not address these emissions in their overall engine and aftertreatment design and development plans. Manufacturers will be able to design and develop the engines and aftertreatment to avoid such emissions increases through appropriate emission control technology selections like those already used and available today . Because EPA b elieves that these standards can be capped at the same level, regardless of ty pe of HD engine involved, the following discussion relates to all ty pes of HD engines regardless of the vehicles in which such engines are ultimatel y used. In addition, since th ese standards are designed to cap current emissions, EPA is finalizing the same standards for all of the model years to which the rules apply
. 188 The global warming potentials (GWP) used in this rule are consistent with Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4). At this time, the IPCC Second Assessment Report (SAR) GWP values are used in the official U.S. greenhouse gas inventory submission to the United Nations climate change framework , per that convention's requirements
. N 2 O has a GWP of 298 and CH 4 has a GWP of 25 according to the IPCC Fourth Assessment Rep ort.******* **E.O. 12866 Review**

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176 of EPA believes that the final N 2 O and CH 4 cap standards will accomplish the primary goal of deterring increases in these emissions as engine and aftertreatment technologies evolve because manufacturers will continue to target current or lower N 2 O and CH 4 levels in order to maintain ty pical compliance margins. While the cap standards are set at levels that are higher than current average emission levels, the control technologies used today

are highl y effective and there is no reason to believe that emissions will slip to levels close to the cap, particularl y considering compliance margin targets. The caps will protect against significant increases in emissions due to new or poorly implemented technologies. However, we also believe that an alternative compliance approach that allows manufacturers to convert these emissions to CO 2 eq emission values and combine them with C O 2 into a single compliance value would also be appropriate, so long as it did not undermine the stringency of the CO 2 standard. As described below, EPA is finalizing that such an alternative compliance approach be available to manufacturers to provide ce rtain flexibilities for different technologies
. EPA requested comments in the NPRM on the approach to regulating N 2 O and CH 4 emissions including the appropriateness of “cap” standards, the technical bases for the levels of the final N 2 O and CH 4 standards, the final test procedures, and the final timing for the standards. In addition, EPA requested any additional emissions data on N 2 O and CH 4 from current technology engines. We solicited additional data, and especiall y data for in
- use vehicles and engines that would help to better characterize changes in emissions of these pollutants throughout their useful lives, for both gasoline and diesel applications. As is ty pical for EPA emissions standards, we are finalizing that manufacturers should establish deterioration factors to ensure compliance throughout the useful life. We are not at this time aware of deterioration mechanisms for N 2 O and CH 4 that would result in large deterioration factors, but neither do we believe enough is known about these mechanisms to justify finalizing assigned factors corresponding to no deterioration, as we are finalizing for CO 2 , or for that matter to an y predetermined level. In addition to N 2 O and CH 4 standards, this section also discusses air conditioning
- related provisions and EPA pro visions to extend certification requirements to all
- electric HD vehicles and vehicles and engines designed to run on ethanol fuel. **(1) What is EPA’s**  **Approach to C ontrolling N**  **2 O?**  N 2 O is a global warming gas with a GWP of 298. It accounts for about 0.3% of the current greenhouse gas emissions from heav y - duty trucks. 189 N 2 O is emitted from gasoline and diesel vehicles mainly during specific cataly st temperature conditions conducive to N 2 O formation. Specificall y, N 2 O can be generated during periods of emission hardware warm
- up when rising catal ys t temperatures pass through the temperature window when N 2 O formation potential is possible. For current heav y - dut y gasoline engines with conventional three
- way cataly st technology , N 2 O is not generall y produced in significant amounts because the time the catal ys t spends at the critical temperatures during warm
- up is short. This is largel y due to the need to quickly reach the higher temperatures necessary for high cataly st efficiency to achieve emission

189 Value adapted from “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990
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177 of compliance of criteria pollutants. N 2 O formation is generall y onl y a concern with diesel and potentially

with future gasoline lean
- burn engines with compromised NO X emissions control sy stems. If the risk for N 2 O formation is not factored into the design of the controls, these s ys tems can but need not be designed in a way that emphasizes efficient NO X control while allowing the formation of significant quantities of N 2 O. However, these future advanced gasoline and diesel technologies do not inherently re quire N 2 O formation to properl y control NO X . Pathway s exist today that meet criteria emission standards that would not compromise N 2 O emissions in future sy stems as observed in current production engine and vehicle testing 190 which would also work for future diesel and gasoline technologies. Manufacturers would need to use appropriate technologies and temperature controls during future development programs with the objective to optimize for both NO X and N 2 O control. Therefore, future designs and controls at reducing criteria emissions would need to take into account the balance of reducing these emissions with the different control approaches while also preventing inadvertent N 2 O formation, much like the path taken in current heav y - duty compliant engines and vehicles. Alternativel y, manufacturers who find technologies that reduce criteria or CO 2 emissions but see increases N 2 O emissions beyond the cap could choose to offset N 2 O emissions with reduction in CO 2 as allowed in the CO 2 eq option discussed in Sectio n II.E.3. EPA is finalizing an N 2 O emission standard that we believe would be met by most current - technology

gasoline and diesel vehicles at essentially no cost to the vehicle, though the agency

is accounting for additional N 2 O equipment costs. EPA beli eves that heav y - dut y emission standards since 2008 model year, specificall y the very stringent NO X standards for both engine and chassis certified engines, directl y result in stringent N 2 O control. It is believed that the current emission control technolog ies used to meet the stringent NO X standards achieve the maximum feasible reductions and that no additional technologies are recognized that would result in additional N 2 O reductions. As noted, N 2 O formation in current catal ys t sy stems occurs, but their em ission levels are inherentl y low, because the time the catal ys t spends at the critical temperatures during warm
- up when N 2 O can form is short. At the same time, we believe that the standard would ensure that the design of advanced NO X control s ys tems for future diesel and lean
- burn gasoline vehicles would control N 2 O emission levels. While current NO X control approaches used on current heav y - dut y diesel vehicles do not compromise N 2 O emissions and actuall y result in N 2 O control, we believe that the stand ards would discourage any new emission control designs for diesels or lean
- burn gasoline vehicles that achieve criteria emissions compliance at the cost of increased N 2 O emissions. Thus, the standard would cap N 2 O emission levels, with the expectation that current gasoline and diesel vehicle control approaches that compl y with heav y - dut y vehicle emission standards for NO X would not increase their emission levels, and that the cap would ensure that future diesel and lean
burn gasoline vehicles with advanced NO X controls would appropriatel y control their emissions of N 2 O.

190 Memorandum “N 2 O Data from EPA Heavy
- Duty Testing”******* **E.O. 12866 Review**

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178 of (a ) Heavy
-Duty Pickup Truck and Van N 2 O Exhaust Emission Standard EPA is finalizing the proposed per
- vehicle N 2 O emission standard of 0. 0 5 g/mi, measured over the Light
- duty FTP and HFET drive cycles. Similar to the CO 2 standard approach, the N 2 O emission level of a vehicle would be a composite of the Light
- dut y FTP and HFET cycles with the same 55 percent city weighting and 45 percent highway weighting. The standard would become effective in model year 20 14 for all HD pickups and vans that are subject to the CO 2 emission requirements. Averaging between vehicles would not be allowed. The standard is designed to prevent increases in N 2 O emissions from current levels, i.e., a no - backsliding standard. The N 2 O standard level is approximately two times the average N 2 O level of current gasoline and diesel heav y - dut y trucks that meet the NO X standards effective since 2008 model year. 191 Manufacturers ty pically use design targets f

or NO X emission levels at approximately

50 percent of the standard, to account for in
- use emissions deterioration and normal testing and production variability , and we expect manufacturers to utilize a similar approach for N 2 O emission compliance. We are n ot adopting a more stringent standard for current gasoline and diesel vehicles because the stringent heavy
- dut y NO X standards already result in significant N 2 O control, and we do not expect current N 2 O levels to rise for these vehicles particularl y with expected manufacturer compliance margins. Diesel heav y - duty

pickup trucks and vans with advanced emission control technology

are in the early

stages of development and commercialization. As this segment of the vehicle market develops, the final N 2 O standard would require manufacturers to incorporate control strategies that minimize N 2 O formation. Available approaches include using electronic controls to limit cataly st conditions that might favor N 2 O formation and considering different cataly st formulations. While some of these approaches may

have associated costs, EPA believes that they will be small compared to the overall costs of the advanced NO X control technologies already required to meet heav y - dut y standards. The light
- dut y GHG rule requires that manufacturers begin testing for N 2 O by 2015 model year . The manufacturers of complete pickup trucks and vans (Ford, General Motors, and Chry sler) are already impacted b y the light
- dut y GHG rule and will therefore have this equipment and capability in place f

or the timing of this rulemaking
. Overall, we believe that manufacturers of HD pickups and vans (both gasoline and diesel) would meet the standard without implementing an y significantly new technologies, only

further refinement of their existing controls, and we do not expect there to be an y significant costs associated with this standard.

191 Memorandum “N 2 O Data from EPA Heavy
- Duty Testing”.******* **E.O. 12866 Review**

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179 of (b ) Heavy
- duty Engine N 2 O Exhaust Emission Standard EPA proposed a per engine N 2 O emissions standard of 0.05 g/bhp
- hr for heavy
duty engines, but is finalizing a standard of 0.10 g/bhp
- hr based on additional data submitted to the agency

which better represents the full range of current diesel and gasoline engi ne performance. The final N 2 O standard becomes effective in 2014 model ye ar for diesel engines, as proposed. However, EPA is finalizing N 2 O standards for gasoline engines that become effective in 2016 model year to align with the first year of the CO 2 g asoline engine standards. Without this alignment, manufacturers would not have an y flexibility , such as CO 2 eq credits, in meeting the N 2 0 cap and therefore would not have an y recourse to comply if an engine’s N 2 O emissions were above the standard. The st andard remains the same over the useful life of the engine. The N 2 O emissions would be measured over the composite Heav y - duty FTP cycle because it is believed that this cycle poses the highest risk for N 2 O formation versus the additional heavy
- dut y compli ance cycles. The agencies received comments from industry suggesting that the N 2 O and CH 4 emissions be evaluated over the same test cycle required for CO 2 emissions compliance. In other words, the commenters wanted to have the N 2 O emissions measured over the SET for engines installed in tractors. The agencies are not adopting this approach for the final action because we do not have sufficient data to set the appropriate N 2 O level using the SET. The agencies are not requiring an y additional burden b y re quiring the measurement to be conducted over the Heavy
- Duty FTP cycle because it is already required for criteria emissions. Averaging of N 2 O emissions between HD engine s w ill not be allowed. The standard is designed to prevent increases in N 2 O emissions from current levels, i.e., a no - backsliding standard. The proposed N 2 O level was twice the average N 2 O level of primaril y pre - 2010 model year diesel engines as demonstrated in the ACES Study and in EPA’s testing of two additional engines with selective cat al yt ic reduction aftertreatement s ystems. 192 Manufacturers t ypicall y use design targets for NO X emission levels of about 50 percent of the standard, to account for in
- use emissions deterioration and normal testing and production variability , and manufacturers are expected to utilize a similar approach for N 2 O emission compliance. EPA sought comment about deterioration factors for N 2 O emissions. See 75 FR 74208. Industry

stakeholders recommended that the agency define a DF of zero. While we believe it is also possible that N 2 O emissions will not deteriorate in use, very little data for exists for aged engines and vehicles. Therefore , the value we are assigning is conservative
- specifically additive DF of 0.02 g/bhp
- hr. While the value is conservative, it is small enough to allow compliance for all engines except those very close to the standards. For engines too close to the standard to use the assigned DFs, the manufacturers would need to demonstrate via engineering analy sis that deterioration is less than assigned DF.

192 Coordinating Research Council Report: ACES Phase 1 of the Advanced Collaborative Emissions Study, 2009.(This study included detailed chemical characterization of exhaust species emitted from four 2007 mo del year heavy heavy diesel engines)******* **E.O. 12866 Review**

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180 of EPA sought additional data on the level of the proposed N 2 O level of 0.05 g/bhp
hr. See 75 FR 74208. The agency received additional data of 2010 model y ear engines from the Engine Manufacturers Association. 193 The agencies reanal yz ed a new data set, as shown in Table II
- 22 , to derive the final N 2 O standard of 0.10 g/bhp
- hr with a defined deterioration factor of 0.02 g/bhp
- hr. **Table II**  **- 22**  **: N 2**  **O Data Analysis** Engine Famil y Rated Power (HP) Composite FTP

Cycle N 2 O Result (g/bhp
- hr) EPA Data of 2007 Engine with SCR 0.042 EPA Data of 2010 Production Intent

Engine 0.037 A 450 0.0181 A 600 0.0151 B 360 0.0326 C 380 0.0353 D 560 0.0433 D 455 0.0524 E 600 0.0437 F 500 0.0782 G 483 0.1127 H 385 0.0444 H 385 0.0301 H 385 0.0283 J 380 0.0317 Mean 0.043 2 * Mean 0.09 Engine emissions regulations do not currently require testing for N 2 O. The Mandatory

GHG Reporting final rule requires reporting of N 2 O and requires that manufacturers either measure N 2 O or use a compliance statement based on good engineering judgment in lieu of direct N 2 O measurement ( 74 FR 56260, October 30, 2009 ) . The light
- dut y GHG final rule allows manufacturers to provide a compliance statement based on good engineering judgment through the 2014 model ye ar, but requires measurement beginning in 2015 model year ( 75 FR 25324, May 7, 2010 ) . EPA is finalizing a consistent approach for heav y - dut y engine manufacturers which allows them to delay direct measurement of N 2 O until the 2015 model y ear. Manufacturers without the capability to measure N 2 O by

th e 2015 model ye ar would need to acquire and install appropriate measurement equipment in response to this

193 Engine Manufacturers Association. See Docket EPA
- HQ
- OAR
- 2010
- 0162.******* **E.O. 12866 Review**

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181 of final program. EPA has established four separate N 2 O measurement methods, all of which are commercially

available today
. EPA expects that most manuf acturers would use either photo
- acoustic measurement equipment for stand
- alone, existing FTIR instrumentation at a cost of $50,000 per unit or upgrade existing emission measurement sy stems with NDIR analyzers for $25,000 per test cell
**.** Overall, EPA believes that manufacturers of heavy
- dut y engines, both gasoline and diesel, would meet the final standard without implementing an y new technologies, and beyond relatively

small facilities costs for any company that still needs to acquire and install N 2 O measurement equipment, EPA does not project that manufacturers would incur significant costs associated with this final N 2 O standard. EPA is not adopting an y vehicle
- level N 2 O standards for heav y - dut y vocational vehicles and combination trac tors. The N 2 O emissions would be controlled through the heav y - dut y engine portion of the program. The only requirement of those vehicle manufacturers to compl y with the N 2 O requirements is to install a certified engine. **(2) What is EPA’s**  **A pproa**  **ch to**  **C ontrolling CH**  **4 ?**  CH 4 is greenhouse gas with a GWP of 25. It accounts for about 0.03 percent of the greenhouse gases from heav y - dut y trucks. 194 EPA is finalizing a standard that would cap CH 4 emission levels, with the expectation that current heav y - dut y vehicles and engines meeting the heav y - duty emission standards would not increase their levels as explained earlier due to robust current controls and manufacturer compliance margin targets. It would ensure that emissions would be addressed if in the future there are increases in the use of natural gas or an y other alternative fuel. EPA believes that current heav y - dut y emission standards, specificall y the NMHC standards for both engine and chas sis certified engines directl y result in stringent CH 4 control. It is believed that the current emission control technologies used to meet the stringent NMHC standards achieve the maximum feasible reductions and that no additional technologies are recogniz ed that would result in additional CH 4 reductions. The level of the standard would generally be achievable through normal emission control methods already required to meet heav y - duty emission standards for h ydrocarbons and EPA is therefore not attributing an y cost to this part of the final action. Since CH 4 is produced in gasoline and diesel engines similar to other hydrocarbon components, controls targeted at reducing overall NMHC levels generall y also work at reducing CH 4 emissions. Therefore, for gasoli ne and diesel vehicles, the heav y - dut y h ydrocarbon standards will generally prevent increases in CH 4 emissions levels. CH 4 from heav y - duty vehicles is relatively

low compared to other GHGs largel y due to the high effectiveness of the current heav y - duty st andards in controlling overall HC emissions. EPA believes that this level for the standard would be met by current gasoline and diesel trucks and vans, and would prevent increases in future CH 4 emissions in the event that alternative fueled vehicles with high methane emissions, like some past dedicated
194 Value adapted from “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990
- 2007. April 2009.******* **E.O. 12866 Review**

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182 of compressed natural gas vehicles, become a significant part of the vehicle fleet. Currentl y EPA does not have separate CH 4 standards because, unlike other h ydrocarbons, CH 4 does not contribute significantly to ozone formation. 195 However, CH 4 emissions levels in the gasoline and diesel heavy
- dut y truck fleet have nevertheless generally been controlled by the heav y - dut y HC emission standards. Even so, without an emission standard for CH 4 , future emission leve ls of CH 4 cannot be guaranteed to remain at current levels as vehicle technologies and fuels evolve. In recent model years, a small number of heav y - duty trucks and engines were sold that were designed for dedicated use of natural gas. While emission contr ol designs on these recent dedicated natural gas
- fueled vehicles demonstrate CH 4 control can be as effective as gasoline or diesel equivalent vehicles, natural gas
- fueled vehicles have historically

produced significantly

higher CH4 emissions than gasoline or diesel vehicles. This is because the fuel is predominantly methane, and most of the unburned fuel that escapes combustion without being oxidized by the catal ys t is emitted as methane. However, even if these vehicles meet the heav y - duty hydrocarbon stan dard and appear to have effective CH 4 control by nature of the h ydrocarbon controls, the heavy
- dut y standards do not require CH 4 control and therefore some natural gas vehicle manufacturers have invested very little effort into methane control. While the f inal CH 4 cap standard should not require an y different emission control designs beyond what is already required to meet heavy
- dut y h ydrocarbon standards on a dedicated natural gas vehicle (i.e., feedback controlled 3
- way catal ys t), the cap will ensure that sy stems provide robust control of methane much like a gasoline
- fueled engine. We are not finalizing more stringent CH 4 standards because we believe that the controls used to meet current heavy
duty hydrocarbon standards should result in effective CH 4 control when properly implemented. Since CH 4 is alread y measured under the current heav y - dut y emissions regulations (so that it may be subtracted to calculate NMHC), the final standard would not result in additional testing costs. (a ) Heavy
- duty Pickup Truck and Van CH 4 Standard EPA is finalizing the proposed CH 4 emission standard of 0. 05 g/mi as measured on the L ight
- dut y FTP and HFET drive cycles, to apply beginning with model year 20 14 for HD pickups and vans subject to the CO 2 standards. Similar to the CO 2 standard approach, the CH 4 emission level of a vehicle will be a composite of the Light
- duty FTP and HFET cycles, with the same 55% city weighting and 45% highway weighting. The level of the standard is approximately two times the average heavy
- duty gas oline and diesel truck and van levels. 196 As with N 2 O, this standard level recognizes that manufacturers t ypically set emissions design targets with a compliance margin of approximately

50% of the standard. Thus, we believe that the standard should be me t by current gasoline vehicles with no increase from today ’s CH 4 levels. Similarly , since current diesel vehicles generall y have even lower CH 4 emissions than gasoline vehicles,

195 But see Ford Motor Co. v. EPA , 604 F. 2d 685 (D.C. Cir. 1979) (permissible for EPA to regulate CH 4 under CAA section 202(b)). 196 Memorandum “CH 4 Data from 2010 and 2011 Heavy
- Duty Vehicle Certification Tests”.******* **E.O. 12866 Review**

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183 of we believe that diesels will also meet the standard with a larger compliance margin resulting in no change in today ’s CH 4 levels. (b ) Heavy
- duty Engine CH 4 Exhaust Emission Standard EPA is adopting a heav y - duty engine CH 4 emission standard of 0.10 g/hp
- hr with a defined deterioration factor of 0.02 g/bhp
- hr as measured on the compos ite Heav y - dut y FTP, to apply

beginning in model y ear 2014 for diesel engines and in 2016 model y ear for gasoline engines. EPA is adopting a different CH 4 standard than proposed based on additional data submitted to the agency which better represents the f ull range of current diesel and gasoline engine performance. EPA is adopting CH 4 standards for gasoline engines that become effective in 2016 model year to align with the first year of the gasoline engine CO 2 standards. Without this alignment, manufactur ers would not have any flexibility , such as CO 2 eq credits, in meeting the CH 4 cap and therefore would not be able to sell an y engine with a CH 4 level above the standard. The final standard would cap CH 4 emissions at a level currentl y achieved b y diesel an d gasoline heavy
- duty engines. The level of the standard would generall y be achievable through normal emission control methods already required to meet 2007 emission standards for NMHC and EPA is therefore not attributing any cost to this part of this pro gram (see 40 CFR 86.007
- 11). The level of the final CH 4 standard is twice the average CH 4 emissions from gasoline engines from General Motors in addition to the four diesel engines in the ACES study
. 197 As with N 2 O, this final level recognizes that manufac turers t ypically set emission design targets at about 50 percent of the standard. Thus, EPA believes the final standard would be met by current diesel and gasoline engines with little if any technological improvements. The agency believes a more stringent CH 4 standard is not necessary due to effective CH 4 controls in current heav y - dut y technologies, since, as discussed above for N 2 O, EPA believes that the challenge of compl yi ng with the CO 2 standards should be the primary focus of the manufacturers CH 4 is measured under the current 2007 regulations so that it may be subtracted to calculate NMHC. Therefore EPA expects that the final standard would not result in additional testing costs. EPA is not adopting an y vehicle
- level CH 4 standards for heav y - dut y combination tractors or vocational vehicles in this final action. The CH 4 emissions will be controlled through the heav y - dut y engine portion of the program. The onl y requirement of these truck manufacturers to comply with the CH 4 requirements is to inst all a certified engine. **(3) Use of**  **CO 2**  **Credits** As proposed, if a manufacturer is unable to meet the N 2 O or CH 4 cap standards, the EPA program will allow the manufacturer to comply using CO 2 credits. Inother words, a manufacturer could offset an y N 2 O or CH 4 e missions above the standard by taking steps to further reduce CO 2 . A manufacturer choosing this option would convert

197 Coordinating Research Council Report: ACES Phase 1 of the Advanced Collaborative Emissions Study, 2009.******* **E.O. 12866 Review**

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184 of its measured N 2 O and CH 4 test results that are in excess of the applicable standards into CO 2 eq to determine the amount of CO 2 credits required. For example, a manufacturer would use 25 M g of positive CO 2 credits to offset 1 M g of negative CH 4 credits or use 298 M g of positive CO 2 credits to offset 1 M g of negative N 2 O credits. 198 By using the Global Warming Potential of N 2 O and CH 4 , the approach recognizes the inter
- correlation of these compounds in impacting global warming and is environmentall y neutral for demonstrating compliance with the individual emissions caps. Because fuel conversion manufacturers certifying under 40 C FR Part 85, subpart F do not participate in ABT programs, EPA is finalizing a compliance option for fuel conversion manufacturers to comply with the N 2 O and CH 4 standards that is similar to the credit program just described above. The compliance option wi ll allow conversion manufacturers, on an individual engine family

basis, to convert CO 2 overcompliance into CO 2 equivalents of N 2 0 and/or CH 4 that can be subtracted from the CH 4 and N 2 0 measured values to demonstrate compliance with CH 4 and/or N 2 0 standards. The final NHTSA fuel consumption program will not use CO 2 eq, as suggested above. Measured performance to the NHTSA fuel consumption standards will be based on the measurement of CO 2 with no adjustment for N 2 O and/or CH 4 . For manufacturers that use the EPA alternative CO 2 eq credit, compliance to the EPA CO 2 standard will not be directl y equivalent to compliance with the NHTSA fuel consumption standard. **(4) Am**  **endment to Light**  **- duty Vehicle N**  **2 O and CH**  **4 Standards**  EPA also requested comment on revising a portion of the light
- dut y vehicle standards for N 2 O and CH 4 . 75 FR at 74211. Specificall y, EPA requested comments on two additional options for manufacturers to comply with N 2 O and CH 4 standards to provide additional near
- term flexibility
. EPA is finalizing one of those options, as discussed below. For light
- duty

vehicles, as part of the MY 2012

–2016 rulemaking, EPA finalized standards for N 2 O and CH 4 which take effect with MY 2012. 75 FR at 25421

–24. Similar to the heavy
- duty standards discussed in Section II.E above, the light
- duty vehicle standards for N 2 O and CH 4 were established to cap emissions and to prevent future emissions increases, and wer e generall y not expected to result in the application of new technologies or significant costs for the manufacturers for current vehicle designs. EPA also finalized an alternative CO 2 equivalent standard option, which manufacturers may choose to use in li eu of complying with the N 2 O and CH 4 cap standards. The CO 2 equivalent standard option allows manufacturers to fold all N 2 O and CH 4 emissions, on a CO 2 eq basis, along with CO 2 into their otherwise applicable CO 2 emissions standard level. For fl exible fueled vehicles, the N 2 O and CH 4 standards must be met on both fuels (e.g., both gasoline and E

– 85). After the light
- dut y standards were finalized, manufacturers raised concerns that for a few of the vehicle models in their existing fleet they were having difficulty

meeting the N 2 O and/or CH 4 standards, especially in the early

years of the program for a few of

198 N 2 O has a GWP of 298 an d CH 4 has a GWP of 25 according to the IPCC Fourth Assessment Report.******* **E.O. 12866 Review**

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185 of the vehicle models in their existing fleet. Th ese standards could be problematic in the near - term because there is little lead time to implement unplanned redesigns of vehicles to meet the standards. In such cases, manufacturers may need to either drop vehicle models from their fleet or to comply using the CO 2 equivalent alternative. On a CO 2 eq basis, folding in all N 2 O and CH 4 emissions would add 3

–4 g/mile or more to a manufacturer’s overall fleet
- average CO 2 emissions level because the alternative standard must be used for the entire fleet, not just for the problem vehicles. 199 See 75 FR at 74211. This could be especially

challenging in the early

y ears of the program for manufacturers with little compliance margin because there is very limited lead time to develop strategies to address these additional emissions. As stated at p roposal, EPA believed this posed a legitimate issue of sufficiency of lead time in the short term, as well as an issue of cost, since EPA assumed that the N 2 O and CH 4 standards would not result in significant costs for existing vehicles. Id. However, EPA expected that manufacturers would be able to make technology

changes (e.g., calibration or cataly st changes) to the few vehicle models not currentl y meeting the N 2 O and/or CH 4 standards in the course of their planned vehicle redesign schedules in order to meet the standards. Because EPA intended for these standards to be caps with little anticipated near
term impact on manufacturer’s current product lines, EPA requested comment in the heav y - dut y vehicle and engine proposal on two approaches to provide addit ional flexibilities in the light
- duty vehicle program for meeting the N 2 O and CH 4 standards. 75 FR at 74211. EPA requested comments on the option of allowing manufacturers to use the CO 2 equivalent approach for one pollutant but not the other for their fl eet

—that is, allowing a manufacturer to fold in either CH 4 or N 2 O as part of the CO 2 - equivalent standard. For example, if a manufacturer is having trouble complying with the CH 4 standard but not the N 2 O standard, the manufacturer could use the CO 2 equival ent option including CH 4 , but choose to comply separatel y with the applicable N 2 O cap standard. EPA also requested comments on an alternative approach of allowing manufacturers to use CO 2 credits, on a CO 2 equivalent basis, to offset N 2 O and CH 4 emission s above the applicable standard. This is similar to the approach proposed and being finalized for heav y - duty vehicles as discussed above in Section II.E
. EPA requested comments on allowing the additional flexibility in the light
- duty

program for MYs 2012

–2014 to help manufacturers address any near
- term issues that they may have with the N 2 O and CH 4 standards. Commenters providing comment on this issue supported additional flexibility for manufacturers, and manufacturers specificall y supported the heav y - duty vehicle approach of allowing CO 2 credits on a CO 2 equivalent basis to be used to meet the CH 4 and N 2 O standards. The Alliance of Automobile Manufacturers and the American Automotive Policy Council commented that the proposed heavy
- dut y approach represe nted a significant improvement over the approach adopted for light
- dut y vehicles. Manufacturers support de
- linking N 2 O and CH 4 , and commented that the formation of the
199 0.030 g/mile CH 4 multiplied by a GWP of 25 plus 0.010 g/mile N 2 O multiplied by a GWP of 298 results in a combined 3.7 g/mile CO 2 - equivalent value. Manufacturers using the default N 2 O value of 0.10 g/mile prior to MY 2015 in lieu of measuring N 2 O would fold in the entire 0.010 g/mile on a CO 2 - equivalent basis, or about 3 g/mile under the CO 2 - equivalent option.******* **E.O. 12866 Review**

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186 of pollutants do not necessarily trend together. Manufacturers also commented that a defi cit against the N 2 O or CH 4 cap would be required to be covered with CO 2 credits for that model, but the approach does not “punish” manufacturers for using a specific technology (which could provide CO 2 benefits, e.g., diesel, CNG, etc.) b y requiring manufa cturers to use the CO 2 - equivalent approach for their entire fleet. The Natural Gas Vehicle Interests also supported allowing the use of CO 2 credits on a CO 2 - equivalent basis for compliance with CH 4 standards and urged providing this type of flexibility on a permanent basis. The Institute for Policy

Integrity also submitted comments supportive of providing additional flexibility to manufacturers as long as it does not undermine standard stringency . This commenter was supportive of either approach discussed at proposal. 200 Manufacturers supported not only adopting the aspects of the heav y - dut y approach noted above, but the entire heav y - dut y vehicle approach, including two aspects of the program not contemplated in EPA’s request for comments. First, manufactur ers commented that EPA incorrectl y characterizes the light
- duty vehicle issues with CH 4 and N 2 O as short
- term or early lead time issues. For the reasons discussed above, manufacturers believe the changes should be made permanent, for the entire 2012
- 2016 light
- duty rulemaking period and, indeed, in an y s ubsequent rules for the light
- dut y vehicle sector. Second, manufacturers commented that N 2 O and CH 4 should be measured on the combined 55/45 weighting of the FTP and highway cycles, res pectively , as these cycles are the yardstick for fuel economy and CO 2 measurement. Manufacturers commented that there should not be a disconnect between the light
- dut y and heav y - dut y vehicle programs. EPA continues to believe that it is appropriate to pro vide additional flexibility to manufacturers to meet the N 2 O and CH 4 standards. EPA is thus finalizing provisions allowing manufacturers to use CO 2 credits, on a CO 2 - equivalent basis, to meet the N 2 O and CH 4 standards, which is consistent with many commenters’ preferred approach. Manufacturers will have the option of using CO 2 credits to meet N 2 O and CH 4 standards on a test group basis as needed for MYs 2012
- 2016. Because fuel conversion manufacturers certifying under 40 CFR Part 85, subpart F do not participate in ABT programs, EPA is finalizing a compliance option for fuel conversion manufacturers to comply with the N 2 O and CH 4 standards similar to the credit option just described above. The compliance option will allow conversion manufacturers, on an i ndividual test group basis, to convert CO 2 overcompliance into CO 2 equivalents of N 2 0 and/or CH 4 that can be subtracted from the CH 4 and N 2 0 measured values to demonstrate compliance with CH 4 and/or N 2 0 standards. In EPA’s request for comments, EPA discussed the new flexibility as being needed to address lead time issues for MYs 2012
- 2014. EPA understands that manufacturers are now making technology decisions for beyond MY 2014 and that some
200 The Institute for Policy Integrity questioned whether EPA had provided adequate notice of the proposal, given that it appeared in the proposed GHG rules for heavy duty vehicles. EPA provided notice not only in the preamble, but in the summary of action appearing on the first page of the Federal Register notice (“EPA is also requ esting comment on possible alternative CO 2 - equivalent approaches for model year 2012
- 14 light
- duty vehicles”). 75 FR at 74152. This is ample notice (demonstrated as well by the comments received on the issue, including from the Institute).******* **E.O. 12866 Review**

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187 of technologies such as FFVs may have difficulty

meeting the CH 4 and N 2 O standards, presenting manufacturers with difficult decisions of absorbing the 3
- 4 g/mile CO 2 - equivalent emissions fleet wide, making significant investments in existing vehicle technologies, or curtailing the use of certain technologies. 201 The CH 4 standard, in particular, could prove challenging for FFVs because exhaust temperatures are lower on E
- 85 and CH 4 is more difficult to convert over the catal ys t. EPA’s initial estimate that these issues could be resolved without disrupting product plan s by MY 2015 appears to be overl y optimistic, and therefore EPA is extending the flexibility through model y ear 2016. This change helps ensure that the CH 4 and N 2 O standards will not be an obstacle for the use of FFVs or other technologies in this time frame, and at the same time, assure that overall fleet average GHG emissions will remain at the same level as under the main standards. In response to comments from manufacturers and from the Natural Gas Vehicle Interests that the changes to the program make sense and should be made on a permanent basis (i.e. for model ye ars after 2016), EPA is extending this flexibility through MY 2016 as discussed above, but we believe it is premature to decide here whether or not these changes should be permanent. EPA may consider this issue further in the context of new standards for MYs 2017
- 2025 in the planned future light
- dut y vehicle rulemaking. With regard to comments on changing the test procedures over which N 2 O and CH 4 emissions are measured to determine complian ce with the standards, the level of the standards and the test procedures go hand
- in
- hand and must be considered together. Weighting the highway test result with the city

test result in the emissions measurement would in most cases reduce the overall emis sions levels for determining compliance with the standards, and would thereb y, in effect make the standards less stringent. This appears to be inappropriate. In addition, EPA did not request comments on changing the level of the N 2 O and CH 4 standards or the test procedures and it is inappropriate to amend the standards for that reason as well. **(5) EPA’s**  **Final Standards for D**  **irect E**  **missions From A**  **ir C**  **onditioning** Air conditioning s ys tems contribute to GHG emissions in two way s – direct emissions through refrig erant leakage and indirect exhaust emissions due to the extra load on the vehicle’s engine to provide power to the air conditioning s ys tem. HFC refrigerants, which are powerful GHG pollutants, can leak from the A/C s ystem. 202 This includes the direct leakage of refrigerant as well as the subsequent leakage associate with maintenance and servicing, and with disposal at the end of the vehicle’s life. 203 The most commonly

used refrigerant in automotive applications

– R134a, has a high GWP of 1430. 204 Due t o the high GWP of R134a , a small leakage of the refrigerant has a much greater
201 “Discussions with Vehicle Manufacturers Regarding the Light
- duty Vehicle CH 4 and N 2 O Standards,” Memorandum from Christopher Lieske to Docket EPA
- HQ
- OAR
- 2010
- 0162, 202 The United States has submitted a proposal to the Montreal Protocol which, if adopted, would phasedown production and consumption of HFCs. 203 The U.S. EPA has reclamation requirements for refrigerants in place under Title VI of the Clean Air Act. 204 The global warming potentials used in the NPRM analysis are consistent with Intergovernmental Panel on Climat e Change (IPCC) Fourth Assessment Report. At this time, the global warming potential values from the IPCC Second Assessment Report have been agreed upon as the official U.S. framework for******* **E.O. 12866 Review**

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188 of global warming impact than a similar amount of emissions of CO 2 or other mobile source GHGs. Heav y - dut y ai r conditioning s ys tems today are similar to those used in light
- duty applications. However, differences may exist in terms of cooling capacit y (such that sleeper cabs have larger cabin volumes than day cabs), s ys tem layout (such as the number of evaporators), and the durability requirements due to longer vehicle lif e. However, the component technologies and costs to reduce direct HFC emissions are similar between the two ty pes of vehicles. The quantity

of GHG refrigerant emissions from heavy
- dut y trucks relative to the CO 2 emissions from driving the vehicle and mo ving freight is very small. Therefore, a credit approach is not appropriate for this segment of vehicles because the value of the credit is too small to provide sufficient incentive to utilize feasible and cost
- effective air conditioning leakage improveme nts. For the same reason, including air conditioning leakage improvements within the main standard would in many instances result in lost control opportunities. Therefore, EPA is finalizing the proposed requirement that vehicle manufacturers meet a low leakage requirement for all air conditioning s ys tems installed in 2014 model y ear and later trucks, with one exception. The agency is not finalizing leakage standards for Class 2b
- 8 Vocational Vehicles at this time due to the complexity in the build process and the potential for different entities besides the chassis manufacturer to be involved in the air conditioning s ys tem production and installation, with consequent difficulties in developing a regulatory s ys tem. For air conditioning s ys tems with a refrigerant capacity greater than 733 grams, EPA is finalizing a leakage standard which is a “percent refrigerant leakage per year” to assure that high
- qualit y, low
- leakage components are used in each air conditioning sy stem design. The agency believes that a single “gram of refrigerant leakage per ye ar” would not fairly

address the variet y of air conditioning s ys tem designs and layouts found in the heav y - dut y truck sector. EPA is finalizing a standard of 1.50 percent leakage per ye ar for heav y - dut y pi ckup trucks and vans and Class 7 and 8 tractors. The final standard was derived from the vehicles with the largest s ys tem refrigerant capacity based on the Minnesota GHG Reporting database. 205 The average percent leakage per year of the 2010 model year veh icles is 2.7 percent. This final level of reduction is roughl y comparable to that necessary to generate credits under the light
- duty vehicle program. See 75 FR 25426
- 25427. Since refrigerant leakage past the compressor shaft seal is the dominant source of leakage in belt
- driven air conditioning sy stems, the agency recognizes that a single “percent refrigerant leakage per ye ar” is not feasible for s ys tems with a refrigerant capacity of 733 grams or lower , as the minimum feasible leakage rate does not continue to drop as the capacit y or size of the air conditioning s ys tem is reduced
. T he fixed leakage from the compressor seal and other sy stem devices result s in a addressing climate change. The global warming potential values fro m the IPCC Second Assessment Report are used in the official U.S. greenhouse gas inventory submission to the climate change frame wo rk. When inventories are recalculated for the final rule, changes in global warming potential may lead to adjustments. 205 T he Minnesota refrigerant leakage data can be found at http://www.pca.state.mn.us/climatechange/mobileair.html#leakdata.******* **E.O. 12866 Review**

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189 of minimum feasible ye arl y leakage rate , and f urther reductions in refrigerant cap acity (the ‘denominator’ in the percent refrigerant leakage calculation) will result in a sy stem which cannot meet the 1.50 percent leakage per year standard. EPA does not beli eve that leakage reducing technologies are available at this time which would allow lower capacity s ys tem s to meet the percent per ye ar standard , so we are finalizing a maximum gram per ye ar leakage standard of 11.0 grams per y ear for air conditioning sy stems with a refrigerant capacity

of 733 grams or lower. EPA defined the standard, as w ell as the refrigerant capacity

threshold, by

examining the State of Minnesota GHG Reporting Data base for the ye arl y l eakage rate from 2010 and 2011 model year pickup trucks. In the Minnesota data, the average leak rate for the pickup truck category (16 unique model and refrigerant capacity combinations ) was 13.3 grams per ye ar, with an average capaci ty of 654 grams, resulting in an average percent refrigerant leakage per year of 2.0 percent . 4 of the 16 model/capacity combinations in the reporting data achieved a leak rate 11.0 grams per ye ar or lower , and this was chosen as the maximum yearl y leak rate, as several manufacturers have demonstated that this level of yearl y leakage is feasibile. To avoid a discontinuity

between the “percent leakage” and “leak rate” standards

– where one approach would be more or less stringent, depending on the refrigerant capacity

– a refrigerant capacity

of 733 grams was chosen as a threshold capacity , below which , the leak rate approach can be used
. EPA believes this approach of having a leak rate standard for lower capacity s ys tems and a percent leakage per year standard for higher capacity s ys tems will result i n reduced re frigerant emissions from all air condit ioning sy stems, while still allowing manufacturers the ability to produce low
- leak, lower capacity sy stem s in vehicle s which require them
. Manufacturers can choose to reduce A/C leakage emissions in two way s. First, they can utilize leak
- tight components. Second, manufacturers can largel y eliminate the global warming impact of leakage emissions by adopting sy stems that use an alternative, low
- G lobal Warming Potential (G WP ) refrigerant. One alternative refrigerant, HFO
1234y f, with a GWP of 4, has been approved for use in light
- dut y passenger vehicles under EPA’s Significant New Alternatives Program (SNAP). While the scope of this SNAP approval does not include heav y - dut y highway vehicles, we expect that those interested in using this refrigerant in other sectors will petition EPA for broader approval of its use in all mobile air conditioning sy stems. In addition, the EPA is currentl y acting on a petition to de
- list R
- 134a as an acceptable refrigerant for new, light
- duty passenger vehicles. The time frame and scale of R
- 134a de
- listing is yet to be determined, but any phase
- down of R
- 134a use will likely take place after this rulemaking is in effect. Given that HFO
- 1234y f is y et to be approved for heavy
- duty vehicles, and that the time frame for the de
- listing of R
- 134a is not known, EPA believes that a leakage standard for heav y - dut y vehicles is still appropriate. If future heav y - dut y vehicles adopt refrigerants other than R
- 134a, the calculated refrigerant leak rate can be ad justed by multiplying the leak rate by

the ratio of the GWP of the new refrigerant divided by the GWP of the old re frigerant (e.g. for HFO
- 1234y f replacing R
- 134a, the calculated leak rate would be multiplied by 0.0028, or 4 divided by 1430 ). EPA believe s that reducing A/C s ys tem leakage is both highly cost - effective and technologicall y feasible. The availability of low leakage components is being driven b y the air conditioning program in the light
- dut y GHG rule which apply to 2012 model year******* **E.O. 12866 Review**

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190 of and later v ehicles. The cooperative industry and government Improved Mobile Air Conditioning program has demonstrated that new
- vehicle leakage emissions can be reduced b y 50 percent b y reducing the number and improving the quality of the components, fittings, seals, and hoses of the A/C sy stem. 207 All of these technologies are already in commercial use and exist on some of today’s s ys tems, and EPA does not anticipate an y significant improvements in sealing technologies for model years beyond 2014. However, EPA has rec ognized some manufacturers utilize an improved manufacturing procces for air conditioning s ys tem s, where a hel ium leak test is performed on 100 percent of all o - ring fittings and connections after final assembly . By leak testin g each fitting, the manufacturer or supplier is verifying the th e o - ring is not damaged during assembly (which is the primary source of leakage from o
- ring fittings), and when calculating the yearly leak rate for a s ys tem, EPA will allow a re lative emission value equivalent to a ‘seal washer’ can be used in place of the value normally used for an o - ring fitting , when 100% helium leak test ing is performed on those fittings. Wh ile f urther updates to the SAE J2727 standard may be forthcoming (to address new materials and measurement methods for permeat ion through hoses , EPA believes it is appropriate to include the helium leak test update to the leaka ge calculation method at this time. C onsistent with the light
- duty 2012
- 2016 MY vehicle rule, we are estimating costs for leakage control at $18 (2008$) in direct manufacturing costs. Including a low complexity indirect cost multiplier ( IC M ) of 1.14 results in costs of $21 in the 2014 model year. A/C control technology is considered to be on the flat portion of the learning curve , so costs in the 2017 model year will be $19. These costs are applied to all heav y - dut y pickups and vans, and to all combination tractors. EPA views these costs as minimal and the reductions of potent GHGs to be easily feasible and reasonable in the lead times provided b y the final rules. EPA is requiring that manufacturers demonstrate improvements in their A/C sy stem designs and components through a design
- based method. The method for calculating A/C leakage is based closel y on an industry
- consensus leakage scoring method, described below. This leakage scoring method is correlated to experimentally
measured leakage rates from a number of vehicles using the different available A/C components. Under the final approach, manufacturers will choose from a menu of A/C equipment and components used in thei r vehicles in order to establish leakage scores, which will characterize their A/C sy stem leakage performance and calculate the percent leakage per ye ar as this score divided b y the s ys tem refrigerant capacit y. Consistent with the light
- duty ru le, EPA is finalizing a requirement that a manufacturer will compare the components of its A/C sy stem with a set of leakage
- reduction technologies and actions that is based closel y on that being developed through the Improved Mobile Air Conditioning program and SAE International (as SAE Surface Vehicle Standard J2727, “HFC
- 134a, Mobile Air Conditioning Sy stem Refrigerant Emission Chart,” August 2008 version). See generally 75 FR 25426. The SAE J2727 approach was developed from laboratory testing of a variety

of A/C related components, and EPA believes that the J2727 leakage scoring sy stem generall y represents a reasonable

207 Team 1
- Refrigerant Leakage Re duction: Final Report to Sponsors, SAE, 2007.******* **E.O. 12866 Review**

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191 of correlation with average real
- world leakage in new vehicles. Like the cooperative industry
- government program, our final approach will associate each component with a specific leakage rate in grams per ye ar that is identical to the values in J2727 and then sum together the component leakage values to develop the total A/C sy stem leakage. However, in the heav y - duty vehicl e program, the total A/C leakage score will then be divided by

the value of the total refrigerant s ys tem capacit y to develop a percent leakage per year. EPA believes that the design
- based approach will result in estimates of likely leakage emissions reductions that will be comparable to those that would eventually result from performance
- based testing. EPA is not specifying a specific in
- use standard for leakage, as neither test procedures nor facilities exist to measure refrigerant leakage from a vehicle’s air conditioning sy stem. However, consistent with the light
- dut y rule, where we require that m anufacturers attest to the durability of components and sy stems used to meet the CO 2 standards (see 75 FR 25689), we will require that manufacturers of heav y - duty vehicles attest to the durability

of these sy stems, and provide an engineering analy sis which demonstrates component and sy stem durability
. **(6) In**  **direct E**  **missions F**  **rom A**  **ir C**  **onditioning** In addition to direct emissions from refrigerant leakage, air conditioning s ystems also create indirect exhaust emissions due to the extra load on the vehicle’s engine to provide power to the air conditioning sy stem. These indirect emissions are in the form of the additional CO 2 emitted from the engine when A/C is being used due to the added loads. Unlike direct emissions which tend to be a set annual leak rate not directly tied to usage, indirect emissions are full y a function of A/C usage. These indirec t CO 2 emissions are associated with air conditioner efficiency , since air conditioners create load on the engine. See 74 FR 49529. However, the agencies are not setting air conditioning efficiency standards for vocational vehicles, combination tractors, or heav y - dut y pickup trucks and vans. The CO 2 emissions due to air conditioning sy stems in these heavy
- dut y vehicles are minimal compared to their overall emissions of CO 2 . For example, EPA conducted modeling of a Class 8 sleeper cab using the GEM to eva luate the impact of air conditioning and found that it leads to approximately

1 gram of CO 2 /ton
- mile. Therefore, a projected 24% improvement of the air conditioning s ys tem (the level projected in the light
- duty GHG rulemaking), would only reduce CO 2 emis sions by less than 0.3 g CO 2 /ton
- mile, or approximately 0.3 percent of the baseline Class 8 sleeper cab CO 2 emissions. **(7) Ethanol**  **- F**  **ueled and El**  **ectric V**  **ehicles** Current EPA emissions control regulations explicitly appl y to heav y - duty

engines and vehicles fueled b y gasoline, m ethanol, natural gas and liquefied petroleum gas. For multi
- fueled vehicles they call for compliance with requirements established for each consumed fuel. This contrasts with EPA’s light
- duty vehicle regulations that apply to all vehicles generall y, regardless of fuel t ype. As we proposed, we are revising the heav y duty vehicle and engine regulations to make them consistent with the light
- duty vehicle approach, appl yi ng standards for all regulated criteria pollutants and GHGs regardless of******* **E.O. 12866 Review**

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192 of fuel ty pe, inc luding application to all
- electric vehicles (EVs). This provision will take effect in the 2014 model year, and be optional for manufacturers in earlier model y ears. However, to satisfy

the CAA section 202(a)(3) lead time constraints, the provision will r emain optional for all criteria pollutants through the 2015 model y ear. Commenters did not oppose this change in EPA regulations. This change primarily

affects manufacturers of ethanol
- fueled vehicles (designed to operate on fuels containing at least 50 p ercent ethanol) and EVs. Flex
- fueled vehicles (FFVs) designed to run on both gasoline and fuel blends with high ethanol content will also be impacted, as they will need to comply with requirements for operation both on gasoline and ethanol. The regulatory requirements we are finalizing today for certification on ethanol follow those already established for methanol, such as certification to NMHC equivalent standards and waiver of certain requirements. We expect testing to be done using the same E85 test f

uel as is used today

for light
- dut y vehicle testing, an 85/15 blend of commerciall y - available ethanol and gasoline vehicle test fuel. EV certification will also follow light
- dut y precedents, primarily calling on manufacturers to exercise good engineering judgment in applying the regulatory requirements, but will not be allowed to generate NO X or PM credits. This provision is not expected to result in an y significant added burden or cost. It is alread y the practice of HD FFV manufacturers to voluntarily c onduct emissions testing for these vehicles on E85 and submit the results as part of their certification application, along with gasoline test fuel results. No changes in certification fees are being set in connection with this provision. We expect that there will be strong incentives for an y manufacturer seeking to market these vehicles to also want them to be certified: (1) uncertified vehicles carry a disincentive to potential purchasers who typically have the benefit to the environment as one of thei r reasons for considering alternative fuels, (2) uncertified vehicles are not eligible for the substantial credits they could likely

otherwise generate, (3) EVs have no tailpipe or evaporative emissions and thus need no added hardware to put them in a cert ifiable configuration, and (4) emissions controls for gasoline vehicles and FFVs are also effective on dedicated ethanol
- fueled vehicles, and thus costly

development programs and specialized components will not be needed; in fact the highl y integrated nature of modern automotive products make the emission control sy stems essential to reliable vehicle performance. **(8) Regarding technological feasibility, as mentioned above, HD FFV**  **manufacturers already test on E85 and the resulting data shows that they can meet**  **emissions standards on this fuel. Furthermore, there is a substantial body of certification data on light**  **- duty FFVs (for which**  **testing on ethanol is already a requirement), showing existing emission control technology is capable of meeting even the more s**  **tringent Tier 2 standards in place for light**  **- duty vehicles.**  **Correction to 40 CFR 1033.625** In a 2008 final rule that set new locomotive and marine engine standards, EPA adopted a provision allowing manufacturers to use a limited number of nonroad engines******* **E.O. 12866 Review**

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193 of to power switch locomotives provided, among other things, that “the engines were certified to standards that are numericall y lower than the applicable locomotive standards of this part (1033)
. ” (40 CFR 1033.625(a)). The goal of this provision is to encour age the replacement of aging, high
- emitting switch locomotives with new switch locomotives having very

low emissions of PM, NO X , and h ydrocarbons. However, this provision neglected to consider the fact that preexisting nonroad engine emission standards f or CO were set at levels that were slightl y numerically higher than those for locomotives. The applicable switch locomotive CO standard of Part 1033 is 3.2 g/kW
- hr (2.4 g/hp
- hr), while the applicable nonroad engine CO standard is 3.5 g/kW
- hr (2.6 g/hp
- hr) . This is the case even for the cleanest final Tier 4 nonroad engines that will phase in starting in 2014. Thus, nonroad engines cannot be certified to CO standards that are numericall y lower than the applicable locomotive standards , and the nonroad engi ne provision is rendered practicall y unusable. This matter was brought to EPA’s attention by affected engine manufacturers. 208 As indicated above, EPA believes that allowing certification of new switch locomotive engines to nonroad engine standards will greatl y reduce emissions from switch locomotives, and EPA does not believe the slight difference in CO standards should prevent this environmentally beneficial program. EPA is therefore adopting a corrective technical amendment in Part 1033. The regulation is being amended at § 1033.625(a)(2) to add the following italicized text: “ The engines were certified to PM, NO X , and hydro carbon standards that are numerically lower than the applicable locomotive standards of this part.” This change is a straightforward correction to restore the intended usability

of the provision and is not expected to have adverse environmental impacts, a s nonroad engines have CO emissions that are t ypically well below both the nonroad and locomotive emissions standards. 

## III. **Feasibility Assessments and Conclusions**  In this section, NHTSA and EPA discuss several aspects of our joint technical anal ys es. These anal ys es are common to the development of each agency ’s final standards. Specifically

we discuss: the development of the baseline used by each agency for assessing costs, benefits, and other impacts of the standards, the technologies the agencies evaluate d and their costs and effectiveness, and the development of the final standards based on application of technology in light of the attribute based distinctions and related compliance measurement procedures. We also discuss the agencies’ consideration of s tandards that are either more or less stringent than those adopted. This program is based on the need to obtain significant oil savings and GHG emissions reductions from the transportation sector, and the recognition that there are appropriate and cost
- effective technologies to achieve such reductions feasibly . The decision on what standard to set is guided b y each agency’s statutory requirements, and is

208 See e
- mail correspondence from Timothy A. French, EMA, to Donald Kopinski and Charles Moulis, U.S. EPA dated 12/8/10, “Switcher Locomotive Flexibility”, docket# EPA
- HQ
- OAR
- 2010
- 0162
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194 of largel y based on the need for reductions, the effectiveness of the emissions control technology , th e cost and other impacts of implementing the technology , and the lead time needed for manufacturers to employ the control technology . The availability of technology

to achieve reductions and the cost and other aspects of this technology are therefore a ce ntral focus of this final rulemaking. CBD submitted several comments on whether NHTSA had met EI SA’s mandate to set standards “designed to achieve the maximum feasible improvement” and, to that end, appropriatel y considered feasible technologies in setting the stringency level. CBD stated that the proposed rule had been improperl y limited to currently available technology , and that no ne of the alternatives contained all of the available technology , which it argued violated EI SA and the CAA . CBD also stated that the phase
- in schedule violated the technology
- forcing intention of EI SA, and that the agencies misperceived their statutory

m andates, arguing that the agencies are required to force technological innovation through aggressive standards. As demonstrated in the standard
- specific discussions later in this section of the preamble, the standards adopted in the final program are consistent with section 202 (a) of the CAA and section 32902 (k)(2) of EISA With respect to the EPA rules, we note at the outset, that CBD’s premise that EPA must adopt “technology
- forcing” standards for heav y - dut y vehicles and engines is wrong . A technology
- forcing standard is one that is to be based on standards which will be available, rather than technology which is presentl y available. NRDC v. Thomas , 805 F. 2d 410, 429 (D.C. Cir. 1986). Clean Air Act provisions requiring “the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will be available” are technology
- forcing. See e.g. CAA sections 202 (a)(3)(1) 209 ; 213 (a)(3). Section 202(a) (1) standards are technology
- based, but not technology
- forcing, requiring EPA to issue standards for a vehicle’s useful life “after providing such period as the Administrator finds necessary

to permit the development and application of the requisite technology , giving appropriate consideration to the cost of compliance within such period.” See NACAA v. EPA , 489 F. 3d 1221, 1230 (D.C. Cir. 2007) upholding EPA’s interpretation of similar language in CAA section 231 (a) as providing even greater leeway to weigh the statutory factors than if the provision were technology
- forcing. See generally 74 FR at 49464
- 465 (Sept. 28. 2009); 75 FR at 74171. Section 202 (a)(1) of course allows EPA to consider application of technologies which will be ava ilable as well as those presently available, id., and EPA exercised that discretion here. For example, as shown below, the agencies carefull y considered application of h ybrid technologies and bottoming cycle technologies for a number of the standards. Thus, the critical issue is whether EPA’s choice of technology penetration on which the standards are premised is reasonable considering the statutory factors, the key ones being technology

feasibility , technology

availability

in the 2014
- 2018 model years

209 CBD cites the District Court’s opinion in Cent. Valley Chrysler
- Jeep Inc. v. Goldstene , 529 F. Supp. 2d 1151, 1178 (E.D. Cal. 2007) for the proposition thatstandard
- setting provisions of Title II of the CAA are technology forcing, but the court was citing to the technology
- forcing provision section 202 (a)(3)(A)(i), which is not the applicable authority here.******* **E.O. 12866 Review**

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195 of (i .e. adequacy

of lead time), and technology cost and cost
- effectiveness. EPA has considerable discretion to weigh these factors in a reasonable manner (even for provisions which are explicitly technology
- forcing, see Sierra Club v. EPA , 325 F. 3d 374, 378 (D.C. Cir. 2003)), and has done so here. With respect to EI SA, 49 USC section 32902(k)(2) directs NHTSA to “determine in a rulemaking proceeding how to implement a commercial medium
- and heavy
- duty on
- highway vehicle and work truck fuel efficiency improve ment program designed to achieve the maximum feasible improvement,” and “adopt and implement appropriate test methods, measurement metrics, fuel economy standards, and compliance and enforcement protocols that are appropriate, cost
- effective, and technologically feasible for commercial medium
- and heavy
- duty on
- h ighway vehicles and work trucks ” NHTSA recognizes that Congress intended EPCA (and b y extension, EI SA, which amended it) to be technology
- forcing. See Center for Auto Safety v. National Highway Traffic Safety Admin
. , 793 F.2d 1322, 1339 (D.C. Cir. 1986). However, NHTSA believes it is important to distinguish between setting “maximum feasible” standards, as EPCA/EI SA requires, and “maximum technologically feasible” standards, as CBD would have NHTS A do. The agency must weigh all of the statutory factors in setting fuel efficiency standards, and therefore may not weigh one statutory

factor in isolation of others. Neither EPCA nor EISA define “maximum feasible” in the context of setting CAFE standards. Instead, NHTSA is directed to consider and meet three factors when determining what the maximum feasible standards are

– “appropriateness, cost
effectiveness, and technological feasibility .” 32902(k)(2). These factors modify “feasible” in the contex t of the MD/HD rule s bey ond a plain meaning of “capable of being done.” See Center for Biological Diversity v. National Highway Traffic Safety Admin ., 538 F.3d 1172, 1194 (9th Cir. 2008). With respect to the setting of standards for light
- duty vehicles, EPCA/EI SA “gives NHTSA discretion to decide how to balance the statutory factors

– as long as NHTSA’s balancing does not undermine the fundamental purpose of EPCA: energy conservation.” Id . at 1195. Where Congress has not directly spoken to a potential i ssue related to such a balancing , NHTSA’s interpretation must be a “reasonable accommodation of conflicting policies... committed to the agency’s care b y the statute.” Id . (discussing consideration of consumer demand) (internal citations omitted). In the c ontext of the agency ’s light
- duty vehicle authorit y , it was determined that Congress delegated the process for setting the maximum feasible standard to NHTSA with broad guidelines concerning the factors that the agency must consider. Id. (intern al citations omitted) (emphasis in original). We believe that the same conclusion should be drawn about the statutory provisions governing the agency ’s setting of standards for heav y - dut y vehicles. Those provisions prescribe statutory factors comm ensurate to, and equally broad as, those prescribed for light
- dut y. Thus, NHTSA believes that it is firmly within our discretion to weigh and balance the factors laid out in 32902(k) in a way that is technology
- forcing, as evidenced b y these standards promulg ated in this final action , but not in a way

that requires the application of technology which will not be available in the lead time provided b y the rule s , or which is not cost
- effective, or is cost
- prohibitive, as CBD evidently

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196 of As detailed below for each regulatory category , NHTSA has considered the appropriateness, cost
- effectiveness, and technological feasibility of the standards in designing a program to achieve the maximum feasible fuel eff iciency improvement. It believes that each of those criteria is met. As described in Section I. F. (2) above, the final standards w ill remain in effect indefinitely

at their 2018 or 2019 levels, unless and until the standar ds are revised . CBD maintained that this is a per se violation of EISA, arguing that , by definition, standards which are not updated continually and regularl y cannot be considered maximum feasible. NHTSA would like to clarify that the NPRM specified that the standards would remain indefinitely

“until amended by

a future rulemaking action.” NPRM at 74172 . Further, as noted above, NHTSA has broad discretion to determine the maximum feasible standards. Unlike § 32902(b)(3)(B), which applies to automobiles regulated under light
- duty CAFE, § 32902(k) does not specify a maximum number of years that fuel econ omy standards for heav y - dut y vehicles will be in place. Consistent with its broad authority to define maximum feasible standards, NHTSA interprets its authority as including the discretion to define expiration periods where Congress has not otherwise spec ified. This is particularl y appropriate for the heav y - duty sector, where fuel efficiency regulation is unprecedented. NHTSA believes that it would be unwise to set an expiration period for this first rulemaking absent both Congressional direction and a k nown compelling reason for setting a specific date. NHTSA believes that the phase
- in schedule s provide an appropriate balance between the technology
- forcing purpose of the statute and EISA
- mandated considerations of economic practicability
. NHTSA recognizes, as noted in the case above, that balancing each statutory factor in order to set the maximum feasible standards means that the agency

must engage in a “reasonable accommodation of conflicting policies.” See 538 F.3d at 1195, supra . Here, the agency has determined that the phase
- in schedule s are one such rea sonable accommodation. Navistar commented generall y that the proposed rule was not technologically feasible, stating that the proposed standards assume technologies which are not in production for all manufacturers. This is not the test for technical feasibility . Under the Clean Air Act, EPA needs only to outline a technical path toward compliance with a standard, giving plausible reasons for its belief that technology will either be developed or applied in the requisite period. NRDC v. EPA , 655 F. 2d 318, 333
- 34 (D.C. Cir. 1981). EPA has done so here with respect to the al ternative engine standards of particular concern to Navistar. 210 Similarly , NHTSA has previousl y interpreted “technological feasibility” to mean “whether a particular method of improving fuel econom y can be available for commercial application in the model year for which a standard is being established.’ 74 FR 14196, 14216. NHTSA has further clarified that the consideration of technological feasibility “does not mean that the technology must be available or in use when a standard is proposed or issued.” Center for Auto Safety v. National Highway Traffic Safety Admin
. , 793 F.2d 1322, 1325 n12 (D.C. Cir. 1986), quoting 42 Fed. Reg. 63, 184, 63, 188 (1977).

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197 of Consistent with these previous interpretations, NHTSA believes that a technology does not necessaril y need to be currently available or in use for all regulated parties to be “technologicall y feasible” for this program , as long as it is reasonable to expect, based on the evidence before the agency , that the technology will be available in the model year in which the relevant standard takes effect. The agencies provide multiple technology pathway s for compliance with a standard, allowing each manufacturer to develop technologies which fit their current production and research, and the standards are ba sed on fleet penetration rates of those technologies. As discussed below, it is reasonable to assume that all the technologies incorporated in this final program will be available over the period the standards are in e ffect. The Institute for Policy

I ntegrit y ( IP I) commented that the agencies should increase the scope and stringency of the final rule to the point at which net benefits would be maximized, citing Executive Orders 12866 and 13563. EOs 12866 and 13563 instruct agencies, to the extent permitted by law, to select, among other things, the regulatory approaches which maximize net benefits. NHTSA agrees with IPIabout the applicability of these EOs and has made every effort to incorporate their guidance in draf ting this rule. Though IPI agreed that the proposed rule was cost - benefit justified, IPIfurther stated that the agencies must implement an alternative that provides the maximum net benefits. The agencies believe that standards that maximized net benefits would be beyond the point of technological feasibility for this first phase of the HD National Program. The standards already require the maximum feasible fuel efficiency improvements for the HD fleet in the 2014
- 2018 time frame . Thus, even though, the final standards are highly cost - effective , and standards that maximized net benefits would likely be more stringent than those being promulgated in this final action , NHTSA believes that standards that maximized net benefits would not be appropriate or technologicall y feasible in the rulemaking time frame . The Executive Orders cited b y IP I cannot and do not require an agency to select a regulatory

alternative that is inconsistent with its statutory

obligations. Thus, the standards adopted in the final rule s are consistent with the agencies’ respective statutory authorities, and are not established at levels which are infeasible or cost
- ineffective. Here, the focus of the standards is on appl yi ng fuel efficiency and emissions control technology

to reduce fuel consumption, CO 2 and other greenhouse gases. Vehicles combust fuel to generate power that is used to perform two basic functions: 1 ) transport the truck and its payload, and 2) operate various accessories during the operation of the truck such as the PTO units. Engine
- based technology can reduce fuel consumption and CO 2 emissions by improving engine efficiency , which increases the am ount of power produced per unit of fuel consumed. Vehicle
- based technology can reduce fuel consumption and CO 2 emissions by increasing the vehicle efficiency , which reduces the amount of power demanded from the engine to perform the truck’s primary functi ons. Our technical work has therefore focused on both engine efficiency improvements and vehicle efficiency

improvements. In addition to fuel delivery , combustion, and aftertreatment technology, an y aspect of the truck that affects the need for the engine to******* **E.O. 12866 Review**

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198 of produce power must also be considered. For example, the drag due to aerody namics and the resistance of the tires to rolling both have major impacts on the amount of power demanded of the engine while operating the vehicle. The large number of possible technologies to consider and the breadth of vehicle sy stems that are affected mean that consideration of the manufacturer’s design and production process play s a major role in developing the final standards. Engine and vehicle manufacturers t ypic ally develop many

different models based on a limited number of platforms. The platform typicall y consists of a common engine or truck model architecture. For example, a common engine platform may contain the same configuration (such as inline), number of cylinders, valvetrain architecture (such as overhead valve), cylinder head design, piston design, among other attributes. An engine platform may

have different calibrations, such as different power ratings, and different aftertreatment control strategies , such as exhaust gas recirculation (EGR) or selective catal yt ic reduction (SCR). On the other hand, a common vehicle platform has different meanings depending on the market. In the heav y - duty pickup truck market, each truck manufacturer usuall y has only a single pickup truck platform (for example the F series by Ford) with common chassis designs and shared body panels, but with variations on load capacity of the axles, the cab configuration, tire offerings, and powertrain options. Lastl y, the combinatio n tractor market has several different platforms and the trucks within each platform (such as LoneStar b y Navistar) have less commonality . Tractor manufacturers will offer several different options for bumpers, mirrors, aerody namic fairing, wheels, and ti res, among others. However, some areas such as the overall basic aerod ynamic design (such as the grill, hood, windshield, and doors) of the tractor are tied to tractor platform. The platform approach allows for efficient use of design and manufacturing re sources. Given the very large investment put into designing and producing each truck model, manufacturers of heav y - dut y pickup trucks and vans t ypicall y plan on a major redesign for the models every 5 years or more (a key

consideration in the choice of th e five model year duration during which the vehicle standards are phased in) . Recently , EPA’s non
- GHG heav y - duty engine program provided new emissions standards every three model ye ars. Heavy
- dut y engine and truck manufacturer product plans ty picall y hav e fallen into three ye ar cycles to reflect this regime. While the recent non
- GHG emissions standards can be handled generall y with redesigns of engines and trucks, a complete redesign of a new heav y - dut y engine or truck ty pically occurs on a slower cycle and often does not align in time due to the fact that the manufacturer of engines differs from the truck manufacturer. At the redesign stage, the manufacturer will upgrade or add all of the technology

and make most other changes supporting the manufacture r’s plans for the next several ye ars, including plans related to emissions, fuel efficiency , and safet y regulations. A redesign of either engine or truck platforms often involves a package of changes designed to work together to meet the various requirements and plans for the model for several model years after the redesign. This often involves significant engineering, development, manufacturing, and marketing resources to create a new product with multiple new features. In order to leverage this signific ant upfront******* **E.O. 12866 Review**

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199 of investment, manufacturers plan vehicle redesigns with several model ye ars of production in mind. Vehicle models are not completel y static between redesigns as limited changes are often incorporated for each model year. This interim process is called a refresh of the vehicle and it generall y does not allow for major technology changes although more minor ones can be done ( e.g. , small aerodyn amic improvements, etc). More major technology

upgrades that affect multiple sy stems of the vehicle thus occur at the vehicle redesign stage and not in the time period between redesigns. As discussed below, there are a wide variet y of CO 2 and fuel consumption reducing technologies involving several different sy stems in the engine and vehicle that are availabl e for consideration. Many can involve major changes to the engine or vehicle, such as changes to the engine block and cylinder heads or changes in vehicle shape to improve aerodynamic efficiency. Incorporation of such technologies during the periodic eng ine, transmission or vehicle redesign process would allow manufacturers to develop appropriate packages of technology upgrades that combine technologies in way s that work together and fit with the overall goals of the redesign. By s ynchronizing with their multi
- ye ar planning process, manufacturers can avoid the large increase in resources and costs that would occur if technology had to be added outside of the redesign process. We considered redesign cycles both in our costing and in assessing the lead tim e required. As described below, the vast majority of technology on whose performance the final standards are predicated is commerciall y available and already being utilized to a limited extent across the heav y - dut y fleet. Therefor e the majorit y of the emission and fuel consumption reductions which would result from these final rules would result from the increased use of these technologies. EPA and NHTSA also believe that these final rules will encourage the development and limite d use of more advanced technologies, such as advanced aerod ynamics and h ybrid powertrains in some vocational vehicle applications. In evaluating truck efficiency , NHTSA and EPA have excluded fundamental changes in the engine or truck’s perfor mance. Put another way , none of the technology pathway s underl yi ng the final standards involve any alteration in vehicle utility . For example, the agencies did not consider approaches that would necessitate reductions in engine power or otherwise limit truck performance. The agencies have thus limited the assessment of technical feasibility and resultant vehicle cost to technologies which maintain freight utility
. Similarly , the agencies’ choice of attributes on which to base the standards, and the metrics used to measure them, are consciously adopted to preserve the utility of heavy
- dut y vehicles and engines. The agencies worked together to determine component costs for each of the technologies and build up the costs accordingl y. For costs, the agencies considered both the direct or “piece” costs and indirect costs of individual components of technologies. For the direct costs, the agencies followed a bill of materials approach utilized by the agencies in the light
- dut y 2012
- 16 MY vehicle rule. A bill of materials, in a general sense, is a list of components or sub
- sy stems that make up a s ys tem

— in this case, an item of technology

which reduces GHG emissions and fuel consumption. In order to******* **E.O. 12866 Review**

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200 of determine what a s ys tem costs, one of the first steps is to determine its components and what they cost. NHTSA and EPA estimated these components and their costs based on a number of sources for cost
- related information. In general, the direct costs of fuel consumption
- improving technologies for heav y - d uty pickups and vans are consistent with those used in the light
- duty 2012
- 2016 MY vehicle rule, except that the agencies have scaled up certain costs where appropriate to accommodate the larger size and/or loads placed on parts and sy stems in the heav y - duty classes relative to the light
- dut y classes. For loose heav y - duty engines, the agencies have consulted various studies and have exercised engineering judgment when estimating direct costs. For technologies expected to be added to vocatio nal vehicles and combination tractors, the agencies have again consulted various studies and have used engineering judgment to arrive at direct cost estimates. Once costs were determined, they were adjusted to ensure that they were all expressed in 2009 d ollars using a ratio of gross domestic product deflators for the associated calendar years. Indirect costs were accounted for using the ICM approach explained in Chapter 2 of the RIA, rather than using the traditional Retail Price Equivalent (RPE) multip lier approach. For the heav y - duty pickup truck and van cost projections in this final action, the agencies have used ICMs developed for light
- duty vehicles (with the exception that here return on capital has been incorporated into the I CMs, where it had n ot been in the light
- duty rule) primarily because the manufacturers involved in this segment of the heav y - dut y market are the same manufacturers that build light
- duty trucks. For the Class 7 and 8 tractor, vocational vehicle , and heav y - dut y engine cost pr ojections in this final rulemaking, EPA contracted with RTIInternational to update EPA’s methodology for accounting for indirect costs associated with changes in direct manufacturing costs for heav y - dut y engine and truck manufacturers. 211 Inaddition to th e indirect cost multipliers varying by

complexity

and time frame, there is no reason to expect that the multipliers would be the same for engine manufacturers as for truck manufacturers. The report from RTIprovides a description of the methodology , as we ll as calculations of new indirect cost multipliers. The multipliers used here include a factor of 5 percent of direct costs representing the return on capital for heav y - dut y engines and truck manufacturers. These indirect cost multipliers are intended t o be used, along with calculations of direct manufacturing costs, to provide improved estimates of the full additional costs associated with new technologies. The agencies did not receive any adverse comments related to this methodology
. Details of the di rect and indirect costs, and all applicable ICMs, are presented in Chapter 2 of the RIA. Inaddition, for details on the I CMs, please refer to the RTIreport ( See Docket ID EPA
- HQ
- OAR
- 2010
- 0162
- 0283). Importantly , the agencies have revised the ICM factor s and the way that indirect costs are calculated using the I CMs. As a result, the ICM factors are now higher, the indirect costs are higher and, therefore, technology

costs are higher. The changes made to the I CMs and the indirect cost calculations are d iscussed in Section VIII of this preamble and are detailed in Chapter 2 of the RIA.

211 RTI International. Heavy
- duty Truck Retail Price Equivalent and Indirect Cost Multipliers. July 2010.******* **E.O. 12866 Review**

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201 of EPA and NHTSA believe that the emissions reductions called for b y the final standards are technologically feasible at reasonable costs within the lead time provided by the final standards, reflecting our projections of widespread use of commerciall y available technology . Manufacturers may also find additional means to reduce emissions and lower fuel consumption beyond the technical approaches we describe here. We encour age such innovation through provisions in our flexibility program as discussed in Section IV. The remainder of this section describes the technical feasibility and cost analy sis in greater detail. Further detail on all of these issues can be found in the joint RIA Chapter 2. 

### A. **Class 7 -**  **8 Combination Tractor** Class 7 and 8 tractors are used in combination with trailers to transport freight. 212 The variation in the design of these tractors and their ty pical uses drive different technology

solutions for each regulatory subcategory . The agencies are adopting provisions to treat vocational tractors as vocational vehicles instead of as combination tractors, as noted in Section II.B. The focus of this section is on the feasibility of the standards for combination trac tors, not the vocational tractors. EPA and NHTSA collected information on the cost and effectiveness of fuel consumption and CO 2 emission reducing technologies from several sources. The primary sources of information were the 2010 National Academ y of Scie nces report of Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heav y - Duty

Vehicles, 213 TIAX’s assessment of technologies to support the NAS panel report, 214 EPA’s Heav y - duty Lumped Parameter Model 215 , the anal ys is conducted by the Northeast States Center for a Clean Air Future, International Council on Clean Transportation, Southwest Research Institute and TIAX for reducing fuel consumption of heav y - dut y long haul combination tractors (the NESCCAF/I CCT study), 216 and the technology

cost anal ys is conducted by I CF for EPA. 217 Following on the EISA of 2007, the National Research Council appointed a NAS committee to assess technologies for improving fuel efficiency of heav y - dut y vehicles to support NHTSA’s rulemaking. The 2010 NAS report asse ssed current and future technologies for reducing fuel consumption,
212 “T ractor” is defin ed in 49 CFR Part 571.3 to mean “ a truck designed primarily for drawing other motor vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and the load so draw n .” 213 Committee to Assess Fuel Economy Technologies f or Medium
- and Heavy
- Duty Vehicles; National Research Council; Transportation Research Board (2010). Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heavy
- Duty Vehicles. (“The NAS Report”) Washington, D.C. **,** The National Academie s Press. Available electronically from the National Academy Press Website at http://www.nap.edu/catalog. 214 TIAX, LLC. “Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles,” November 19, 2009. 215 U.S. EPA. Heavy
- duty Lumped Paramete r Model
. 216 NESCCAF, ICCT, Southwest Research Institute, and TIAX. Reducing Heavy
- Duty Long Haul Com bination Truck Fuel Consumption and CO 2 Emissions. October 2009. 217 ICF International. “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emis sions for Heavy
- Duty On
- Road Vehicles.” July 2010. Docket Number EPA
- HQ
- OAR
- 2010
- 0162
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202 of how the technologies could be implemented, and identified the potential cost of such technologies. The NAS panel contracted with TIAX to perform an assessment of technologies which provid e potential fuel consumption reductions in heav y - duty trucks and engines and the technologies’ associated capital costs. Similar to the Lumped Parameter model which EPA developed to assess the impact and interactions of GHG and fuel consumption reducing t echnologies for light
- duty vehicles, EPA developed a new version of that model to specificall y address the effectiveness and interactions of the final pickup truck and light heavy
- duty engine technologies. The NESCAFF/I CCT study assessed technologies avai lable in 2012 through 2017 to reduce CO 2 emissions and fuel consumption of line haul combination tractors and trailers. Lastl y, the ICF report focused on the capital, maintenance, and operating costs of technologies currently available to reduce CO 2 emissions and fuel consumption in heavy
- duty engines, combination tractors, and vocational vehicles. **(1) What Technologies Did the Agencies Consider to Reduce the CO**  **2 Emissions and Fuel Consumption of**  **Combination T ractors?**  Manufacturers can reduce CO 2 emissi ons and fuel consumption of combination tractors through use of, among others, engine, aerody namic, tire, extended idle, and weight reduction technologies. The standards in the final rule s are premised on use of these technologies. The agencies note that SmartWay trucks are available today which incorporate the technologies on whose performance the final standards are based. We will also discuss other technologies that could potentially be used, such as vehicle speed limiters, although we are not basing the final standards on their use for the model years covered b y this rulemaking, for various reasons discussed below. In this section we discuss the baseline tractor and engine technologies for the 2010 model year, and then discuss the ty pes of technologies that the agencies considered to improve performance relative to this baseline, while S ection III.A.2 discusses the technology

packages the agencies used to determine the final standard levels. (a ) Baseline Tractor &Tractor Technologies Baseline tractor: The agencies developed the baseline tractor to represent the average 2010 model ye ar tractor. Today there is a large spread in aerody namics in the new tractor fleet. Trucks sold may reflect so
- called classic styling (as described in Section II.B.3.c), or may

be sold with aerody

namic packages. Based on our review of current truck model configurations and Polk data provi ded through MJ Bradley , 218 we believe the aerodynamic configuration of the baseline new truck fleet is approximately 25 percent Bin I, 70 percent Bin II, and 5 percent Bin III (as these bin configurations are explained above in Section II.B. (2)(c). The bas eline Class 7 and 8 day cab tractor consists of an aerodynam ic package which closely resembles the Bin I package described in Section II.B. (2)(c), baseline tire rolling resistance of 7.8 kg/metric ton for the steer tire and 8.2 kg/ metric ton, 219 dual tire s with steel wheels on the drive axles, and no

218 MJ Bradley. Heavy
- duty Market Analysis. May 2009. Page 10. 219 US E nvironmental Protection Agency. SmartWay Transport Partnership July 2010 e
- update accessed July 16, 2010, from http://www.epa.gov/smartwaylogistics/newsroom/documents/e
- update
- july
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203 of vehicle speed limiter. The baseline tractor for the Class 8 sleeper cabs contains the same aerod ynamic and tire rolling resistance technologies as the baseline day cab, does not include vehicle speed limiters , and does not include an idle reduction technology . The agencies assume the baseline transmission is a 10 speed manual. The agencies received a comment from the ICCT stating that the 0.69 Cd baseline for high roof sleepers published in the NPRM is highe r than existing studies show. I CCT cited three studies including a Society of Automotive Engineering paper showing a lower Cd for tractor trailers. The agencies based the average Cd for high roof sleepers on available in use fleet composition data, combin ed with an assessment of drag coefficient for different truck configurations. The agencies are finalizing the 0.69 baseline Cd for high roof sleeper based on our assessment for the NPRM. However, we will continue to gather information on the composition of the in
- use fleet and may alter the baseline in a future action, should more data become available that demonstrates our estimate is incorrect. Performance from this baseline can be improved by the use of the following technologies: Aerod ynamic technolog ies: There are opportunities to reduce aerodynamic drag from the tractor, but it is difficult to assess the benefit of individual aerodyn amic features. Therefore, reducing aerody namic drag requires optimizing of the entire s ys tem. The potential areas to reduce drag include all sides of the truck

– front, sides, top, rear and bottom. The grill, bumper, and hood can be designed to minimize the pressure created b y the front of the truck. Technologies such as aerodynamic mirrors and fuel tank fairings can reduce the surface area perpendicular to the wind and provide a smooth surface to minimize disruptions of the air flow. Roof fairings provide a transition to move the air smoothly over the tractor and trailer. Side extenders can minimize the air entrappe d in the gap between the tractor and trailer. Lastly , underbell y treatments can manage the flow of air underneath the tractor. As discussed in the TIAX report, the coefficient of drag (Cd) of a SmartWay sleeper cab high roof tractor is approximately 0.60 , which is a significant improvement over a truck with no aerody namic features which has a Cd value of approximately

0.80. 220 The GEM demonstrates that an aerodynamic improvement of a Class 8 high roof sleeper cab with a Cd value of 0.60 (which represents a Bin III tractor) provides a 5 percent reduction in fuel consumption and CO 2 emissions over a truck with a Cd of 0.68. Lower Rolling Resistance Tires: A tire’s rolling resistance results from the tread compound material, the architecture and materials of the casing, tread design, the tire manufacturing process, and its operating conditions (surface, inflation pressure, speed, temperature, etc.). Differences in rolling resistance of up to 50 percent have been identified for tires designed to equip the same vehicle. The baseline rolling resistance coefficient for today ’s fleet is 7.8 kg/metric ton for the steer tire and 8.2 kg/metric ton for the drive tire, based on sales weighting of the top three manufacturers based on market share. 221 Since 2007, SmartWay trucks have had steer tires with rolling resistance coefficients of less than 6.6 kg/metric ton for the steer tire and less than 7.0 kg/metric ton

220 See TIAX, Note 184 , Page 4
- 50. 221 See SmartWay, Note 219 , above.******* **E.O. 12866 Review**

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204 of for the drive tire. 222 Lo w rolling resistance (LRR) drive tires are currently offered in both dual assembly

and single wide
- base configurations. Single wide tires can offer rolling resistance reduction along with improved aerodyn amics and weight reduction. The GEM demonstrates that replacing baseline tractor tires with tires which meet the Bin I level provides approximately

a 4 percent reduction in fuel consumption and CO 2 emissions over the prescribed test cycle, as shown in RIA Chapter 2, Figure 2
- 2. Weight Reduction: Reductions in vehicle mass reduce fuel consumption and GHGs b y reducing the overall vehicle mass to be accelerated and also through increased vehicle payloads which can allow additional tons to be carried by fewer trucks consuming less fuel and producing lower emissions on a ton
- mile basis. Initially for proposal, the agencies considered evaluat ing vehicle mass reductions on a total vehicle basis for combination tractors ( and also for vocational vehicles)
. 223 The agencies considered defining a baseline vehicle curb weight and the GEM would have used the vehicle’s actual curb weight to calculate the increase or decrease in fuel consumption related to the overall vehicle mass relative to that baseline. After considerable evaluation of this issue, including discussions with the industry , we decided it would not be possible to define a single vehicle baseline mass for the tractors and for vocational trucks that would be appropriate and representative. Actual vehicle curb weights for these classes of vehicles vary

by thousands of pounds d ependent on customer features added to vehicles and critical to the function of the vehicle in the particular vocation in which it is used. This is true of vehicles such as Class 8 tractors considered in this section that may appear to be relativel y homog enous but which in fact are quite heterogeneous. This reality

led us to the solution we proposed. In the proposal, we reflected mass reductions for specific technology substitutions (e.g., installing aluminum wheels instead of steel wheels) where we could with confidence verify the mass reduction information provided b y the manufacturer even though we cannot estimate the actual curb weight of the vehicle. In this way , we accounted for mass reductions where we can accurately account for its benefits. For the final rules , based on evaluation of the comments , the agencies developed an expanded list of weight reduction opportunities, which can be input into the GEM as listed in Table II
- 9 in Section II. The list includes additional component s, but not materials, from those proposed in the NPRM. For high strength steel, the weight reduction value is equal to 10 percent of the presumed baseline component weight, as the agencies used a conservative value based on the DOE report. We recognize t hat there may be additional potential for weight reduction in new high strength steel components which combine the reduction due to the material substitution along with improvements in redesign, as evidenced by the studies done for light
- duty veh icles. In the development of the high strength steel component weights, we are only assuming a reduction from material substitution and no weight reduction from redesign, since we do not have an y data specific to redesign of heav y - dut y components nor do w e have a regulatory

222 Ibid. 223 The agencies are using the approach of evaluating total vehicle mass for heavy
- duty pickups and vans where we have more data on the current fleet vehicle mass.******* **E.O. 12866 Review**

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205 of mechanism to differentiate between material substitution and improved design. We are finalizing for wheels that both aluminum and light weight aluminum are eligible to be used as light
- weight materials. Onl y aluminum and not light weight aluminum can be used as a light
- weight material for other components. The reason for this is data was available for light weight aluminum for wheels but was not available for other components. The agencies continue to believe that the 400 pound weight target is appropriate for setting the final combination tractor CO 2 emissions and fuel consumption standards. The agencies agree with the commenter that 400 pounds of weight reduction without the use of single wide tires may not be achie vable for all tractor configurations. The agencies have extended the list of weight reduction components in order to provide the manufacturers with additional means to comply with the combination tractors and to further encourage reductions in vehicle wei ght. The agencies considered increasing the target value beyond 400 pounds given the additional reduction potential identified in the expanded technology

list; however, lacking information on the capacity for the industry to change to these light weight c omponents across the board b y the 2014 model year , we have decided to maintain the 400 pound target. The agencies intend to continue to study the potential for additional weight reductions in our future work considering a second phase of truck fuel effici ency and GHG regulations. On average, these mass reduction technologies together can reduce weight by over 400 pounds. A weight reduction of this magnitude applied to a truck which travels at 70,000 pounds will have a minimal impact on fuel consumption. H owever, for trucks which operate at the maximum GVWR which occurs approximately in one third of truck miles travelled, a reduced tare weight will allow for additional payload to be carried. The GEM demonstrates that a weight reduction of 400 pounds applie d to the payload tons for one third of the trips provides a 0.3 percent reduction in fuel consumption and CO 2 emissions over the prescribed test cycle, as shown in Figure 2
- 3 of RIA Chapter 2. Extended I dle Reduction: Auxiliary power units (APU)s, fuel op erated heaters, battery supplied air conditioning, and thermal storage s ys tems are among the technologies available today to reduce main engine extended idling from sleeper cabs. Each of these technologies reduces the baseline fuel consumption during idli ng from a truck without this equipment (the baseline) from approximately 0.8 gallons per hour (main engine idling fuel consumption rate) to approximately 0.2 gallons per hour for an APU. 224 EPA and NHTSA agree with the TIAX assessment of a 6 percent reducti on in overall fuel consumption reduction. 225 Vehicle Speed Limiters: Fuel consumption and GHG emissions increase proportional to the square of vehicle speed. Therefore, lowering vehicle speeds can significantl y reduce fuel consumption and GHG emissions. A vehicle speed limiter (VSL), which limits the vehicle’s maximum speed, is a simple technology that is utilized today by some fleets (though the t ypical maximum speed setting is often higher than 65

224 See the RIARIA Chapter 2 for details. 225 See the 2010 NAS Report, Note 213 , above, at 128.******* **E.O. 12866 Review**

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206 of mph). The GEM shows that using a vehicle speed limiter set at 62 mph on a sleeper cab tractor will provide a 4 percent reduction in fuel consumption and CO 2 emissions over the prescribed test cycles over a baseline vehicle without a VSLor one set above 65 mph. 226 Transmission: As discussed in the 2010 NAS repo rt, automatic and automated manual transmissions may offer the ability to improve vehicle fuel consumption by optimizing gear selection compared to an average driver. However, as also noted in the report and in the supporting TIAX report, the improvement is very dependent on the driver of the truck, such that reductions ranged from 0 to 8 percent. 227 Well
- trained drivers would be expected to perform as well or even better than an automatic transmission since the driver can see the road ahead and anticipate a changing stoplight or other road condition that an automatic transmission can not anticipate. However, poorly
trained drivers that shift too frequentl y or not frequently enough to maintain optimum engine operating conditions could be expected to realize improved in
- use fuel consumption by

switching from a manual transmission to an automatic or automated manual transmission. Although we believe there may be real benefits in reduced fuel consumption and GHG emissions through the application of dual clutch , automatic or automated manual transmission technology , we are not reflecting this potential improvement in our standard setting or in our compliance model. We have taken this approach because we cannot say with confidence what level of performance impro vement to expect. Low Friction Transmission, Axle, and Wheel Bearing Lubricants: The 2010 NAS report assessed low friction lubricants for the drivetrain as a 1 percent improvement in fuel consumption based on fleet testing. 228 The light
- duty 2012
- 16 MY vehicle rule and the pickup truck portion of this program estimate that low friction lubricants can have an effectiveness value between 0 and 1 percent compared to traditional lubricants. However, it is not clear if in m any

heavy
- dut y applications these low friction lubricants could have competing requirements like component durability issues requiring specific lubricants with different properties than low friction. Hy brid: Hy brid powertrain development in Class 7 and 8 tractors has been limited to a few manufacturer demonstration vehicles to date. One of the key benefit opportunities for fuel consumption reduction with hy brids is less fuel consumption when a vehicle is idling, but the standard is already premised on u se of extended idle reduction so use of h ybrid technology would duplicate man y of the same emission reductions attributable to extended idle reduction. NAS estimated that hy brid sy stems would cost approximately

$25,000 per truck in the 2015 through the 20 20 time frame and provide a potential fuel consumption reduction of 10 percent, of which 6 percent is idle reduction which can be achieved (less expensively) through other idle reduction technologies. 229

226 The Center for Biological Diversity thought that the agencies; were limiting their consideration of vehicle speed limiters as a potential control technology due to perceived legal constraints. Vehicle speed limiters are a potential control technology for heavy duty vehicles and there is no statutory bar on either agency considering the performance of VSLs in developing the standards. 227 See TIAX, Note 214 , above at 4
- 70. 228 See the 2010 NAS Report, Note 213 , page 67. 229 See the 2010 NAS Report, Note 213 , page 128.******* **E.O. 12866 Review**

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207 of The limited reduction potential outside of idle reduction for Class 8 sleeper cab tractors is due to the mostly

highway operation and limited start
- stop operation. Due to the high cost and limited benefit during the model ye ars at issue in this action, the agencies are not including h ybrids in assessing standard stringency (or as an input to GEM). However as discussed in Section IV, the agencies are providing incentives to encourage the introduction of advanced technologies including hybrid powertrains in appropriate applications. Management: The 2010 NAS report noted man y operational opportunities to reduce fuel consumption, such as driver training and route optimization. The agencies have included discussion of several of these strategies in RIA Chap ter 2, but are not using these approaches or technologies in the standard setting process. The agencies are looking to other resources, such as EPA’s SmartWay Transport Partnership and regulations that could potentially be promulgated by

the Federal Highw ay

Administration and the Federal Motor Carrier Safet y Administration, to continue to encourage the development and utilization of these approaches. (b ) Baseline Engine & Engine Technologies The baseline engine for the Class 8 tractors is a Heav y Heavy
- D ut y Diesel engine with 15 liters of displacement which produces 455 horsepower. The agencies are using a smaller baseline engine for the Class 7 tractors because of the lower combined weights of this class of vehicles require less power, thus the baseline is an 11L engine with 350 horsepower. The agencies developed the baseline diesel engine as a 2010 model year engine with an aftertreatment sy stem which meets EPA’s 0.20 grams of NO X/bhp
- hr standard with an SCR system along with EGR and meets the PM emissions standard with a diesel particulate filter with active regeneration. The baseline engine is turbocharged with a variable geometry

turbocharger. The following discussion of technologies describes improvements over the 2010 model ye ar baseline engine perfo rmance, unless otherwise noted. Further discussion of the baseline engine and its performance can be found in Section III.A.2.6 below. With respect to stringency level, the agencies received comments from Cummins and Daimler stating that the proposed stringency levels were appropriate for the lead
times. Conversely , the agencies receive d comments from several environmental groups (UCS, CATF, ACEEE) supporting a greater reduction in engine CO 2 emissions and fuel consumption based on the NAS report. Navistar also stated that the agencies’ baseline engine is inappropriate since there is no t currently a 0.20 NOx compliant engine in production. A discussion of how the baseline engine configuration can be found below in section (2)(b)(i). Navistar also stated that the baseline engines proposed in the NPRM, MY 2010 selective catal yt ic reduction ( SCR)
- equipped, could not meet the agencies’ statutory obligation to set feasible standards, and requested instead that MY 2010 engines currentl y in
- use be used to meet the feasibility factor. EPA disagrees with the statement that SCR is infeasi ble and that therefore the engine used as the baseline engine in the agencies’ anal ys is does indeed exist. In fact, several engine families have been certified by EPA******* **E.O. 12866 Review**

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208 of using SCR technology

over the past two y ears, all of which have met the 0.20 g/bhp
- hr NO x standard. 230 EPA disagrees with Navistar that SCR engines currently certified do not meet this standard. Compliance with the 0.20 g/bhp
- hr FTP NOx standard is measured based on an engine’s performance when tested over a specific duty cycle (see 40 CFR § 86.007
- 11(a)(2)). This is also true regarding the SET standard (see 40 CFR § 86.007
- 11(a)(3)). Further, the FTP and SET tests are average tests, so emissions could go over 0.20 even for some portion of the test itself. Manufacturers are also required to ensure that their engines meet the NTE standard under all conditions specified in the regulations (see 40 CFR § 86.007
- 11(a)(4)). Several manufacturers have been able to show compliance with these standards in applications for certification provided to EPA for several engine families. Navistar has provided no information indicating that these tests were false or improper. Indeed, Navistar does not appear to suggest, or provide any evidence, that engines with working SCR sy stems do not meet the NOx stan dard. Thus, it is demonstrably false to conclude that the NOx standard cannot be met with SCR
- equipped engines. A more detailed response to these comments appears in the Re s ponse to Comment document for this rule. Engine performance for CO 2 emissions and fuel consumption can be improved by use of the following technologies: Improved Combustion Process: Fuel consumption reductions in the range of 1 to 3 percent over the baseline diesel engine are identified in the 2010 NAS report through improved combustio n chamber design, higher fuel injection pressure, improved injection shaping and timing, and higher peak cylinder pressures. 231 Turbochargers: Improved efficiency of a turbocharger compressor or turbine could reduce fuel consumption by approximately 1 to 2 percent over variable geometry turbochargers in the market today
. 232 The 2010 NAS report identified technologies such as higher pressure ratio radial compressors, axial compressors, and dual stage turbochargers as design paths to improve turbocharger efficiency
. Higher efficiency

air handling processes: To maximize the efficiency of such processes, induction s ys tems may be improved by manufacturing more efficiently designed flow paths (including those associated with air cleaners, chambers, conduit, mass air flow sensors and intake manifolds) and by designing such s ys tem s for improved thermal control. Improved turbocharging and air handling s ys tems must include higher efficiency EGR s ys tems and intercoolers that reduce frictional pressure loss while maximizing the ability

to thermally

control induction air and EGR. The agencies

230 See 2010 Model Year Engine Certification Data and 2011 Model Year Engine Certification Data files located in the Docket EPA
- HQ
- OAR
- 2010
- 0162
. 231 TIAX. Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles. November 2009. Page 4
- 13. 232 TIAX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, Nov 19, 2009, Page 4
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209 of received comments from Honey well confirming that turbochargers provide a role in reducing the CO 2 emissions from engines. Other components that offer opportunities for improved flow efficiency include cylinder heads, ports and exhaust manifolds t o further reduce pumping losses. Variable air breathing s ystems such as variable valve actuation may provide additional gains at different loads and speeds. The NESCCAF/I CCT study indicated up to 1.2% reduction could be achieved solely through improved E GR sy stems. Low Temperature Exhaust Gas Recirculation: Most medium
- and heav y - duty vehicle diesel engines sold in the U.S. market today use cooled EGR, in which part of the exhaust gas is routed through a cooler (rejecting energy to the engine coolant) bef ore being returned to the engine intake manifold. EGR is a technology employed to reduce peak combustion temperatures and thus NO X . L ow - temperature EGR uses a larger or secondary EGR cooler to achieve lower intake charge temperatures, which tend to further reduce NO X formation. If the NO X requirement is unchanged, low
- temperature EGR can allow changes such as more advanced injection timing that will increase engine efficiency slightl y more than 1 percent. 233 Because low
- temperature EGR reduces the engine’s e xhaust temperature, it may not be compatible with exhaust energy recovery sy stems such as turbocompounding or a bottoming cycle. Engine Friction Reduction: Reduced friction in bearings, valve trains, and the piston
- to - liner interface will improve efficien cy . Any friction reduction must be carefully developed to avoid issues with durability or performance capabilit y. Estimates of fuel consumption improvements due to reduced friction range from 0 to 2 percent. 234 Reduced Parasitic L oads: Accessories that ar e traditionally gear or belt driven by a vehicle’s engine can be optimized and/or converted to electric power. Examples include the engine water pump, oil pump, fuel injection pump, air compressor, power
- steering pump, cooling fans, and the vehicle’s air
- c onditioning s ys tem. Optimization and improved pressure regulation may significantl y reduce the parasitic load of the water, air and fuel pumps. Electrification may result in a reduction in power demand, because electrically

powered accessories (such as th e air compressor or power steering) operate only when needed if they are electrically powered, but they

impose a parasitic demand all the time if they

are engine driven. In other cases, such as cooling fans or an engine’s water pump, electric power allows the accessory to run at speeds independent of engine speed, which can reduce power consumption. The TIAX study used 2 to 4 percent fuel consumption improvement for accessory electrification, with the understanding that electrification of accessories will h ave more effect in short
- haul/urban applications and less benefit in line
- haul applications. 235 Bendix, in their comments to the agencies, confirmed that there are engine accessories available that can improve an engine’s fuel efficiency
.

233 TIAX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, Nov 19, 2009, Page 4
- 13. 234 TIAX, Assessment of Fuel Economy Technologies for Medium
- and Heavy
- duty Vehicles, Final Report, Nov. 19, 2009, pg 4
- 15 235 TIAX. November 2009. Page 3
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210 of Selective catal yt ic reduction: This technology is common on 2010 the medium
and heav y - dut y diesel engines used in Class 7 and 8 tractors (and the agencies therefore have includ ed it as part of the baseline engine, as noted above). Because SCR is a highly effective NO X aftertreatment approach, it enables engines to be optimized to maximize fuel efficiency , rather than minimize engine
- out NO X . 2010 SCR sy stems are estimated to result in improved engine efficiency of approximately

3 to 5 percent compared to a 2007 in
- cylinder EGR
- based emissions sy stem and by an even greater percentage compared to 2010 in
- cylinder approaches. 236 As more effective low
- temperature catal ys ts are developed, the NO X conversion efficiency of the SCR sy stem will increase. Next
- generation SCR sy stems could then enable additional efficiency improvements; alternativel y, these advances could be used to maintain efficiency while down
- sizing the aftertreatment. We estimate that continued optimization of the catal ys t could offer 1 to 2 perce nt reduction in fuel use over 2010 model y ear sy stems in the 2014 model year. 237 The agencies estimate an additional 1 to 2 percent reduction may be feasible in the 2017 model year through additional refinement. Mechanical Turbocompounding: Mechanical tur bocompounding adds a low pressure power turbine to the exhaust stream in order to extract additional energy , which is then delivered to the crankshaft. Published information on the fuel consumption reduction from mechanical turbocompounding varies between 2.5 and 5 percent. 238 Some of these differences may

depend on the operating condition or duty cycle that was considered b y the different researchers. The performance of a turbocompounding s ys tem tends to be highest at full load and much less or even zero at light load. The agencies did not receive an y comments regarding the efficacy of mechanical turbocompound systems. Electric Turbocompounding: This approach is similar in concept to mechanical turbocompounding, except that the power turbine drives an el ectrical generator. The electricit y produced can be used to power an electrical motor supplementing the engine output, to power electrified accessories, or to charge a h ybrid s ys tem battery . None of these sy stems have been demonstrated commercially , but m odeled results by industry and DOE have shown improvements of 3 to 5 percent. 239 The agencies did not receive an y comments regarding the efficacy of electric turbocompound sy stems Bottoming C ycle: An engine with bottoming cycle uses exhaust or other heat en ergy from the engine to create power without the use of additional fuel. The sources of energy include the exhaust, EGR, charge air, and coolant. The estimates for fuel consumption reduction range up to 10 percent as documented in the 2010 NAS report. 240

236 Stanton, D. “Advanced Diesel Engine Technology Development for High Efficiency, Clean Com bustion.” Cummins, Inc. Annual Progress Report 2008 Vehicle Technologies Program: Advanced Com bustion Engine T echnologies, US Department of Energy. Pp 113
- 116. December 2008. 237 TIAX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, Nov 19, 2009, pg. 4
- 9 238 NESCCAF/ICCT study (p. 54) and TIAX (2009, p p. 3
- 5) 239 K. G. Duleep of Energy and Environmental Analysis, R. Kruiswyk, 2008, pp. 212
- 214, NESCCAF/ICCT, 2009, p. 54 240 See 2010 NAS Report, Note 213 , page 57.******* **E.O. 12866 Review**

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211 of However, none of the bottoming cycle or Rankine sy stems has been demonstrated commerciall y and are currently in onl y the research stage. **(2) Projected Technology Package Effectiveness and Cost**  (a ) Class 7 and 8 Combination Tractors EPA and NHTSA project that CO 2 emissions and fuel consumption reductions can be feasibl y and cost
- effectivel y achieved in these rules’ time frame s through the increased application of aerodynamic technologies, LRR tires, weight reduction, extended idle reduction technologies, vehicle speed limiters, and engine improvements. T he agencies believe that hy brid p owertrains sy stems for tractors will not be sufficientl y developed and the necessary manufacturing capacity

put in place to base a standard on any significant volume of hy brid tractors. As highlighted by the 2010 NAS report, the agencies do believe that hybrid powertrains have the potential in the longer term to provide significant improvements in fuel efficiency and to reduce greenhouse gas emissions. . The agencies also are not including drivetrain technologies in the standard setting process, as discu ssed in Section II. The agencies evaluated each technology and estimated the most appropriate application rate of technology into each tractor subcategory . The next sections describe the effectiveness of the individual technologies, the costs of the tec hnologies, the projected application rates of the technologies into the regulatory subcategories, and finally the derivation of the final standards. (i ) Baseline Tractor Performance The agencies developed the baseline tractor for each subcategory to represent an average 2010 model ye ar tractor configured as noted earlier. The approach taken by the agencies was to define the individual inputs to the GEM , as shown in Table III
- 1 . For example, the agencies evaluated the industry ’s tractor offerings and concluded that the average tractor contains a generally aerody namic shape (such as roof fairings) and avoids classic features such as exhaust stacks at the B
- pillar, which increase drag. As noted earlier, our assessment of the baseline new high roof tractor fleet aerody namics consists of approximately

25 percent Bin I, 70 percent Bin II, and 5 percent Bin III tractors. The baseline rolling resistance coefficient for today ’s fleet is 7.8 kg/metric ton for the steer tire and 8.2 kg/metric ton for the drive tire, based on sales weighting of the top three manufacturers based on market share. 241 The agencies assumed no application of vehicle speed limiters, weight reduction technologies, or idle reduction technologi es in the baseline tractor. The agencies use the inputs in the G EM to derive the baseline CO 2 emissions and fuel consumption of Class 7 and 8 tractors. The results are included in Table III
- 1
.

241 US Environmental Protection Agency. SmartWay Transport Partnership July 2010 e
- update accessed July 16, 2010, from http://www.epa.gov/smartwaylogistics/newsroom/documents/e
- update
- july
- 10.pdf

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212 of **Table III**  **- 1**  **: Baseline Tractor Definitions** Class 7 Class 8 Day Cab Day Cab Sleeper Cab Low Roof Mid

Roof High

Roof Low

Roof Mid Roof High Roof Low Roof Mid Roof High Roof **Aerodynamics (Cd)** Baseline 0.77 0.87 0. 73 0. 7 7 0. 87 0. 73 0.77 0.87 0. 70 **Steer Tires ( RR**  **C kg/metric ton)**  Baseline 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 7.8 **Drive Tires ( RR**  **C kg/metric ton)**  Baseline 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.2 8.2 **Weight Reduction ( lb**  **)** Baseline 0 0 0 0 0 0 0 0 0 **Extended Idle Reduction (gram CO 2**  **/ton -**  **mile reduction)** Baseline N/A N/A N/A N/A N/A N/A 0 0 0 **Vehicle Speed Limiter** Baseline -- -- -- -- -- -- -- -- -- **Engine** Baseline 2010

MY 11L Engine 2010

MY 11L Engine 2010

MY 11L Engine 2010 MY

15L Engine 2010 MY

15L Engine 2010 MY

15L Engine 2010 MY

15L Engine 2010 MY

15L Engine 2010 MY

15L Engine
**Table III**  **- 2**  **: Class**  **7 and 8 Tractor Baseline CO 2**  **Emissions and Fuel Consumption**

Class 7 Class 8 Day Cab Day Cab Sleeper Cab Low Roof Mid Roof High Roof Low Roof Mid

Roof High Roof Low Roof Mid Roof High Roof CO 2 (grams CO 2 /ton - mi le) 116 128 138 88 95 103 80 89 94 Fuel Consumption (gal/1 , 000 ton mi le) 11. 4 12.6 13. 6 8. 7 9.4 10.1 7. 8 8. 7 9. 3

(ii) Tractor Technology Package Definitions The agencies’ assessment of the final technology effectiveness was developed through the use of the GEM in coordination with chassis testing of three SmartWay certified Class 8 sleeper cabs. The agencies developed the standards through a three
- step proces s. First, the agencies developed technology performance characteristics for each technology , described below. Each technology is associated with an input parameter which is in turn modeled in the GEM. T he performance levels for the range of C lass 7 and 8 tractor aerodyn amic packages and vehicle technologies are described in Table III
- 3
. Second, the agencies combined the technology performance levels with a projected technology application rate to determine the GEM inputs used to set the stringency of the final standards. Third, the agencies input the parameters into GEM and used the o utput to determine the final CO 2 emissions and fuel consumption levels.******* **E.O. 12866 Review**

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213 of Aerodynamics The aerod ynamic packages are categorized as Bin I, Bin II, Bin III, Bin IV, or Bin V based on the aerodyn amic performance determined through testing conducted by the manu facturer. A more complete description of these aerodynamic packages is included in Chapter 2 of the RIA. In general, the CdA values for each package and tractor subcategory

were developed through EPA’s coastdown testing of tractor
- trailer combinations, the 2010 NAS report, and SAE papers. Tire Rolling Resistance The rolling resistance coefficient for the tires was developed from SmartWay’s tire testing to develop the SmartWay certification, in addition to testing a small selection of tractor tires as pa rt of this program. The tire performance was evaluated in three levels
- the baseline (average), 15 percent better than the average, and an additional 15 percent improvement. The first 15 percent improvement represents the threshold used to develop SmartWay certified tires for long haul tractors. The second 15 percent threshold represents an incremental step for improvements beyond today’s SmartWay level and represents the best in class rolling resistance of the tires we tested. Weight Reduction The weight reductions were developed from tire manufacturer information, the Aluminum Association, the Department of Energy, and TIAX, as discussed above in Section II.B.3.e. Idle Reduction The benefits for the extended idle reductions were developed from literature, SmartWay

work, and the 2010 NAS report. The agencies received comments from multiple stakeholders regarding idle reduction technologies (IRT). T wo commenters ask ed us to revise the default value associated with the IRT technology , and two comme nters want to use IRT in GEM even without automatic engine shut down ( AES )
. The agencies proposed AES after 5 minutes with no exceptions to help ensure that the idle reductions are realized in
- use . Use of an A ES ensures the main engine will be shut down , where as idle reduction technologies alone do not provide th at level of certainty
. Without an automatic shutdown of the main engine, actual savings would depend on operator behavior and thus be essentially unverifiable
. The agencies are finalizing the calc ulation as proposed, along with the automotive engine shutdown requirement. Additional details regarding the comments and calculations are included in RIA Section 2.5.4.2. Several c ommenters requested that the level of emissions reductions vary in GEM by different idle reduction technologies, and one commenter requested that the application of battery

powered APUs be incentivized. The agencies recognize that the level of emission reductions provided by different IRT varies, but are adopting a conservative level to recognize that some vehicles may be sold with onl y an AES but may then install an IRT in
- use. Or some vehicles may be sold with one IRT but then choose to install alternative ones in
- use. The agencies cannot verify the savings which depend on operator behavior.******* **E.O. 12866 Review**

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214 of One commenter requested that we provide manufacturers with an option to allow the AES feature to be reprogammable after a specified number of miles or time in service. The agencies recognize that AES may impact the resale value of tractors and, in response to comments, are adopting provisions for the optional expiration of an AES. Thus, the initial buyer could select AES only for the number of miles based on the expected time before resale. Si milar to vehicle speed limiters, we wo uld discount the impact based on the full life of the truck (e.g. 1,258,788 miles). Additional detail can be found in RIA Section 2.5.4.2. Vehicle Speed Limiter The agencies are not including vehicle speed limiters in the technology package for Class 7 and 8 tractors. Summary of Technology Performance Table III
- 3 describes the performance levels for the range of Class 7 and 8 tractor aerod ynamic packages and vehicle technologies.******* **E.O. 12866 Review**

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215 of **Table III**  **- 3**  **: Class 7 and 8 Tractor Technology Values** Class 7 Class 8 Day Cab Day Cab Sleeper Cab Low/Mid Roof High

Roof Low/Mid

Roof High

Roof Low

Roof Mid

Roof High

Roof **Aerodynamics (Cd)** Bin I 0.77 /0.8 7 0.7 9 0.77 /0.87 0.7 9 0.77 0.87 0.7 5 Bin II 0.71 /0.8 2 0.7 2 0.71 /0.82 0.7 2 0.71 0.82 0.6 8 Bin III 0.6 3 0.6 3 0. 60 Bin IV 0.5 6 0.5 6 0.5 2 Bin V 0.5 1 0.5 1 0.4 7 **Steer Tires ( RR**  **C kg/metric ton)**  Baseline 7.8 7.8 7.8 7.8 7.8 7.8 7.8 Level I 6.6 6.6 6.6 6.6 6.6 6.6 6.6 Level II 5.7 5.7 5.7 5.7 5.7 5.7 5.7 **Drive Tires ( RR**  **C kg/metric ton)**  Baseline 8.2 8.2 8.2 8.2 8.2 8.2 8.2 Level I 7.0 7.0 7.0 7.0 7.0 7.0 7.0 Level II 6.0 6.0 6.0 6.0 6.0 6.0 6.0 **Weight Reduction ( lb**  **)** Control 400 400 400 400 400 400 400

**Extended Idle Reduction (gram CO 2**  **/ton -**  **mile reduction) a**  Control N/A N/A N/A N/A 5 5 5 **Vehicle Speed Limiter b**  Control N/A N/A N/A N/A N/A N/A N/A Not e s : a While the standards are set based on this value, users would enter another value if AES is not applied or applied for less than the full useful life of the engine. b Vehicle speed limiters are an applicable technology for all Class 7 and 8 tractors, howev er the standards are not premised on the use of this technology. (iii) Tractor Technology Application Rates As explained above, vehicle manufacturers often introduce major product changes together, as a package. In this manner the manufacturers can optimize the ir available resources, including engineering, development, manufacturing and marketing activities to create a product with multiple new features. In addition, manufacturers recognize that a truck design will need to remain competitive over the intended l ife of the design and meet future regulatory

requirements. In some limited cases, manufacturers may implement an individual technology

outside of a vehicle’s redesign cycle. With respect to the levels of technology application used to develop the final standards, NHTSA and EPA established technology application constraints. The first ty pe of constraint was established based on the application of fuel consumption and CO 2******* **E.O. 12866 Review**

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216 of emission reduction technologies into the different ty pes of tractors. For example, i dle reduction technologies are limited to Class 8 sleeper cabs using the assumption that day cabs are not used for overnight hoteling. A second ty pe of constraint was applied to most other technologies and limited their application based on factors reflec ting the real world operating conditions that some combination tractors encounter. This second ty pe of constraint was applied to the aerodyn amic, tire, and vehicle speed limiter technologies. Table III
- 4 specifies the application rates that EPA and NHTSA used to develop the final standards. The agencies received a significant number of comments related to this second basis. In particular, commenters questioned the reasons for not requiring the maximum reduction technology in every case. The agencies have not done so because we have concluded that within each of these individual vehicle categories there are particular applications where the use of the identified technologies would be either ineffective or not technically feasible. The addition of ineffective technologies provides no environmental or fuel efficiency benefit, increases costs and is not a basis upon which to set a maximum feasible improve ment. For example, the agencies have not required the use of full aerod ynamic vehicle treatments on 100 percent of tractors because we know that in many

applications (for example gravel truck engaged in local aggregate delivery) the added weight of the ae rod ynamic technologies will increase fuel consumption and hence CO 2 emissions to a greater degree than the reduction that would be accomplished from the more aerodyn amic nature of the truck. To simply set the standard based on the largest reduction possib le estimated narrowl y over a single test procedure while ignoring the in
- use effects of the technology would in this case result in a perverse outcome that is not in keeping with the agencies’ goals or the requirements of the CAA and EPCA. Aerodynamics Application Rate The impact of aerodynamics on a truck’s efficiency increases with vehicle speed. Therefore, the usage pattern of the truck will determine the benefit of various aerod ynamic technologies. Sleeper cabs are often used in line haul applicati ons and drive the majority

of their miles on the highway travelling at speeds greater than 55 mph. The industry has focused aerody

namic technology

development, including SmartWay tractors, on these t yp es of trucks. Therefore the agencies are adopting the most aggressive aerod yn amic technology application to this regulatory subcategory . All of the major manufacturers today offer at least one SmartWay truck model. The 2010 NAS Report on heav y - dut y trucks found that manufacturers indicated that aerodynamic improvements which yi eld 3 to 4 percent fuel consumption reduction or 6 to 8 percent reduction in Cd values, beyond technologies used in today ’s SmartWay trucks are achievable. 242 The aerod yn amic application rate for Class 8 sleeper cab high roof cabs (i.e ., the degree of technology application on which the stringency of the final standard is premised) consists of 20 percent of Bin IV, 70 percent Bin III, and 10 percent Bin II reflecting our assessment of the fraction of tractors in this segment that can su ccessfull y apply these aerody

namic packages.

242 TIAX. Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles. November 2009. Page 4
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217 of The 90 percent of tractors that we project can either be Bin II or Bin III equipped reflects the bulk of Class 8 high roof sleeper cab applications. We are not projecting a higher fraction of Bin III aerod ynamic s ys tems because of the limited lead time for the program and the need for these more advanced technologies to be developed and demonstrated before being applied across a wider fraction of the fleet. Our averaging, banking and trading provisions provid e manufacturers with the flexibility to implement these technologies over time even though the standard changes in a single step. The final aerodynamic application for the other tractor regulatory categories is less aggressive than for the Class 8 sleepe r cab high roof. The agencies recognize that there are truck applications which require on/off
- road capability

and other truck functions which restrict the t ype of aerod ynamic equipment applicable. We also recognize that these ty pes of trucks spend less time at highway speeds where aerody

namic technologies have the greatest benefit. The 2002 VIUS data ranks trucks by major use. 243 The heav y trucks usage indicates that up to 35 percent of the trucks may be used in on/off

- road applications or heavier applic ations. The uses include construction (16 percent), agriculture (12 percent), waste management (5 percent), and mining (2 percent). Therefore, the agencies analyzed the technologies to evaluate the potential restrictions that would prevent 100 percent ap plication of SmartWay technologies for all of the tractor regulatory

subcategories. As discussed in Section II.B.2.c, in response to comments received from manufacturers, the agencies are finalizing only two aerod ynamic bins for low and mid roof tractors. The agencies are reducing the number of bins for these tractors to reflect the actual range of aerodynamic technologies effective in low and mid roof tractor applications. The aerodynamic improvements to the bumper, hood, windshield, mirrors, and doors are developed for the high roof tractor application and then carried over into the low and mid roof applications. As mentioned in Section II.B.2.c, the types of designs that would move high roof tractors from a Bin III to Bins IV and V include features suc h as gap reducers and integral roof fairings which would not be appropriate on low and mid roof tractors. Thus, the agencies are differentiating the aerodyn amic performance for low
- and mid
- roof tractors into two bins

– Bin Iand Bin II. The application rates in the low and mid roof categories are the same as proposed, but aggregated into just two bins. Bin I for these tractors corresponds to the proposed “Classic” and “Conventional” bins and Bin II corresponds to the proposed “SmartWay ,” “Advanced SmartWay ,” and “Advanced SmartWay

I I” bins. Low Rolling Resistance Tire Application Rate At proposal, the agencies stated that at least one LRR tire model is available today that meets the rolling resistance requirements of the Bin I and Bin II tire packages so the 2014 MY should afford manufacturers sufficient lead time to install these packages. However, tire rolling resistance is only one of several performance criteria that affect tire selection. The characteristics of a tire also influence durability, traction control, vehicle handling, comfort, and retreadability . A single performance parameter can easily be

243 U.S. Department of Energy. Transportation Energy Data Book, Ed ition 28
- 2009. Table 5.7.******* **E.O. 12866 Review**

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218 of enhanced, but an optimal balance of all the criteria will require improvements in materials and tread design at a higher cost, as estimated by the agencies. Tire design requires balancing performance, since changes in design may change different performance characteristics in opposing directions. Similar to the discussion regarding lesser aerod ynamic technology application in tractor segments othe r than sleeper cab high roof, the agencies believe that the final standards should not be premised on 100 percent application of LRR tires in all tractor segments given the interference with vehicle utility that would result. The agencies are basing their analy ses on application rates that vary by subcategory recognizing that some subcategories require a different balancing of performance versus rolling resistance. EPA and NHTSA conducted additional evaluation testing on HD trucks tires used for tracto rs and vocational vehicles. The agencies also received several commenters on the suitability

of low rolling resistance tires for various HD truck applications. The summary of the agencies finding and a response to issues raised by commenters is presented in Section II.D(1)(a). Weight Reduction Technology Application Rate The agencies proposed setting the 2014 model ye ar tractor standards using 100 percent application of a 400 pound weight reduction package. Volvo and ATA stated in their comments that not all fleets can use single wide tires and if this is the case the 400 pound weight reduction cannot be met. The agencies also received comments from MEMA, Navistar, American Chemistry Council, the Auto Policy Center, Iron and Steel Institute, Arvin Meritor, Aluminum Association, and environmental groups and NGOs identifyin g other potential weight reduction opportunities for tractors. As described in Section II.B.3.e above, the agencies are adopting an expanded list of weight reduction options which can be input into the GEM for the final rulemaking. The agencies, upon further anal ys is, continue to believe that a 400 pound weight reduction package is appropriate for tractors in the time frame
. For tractors where single wide tires are not appropriate, th e manufacturers have additional options available to achieve weight reduction, such as body panels and chassis components as documented in the earlier discussion. The agencies have extended the list of weight reduction components in order to provide the manufacturers with additional means to comply with the combination tractors and to further encourage reductions in vehicle weight. The agencies considered increasing the target value beyond 400 pounds given the additional reduction potential identified in the expanded technology list; however, lacking information on the capacity for the industry

to change to these light weight components across the board b y the 2014 model year , we have decided to maintain the 400 pound target. The agencies intend to continu e to study the potential for additional weight reductions in our future work considering a second phase of truck fuel efficiency and GHG regulations. Idle Reduction Technology Application Rate******* **E.O. 12866 Review**

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219 of Idle reduction technologies provide significant reductions in fuel consumption and CO 2 emissions for Class 8 sleeper cabs and are available on the market today, and therefore will be available in the 2014 model y ear. There are several different technologies available to reduce idling. These include APUs, diesel fired heaters, and battery powered units. Our discussions with manufacturers indicate that idle technologies are sometimes installed in the factory , but it is also a common practice to have the units installed after the sale of the truck. We would like to continue to incentivize this practice and to do so in a manner that the emission reductions associated with idle reduction technology

occur in use . Therefore, as proposed, we are allowing only idle emission reduction technologies with include an automatic engine shutoff (AES) . We are also adopting some override provisions in response to comments we received (as explained below). As proposed, we adopting a 100 percent application rate for this technology for Class 8 sleeper cabs, even though the current fleet is estimated to have a 30 percent application rate. The agencies are unaware of reasons why AES with extended idle reduction technologies could not be applied to all tractors with a sleeper cab , except those deemed a vocational tractor, in the ava ilable lead time. One commenter stated the application rate of AES should be less than 100 percent, but did not recommend an alternative application rate or provide justification for a change. The agencies re
- evaluated the proposed 100 percent appli cation rate and determined that a 100 percent application rate for this technology for Class 8 sleeper cabs remains appropriate. The agencies have also considered the many comments which raised concerns about the proposed mandatory 5 minute automatic engin e shut down without override capabilit y ( in terms of safet y, extreme temperatures and low battery conditions )
. To avoid unintended adverse impacts, we are adopting limited override provisions. Three of the five exceptions are similar to those currently in effect under a California Air Resources Board (CARB) regulation . CARB provides AES exceptions (or overrides) within its ex isting heav y - duty vehicle anti
- idling law, which were developed to address these same t ypes of concerns. The exceptions we are adopt ing include override capability during exhaust emissions control device regeneration, during engine servicing and maintenance, when battery state of charge is too low , in e xtreme ambient temperatures , when engine coolant temperature is too low , and during PTO operation. The RIA provides more detail about these final override provisions in Section 2.5.4.3. The agencies received comment that we should extend the idle reduction benefits beyond Class 8 sleepers, including Class 7 tractors and vocational vehicles. The agencies reviewed literature to quantify the amount of idling which is conducted outside of hoteling operations. One study , conducted by Argonne National Laboratory , identified several different ty

pes of trucks which might idle for extended amounts of time during the work day
. 244 Id ling may occur during the delivery process, queuing at loading docks or border crossings, during power take off operations, or to provide comfort during the work day . However, the study provided onl y “rough estimat es” of the idle time and energy use for these vehicles. The agencies are not able to appropriately develop a baseline of workday

idling for the other t ypes of vehicles and identify the percent of this idling which could be reduced through the use of AES

244 Gaines, L., A. Vyas, J. Anderson. Estimation of Fuel Use by Idling Commercial Trucks. January 2006******* **E.O. 12866 Review**

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220 of V ehicle Speed Limiter Application Rate Vehicle speed limiters may be used as a technology

to meet the standard, but in setting the standard we assumed a zero percent application rate of vehicle speed limiters. Although we believe vehicle speed limiters ar e a simple, easy to implement, and inexpensive technology , we want to leave the use of vehicles speed limiters to the truck purchaser. Since truck fleets purchase trucks today with owner set vehicle speed limiters, we considered not including VSLs in our compliance model. However, we have concluded that we should allow the use of VSLs that cannot be overridden by the operator as a means of compliance for vehicle manufacturers that wish to offer it and truck purchasers that wish to purchase the technology
. In doing so, we are providing another means of meeting that standard that can lower compliance cost and provide a more optimal vehicle solution for some truck fleets. For example, a local beverage distributor may

operate trucks in a distribution network of primaril y local roads. Under those conditions, aerodynamic fairings used to reduce aerodynamic drag provide little benefit due to the low vehicle speed while adding additional mass to the vehicle. A vehicle manufacturer could choose to install a VSL s et a 55 mph for this customer. The resulting truck modeled in GEM could meet our final emission standard without the use of an y specialized aerodynamic fairings. The resulting truck would be optimized for its intended application and would be fully compl iant with our program all at a lower cost to the ultimate truck purchaser. 245 We have chosen not to base the standards on performance of VSL s because of concerns about how to set a realistic application rate that avoids unintended adverse impacts. Alth ough we expect there will be some use of VSL, currentl y it is used when the fleet involved decides it is feasible and practicable and increases the overall efficiency of the freight sy stem for that fleet operator. However, at this point the agencies are n ot in a position to determine in how many additional situations use of a VSLwould result in similar benefits to overall efficiency
. Therefore, the agencies are not premising the final standards on use of VSL, and instead will rel y on the industry to select VSL when circumstances are appropriate for its use. The agencies have not included either the cost or benefit due to VSLs in anal ys is of the program’s costs and benefits. Implementation of this program may provide greater information for using this technology

in standard setting in the future. Man y stakeholders including the American Trucking Association have advocated for more widespread use of vehicle speed limits to address fuel efficiency

and greenhouse gas emissions. ATA commented that l imited flexibility must be built into speed limiters as not to interfere with NHTSA pl anned rulemaking in response to 2006 ATA petition and its 2008 Sustainability Plan . Similar comments were received from DTNA requesting that the agencies consider any NHTSA safet y regulations that may also be regulating VSLs. NHTSA plans to issue a rule in 2012 addressing the safety performance features of VSL s.

245 Gaines, L., A. Vyas, J. Anderson. Estimation of Fuel Use by Idling Commercial Trucks. January 2006 245 The agencies note that because a VSL value can be input into GEM its benefits can be directly assessed with the model and off cycle credit applications therefore are not necessary even though the standard is not based on performance of VSLs (i.e. VSL is an on
- cycle technology).******* **E.O. 12866 Review**

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221 of Table III
- 4 provides the final application rates of each technology broken down by weight class, cab configuration, and roof height.

**Table III**  **- 4**  **: Final Technology Application Rates for Class 7 and 8 Tractors**

Class 7 Class 8 Day Cab Day Cab Sleeper Cab Low/Mid Roof High

Roof Low/Mid

Roof High

Roof Low

Roof Mid

Roof High

Roof **Aerodynamics (Cd)** Bin I 4 0% 0% 4 0% 0% 3 0% 3 0% 0% Bin II 6 0% 30% 6 0% 30% 7 0% 7 0% 10% Bin III 60% 60% 70% Bin IV 10% 10% 20% Bin V 0% 0% 0% **Steer Tires ( RR**  **C kg/metric ton)**  Baseline 40% 30% 40% 30% 30% 30% 10% Bin I 50% 60% 50% 60% 60% 60% 70% Bin II 10% 10% 10% 10% 10% 10% 20% **Drive Tires ( RR**  **C kg/metric ton)**  Baseline 40% 30% 40% 30% 30% 30% 10% Bin I 50% 60% 50% 60% 60% 60% 70% Bin II 10% 10% 10% 10% 10% 10% 20% **Weight Reduction ( lb**  **)** 400 lb. W eight Reduction 100% 100% 100% 100% 100% 100% 100%

**Extended Idle Reduction (gram CO 2**  **/ton -**  **mile reduction)** AES N/A N/A N/A N/A 100% 100% 100% **Vehicle Speed Limiter** VSL 0% 0% 0% 0% 0% 0% 0% (iv) Derivation of the Final Tractor Standards The agencies used the technology inputs and final technology application rates in GEM to develop the final fuel consumption and CO 2 emissions standards for each subcategory

of Class 7 and 8 combination tractors. The agencies de rived a scenario truck for each subcategory

by weighting the individual GEM input parameters included in Table III
- 3 by

the application rates in Table III
- 4 . For example, the Cd value for a Class 8 Sleeper Cab High Roof scenario case was derived as 10 percent times 0.68 plus 70 percent times 0.60 plus 20 percent times 0.5 5, which is equal to a Cd of 0.60. Similar calculations were done for tire rolling resistance, weight reduction, idle reduction, and vehicle speed limiters. To account for the two final engine standards, the agencies assumed a compliant engine in GEM. 246 In other words, EPA is finalizing the use of a 2014 model year fuel consumption map in GEM to derive the 2014 model year tractor standard and a 2017 model year fuel consumption map to derive the 2017 model year

246 See Section III.A.2.b below explaining the derivation of the engine standards******* **E.O. 12866 Review**

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2 22 of tractor standard. 247 The agencies then ran GEM with a single set of vehicle inputs, as shown in Table III
- 5 , to derive the final standards for each subcategory . Additional detail is provided in the RIA Chap ter 2.

**Table III**  **- 5**  **: GEM Inputs for the Class 7 and 8 Tractor Standard Setting** Class 7 Class 8 Day Cab Day Cab Sleeper Cab Low Roof Mid Roof High Roof Low Roof Mid Roof High Roof Low Roof Mid Roof High Roof **Aerodynamics (Cd)** 0.73 0.84 0.65 0. 73 0. 84 0.65 0.73 0.84 0.59 **Steer Tires ( RR**  **C kg/metric ton)**  6.99 6.99 6.87 6.99 6.99 6.87 6.87 6.87 6.54 **Drive Tires ( RR**  **C kg/metric ton)**  7.38 7.38 7.26 7.38 7.38 7.26 7.26 7.26 6.92 **Weight Reduction ( lb**  **)** 400 400 400 400 400 400 400 400 400 **Extended Idle Reduction (gram CO 2**  **/ton -**  **mile reduction)** N/A N/A N/A N/A N/A N/A 5 5 5 **Vehicle Speed Limiter**

-- -- -- -- -- -- -- **Engine** 2014/17 MY 11L Engine 2014/17

MY 11L Engine 2014/17

MY 11L Engine 2014/17

MY 15L Engine 2014/17

MY 15L Engine 2014/17

MY 15L Engine 2014/17

MY 15L Engine 2014/17

MY 15L Engine 2014/17

MY 15L Engine The level of the 2014 and 2017 model year final standards and percent reduction from the baseline for each subcategory are included in Table III
- 6
.

247 As explained further in Section V below , EPA would use these inputs in GEM even for engines electing to use the alternative engine standard.******* **E.O. 12866 Review**

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223 of **Table III**  **- 6**  **: Final 2014 and 2017 Model Year Tractor Reductions** 2014 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 107 81 68 Mid Roof 119 88 76 High Roof 12 4 9 2 75 2014
- 2016 Model Year Gallons of Fuel per 1,000 Ton
- Mile 248

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10.5 8.0 6. 7 Mid Roof 11. 7 8.7 7.4 High Roof 12. 2 9.0 7. 3 2017 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 104 80 66 Mid Roof 115 86 73 High Roof 120 8 9 72 2017 Model Year and Later Gallons of Fuel per 1,000 Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10. 2 7.8 6.5 Mid Roof 11.3 8.4 7.2 High Roof 11. 8 8. 7 7. 1 A summary

of the final technology

package costs is included in Table III
- 7 with additional details available in the RIA Chapter 2.

248 Manufacturers may voluntarily opt - in to the NHTSA fuel consumption program in 2014 or 2015. If a manufacturer opts
- in, the program becomes mandatory. See Section [add cross reference] below for more information about NHTSA’s voluntary opt
- in program for MYs 2014 and 2015.******* **E.O. 12866 Review**

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224 of **Table III**  **- 7**  **: Class 7 and 8 Tractor Technology Costs inclusive of Indirect Cost Markups in the 2014 Model Year**  **a (2009$)**  Class 7 Class 8 Day Cab Day

Cab Sleeper Cab Low/Mid Roof High

Roof Low/ Mid Roof High

Roof Low

Roof Mid

Roof High Roof Aerod ynamics $675 $924 $675 $924 $962 $983 $1,627 Steer Tires $68 $68 $68 $68 $68 $68 $68 Drive Tires $63 $63 $126 $126 $126 $126 $126 Weight Reduction $1,536 $1,536 $ 1,980 $ 1,980 $ 3,275 $ 3,275 $ 1,980 Auxiliary Power Unit -- -- -- -- $3,819 $3,819 $3,819 Air Conditioning $22 $22 $22 $22 $22 $22 $22 Total $2,364 $2,612 $2,871 $3,119 $8,271 $8,291 $7,641 Notes: a Costs shown are for the 2014 model year so do not reflect learning impacts which would result in lower costs for later model years. For a description of the learning impacts considered in this analysis and how it im pacts technology costs for other years, refer to Chapter 2 of the RIA (see RIA 2.2.2)
. b Note that values in this table include penetration rates. Therefore, the technology costs shown reflect the average cost expected for each of the indicated classes. To see the actual estimated technology c osts exclusive of penetration rates, refer to Chapter 2 of the RIA (see RIA 2.9)
. (v) Reasonableness of the Final Standards The final standards are based on aggressive application rates for control technologies which the agencies regard as the maximum feasible for purposes of EISA section 32902 (k) and appropriate under CAA section 202 (a) for the reasons given in Section (iii) above; see also RIA Chapter 2.5.8.2. These technologies, at the estimated application rates, are available within the lead time provid ed, as discussed in RIA Chapter 2.5. Use of these technologies would add only a small amount to the cost of the vehicle, and the associated reductions are highl y cost effective, an estimated $20 per ton of CO 2 e q per vehicle in 2030 without consideration o f the substantial fuel savings. 249 This is even more cost effective than the estimated cost effectiveness for CO 2 e q removal and fuel economy

improvements under the light
- duty vehicle rule, already considered b y the agencies to be a highly cost effective red

uction. 250 Moreover, the cost of controls is rapidly recovered due to the associated fuel savings, as shown in the pay back anal ys is included in Table VIII
- 8 located in Section VIII below. Thus, overall cost per ton of the program , considering fuel savin gs, is negative

– fuel savings associated with the rule s
249 See Secti on VIII.D below
. 250 The light
- duty rule had an estimated cost per ton of $50 w hen considering the vehicle program costs only and a cost of
- $210 per ton considering the vehicle program costs along with fuel savings in 2030. See 75 FR 25515, Table III.H.3
- 1.******* **E.O. 12866 Review**

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225 of more than offset projected costs by a wide margin. See Table VIII
- 5 in Section VIII below. Given that the standards are technically feasible within the lead time afforded by the 2014 model y ear, ar e inexpensive and highl y cost effective even without accounting for the fuel savings, and have no apparent adverse potential impacts (e.g., there are no projected negative impacts on safety or vehicle utility), the final standards represent a reasonable ch oice under section 202(a) of the CAA and the maximum feasible under NHTSA’s EISA authority at 49 U.S.C. 32902(k)(2). (vi) Alternative Tractor Standards Considered The agencies are not adopting tractor standards less stringent than the proposed standards becau se the agencies believe these standards are appropriate, highly cost effective, and technologically feasible within the rulemaking time frame. The agencies considered adopting tractor standards which are more stringent than those proposed reflecting incr eased application rates of the technologies discussed. We also considered setting more stringent standards based on the inclusion of hy brid powertrains in tractors. We stopped short of finalizing more stringent standards based on higher application rates of improved aerody namic controls and tire rolling resistance because we concluded that the technologies would not be compatible with the use profile of a subset of tractors which operate in off
- road conditions. We have not adopted more stringent standard s for tractors based on the use of hy brid vehicle technologies, believing that additional development and therefore lead
- time is needed to develop hy brid s ys tems and battery

technology

for tractors that operate primarily in highway

cruise operations. We k now, for example, that hy brid s ys tems are being researched to capture and return energy for tractors that operate in gentl y rolling hills. However, it is not clear to us today that these sy stems will be generall y applicable to tractors in the tim e frame of this regulation. In addition, even if hy brid technologies were generally available for these tractors during the MY 2014
- 2017 period, their costs would be extremely high and benefits would be limited given that idle reduction controls already capture many of the same emissions. According to the 2010 NAS Report, hy brid powertrains in tractors have the potential to improve fuel consumption by 10 percent, but it displaces the 6 percent reduction for idle reduction technologies, for a net improvement of 4 percent at a cost of $25,000. 251 (b ) Tractor Engines (i ) Baseline Engine Performance As noted above, EPA and NHTSA developed the baseline medium
- and heavy heav y - dut y diesel engine to represent a 2010 model y ear engine compliant with the 0.20 g/bhp
- hr NO X standard for on
- highway heavy
- duty

engines. The agencies developed baseline SET values for medium
- and heav y heavy
- dut y diesel engines based on 2009 model year confidential manufacturer data and from testing conducted b y EPA. The agencies adjusted th e pre - 2010 data to represent 2010 model
251 2010 NAS Report
. Page 146.******* **E.O. 12866 Review**

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226 of ye ar engine maps by

using predefined technologies includ ing SCR and other sy stem s that are being used in current 2010 model year production . I f an engine utilized did not meet the 0.20 g/bhp
- hr NO X level, then the i ndividual engine’s CO 2 result was adjusted to accommodate aftertreatment strategies that would result in a 0.20 g/bhp
- hr NO X emission level as described in RIA Chapter 2.4.2.1. The engine CO 2 results were then sales weighted within each regulatory subcate gory (i.e., medium heavy
- dut y diesel or heav y heav y - dut y diesel) to develop an industry average 2010 model year reference engine. Although, most of the engines fell within a few percent of this baseline at least one engine was more than six percent above this average baseline.

**Table III**  **- 8**  **: 2010 Model Year Baseline Diesel Engine Perform ance**  CO 2 Emissions (g/bhp
- hr) Fuel Consumption

(gallon/100 bhp
- hr) Medium Heav y - Dut y Diesel
- SET 518 5.09 Heav y Heav y - Duty

Diesel
- SET 490 4.81 (ii) Engine Technology Package Effectiveness The MHD and HHD diesel engine technology package for the 2014 model year includes engine friction reduction, improved aftertreatment effectiveness, improved combustion processes, and low temperature EGR system optimization. The agencies considered improvements in parasitic and friction losses through piston designs to reduce f riction, improved lubrication, and improved water pump and oil pump designs to reduce parasitic losses. The aftertreatment improvements are available through lower backpressure of the sy stems and optimization of the engine
- out NO X levels. Improvements to the EGR sy stem and air flow through the intake and exhaust sy stems, along with turbochargers can also produce engine efficiency improvements. We note that individual technology

improvements are not additive due to the interaction of technologies. The age ncies assessed the impact of each technology over each of the 13 SET modes to project an overall weighted SET cycle improvement in the 2014 model ye ar of 3 percent, as detailed in RIA Chapter 2.4.2.9 through 2.4.2.14. All of these technologies represent e ngine enhancements already developed beyond the research phase and are available as “off the shelf” technologies for manufacturers to add to their engines during the engine’s next design cycle. We have estimated that manufacturers will be able to implement these technologies on or before the 2014 engine model year. The agencies adopted a standard that therefore reflects a 100 percent application rate of this technology

package. The agencies gave consideration to finalizing a more stringent standard based on the application of turbocompounding, a mechanical means of waste heat recovery , but concluded that manufacturers would have insufficient lead
- time to complete the necessary

product development and validation work necessary to include this technology

acr oss the industry

by model year 2014. As explained earlier, EPA’s heav y - duty highway engine standards for criteria pollutants apply

in three year increments. The heavy
- duty engine manufacturer product plans have fallen into three ye ar cycles to reflect these requirements. The agencies are finalizing fuel consumption and CO 2 emission standards recognizing the opportunity for technology

improvements over this time frame while reflecting the t ypical heav y - dut y******* **E.O. 12866 Review**

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227 of engine manufacturer product plan redesign and refresh cycles. Thus, the agencies are finalizing to set a more stringent standard for heavy
- dut y engines beginning in the 2017 model year. The MHDD and HHDD engine tec hnology package for the 2017 model ye ar includes the continued development of the 2014 model year technology package including refinement of the aftertreatment s ys tem plus turbocompounding. The agencies calculated overall reductions in the same manner as for the 2014 model year package. The weighted SET cycle improvements lead to a 6 percent reduction on the SET cycle, as detailed in RIA Chapter 2.4.2.12. The agencies’ final standards are premised on a 100 percent application rate of this technology pack age. C ommenter s noted that the National Academ y of Sciences (NAS) study indicates that additional technology improvements can be made to heav y - dut y engines in MY 2014 and 2017. For diesel engine standards, the agencies evaluated the following technologi es: combustion sy stem optimization, turbocharging and air handling s ys tems, engine parasitic and friction reduction, integrated aftertreatment sy stems, electrification, and waste heat recovery
. The agencies carefully

evaluated the research supporting the NAS report and its recommendations and incorporated them to the extent practicable in the development of the HD p rogram. While the NAS report suggests that greater engine improvements c ould be achieved b y the use of technologies such as improved emission control sy stems and turbo
- compounding than do the agencies in this final action , we believe the standards being finalized represent the most stringent technically feasible for diesel engines used in tractors and vocational vehicles in the 2014 to 2017 model year time frame . The NAS study concluded that tractor engine fuel consumption can be reduced b y approximately 15 percent in the 2015 to 2020 time frame and vocational engine fuel consumption can be reduced b y approximately 10 to 17 percent in the same time frame
. 252 Based on a review of existing studies, NAS study authors found a range of reduction potential exists for improvements in combustion efficiency , electrification of accessories; improved emission control sy stems; and turbocompounding. The study found that improvements in combustion efficiency

can provide red

uctions of 1 percent to 4 percent; electrification of accessories can provide reductions of 2 percent to 5 percent in a h yb ridized vehicle; improved emission control sy stems can provide a 1 percent to 4 percent improvement (depending on whether the improve ment is to the EGR or SCR sy stem); and a 2.5 percent to 10 percent reduction is possible with mechanical or electrical turbocompounding. While the reductions being finalized in this regulation are lower than tho se published in the NAS study , the a gencies believe that the percent reductions being finalized in this rule are c on sistent with the findings of the NAS study . The reasons for this are as follows. First, some technologies cannot be used b y all manufacturers. For example, improved SCR conversion efficiency was projected by

NAS to provide a 3 percent to 4

252 National Research Council, “ Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heavy
- Duty Vehicles ” Figure S
- 1, page 4, National Acedemies Press, 2011******* **E.O. 12866 Review**

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228 of percent improvement in fuel consumption. Conversely , low temperature EGR was found to provide only

a 1 percent improvement. While the majority of manufacturers do use SCR sy stems and will be abl e to realize the 3 percent to 4 percent improvement, not all manufacturers use SCR for NO X aftertreatment. Manufacturers that do not use SCR aftertreatment s ys tems would only be able to realize the 1 percent improvement from low temperature EGR. The age ncies need to take into consideration the entire market in setting the stringency

of the standards and thus cannot assume that all manufacturers will be able to use all technologies. Second, significant technical advances may be needed in order to realiz e the upper end of estimates for some technologies. For example, studies evaluated by NAS on turbocompounding found that a 2.5 percent to 10 percent reduction is feasible. However, only one s ys tem is available commerciall y and this sy stem provides reducti ons on the low end of this range. Little technical information is available on the s ys tems that achieve reductions in the upper range for turbocompounding. These s ys tems are based on proprietary

designs the improvement results for which have not y et been replicated b y other companies or organizations. The agencies are assuming that all tractor engine manufacturers will use turbocompounding b y 201 7 model year . This will require a significant change in the design of heav y - duty tractor engines, one that represents the maximum technically

feasible standard even at the low end of the assumed improvement spectrum. Finally , different duty

cy cles used in the evaluation of medium
- and heav y - duty engine technologies can affect reported fuel consumption improveme nts. For example, some technologies are dependent on high load conditions to provide the greatest reductions. The dut y c yc les used to evaluate some of the technologies considered b y NAS differed significantly from that used b y the agencies in the modelin g for this rulemaking. Maximum and average speed was higher in some of the cycles used in the studies, for example, and one result was demonstrated on a nonroad engine cycle. The effectiveness of turbocompounding when evaluated on a duty c ycl e with highe r engine load can show a greater reduction potential than when evaluated with a lower engine load. Inaddition, technologies such as improvements to cool ing fans, air compressors, and air conditioning s ys tems will not be demonstrated using the engine dyn amometer test procedures being adopted in this final action because those components are not installed on the engine during the testing. The agencies selected the dut y c yc les for the anal ys is that we believed best s uited tractors engines
. The agencies selected engine technologies and the estimated fuel reduction percentages for setting the standards. For the reasons stated above, the agency believes the technologies and required improvements in fuel consumption represent the maximum feasible improvement, and are appropriate, cost
- effective , and technologically feasible. We gave consideration to finalizing an even more stringent standard based on the use of waste heat recovery via a Rankine cycle (also called bott oming cycle) but concluded that there is insufficient lead
- time between now and 2017 for this promising technology

to be developed and applied generally to all heavy
- dut y engines. TIAX noted in their report to the NAS committee that the engine improvement s beyond 2015 model******* **E.O. 12866 Review**

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229 of ye ar included in their report are highl y uncertain, though they include Rankine cycle t ype waste heat recovery

as applicable sometime between 2016 and 2020. 253 The Department of Energy , along with industry are both working to develop was te heat recovery s ys tems for heav y - dut y engines. At the Diesel Engine
- Efficiency and Emissions Research (DEER) conference in 2010, Caterpillar presented details regarding their waste heat recovery s ys tems development effort. In their presentation, Caterp illar clearly noted that the work is a research project and therefore does not imply commercial viability
. 254 At the same conference, Concepts NREC presented a status of exhaust energy recovery in heav y - dut y engines. The scope of Concepts NREC included the design and development of prototy pe parts. 255 Cummins, also in coordination with DOE, is also active in dev eloping exhaust energy recovery s ys tems. Cummins made a presentation to the DEER conference in 2009 providing an update on their progress which highlighted opportunities to achieve a 10 percent engine efficiency improvement during their research, but indi cated the need to focus their future development on areas with the highest recovery

opportunities (such as EGR, exhaust, and charge air). 256 Cummins also indicated that future development would focus on reducing the high additional costs and sy stem complexi ty . Based upon the assessment of this information, the agencies did not include these technologies in determining the stringency of the final standards. However, we do believe the bottoming cycle approach represents a significant opportunity to reduce fu el consumption and GHG emissions in the future. EPA and NHTSA are therefore both finalizing provisions described in Section IV to create incentives for manufacturers to continue to invest to develop this technology
. (iii) Derivation of Engine Standards EPA dev eloped the final 2014 model year CO 2 emissions standards (based on the SET cycle) for diesel engines by applying the three percent reduction from the technology

package (just explained above) to the 2010 model year baseline values determined using the SET cycle. EPA developed the 2017 model year CO 2 emissions standards for diesel engines while NHTSA similarly developed the 2017 model y ear diesel engine fuel consumption standards by applyingthe 6 percent reduction from the 2017 model year technology packag e (reflecting performance of turbocompounding plus the 2014 MY technology package) to the 2010 model y ear baseline values. The final standards are included in Table III
- 9
.

253 TIAX Report (2009). Page 4
- 29. 254 Kruiswyk, R. “An Engine System Approach to Exhaust Waste Heat Recovery.” Presented at DOE DEER Conference on September 29, 2010. Last viewed on May 11, 2011 at http://www1.eere.energy.gov/vehiclesandfuels/pdfs/deer_201 0/wednesday/presentations/deer10_kruiswyk. pdf 255 Cooper, D,, N. Baines, N. Sharp. “Organic Rankine Cycle Turbine for Exhaust Energy Recovery in a Heavy Truck Engine.” Presented at the 2010 DEER Conference. Last viewed on May 11, 2011 at http://www1.eere. energy.gov/vehiclesandfuels/pdfs/deer_2010/wednesday/presentations/deer10_baines.pdf 256 Nelson, C. “Exhaust Energy Recovery.” Presented at the DOE DEER Conference on August 5, 2009. Last viewed on May 11, 2011 at http://www1.eere.energy.gov/vehiclesandfu els/pdfs/deer_2009/session5/deer09_nelson_1.pdf******* **E.O. 12866 Review**

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230 of **Table III**  **- 9**  **: Final Diesel Engine Standards Over the SET Cycle** Model Year MHD Diesel Engine HHD Diesel

Engine 2014

– 2016 CO 2 Standard (g/bhp
- hr) 502 475

Voluntary

Fuel Consumption Standard (gallon/100 bhp
- hr) 4.93 4.67 2017 and later CO 2 Standard (g/bhp
- hr) 487 460

Fuel Consumption (gallon/100 bhp
- hr) 4.78 4.52 (iv) Engine Technology Package Costs EPA has historically

used two different approaches to estimate the indirect costs (sometimes called fixed costs) of regulations including costs for product development, machine tooling, new capital investments and other gene ral forms of overhead that do not change with incremental changes in manufacturing volumes. Where the Agency could reasonabl y make a specific estimate of individual components of these indirect costs, EPA has done so. Where EPA could not readil y make suc h an estimate, EPA has instead relied on the use of markup factors referred to as indirect cost multipliers (ICMs) to estimate these indirect costs as a ratio of direct manufacturing costs. In general, EPA has used whichever approach it believed could pro vide the most accurate assessment of cost on a case b y case basis. The agencies’ general approach used elsewhere in this action (for HD pickup trucks, gasoline engines, combination tractors, and vocational vehicles) estimates indirect costs based on the u se of ICMs. See also 75 FR 25376. We have used this approach generall y because these standards are based on installing new parts and sy stems purchased from a supplier. In such a case, the supplier is conducting the bulk of the research and development on the new parts and s ys tems and including those costs in the purchase price paid by the original equipment manufacturer. In this situation, we believe that the ICM approach provides an accurate and clear estimate of the additional indirect costs borne b y the manufacturer. F or the heav y - dut y diesel engine segment, however, the agencies do not consider this model to be the most appropriate because the primary cost is not expected to be the purchase of parts or s ys tems from suppliers or even the production of the parts and sy st ems, but rather the development of the new technology by the original equipment manufacturer itself. Most of the technologies the agencies are projecting the heav y - dut y engine manufacturers will use for compliance reflect modifications to existing engine sy stems rather than wholesale addition of technology ( e.g. , improved turbochargers rather than adding a turbocharger where it did not exist before as was done in our light
- duty joint rulemaking in the case of turbo
- downsizing). When the bulk of the costs come from refining an existing technology rather than a wholesale addition of technology , a specific estimate of indirect costs may be more appropriate. For example, combustion optimization may

significantly

reduce emissions and cost a manufacturer millio ns of dollars to develop but will lead to an engine that is no more expensive to produce. Using a bill of materials approach would suggest that the cost of the emissions control was zero reflecting no new hardware and ignoring the millions of dollars spent to develop the******* **E.O. 12866 Review**

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231 of improved combustion system. Details of the cost anal ys is are included in the RIA Chapter 2. The agencies did not receive an y comments regarding the cost approach used in the proposal. The agencies developed the engineering costs for th e research and development of diesel engines with lower fuel consumption and CO 2 emissions. The aggregate costs for engineering hours, technician support, dynamometer cell time, and fabrication of prototy pe parts are estimated at $6.8 million (2009 dollar s) per manufacturer per ye ar over the five ye ars covering 2012 through 2016. In aggregate, this averages out to $284 per engine during 2012 through 2016 using an annual sales value of 600,000 light
- , medium
- and heav y - HD engines. The agencies received co mments from Horriba regarding the assumption the agencies used in the proposal that said manufacturers would need to purchase new equipment for measuring N 2 0 and the associated costs. Horriba provided information regarding the cost of stand
- alone FTIR ins trumentation (estimated at $50,000 per unit) and cost of upgrading existing emission measurement sy stems with NDIR anal yz ers (estimated at $25,000 per unit). The agencies further analyzed our assumptions along with Horriba’s comments. Thus, we have revis ed the equipment costs estimates and assumed that 75 percent of manufacturers would update existing equipment while the other 25 percent would require new equipment. The agencies are estimating costs of $63,087 (2009 dollars) per engine manufacturer per e ngine subcategory (light
- , medium
- and heav y - HD) to cover the cost of purchasing photo
- acoustic measurement equipment for two engine test cells. This would be a one
- time cost incurred in the year prior to implementation of the standard (i.e., the cost woul d be incurred in 2013). In aggregate, this averages out to less than $1 per engine in 2013 using an annual sales value of 600,000 light
- , medium
- and heav y - HD engines. Where we projected that additional new hardware was needed to the meet the final standards, we developed the incremental costs for those technologies and marked them up using the ICM approach. Table I II
- 10 below summarizes those estimates of cost on a per item basis. All costs shown in Table III
- 18 include a low complexity I CM of 1.15 and flat
- portion of the curve learning is considered appli cable to each technology
. **Table I**  **II -**  **10 :**  **Heavy -**  **duty Diesel Engine Component Costs for Com**  **bination Tractors (2009$)** Technology 2014 2017 Cylinder Head $6 $6 Turbo efficiency $18 $17 EGR cooler $4 $3 Water pump $91 $84 Oil pump $5 $4 Fuel pump $5 $4 Fuel rail $10 $9 Fuel injector $11 $10 Piston $3 $3 Engine Friction Reduction of Valvetrain $82 $76 Turbo
- compounding (engines placed in combination tractors only) $0 $8 75 MHHD and HHDD Total ( comb ination tractors ) $234 $1,091 Note:******* **E.O. 12866 Review**

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232 of a C osts for aftertreatment improvements for MH and HH diesel engines are covered via the engineering costs (see text). For LH diesel engines, we have included the cost of aftertreatment im provements as a technology cost. The overall diesel engine technology package cost for a engine being placed in a combination tr actor is $234 in the 2014 model y ear and $1,091in the 2017 model y ear. (v) Reasonableness of the Final Standards The final engine standards appear to be reasonable and consistent with the agencies’ r espective statutory authorities. With respect to the 2014 and 2017 MY standards, all of the technologies on which the standards are predicated have already been demonstrated in some capacity and their effectiveness is well documented. The final standards reflect a 100 percent application rate for these technolo gies. The costs of adding these technologies remain modest across the various engine classes as shown in Table III
- 10. Use of these technologies would add only a small amount to the cost of the vehicle, 257 and the associated reductions are highl y cost effe ctive, an estimated $20 per ton of CO 2 e q per vehicle. 258 This is even more cost effective than the estimated cost effectiveness for CO 2 e q removal under the light
- duty vehicle rule, already considered b y the agencies to be a highly cost effective reduction. 259 Even the more expensive 2017 MY final standard still represents onl y a small fraction of the vehicle’s total cost and is even more cost effective than the light
- dut y vehicle rule. Moreover, costs are more than offset b y fuel savings. Accordingl y, EPA and NHTSA view these standards as reflecting an appropriate balance of the various statutory factors under section 202(a) of the CAA and under NHTSA’s EISA authority at 49 U.S.C. 32902(k)(2). (vi) Temporary Alternative Standard for Certain Engine Families As d iscussed above in Section II.B (1)(b), notwithstanding the general reasonableness of the final standards, the agencies recognize that heav y - duty engines have never been subject to GHG or fuel consumption (or fuel econom y) standards and that such control ha s not necessarily been an independent priorit y for manufacturers. The result is that there are a group of legacy engines with emissions higher than the industry baseline for which compliance with the final 2014 MY standards may be more challenging and for which there may simply be inadequate lead time. The issue is not whether these engines’ GHG and fuel consumption performance cannot be improved by utilizing the technology

packages on which the final standards are based. Those technologies can be utiliz ed by all engines and the same degree of reductions obtained. Rather the underl yi ng base engine components of these engines reflect designs that are decades old and therefore have base performance levels below what is typical for the industry as a whole t oday. Manufacturers have been graduall y replacing these legacy

257 Sam ple 2010 MY day cabs are priced at $89,000 w hile 2010 MY sleeper cabs are priced at $113,000. See page 3 of ICF’s “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy
Duty On
- Road Vehicles.” July 2010. 258 See Tractor CO 2 savings and technology costs in Table 7
- 5 in RIA Chapter 7.. 259 The light
- duty rule had an estimated cost per ton of $50 w hen considering the vehicle program costs only and a cost of
- $210 per ton considerin g the vehicle program costs along with fuel savings in 2030. See 75 FR 25515, Table III.H.3
- 1.******* **E.O. 12866 Review**

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233 of products with new engines. Engine manufacturers have indicated to the agencies they will have to align their planned replacement of these products with our final standards and at the same tim e add additional technologies beyond those identified by the agencies as the basis for the final standard. Because these changes will reflect a larger degree of overall engine redesign, manufacturers may not be able to complete this work for all of their legacy

products prior to model y ear 2014. To pull ahead these already planned engine replacements would be impossible as a practical matter given the engineering structure and lead
- times inherent in the companies’ existing product development processes. We have also concluded that the use of fleet averaging would not address the issue of legacy

engines because each manufacturer ty pically produces onl y a limited line of MHDD and HHDD engines. (Because there are ample fleetwide averaging opportunities for heav y - duty pickups and vans, the agencies do not perceive similar difficulties for these vehicles.) Facing a similar issue in the light
- dut y vehicle rule, EPA adopted a Temporary Lead Time Allowance provision whereb y a limited number of vehicles of a sub set of manufacturers would meet an alternative standard in the earl y ye ars of the program, affording them sufficient lead time to meet the more stringent standards applicable in later model years. See 75 FR 25414
- 25418. The agencies are finalizing a simi lar approach here. As explained above in Section II B. (1) (b), the agencies are finalizing a regulatory

alternative whereb y a manufacturer , for a limited period, w ould have the option to comply

with a unique standard requiring the same level of reduction of emissions (i.e., percent removal) and fuel consumption as otherwise required, but the reduction would be measured from its own 2011 model year baseline. We are thus finalizing an optional standard whereb y manufacturers would elect to have designated e ngine families meet a standard of 3 percent reduction from their 2011 baseline emission and fuel consumption levels for that engine family or engine subcategory
. Our assessment is that this three percent reduction is appropriate based on use of similar te chnology

package s at similar cost as we have estimated for the primary program. In the NPRM, we solicited comment on extending this alternative (See 75 FR at 74202). As explained earlier, we are not finalizing that the option to select an alternative sta ndard continues past the 2016 MY. By this time, the engines should have gone through a redesign cycle which will allow manufacturers to replace those legacy engines which resulted in abnormall y high baseline emission and fuel consumption levels and to ach ieve the MY 2017 standards which would be feasible using the technology package set out above (optimized NO X aftertreatment, improved EGR, reductions in parasitic losses, and turbocharging). Manufacturers would, of course, be free to adopt other technolog y paths which meet the final MY 2017 standards. Since the alternative standard is premised on the need for additional lead time, manufacturers would first have to utilize all available flexibilities which could otherwise provide that lead time. Thus, as proposed, the alternative would not be available unless and until a manufacturer had exhausted all available credits and credit opportunities, and engines under the alternative standard could not generate credits. See 75 FR 25417
- 25419 (similar approach for vehicles which are part of Temporary L ead Time Allowance under the light
- duty

vehicle rule). We are finalizing that manufacturers can select engine families for this alternative standard without agency approval, but are requiring that******* **E.O. 12866 Review**

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234 of manufacturers notify

the agency

of their choice and also requiring manufacturers to include in that notification a demonstration that it has exhausted all available credits and credit opportunities. Manufacturers would a lso have to demonstrate their 2011 baseline calculations as part of the certification process for each engine famil y for which the manufacturer elects to use the alternative standard. See Section V.C.1(b)(i) below. (vii) Other Engine Standards Consi dered The agencies are not finalizing engine standards less stringent than the final standards because the agencies believe these final standards are appropriate, highl y cost effective, and technologically feasible, as just described. The agencies consid ered finalizing engine standards which are more stringent. Since the final standards reflect 100 percent utilization of the various technology packages, some additional technology would have to be added. The agencies are finalizing 2017 model year standards based on the use of turbocompounding. As discussed above in Section III.A.2.b.iii, the agencies considered the inclusion of more advanced heat recovery

sy stems, such as Rankine or bottoming cycles, which would provide further reductions. However, the agencies are not finalizing this level of stringency

because our assessment is that these technologies would not be available for production by

the 2017 model year. 

### B. **Heavy -**  **Duty Pickup Trucks and Vans** This section describes the process the agencies used to develop the standards the agencies are finalizing for HD pickups and vans. We started by gathering available information about the fuel consumption and CO 2 emissions from recent model y ear vehicles. The core portion of this information comes primarily from EPA’s certification databases, CFEIS and Verify , which contain the publicly available data 260 regarding emission and fuel economy results. This information is not extensive because manufacturers hav e not been required to chassis test HD diesel vehicles for EPA’s criteria pollutant emissions standards, nor have they been required to conduct any testing of heav y - dut y vehicles on the highway cycle. Nevertheless, enough certification activity has occurr ed for diesels under EPA’s optional chassis
- based program, and, due to a California NO X requirement for the highway test cycle, enough test results have been voluntarily

reported for both diesel and gasoline vehicles using the highway test cycle, to yi eld a reasonabl y robust data set. To supplement this data set, for purposes of this rulemaking EPA initiated its own testing program using in
- use vehicles. This program and the results from it thus far are described in a memorandum to the docket for this rul emaking. 261 Heav y - dut y pickup trucks and vans are sold in a variety of configurations to meet market demands. Among the differences in these configurations that affect CO 2 emissions and fuel consumption are curb weight, GVWR, axle ratio, and drive wheels

260 http://www.epa.gov/otaq/certdata.htm 261 Memorandum from Cleophas Jackson, U.S.EPA, to docket EPA
- HQ
- OAR
- 2010
- 0162 , "Heavy
- Duty Greenhouse Gas and Fuel Consump tion Test Program Summary ", September 20, 2010.******* **E.O. 12866 Review**

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235 of (two - wheel drive or four
- wheel drive). Because the currently
- available test data set does not capture all of these configurations, it is necessary to extend that data set across the product mix using adjustment factors. In this way a test result from, say a truck with two - wheel drive, 3.73:1 axle ratio, and 8000 lb test weight, can be used to model emissions and fuel consumption from a truck of the same basic body design, but with four
- wheel drive, a 4.10:1 axle ratio, and 8,500 lb test weight. The adjustm ent factors are based on data from testing in which onl y the parameters of interest are varied. These parameterized adjustments and their basis are also described in a memorandum to the docket for this rulemaking. 262 The agencies requested and received from each of the three major manufacturers confidential information for each model and configuration, indicating the values of each of these key

parameters as well as the annual production (for the U.S. market). Production figures are useful because, under our final standards for HD pickups and vans, compliance is judged on the basis of production
- weighted (corporate average) emissions or fuel consumption level, not individual vehicle levels. For consistency and to avoid confounding the anal ys is with data fro m unusual market conditions in 2009, the production and vehicle specification data is from the 2008 model y ear. We made the simplifying assumption that these sales figures reasonably approximate future sales for purposes of this anal ys is. One additional a ssessment was needed to make the data set useful as a baseline for the standards selection. Because the appropriate standards are determined by applying efficiency
- improving technologies to the baseline fleet, it is necessary to know the level of penetrat ion of these technologies in the latest model year (2010). This information was also provided confidentiall y b y the manufacturers. Generally, the agencies found that the HD pickup and van fleet was at a roughl y consistent level of technology

application, with (1) the transition from 4
- speed to 5
- or 6
- speed automatic transmissions mostly

accomplished, (2) coupled cam phasing to achieve variable valve control on gasoline engines likewise mostly in place, 263 and (3) substantial remaining potential for optimiz ing catalytic diesel NO X aftertreatment to improve fuel econom y (the new heav y - dut y NO X standards having taken effect in the 2010 model year). Taking this 2010 baseline fleet, and appl yi ng the technologies determined to be feasible and appropriate by the 2018 model ye ar, along with their effectiveness levels, the agencies could then make a determination of appropriate final standards. The assess ment of feasibility , described i mmediately below, takes into account the projected costs of these technologies. The derivation of these costs, largel y based on anal ys es developed in the light
- dut y GHG and fuel econom y rulemaking, are described in Section III.B(3). Our assessment concluded that the technologies that the agencies considered feasible and appropriate for HD pickups and vans could be consistently applied to essentially

all vehicles across this sector by the 2018 model year. Therefore we did no t
262 Memorandum from Anthony Neam and Jeff Cherry, U.S.EPA, to docket EPA
- HQ
- OAR
- 2010
- 0162 , October 18, 2010. 263 See section III.B(2)(a) for our response to c omment s arguing for inclusion of this technology in the list of technologies needed to meet the standards.******* **E.O. 12866 Review**

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236 of apply varying penetration rates across vehicle t yp es and models in developing and evaluating the final standards. Since the manufacturers of HD pickups and vans generall y onl y have one basic pickup truck and van with different versions (( i.e. , d ifferent wheel bases, cab sizes, two
wheel drive, four
- wheel drive, etc.) and do not have the flexibility of the light
- dut y fleet to coordinate model improvements over several ye ars, changes to the HD pickups and vans to meet new standards must be carefull y planned with the redesign cycle taken into account. The opportunities for large
- scale changes ( e.g. , new engines, transmission, vehicle body and mass) thus occur less frequentl y than in the light
- dut y fleet, typicall y at spans of 8 or more ye ars. Howev er, opportunities for gradual improvements not necessarily

linked to large scale changes can occur between the redesign cycles. Examples of such improvements are upgrades to an existing vehicle model’s engine, transmission and aftertreatment sy stems. Giv en this long redesign cycle and our understanding with respect to where the different manufacturers are in that cycle, the agencies have initially

determined that the full implementation of the final standards would be feasible and appropriate b y the 2018 model year. Although we did not determine that it was necessary for feasibility

to apply varying technology

penetration levels to different vehicles, we did decide that a phased implementation schedule would be appropriate to accommodate manufacturers’ r edesign workload and product schedules, especially in light of this sector’s relatively low sales volumes and long product cycles. We did not determine a specific cost of implementing the final standards immediately in 2014 without a phase
- in, but we asse ssed it to be much higher than the cost of the phase
- in we are finalizing, due to the workload and product cycle disruptions it would cause, and also due to manufacturers’ resulting need to develop some of these technologies for heav y - dut y applications soo ner than or simultaneously with light
- duty

development efforts. See generally 75 FR 25467
- 25468 explaining wh y attempting major changes outside the redesign cycle period raises very significant issues of both feasibility

and cost. On the other hand, wait ing until 2018 before applying an y new standards could miss the opportunity to achieve meaningful and cost
- effective earl y reductions not requiring a major product redesign when the largest changes and reductions are expected to occur. The final phase
- in s chedule, 15
- 20
- 40
- 60
- 100 percent in 2014
- 2015
- 2016
- 2017
- 2018, respectivel y, was chosen to strike a balance between meaningful reductions in the earl y ye ars (reflecting the technologies’ penetration rates of 15 and 20 percent) and providing manufacturers wi th needed lead time via a gradually accelerating ramp
- up of technology

penetration. 264 By

expressing the final phase
- in in terms of increasing fleetwide stringency

for each manufacturer, while also providing for credit generation and use (including averagi ng, carry - forward, and carry
- back), we believe our program affords manufacturers substantial flexibility to satisfy the phase
- in through a variet y of pathway s: the gradual application of technologies across the fleet (averaging a fifth of

264 The NHTSA program provides voluntary standards for model years 2014 and 2015. NHTSA and EPA are also providing an alternative standards phase
- in that me ets EISA’s requirement for three years of regulatory stability. See Section II.C.d.ii for a more detailed discussion.******* **E.O. 12866 Review**

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237 of total production in each year), greater application levels on only a portion of the fleet, or a mix of the two. We considered setting more stringent standards that would require the application of additional technologies by 2018. We expect, in fact, that some of these te chnologies may well prove feasible and cost
- effective in this time frame , and may even become technologies of choice for individual manufacturers. This dy namic has played out in EPA programs before and highlights the value of setting performance
- based standards that leave engineers the freedom to find the most cost
- effective solutions. However, the agencies do believe that at this stage there is not enough information to conclude that the additional technologies provide an appropriate basis for standard
- setting. For example, we believe that 42V stop
- start sy stems can be applied to gasoline vehicles with significant GHG and fuel consumption benefits, but we recognize that there is uncertainty

at this time over the cost
- effectiveness of these s ys t ems in heav y duty applications, and over customer acceptance of vehicles with high GCWR towing large loads that would routinely stop running at idle. Hy

brid electric technology

likewise could be applied to heavy
- dut y vehicles, and in fact has already been so applied on a limited basis. However, the development, design, and tooling effort needed to apply this technology

to a vehicle model is quite large, and seems less likely to prove cost - effective in this time frame , due to the small sales volum es relative to the light
- dut y sector. Here again, potential customer acceptance would need to be better understood because the smaller engines that facilitate much of a h ybrid’s benefit are t ypicall y at odds with the importance pickup trucks buy ers place on engine horsepower and torque, whatever the vehicle’s real performance. We also considered setting less stringent standards calling for a more limited set of applied technologies. However, our assessment concluded with a high degree of confidence that the technologies on which the final standards are premised are clearl y available at reasonable cost in the 2014
- 2018 time frame , and that the phase
- in and other flexibility provisions allow for their application in a very cost - effective manner, as discussed in this section below. More difficult to characterize is the degree to which more or less stringent standards might be appropriate because of under
- or over - estimating effectiveness of the technologies whose performance is the basis of the final standards. Our basis for these estimates is described in Section III. B. (1) (1) . Because for the most part these technologies have not yetbeen applied to HD pickups and vans, even on a limited basis, we are rel yi ng to some degree on engineering judgment in predicting their effectiveness. Even so, we believe that we have applied this judgment using the best information available, primaril y from our recent rulemaking on light
- duty vehicle GHGs and fuel econom y, and have generated a robust set of effectiveness values. **(1) What Technologies Did the Agencies Consider?**  The agencie s considered over 35 vehicle technologies that manufacturers could use to improve the fuel consumption and reduce CO 2 emissions of their vehicles during MYs 2014
- 2018. The majority of the technologies described in this section is readily******* **E.O. 12866 Review**

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238 of available, well k

nown, and could be incorporated into vehicles once production decisions are made. Several of the technologies have already been introduced into the heav y - dut y pickup and van market (i.e., variable valve timing, improved accessories, etc.) in a limited number of applications. Other technologies considered may not currently be in production, but are beyond the research phase and under development, and are expecte d to be in production in highway vehicles over the next few years. These are technologies which are capable of achieving significant improvements in fuel econom y and reductions in CO 2 emissions, at reasonable costs. The agencies did not consider technolo gies in the research stage because there is insufficient time for such technologies to move from research to production during the model ye ars covered b y this final action. The agencies received comments regarding applicability of certain advanced technol ogies described in the TIAX 2009 report submitted to NAS. Specifically mentioned where turbo
- charging and downsizing of gasoline vehicles and hydraulic hy brid s ys tems. While turbo
- charging and downsizing of gasoline vehicles was a principal technology

in the light
- dut y rule, the agencies determined that in the realm of heav y - dut y vehicles, this approach provides much less benefit to vehicles which are required to regularl y operate at high and sustained loads. In light
- dut y a pplications, downsizing of a t ypicall y oversized engine largely results in benefits mainly under partial and light load conditions. This approach is more applicable to light
- dut y vehicles because they

infrequently

require high or full power. Further, while turbo downsizing was alread y occurring in a portion of the light
- duty fleet, it has not been demonstrated in the heav y - dut y fleet , likely due to concerns with durability of this technology in the sustained high
- load dut y cycles frequentl y encountered . Similarly , other light
- duty technologies (i.e., cylinder deactivation, engine start stop) were also determined to not be compatible with the duty

cycle of heavy
- dut y vehicles for similar reasons. Due to the relativel y aggressive implementation of this program and the lack of commercialization in the heav y - dut y market, hydraulic hy brid s ys tems were not considered a technology that could be implemented in the time frame of this program for the HD pickup and van sector. The fact that no HD pickup or van hydraulic hybrids have been, or are the verge of being, marketed makes their widespread introduction before the MY 2018 final year of the phase
- in very

unlikely
. The technologies considered in the agencies’ anal ysis are briefl y described below. They fall into five broad categories: e ngine technologies, transmission technologies, vehicle technologies, electrification/accessory technologies, and hy

brid technolog ies
. In this class of trucks and vans, diesel engines are installed in about half of all vehicles. The ratio between gasoline and diesel engine purchases b y consumers has tended to track changes in the overall cost of oil and the relative cost of gasolin e and diesel fuels. When oil prices are higher, diesel sales tend to increase. This trend has reversed when oil prices fall or when diesel fuel prices are significantl y higher than gasoline
. In the context of our technology discussion for heav y - dut y pic kups and vans, we are treating gasoline and diesel engines separately so each has a set of baseline******* **E.O. 12866 Review**

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239 of technologies. We discuss performance improvements in terms of changes to those baseline engines. Our cost and inventory estimates contained elsewhere refl ect the current fleet baseline with an appropriate mix of gasoline and diesel engines. Note that we are not basing the final standards on a targeted switch in the mix of diesel and gasoline vehicles. We believe our final standards require similar levels of technology development and cost for both diesel and gasoline vehicles. Hence the final program does not force, nor does it discourage, changes in a manufacturer’s fleet mix between gasoline and diesel vehicles. Although we considered setting a single standard based on the performance level possible for diesel vehicles, we are not finalizing such an approach because the potential disruption in the HD pickup and van market from a forced shift would not be justified. Typ es of engine technologies that imp rove fuel efficiency and reduce CO 2 emissions include the following:

 Low
- friction lubricants

– low viscosity and advanced low friction lubricants oils are now available with improved performance and better lubrication. If manufacturers choose to make use of these lubricants, they would need to make engine changes and possibly conduct durability

testing to accommodate the low
friction lubricants.

 Reduction of engine friction losses

– can be achieved through low
- tension piston rings, roller cam followers, improved material coatings, more optimal thermal management, piston surface treatments, and other improvements in the design of engine components and subsy stems that improve engine operation.

 Cylinder deactivation

– deactivates the intake and exhaust valves and prevents fuel injection into some cylinders during light
- load operation. The engine runs temporaril y as though it were a smaller engine which substantially reduces pumping losses.

 Variable valve timing

– alters the timing of the intake valve, exhaust valve, or both, primarily

to r educe pumping losses, increase specific power, and control residual gases.

 Stoichiometric gasoline direct
- injection technology

– injects fuel at high pressure directly into the combustion chamber to improve cooling of the air/fuel charge within the cylind er, which allows for higher compression ratios and increased thermody namic efficiency
.

 Diesel engine improvements and diesel aftertreatment improvements

– improved EGR sy stems and advanced timing can provide more efficient combustion and, hence, lower f

uel consumption. Aftertreatment sy stems are a relativel y new technology

on diesel vehicles and, as such, improvements are expected in coming ye ars that allow the effectiveness of these s ys tems to improve while reducing the fuel and reductant demands of current sy stems. Ty pes of transmission technologies considered include:******* **E.O. 12866 Review**

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240 of  Improved automatic transmission controls

– optimizes shift schedule to maximize fuel efficiency

under wide ranging conditions, and minimizes losses associated with torque converter sl ip through lock
- up or modulation.

 Six
-, seven -, and eight
-speed automatic transmissions

– the gear ratio spacing and transmission ratio are optimized for a broader range of engine operating conditions specific to the mating engine. Ty pes of vehicle technologies considered include:

 Low
- rolling
- resistance tires

– have characteristics that reduce frictional losses associated with the energy dissipated in the deformation of the tires under load, therefore improving fuel efficiency and reducing CO 2 emiss ions.

 Aerodynamic drag reduction

– is achieved b y changing vehicle shape or reducing frontal area, including skirts, air dams, underbody covers, and more aerodynamic side view mirrors.

 Mass reduction and material substitution

– Mass reduction encompasses a variet y of techniques ranging from improved design and better component integration to application of lighter and higher
- strength materials. Mass reduction is further compounded b y reductions in engine power and ancillary s ys tems (transmission, steerin g, brakes, suspension, etc.). The agencies recognize there is a range of diversity and complexity

for mass reduction and material substitution technologies and there are man y techniques that automotive suppliers and manufacturers are using to achieve the levels of this technology that the agencies have modeled in our analy sis for this program. Ty pes of electrification/accessory and hy brid technologies considered include:

 Electric power steering and Electro
-Hydraulic power steering

– are electrically
a ssisted steering s ys tems that have advantages over traditional hydraulic power steering because it replaces a continuously operated hydraulic pump, thereby reducing parasitic losses from the accessory drive.

 Improved accessories

– may include high efficie ncy

alternators, electrically driven (i.e., on
- demand) water pumps and cooling fans. This excludes other electrical accessories such as electric oil pumps and electrically driven air conditioner compressors.

 Air Conditioner Systems

– These technologies i nclude improved hoses, connectors and seals for leakage control. They also include improved compressors, expansion valves, heat exchangers and the control of these******* **E.O. 12866 Review**

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241 of components for the purposes of improving tailpipe CO 2 emissions as a result of A/C use. 265 **(2) How Did the Agencies Determine the Costs and Effectiveness of Each of**  **These Technologies?** Building on the technical anal ys is underl yi ng the light
- dut y 2012
- 2016 MY vehicle rule, the agencies took a fresh look at technology cost and effectiveness values for purposes of this final action. For costs, the agencies reconsidered both the direct or “piece” costs and indirect costs of individual components of technologies. For the direct costs, the agencies followed a bill of materials (BOM) approach e mployed by NHTSA and EPA in the light
- duty rule. For two technologies, stoichiometric gasoline direct injection (SGDI) and turbocharging with engine downsizing, the agencies relied to the extent possible on the available tear
- down data and scaling method ologies used in EPA’s ongoing stud y with FEV, Incorporated. This study consists of complete sy stem tear - down to evaluate technologies down to the nuts and bolts to arrive at very detailed estimates of the costs associated with manufacturing them. 266 For the other technologies, considering all sources of information and using the BOM approach, the agencies worked together intensively to determine component costs for each of the technologies and build up the costs accordingl y. Where estimates differ betwee n sources, we have used engineering judgment to arrive at what we believe to be the best cost estimate available today , and explained the basis for that exercise of judgment. Once costs were determined, they were adjusted to ensure that they were all expr essed in 2009 dollars using a ratio of gross domestic product (GDP) values for the associated calendar years, 267 and indirect costs were accounted for using the new approach developed b y EPA and used in the light
- duty 2012
- 2016 MY vehicle rule. N HTSA and EPA also reconsidered how costs should be adjusted by modifying or scaling content assumptions to account for differences across the range of vehicle sizes and functional requirements, and adjusted the associated material cost impacts to account f or the revised content, although some of these adjustments may be different for each agency due to the different vehicle subclasses used in their respective models. Regarding estimates for technology effectiveness, NHTSA and EPA used the estimates from the light
- duty rule as a baseline but adjusted them as appropriate, taking into account the unique requirement of the heav y - duty test cycles to test at curb weight plus half payload versus the light
- dut y requirement of curb plus 300 lb. The adju stments were made on an individual technology basis by assessing the specific impact of the

265 See RIA Chapter 2.3 for more detailed technology descriptions. 266 U.S. Environmental Protection Agency, “Draft Report

– Light
- Duty Techn ology Cost Analysis Pilot Study,” Contract No. EP
- C
- 07
- 069, Work Assignment 1
- 3, Septem ber 3, 2009. 267 NHTSA examined the use of the CPI multiplier instead of GDP for adjusting these dollar values, but found the difference to be exceedingly small

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242 of added load on each technology when compared to the use of the technology on a light
duty vehicle. The agencies also considered other sources such as the 2010 NAS R eport, recent CAFE compliance data, and confidential manufacturer estimates of technology effectiveness. NHTSA and EPA engineers reviewed effectiveness information from the multiple sources for each technology and ensured that such effectiveness estimates were based on technology

hardware consistent with the BOM components used to estimate costs. Together, the agencies compared the multiple estimates and assessed their validity , taking care to ensure that common BOM definitions and other vehicle attribute s such as performance and drivability were taken into account. The agencies note that the effectiveness values estimated for the technologies may represent average values applied to the baseline fleet described earlier, and do not reflect the potentiall y - limitless spectrum of possible values that could result from adding the technology

to different vehicles. For example, while the agencies have estimated an effectiveness of 0.5 percent for low friction lubricants, each vehicle could have a unique effect iveness estimate depending on the baseline vehicle’s oil viscosity rating. Similarly , the reduction in rolling resistance (and thus the improvement in fuel efficiency and the reduction in CO 2 emissions) due to the application of LRR tires depends not only on the unique characteristics of the tires originally on the vehicle, but on the unique characteristics of the tires being applied, characteristics which must be balanced between fuel efficiency , safet y, and performance. Aerodyn amic drag reduction is muc h the same—it can improve fuel efficiency and reduce CO 2 emissions, but it is also highly dependent on vehicle
- specific functional objectives. For purposes of this NPRM, NHTSA and EPA believe that employing average values for technology effectiveness esti mates is an appropriate way of recognizing the potential variation in the specific benefits that individual manufacturers (and individual vehicles) might obtain from adding a fuel
- saving technology
. The following section contains a detailed description of our assessment of vehicle technology

cost and effectiveness estimates. The agencies note that the technology costs included in this NPRM take into account onl y those associated with the initial build of the vehicle. (a ) Engine Technologies NHTSA and EPA have reviewed the engine technology estimates used in the light
- duty rule. In doing so NHTSA and EPA reconsidered all available sources and updated the estimates as appropriate. The section below describes both diesel and gasoline engine techno logies considered for this program. (i ) Low Friction Lubricants One of the most basic methods of reducing fuel consumption in both gasoline and diesel engines is the use of lower viscosit y engine lubricants. More advanced multi
viscosity engine oils are avail able today with improved performance in a wider temperature band and with better lubricating properties. This can be accomplished by changes to the oil base stock ( e.g. , switching engine lubricants from a Group Ibase oils to lower
- friction, lower viscosi ty Group III s ynthetic) and through changes to lubricant******* **E.O. 12866 Review**

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243 of additive packages ( e.g. , friction modifiers and viscosity improvers). The use of 5W
- 30 motor oil is now widespread and auto manufacturers are introducing the use of even lower viscosity

oils, such a s 5W
- 20 and 0W
- 20, to improve cold
- flow properties and reduce cold start friction. However, in some cases, changes to the crankshaft, rod and main bearings and changes to the mechanical tolerances of engine components may be required. In all cases, durab ility testing would be required to ensure that durability is not compromised. The shift to lower viscosity and lower friction lubricants will also improve the effectiveness of valvetrain technologies such as cylinder deactivation, which rel y on a minimum oil temperature (viscosity) for operation. Based on the light
- dut y 2012
- 2016 MY vehicle rule, and previousl y - received confidential manufacturer data, NHTSA and EPA estimated the effectiveness of low friction lubricants to be between 0 to 1 perce nt. In the light
- dut y rule, the agencies estimated the cost of moving to low friction lubricants at $3 per vehicle (2007$). That estimate included a markup of 1.11 for a low complexity

technology . For HD pickups and vans, we are using the same base estimate but have marked it up to 2009 dollars using the GDP price deflator and have used a markup of 1.24 for a low complexity technology

to arrive at a value of $4 per vehicle. As in the light
- duty

rule, learning effects are not applied to costs for thi s technology and, as such, this estimate applies to all model years. 268 , 269 (ii) Engine Friction Reduction In addition to low friction lubricants, manufacturers can also reduce friction and improve fuel consumption by improving the design of both diesel and gasoline engine components and subs ys tems. Approximately 10 percent of the energy

consumed by

a vehicle is lost to friction, and just over half is due to frictional losses within the engine. 270 Examples include improvements in low
- tension piston rings, pis ton skirt design, roller cam followers, improved crankshaft design and bearings, material coatings, material substitution, more optimal thermal management, and piston and cylinder surface treatments. Additionally , as computer - aided modeling software conti nues to improve, more opportunities for evolutionary friction reductions may

become available.

268 Note that throughout the cost estimates for this HD analysis, the agencies have used slightly higher markups than those used in the 2012
- 2016 MY light
- duty vehicle rule. The new, slightly higher ICMs include return on capital of roughly 6% , a factor that was not included in the light
- duty analysis. The markups are also higher than those used the in proposal for this action. That change has to do with our decision to base the ICMs solely on EPA internal work rather than averaging that work with earlier work done under contract to EPA by RTI, International. That change is discussed in Section VIII.C of this preamble and is detailed in Chapter 2 of the RIA (see RIA 2.2.1) 269 Note that the costs developed for low friction lubes for this analys is reflect the costs associated with any engine changes that would be required as well as any durability testing that may be required. 270 “I mp act of Friction Reduction Technologies on Fuel Economy,” Fenske, G. Presented at the March 2009 Chicago Chapter Me eting of the ‘Society of Tribologists and Lubricated Engineers’ Meeting, March 18th, 2009. Available at: http://www.chicagostle.org/program/2008
- 2009/Impact%20of%20Friction%20Reduction%20Technologies%20on%20Fuel%20Economy%20
- %20with%20VGs%20removed.pdf ( last accessed July 9, 2009).******* **E.O. 12866 Review**

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244 of All reciprocating and rotating components in the engine are potential candidates for friction reduction, and minute improvements in several components can add up to a measurable fuel efficiency improvement. The light
- duty 2012
- 2106 MY vehicle rule, the 2010 NAS Report, and NESCCAF and Energy and Environmental Anal ys is reports, as well as confidential manufacturer data, indicate a range of effectiv eness for engine friction reduction to be between 1 to 3 percent. NHTSA and EPA continue to believe that this range is accurate. Consistent with the light
- duty rule, the agencies estimate the cost of this technology

at $15 per cylinder compliance cost (2008$), including the low complexity ICM markup value of 1.24. L earning impacts are not applied to the costs of this technology

and, as such, this estimate applies to all model years. This cost is multiplied by the number of engine cylinders. (iii) Coupled Cam Phasing Valvetrains with coupled (or coordinated) cam phasing can modify the timing of both the inlet valves and the exhaust valves an equal amount by phasing the camshaft of an overhead valve engine. For overhead valve engi nes, which have onl y one camshaft to actuate both inlet and exhaust valves, couple cam phasing is the onl y variable valve timing implementation option available and requires only one cam phaser. Based on the light
- duty rule, previously
- received confidential manufacturer data, and the NESCCAF report, NHTSA and EPA estimated the effectiveness of couple cam phasing to be between 1 and 4 percent. NHTSA and EPA reviewed this estimate for purposes of the NPRM, and continue to find it accurate. The agencies received comments questioning the exclusion of cam phasing from the technology

packages. During the rulemaking process, manufacturers introduced many new or updated gasoline engines resulting in the majority of the 2010 gasoline heav y - dut y engines including cam phasing , and so we now consider this technology to be in the baseline fleet . Because of this, the baseline anal ys is of technology for the 2010 heav y - dut y gasoline fleet already includes the benefits of cam phasing and therefore it is not appropriate for the agencies to include this as a technology that is available for most manufactures to add to their current gasoline engines. (iv) Cylinder Deactivation In conventional spark
- ignited engines throttling th e airflow controls engine torque output. At partial loads, efficiency can be improved by

using cylinder deactivation instead of throttling. C yl inder deactivation can improve engine efficiency by disabling or deactivating (usuall y) half of the cylinders when the load is less than half of the engine’s total torque capabilit y – the valves are kept closed, and no fuel is injected

– as a result, the trapped air within the deactivated cylinders is simply compressed and expanded as an air spring, with reduced friction and heat losses. The active cylinders combust at almost double the load required if all of the cylinders were operating. Pumping losses are significantl y reduced as long as the engine is operated in this “part
- cylinder” mode.******* **E.O. 12866 Review**

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245 of Cylinder deactivatio n control strategy relies on setting maximum manifold absolute pressures or predicted torque within a range in which it can deactivate the cylinders. Noise and vibration issues reduce the operating range to which cylinder deactivation is allowed, although manufacturers are exploring vehicle changes that enable increasing the amount of time that cylinder deactivation might be suitable. Some manufacturers may

choose to adopt active engine mounts and/or active noise cancellations sy stems to address Noise Vib ration and Harshness (NVH) concerns and to allow a greater operating range of activation. Cylinder deactivation is a technology keyed to more lightly

loaded operation, and so may be a less likel y technology choice for manufacturers designing for effective ness in the loaded condition required for testing, and in the real world that involves frequent operation with heavy loads. Cylinder deactivation has seen a recent resurgence thanks to better valvetrain designs and engine controls. General Motors and Chrys ler Group have incorporated cylinder deactivation across a substantial portion of their light
- dut y V8
- powered lineups. Effectiveness improvements scale roughl y with engine displacement
- to - vehicle weight ratio: the higher displacement
- to - weight vehicles, operating at lower relative loads for normal driving, have the potential to operate in part
- cylinder mode more frequentl y. For heavy
- dut y vehicles tested and operated at loaded conditions, the power to weight ratio is considerabl y low er than the light
- dut y case greatl y reducing the opportunity for “part
- cylinder” mode and therefore was not considered in this rulemaking as an effective technology

for heavy
- duty applications. (v) Stoichiometric Gasoline Direct Injection SGDIengines inject fuel at high pressure directl y into the combustion chamber (rather than the intake port in port fuel injection). SGDIrequires changes to the injector design, an additional high pressure fuel pump, new fuel rails to handle the higher f uel pressures and changes to the cylinder head and piston crown design. Direct injection of the fuel into the cylinder improves cooling of the air/fuel charge within the cylinder, which allows for higher compression ratios and increased thermodynamic effi ciency without the onset of combustion knock. Recent injector design advances, improved electronic engine management sy stems and the introduction of multiple injection events per cylinder firing cycle promote better mixing of the air and fuel, enhance combustion rates, increase residual exhaust gas tolerance and improve cold start emissions. SGDI engines achieve higher power densit y and match well with other technologies, such as boosting and variable valvetrain designs. Several manufacturers have recentl y introduced vehicles with SGDIengines, including GM and Ford and have announced their plans to increase dramatically the number of SGDI engines in their portfolios. The light
- dut y 2012
- 2016 MY vehicle rule estimated the range of 1 to 2 pe rcent for SGDI. NHTSA and EPA reviewed this estimate for purposes of the NPRM, and continue to find it accurate.******* **E.O. 12866 Review**

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246 of Consistent with the light
- duty rule, NHTSA and EPA cost estimates for SGDI take into account the changes required to the engin e hardware, engine electronic controls, ancillary and NVH mitigation sy stems. Through contacts with industry NVH suppliers, and manufacturer press releases, the agencies believe that the NVH treatments will be limited to the mitigation of fuel s ys tem nois e, specificall y from the injectors and the fuel lines. For this anal ys is, the agencies have estimated the costs at $481 (2009$) in the 2014 model year. Flat
- portion of the curve learning is applied to this technology . This technology

was considered for gasoline engines only , as diesel engines already emplo y direct injection. (b ) Diesel Engine Technologies Diesel engines have several characteristics that give them superior fuel efficiency compared to conventional gasoline, spark
- ignited engines. Pumping los ses are much lower due to lack of (or greatl y reduced) throttling. The diesel combustion cycle operates at a higher compression ratio, with a very lean air/fuel mixture, and turbocharged light
duty diesels t ypicall y achieve much higher torque levels at lo wer engine speeds than equivalent
- displacement naturally
- aspirated gasoline engines. Additionally, diesel fuel has a higher energy

content per gallon. 273 However, diesel fuel also has a higher carbon to hydrogen ratio, which increases the amount of CO 2 emi tted per gallon of fuel used b y approximately

15 percent over a gallon of gasoline. Based on confidential business information and the 2010 NAS Report, two major areas of diesel engine design will be improved during the 2014
- 2018 time frame . Thes e areas include aftertreatment improvements and a broad range of engine improvements. (i ) Aftertreatment Improvements The HD diesel pickup and van segment has largely adopted the SCR ty

pe of aftertreatment s ys tem to comply with criteria pollutant emission stan dards. As the experience base for SCR expands over the next few years, man y improvements in this aftertreatment s ys tem such as construction of the cataly st, thermal management, and reductant optimization will result in a significant reduction in the amount of fuel used in the process. This technology was not considered in the light
- dut y rule. Based on confidential business information, EPA and NHTSA estimate the reduction in CO 2 as a result of these improvements at 3 to 5 percent. T he age ncies have estimated the cost of this technology at $25 for each percentage improvement in fuel consumption. This estimate is based on the agencies’ belief that this technology is, in fact, a very cost effective approach to improving fuel consumption. As such, $25 per percent improvement is considered a reasonable cost. This cost would cover the engineering and test cell related costs necessary to develop and implement the improved control strategies that would allow for the improvements in fuel consumpt ion. Importantly , the engineering work involved would be expected to result in cost savings to the aftertreatment and control hardware (lower platinum group metal

273 Burning one gallon of diesel fuel pr oduces about 15 percent more carbon dioxide than gasoline due to the higher density and carbon to hydrogen ratio.******* **E.O. 12866 Review**

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247 of loadings, lower reductant dosing rates, etc.). Those savings are considered to be included in the $25 per percent estimate described here. Given the 4 percent average expected improvement in fuel consumption results in an estimated cost of $ 119 (200 9 $) for a 201 4 model year truck or van . This estimate includes a low complexity I CM of 1.24 and flat
portion of the curve learning from 2012 forward. (ii) Engine Improvements Diesel engines in the HD pickup and van segment are expected to have several improvements in their base design in the 2014

– 2018 time frame . These improvements include items such as improved combustion management, optimal turbocharger design, and improved thermal management. This technology was not considered in the light
duty rule. Based on confidential business information , EPA and NHTSA estimate the reduction in CO 2 as a result of these improvements at 4 to 6 percent. The cost for this technology includes costs associated with low temperature exhaust gas recirculation , improved turbochargers and improvements to other s ys te ms and components. These costs are considered collectivel y in our costing analysis and termed “diesel engine improvements.” The agencies have estimated the cost of diesel engine improvements at $ 148 based on the cost estimates for several individual technologies. Specifically , the direct manufacturing costs we have estimated are: improved cylinder head, $9; turbo efficiency improvements, $16; EGR cooler improvements, $3; higher pressure fuel rail, $10; improved fuel injectors, $13; improved pistons, $2; and reduced valve train friction, $ 95
. All values are in 200 9 dollars and are applicable in the 2014 MY. Applying a low complexity I CM of 1. 24 results in a cost of $ 184 (200 9 $) applicable in the 2014MY. We consider flat
- portion of the curve learning to be appropriate for these technologies. (c) Transmission Technologies NHTSA and EPA have also reviewed the transmission technology estimates used in the light
- duty rule. In doing so, NHTSA and EPA considered or reconsidered all available sour ces and updated the estimates as appropriate. The section below describes each of the transmission technologies considered for the final standards. (i ) Improved Automatic Transmission Control (Aggressive Shift Logic and Early Torque Converter Lockup) Calibrat ing the transmission shift schedule to upshift earlier and quicker, and to lock
- up or partiall y lock
- up the torque converter under a broader range of operating conditions can reduce fuel consumption and CO 2 emissions. However, this operation can result in a perceptible degradation in NVH. The degree to which NVH can be degraded before it becomes noticeable to the driver is strongl y influenced b y characteristics of the vehicle, and although it is somewhat subjective, it alway s places a limit on how much fu el consumption can be improved by transmission control changes. Given that the Aggressive Shift Logic and Earl y Torque Converter Lockup are best optimized simultaneously

due to the fact that adding both of them primarily requires only

minor modifications to the transmission or calibration software, these two technologies are******* **E.O. 12866 Review**

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248 of combined in the modeling. We consider these technologies to be present in the baseline, since 6
- speed automatic transmissions are installed in the majority of Class 2b and 3 trucks in the 2010 model year time frame
. (ii) Automatic 6
- and 8
- Speed Transmissions Manufacturers can also choose to replace 4
- 5
- and 6
- speed automatic transmissions with 8
- speed automatic transmissions. Additional ratios allow for further optimization of engine operation over a wider range of conditions, but this is subject to diminish ing returns as the number of speeds increases. As additional planetary gear sets are added (which may

be necessary

in some cases to achieve the higher number of ratios), additional weight and friction are introduced. Also, the additional shifting of such a transmission can be perceived as bothersome or busy to some consumers, so manufacturers need to develop strategies for smooth shifts. Some manufacturers are replacing 4
- and 5
- speed automatics with 6
- speed automatics already, and 7
- and 8
- speed automat ics have entered production in light
- dut y vehicles, albeit in lower
- volume applications in luxury

and performance oriented cars. As discussed in the light
- duty rule, confidential manufacturer data projected that 6
- speed transmissions could incre mentall y reduce fuel consumption by 0 to 5 percent from a 4
- speed automatic transmission, while an 8
- speed transmission could incrementall y reduce fuel consumption by up to 6 percent from a 4
- speed automatic transmission. GM has publicly claimed a fuel ec onomy

improvement of up to 4 percent for its new 6
- speed automatic transmissions. 274 NHTSA and EPA reviewed and revised these effectiveness estimates based on actual usage statistics and testing methods for these vehicles along with confidential business information. When combined with i mproved a utomatic transmission c ontrol , the agencies estimate the effectiveness for a conversion from a 4 to a 6
- speed transmission to be 5.3% and a conversion from a 6 to 8
- speed transmission to be 1.7%. While 8
- speed tr ansmissions were not considered in the light
- dut y 2012
- 2016 MY vehicle rule, they

are considered as a technology of choice for this anal ys is in that manufacturers are expected to upgrade the 6
- speed automatic transmissions being implemente d today

with 8
- speed automatic transmissions in the 2014
- 2018 time frame
. We are estimating the cost of an 8
- speed automatic transmission at $281 (2009$) relative to a 6
- speed automatic transmission in the 2014 model y ear. This estimate is based from the 2010 NAS Report and we have applied a low complexity I CM of 1.24 and flat
portion of the curve learning. This technology applies to both gasoline and diesel trucks and vans.

274 General Motors, news release, “From Hybrids to Six
- Speeds, Direct Injection And More, GM’s 2008 Global Pow ertrain Lineup Provides More Miles with Less Fuel” (released Mar. 6, 2007). Available at http://www.gm.com/experience/fuel_economy/news/2007/adv_engines/2008
- powertrain
- lineup
- 082707.jsp (last accessed Sept. 18, 2008).******* **E.O. 12866 Review**

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249 of (d ) Electrification/Accessory Technologies (i ) Electrical Power Steering or Ele ctrohydraulic Power Steering Electric power steering (EPS) or Electroh ydraulic power steering (EHPS) provides a potential reduction in CO 2 emissions and fuel consumption over hydraulic power steering because of reduced overall accessory loads. This elimin ates the parasitic losses associated with belt
- driven power steering pumps which consistently draw load from the engine to pump hydraulic fluid through the steering actuation sy stems even when the wheels are not being turned. EPS is an enabler for all veh icle hybridization technologies since it provides power steering when the engine is off. EPS may be implemented on most vehicles with a standard 12V sy stem. Some heavier vehicles may require a higher voltage system which may add cost and complexity
. The light
- dut y rule estimated a one to two percent effectiveness based on the 2002 NAS report for light
- duty vehicle technologies, a Sierra Research report, and confidential manufacturer data. NHTSA and EPA reviewed these effectiveness estimates and found them to be accurate, thus they have been retained for purposes of this NPRM. NHTSA and EPA adjusted the EPS cost for the current rulemaking based on a review of the specification of the sy stem. Adjustments were made to include potentia lly higher voltage or heavier duty s ys tem operation for HD pickups and vans. Accordingl y, higher costs were estimated for s ys tems with higher capability . After accounting for the differences in s ys tem capability and appl yi ng the ICM markup of low complex ity technology

of 1.24, the estimated costs are $115 for a MY 2014 truck or van (2009$). As EPS sy stems are in widespread usage today , flat
- portion of the curve learning is deemed applicable. EHPS sy stems are considered to be of equal cost and both are c onsidered applicable to gasoline and diesel engines. (ii) Improved Accessories The accessories on an engine, including the alternator, coolant and oil pumps are traditionally

mechanically
- driven. A reduction in CO 2 emissions and fuel consumption can be realize d by

driving the pumping accessories electrically , and only when needed (“on
- demand”). Alternator improvements include internal changes resulting in lower mechanical and electrical losses combined with control logic that charges the battery at more effici ent voltage levels and during conditions of available kinetic energy from the vehicle which would normally be wasted energy

such as braking during vehicle decelerations. Electric water pumps and electric fans can provide better control of engine cooling. For example, coolant flow from an electric water pump can be reduced and the radiator fan can be shut off during engine warm
- up or cold ambient temperature conditions which will reduce warm
- up time, reduce warm
- up fuel enrichment, and reduce parasitic lo sses. Indirect benefit may

be obtained by

reducing the flow from the water pump electrically

during the engine warm
- up period, allowing the engine to heat more rapidl y******* **E.O. 12866 Review**

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250 of and thereb y reducing the fuel enrichment needed during cold starting of the engine. Further benefit may

be obtained when electrification is combined with an improved, higher efficiency

engine alternator. Intelligent cooling can more easily be applied to vehicles that do not ty

pically carry heavy payloads, so larger vehicles with towing capa city present a challenge, as these vehicles have high cooling fan loads. 275 The agencies considered whether to include electric oil pump technology for the rulemaking. Because it is necessary to operate the oil pump any time the engine is running, electric oil pump technology has insignificant effect on efficiency . Therefore, the agencies decided to not include electric oil pump technology
. NHTSA and EPA jointly reviewed the estimates of 1 to 2 percent effectiveness estimates used in the light
- duty rule and found them to be accurate for Improved Electrical Accessories. Consistent with the light
- duty rule, the agencies have estimated the cost of this technology at $93 (2009$) including a low complexity I CM of 1.24. This cost is applicable in the 2014 model year. Improved accessory s ys tems are in production currentl y and thus flat
- portion of the curve learning is applied. This technology was considered for diesel trucks and vans only
. (e) Vehicle Technologies (i ) Mass Reduction Reducing a vehicle’s mass, or down
- weighting the vehicle, decreases fuel consumption by

reducing the energy

demand needed to overcome forces resisting motion, and rolling resistance. Manufacturers employ a systematic approach to mass reduction, where the net mass reduction is the addition of a direct component or s ys tem mass reduction plus the additional mass reduction taken from indirect ancillary s ystems and components, as a result of full vehicle optimization, effectivel y compounding or obtaining a seco ndary

mass reduction from a primary mass reduction. For example, use of a smaller, lighter engine with lower torque
- output subsequently allows the use of a smaller, lighter
- weight transmission and drive line components. L ikewise, the compounded weight re ductions of the body , engine and drivetrain reduce stresses on the suspension components, steering components, wheels, tires and brakes, allowing further reductions in the mass of these subsy stems. The reductions in unsprung masses such as brakes, control arms, wheels and tires further reduce stresses in the suspension mounting points. This produces a compounding effect of mass reductions. Estimates of the sy

nergistic effects of mass reduction and the compounding effect that occurs along with it can vary s ignificantly

from one report to another. For example, in discussing its estimate, an Auto
- Steel Partnership report states that “These secondary mass changes can be considerable

— estimated at an additional 0.7 to 1.8 times the initial mass change.” 276 This me ans for each one pound reduction in a primary component, up to

275 In the CAFE model, improved accessories refers solely to improved engine cooling. However, EPA has included a high efficiency alternator in this category, as well as improvements to the cooling system. 276 “Preliminary Vehicle Mass Estimation Using Empiric al Subsystem Influence Coefficients,” Malen, D.E., Reddy, K. Auto
- Steel Partnership Report, May 2007, Docket EPA
- HQ
- OAR
- 2009
- 0472
- 0169.******* **E.O. 12866 Review**

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251 of 1.8 pounds can be reduced from other structures in the vehicle ( i.e. , a 180 percent factor). The report also discusses that a primary variable in the realized secondary weight reduction is whe ther or not the powertrain components can be included in the mass reduction effort, with the lower end estimates being applicable when powertrain elements are unavailable for mass reduction. However, another report b y the Aluminum Association, which primarily focuses on the use of aluminum as an alternative material for steel, estimated a factor of 64 percent for secondary mass reduction even though some powertrain elements were considered in the anal ysis. 277 That report also notes that ty pical values for this factor vary from 50 to 100 percent. Although there is a wide variation in stated estimates, sy nergistic mass reductions do exist, and the effects result in tangible mass reductions. Mass reductions in a single vehicle component, for example a door si de impact/intrusion sy stem, may actuall y result in a significantl y higher weight savings in the total vehicle, depending on how well the manufacturer integrates the modification into the overall vehicle design. Accordingl y, care must be taken when reviewi ng reports on weight reduction methods and practices to ascertain if compounding effects have been considered or not. Mass reduction is broadly applicable across all vehicle subsy stems including the engine, exhaust sy stem, transmission, chassis, suspension , brakes, body, closure panels, glazing, seats and other interior components, engine cooling s ys tems and HVAC sy stems. It is estimated that up to 1.25 kilograms of secondary weight savings can be achieved for every kilogram of weight saved on a light
- dut y vehicle when all subs ys tems are redesigned to take into account the initial primary weight savings. 278 , 279 Mass reduction can be accomplished by proven methods such as:

 Smart Design: Computer aided engineering (CAE) tools can be used to better optimize load paths within structures b y reducing stresses and bending moments applied to structures. This allows better optimization of the sectional thicknesses of structural co mponents to reduce mass while maintaining or improving the function of the component. Smart designs also integrate separate parts in a manner that reduces mass by combining functions or the reduced use of separate fasteners. In addition, some “body on frame” vehicles are redesigned with a lighter “unibody” construction. Accessed on the Internet on May 30, 2009 at: http://www.a
sp.org/database/custom/Mass%20Compounding%20
- %20Final%20Repo rt.pdf 277 “Benefit Analysis: Use of Aluminum Structures in Conjunction with Alternative Pow ertrain Technologies in Automobiles,” Bull, M. Chavali, R., Mascarin, A., Aluminum Association Research Report, May 2008, Docket EPA
- HQ
- OAR
- 2009
- 0472
- 0168. Accesse d on the Internet on April 30, 2009 at: http://www.autoaluminum.org/dow nloads/IBIS
- Powertrain
- Study.pdf 278 “Future Generation Passenger Compartment
- Validation (ASP 241)” Villano, P.J., Shaw , J.R., Polewarczyk, J., Morgans, S., Carpenter, J.A., Yocum, A.D., in “Lightweighting Materials

– FY 2008 Progress Report,” U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Vehicle Technologies Program, May 2009, Docket EPA
- HQ
- OAR
- 2009
- 0472
- 0190. 279 “Preliminary Vehicle Mass Estimation Using Empirical Subsystem Influence Coefficients,” Malen, D.E., Reddy, K. Auto
- Steel Partnership Report, May 2007, Docket EPA
- HQ
- OAR
- 2009
- 0472
- 0169. Accessed on the Internet on May 30, 2009 at: http://www.a
sp.org/database/custom/Mass%20Compounding%20
- %20Final%20Report.pdf******* **E.O. 12866 Review**

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252 of  Material Substitution: Substitution of lower density and/or higher strength materials into a design in a manner that preserves or improves the function of the component. This includes su bstitution of high
- strength steels, aluminum, magnesium or composite materials for components currentl y fabricated from mild steel.

 Reduced Powertrain Requirements: Reducing vehicle weight sufficientl y al lows for the use of a smaller, lighter and more ef ficient engine while maintaining or increasing performance. Approximately half of the reduction is due to these reduced powertrain output requirements from reduced engine power output and/or displacement, changes to transmission and final drive gear ratios . The subsequent reduced rotating mass ( e.g. , transmission, driveshafts/halfshafts, wheels and tires) via weight and/or size reduction of components are made possible b y reduced torque output requirements.

 Automotive companies have largely used weight savi ngs in some vehicle subsy stems to offset or mitigate weight gains in other subs ys tems from increased feature content (sound insulation, entertainment systems, improved climate control, panoramic roof, etc.).

 Li ghtweight designs have also been used to improve vehicle performance parameters b y increased acceleration performance or superior vehicle handling and braking. Many manufacturers have already announced final future products plans reducing the weight of a vehicle body through the use of high strength steel body
- in
- white, composite body

panels, magnesium alloy front and rear energy

absorbing structures reducing vehicle weight sufficiently to allow a smaller, lighter and more efficient engine. Nissan will be reducing average vehicle curb weight by 15% b y 2015. 280 Ford has identified weight reductions of 250 to 750 lb per vehicle as part of its implementation of known technology

within its sustainability

strategy between 2011 and 2020. 281 Mazda plans to reduce vehicle weight b y 220 pounds per vehicle or more as models are redesigned. 282 , 283 Ducker International estimates that the average curb weight of light
duty vehicle fleet will decrease approximately 2.8% from 2009 to 2015 and approximately

6.5% from 2009 to 2020 via changes in automotive materials and incre ased change
- over from previously used bod y - on - frame automobile and light
- truck designs to newer unibody designs. 280 While the opportunity for mass reductions available to the light
- duty

fleet may not in all cases be applied directl y to the heav y - duty fleet due

280 “Lighten Up!,” Brooke, L., Evans, H. Automotive Engineering International, Vol. 117, No. 3, March 2009. 281 “2008/9 Blueprint for Sustainability,” Ford Motor Company. Available at: http:// www.ford.com/go/sustainability (last accessed February 8, 2010). 282 “Mazda to cut vehicle fuel consumption 30 percent by 2015,” Mazda press release, June 23, 2009. Available at: http://www.mazda.com/publicity/release/2008/200806/080623.html (last accessed February 8, 2010). 283 “Mazda: Don’t believe hot air being emitted by hybrid hype,” Greimel, H. Automotive News, March 30, 2009.******* **E.O. 12866 Review**

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253 of to the different designs for the expected duty c ycl es of a “work” vehicle, mass reductions are still available particularly to areas unrelated to the components and s ys tems necessary for the work vehicle aspects. Due to the payload and towing requirements of these heav y - dut y vehicles, engine downsizing was not considered in the estimates for CO 2 reduction in the area of mass reduction and m aterial substitution. NHTSA and EPA estimate that a 3 percent mass reduction with no engine downsizing results in a 1 percent reduction in fuel consumption. In addition, a 5 and 10 percent mass reduction with no engine downsizing result in an estimated C O 2 reduction of 1.6 and 3.2 percent respectivel y. These effectiveness values are 50% of the light
- duty rule values due to the elimination of engine downsizing for this class of vehicle. The agencies have recently completed work on an Interim Joint Technical Assessment Report (TAR) that considers light
- duty GHG and fuel economy

standards for the 2017 through 2025 MY and have continued this work for the proposed light
- dut y vehicle rule . Based on new information from various industry and literature sources, the TAR report modified the mass reduction/cost relationship used in the light
- duty 2012
- 2016 MY vehicle rule to begin at the origin (0% weight reduction) and to have increas ing cost with increasing mass reduction. 284 The resulting anal ys is showed costs for 5% mass reduction on light
- dut y vehicles to be near zero or cost parity. At proposal for heavy
- duty vehicles, we estimated mass reduction costs based on the light
- dut y 2012
- 2016 anal ys is without accounting for the new work completed in the Interim Joint Technical Assessment. Since the proposal, we have been able to consider our cost estimates here in the context of both light
- duty and heav y - dut y vehicle bodies of work. For this final action, in aggregate, we estimate a 5 percent mass reduction at a cost of $80
- 100 per vehicle. We are estimating the following direct manufacturer costs for a 5% mass reduction : Class 2b gasoline $8 5 , 2b diesel $9 5 , 3 gasoline $ 90 , 3 diesel trucks $100. In cluding a low complexity I CM of 1.24 and using learning on the flat portion of the curve, these values become $103, $115, $ 109, and $121, respectivel y, applicable in the 2016 MY and expressed in 2009 dollars. This estimate is higher than our most recent estimate of mass reduction contained in the light
- duty vehicle Interim Joint Technical Assessment Report because we do not believe that all of the weight reduction opportunities for light
- duty vehicles can be applied to heavy
- dut y tru cks. However, we do believe reductions in the following components and sy stems can be found that do not affect the payload and towing requirements of these heav y - dut y vehicles; body , closure panels, glazing, seats and other interior components, engine coo ling s ys tems and HVAC sy stems. (ii) Low Rolling Resistance Tires Tire rolling resistance is the frictional loss associated mainly with the energy dissipated in the deformation of the tires under load and thus influences fuel efficiency

284 “Inte rim Joint Technical Assessment Report: Light
- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards for Model Years 2017
- 2025 ;” September 2010; available at http://epa.gov/otaq/climate/regulations/ldv
- ghg
- tar.pdf and in the docket for this rule.******* **E.O. 12866 Review**

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254 of and CO 2 emissions. Other tire design characteristics ( e.g. , materials, construction, and tread design) influence durability , traction (both wet and dry grip), vehicle handling, and ride comfort in addition to roll ing resistance. A t ypical LRR tire’s attributes would include: increased tire inflation pressure, material changes, and tire construction with less hy steresis, geometry

changes ( e.g. , reduced aspect ratios), and reduction in sidewall and tread deflection. These changes would generall y be accompanied with additional changes to suspension tuning and/or suspension design. EPA and NHTSA estimated a 1 to 2 percent increase in effectiveness with a 10 percent reduction in rolling resistance, which wa s based on the 2010 NAS Report findings and consistent with the light
- duty rule. Based on the light
- dut y rule and the 2010 NAS Report, the agencies have estimated the cost for LRR tires to be $7 per Class 2b truck or van, and $10 per Class 3 truck or van (both values in 2009$ and inclusive of a 1.24 low complexity markup). 286 The higher cost for the Class 3 trucks and vans is due to the predominant use of dual rear tires and, thus, 6 tires per truck. Due to the commodity
- ba sed nature of this technology , cost reductions due to learning are not applied. This technology is considered applicable to both gasoline and diesel. (iii) Aerodynamic Drag Reduction Many factors affect a vehicle’s aerody namic drag and the resulting power requi red to move it through the air. While these factors change with air density and the square and cube of vehicle speed, respectivel y, the overall drag effect is determined b y the product of its frontal area and drag coefficient, Cd. Reductions in these quantities can therefore reduce fuel consumption and CO 2 emissions. Although frontal areas tend to be relativel y similar within a vehicle class (mostly due to market
- competitive size requirements), significant variations in drag coefficient can be observed. Significant changes to a vehicle’s aerody namic performance may

need to be implemented during a redesign ( e.g. , changes in vehicle shape). However, shorter
- term aerody namic reductions, with a somewhat lower effectiveness, may be achieved through the use o f revised exterior components (ty picall y at a model refresh in mid
- cycle) and add
- on devices that currentl y being applied. The latter list would include revised front and rear fascias, modified front air dams and rear valances, addition of rear deck lips and underbod y panels, and lower aerodynamic drag exterior mirrors. The light
- dut y 2012
- 2016 MY vehicle rule estimated that a fleet average of 10 to 20 percent total aerodyn amic drag reduction is attainable which equates to incremental redu ctions in fuel consumption and CO 2 emissions of 2 to 3 percent for both cars and trucks. These numbers are generall y supported b y confidential manufacturer data and public technical literature . For the heavy
- duty truck category, a 5 to 10 percent total a erod ynam ic drag reduction was considered due to the different structure and use of these vehicles equating to incremental reductions in fuel consumption and CO 2 emissions of 1 to 2 percent.

286 “T ires and Passenger Vehicle Fuel Economy,” Transport ation Research Board Special Report 286, National Research Council of the National Academies, 2006, Docket EPA
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255 of Consistent with the light
- duty rule, the agencies have estimated the cost for this technology

at $58 (2009$) including a low complexity I CM of 1.24. This cost is applicable in the 2014 model y ear to both gasoline and diesel trucks and vans. **(3) What Are the Projected Technology Packages’ Effectiveness and**  **Cost?** The assessment of the final technology effectiveness was developed through the use of the EPA Lumped Parameter model developed for the light
- dut y rule. Many of the technologies were common with the light
- duty assessment but the effectiveness of indi vidual technologies was appropriatel y adjusted to match the expected effectiveness when implemented in a heav y - dut y application. The model then uses the individual technology

effectiveness levels but then takes into account technology s yn ergies. The model is also designed to prevent double counting from technologies that may directl y or indirectly impact the same phy sical attribute (e.g., pumping loss reductions). To achieve the levels of the final standards for gasoline and diesel powered heav y - dut y vehicl es, the technology packages were determined to generall y require the technologies previousl y discussed respective to unique gasoline and diesel technologies. Although some of the technologies may already be implemented in a portion of heav y duty vehicles, none of the technologies discussed are considered ubiquitous in the heavy
duty fleet. Also, as would be expected, the available test data shows that some vehicle models will not need the full complement of available technologies to achieve the final stan dards. Furthermore, many technologies can be further improved (e.g., aerodynamic improvements) from today’s best levels, and so allow for compliance without needing to apply a technology

that a manufacturer might deem less desirable. Technology

costs for HD pickup trucks and vans are shown in Table III
- 11
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256 of **Table III**  **- 11**  **Technology Costs for HD Pickup Trucks & Vans Inclusive of Indirect Cost Markups for the 2014MY (2009$)**  Technology Class 2b Gasoline Class 2b

Diesel Class 3

Gasoline Class 3

Diesel Low friction lubes $4 $4 $4 $4 Engine friction reduction $1 16 N/A $1 16 N/A Stoichiometric gasoline direct injection $ 481 N/A $ 481 N/A Engine improvements N/A $ 184 N/A $ 184 8s automatic transmission (increment to 6s automatic transmission) $ 281 $ 281 $ 281 $ 281 Improved accessories N/A $ 93 N/A $ 93 Low rolling resistance tires $ 7 $ 7 $ 10 $ 10 Aerod ynamic improvements $5 8 $5 8 $5 8 $5 8 Electric (or electro/hydraulic) power steering $1 15 $1 15 $1 15 $1 15 Aftertreatment improvements N/A $11 9 N/A $11 9 Mass reduction (5%) $ 108 $ 121 $ 115 $ 127 Air conditioning $21 $21 $21 $21 Total $1, 1 90 $1, 003 $1, 200 9 $1, 013 At 15% phase
- in in 2014 $ 17 9 $ 1 50 $ 1 80 $ 1 52 **(4) Reasonableness of the Final Standards**  The final standards are based on the application of the control technologies described in this section. These technologies are available within the lead time provided, as discussed in RIA Chapter 2.3. These controls are estimated to add costs of approxim ately $1, 048 for MY 2018 heav y - dut y pickups and vans. Reductions associated with these costs and technologies are considerable, estimated at a 12 percent reduction of CO 2 eq emissions from the MY 2010 baseline for gasoline engine
- equipped vehicles and 17 percent for diesel engine equipped vehicles, estimated to result in reductions of 18 MMT of CO 2 eq emissions over the lifetimes of 2014 through 2018 MY vehicles. 287 The reductions are cost effective, estimated at $ 90 per ton of CO 2 e q removed in 2030. 288 This cost is consistent with the light
- dut y rule which was estimated at $100 per ton of CO 2 e q removed in 2020 excluding fuel savings. Moreover, taking into account the fuel savings associated with the program, the cost becomes
- $ 230 per ton of CO 2 e q in 2030. The cost of controls is fully

recovered due to the associated fuel savings, with a payback period in the second ye ar of ownership, as shown in Table VIII
- 9 below in Section VIII
. Given the large, cost effective emission redu ctions based on use of feasible technologies which are available in the lead time provided, plus the lack of adverse impacts on vehicle safety or utility , EPA and NHTSA regard these final standards as appropriate and consistent with our respective statutory authorities under CAA section 202 (a) and NHTSA’s EI SA
287 See Table VI
- 4. 288 See **Table VIII**  **- 3** 
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257 of authority under 49 U.S.C. 32902(k)(2). Based on the discussion above, NHTSA believes these standards are the maximum feasible under EISA. 

### C. **Class 2b -**  **8 Vocational Vehicles** Vocational vehicles cover a w ide variet y of applications which influence both the body st yl e and usage patterns. They also are built using a complex process, which includes additional parties such as body builders. These factors create special sensitivity to concerns of needed lead time, as well as developing standards that do not interfere with vehicles’ utility . The agencies are adopting a vehicle standard for vocational vehicles for the first phase of the program that relies on less extensive addition of technology than for the other regulatory

categories as well as focusing on the chassis manufacturer as the manufacturer subject to the standard. We intend that future rulemakings will consider increased stringency

and possibly

more application
- specific standards. The agencies are also finalizing standards for the diesel and gasoline engines used in vocational vehicles, similar to those discussed above for HD engines installed in Class 7 and 8 tractors. **(1) What Technologies Did the Agencies Consider to Reduce the CO**  **2 Emissions and Fuel Consumption of Vocational Vehicles?**  Similar to the approach taken with tractors, the agencies evaluated aerodyn amic, tire, idle reduction, weight reduction, hy brid powertrain, and engine technologies and their impact on reducing fuel consumption and GHG emissions. The engines used in vocational vehicles include both gasoline and diesel engines, thus, each ty pe is discussed separately below. As explained in Section II.D.1.b, the final regulatory structure for heav y - dut y engines separates the compression ignition (or “diesel”) engines into three regulatory

subcategories
- light heav y, medium heav y, and heav y heav y diesel engines
- - while spark ignition (or “gasoline”) engines are a single regulatory subcategory

(an approach for which there was consensus in the public comments). Therefore, the subsequent discussion will assess each t ype of engine separatel y. (a ) Vehicle Technologies V ocational vehicles ty

pically travel fewer miles than combination tractors. They also tend to be used in more urban locations (with consequent stop and start drive cycles). Therefore the average speed of vocational vehicles is significantl y lower than combination tractors. This has a significant effect on the ty pes of technologies that are appropriate to consider for reducing CO 2 emissions and fuel consumption. The agencies considered the ty pe of technologies for vocational vehicles based on the energy

l osses of a t yp ical vocational vehicle. The technologies are similar to the ones considered for combination tractors. Argonne National L ab conducted an energy audit using simulation tools to evaluate the energy losses of vocational vehicles, such as a Cla ss 6 pickup and delivery truck. Argonne found that 74 percent of the energy losses are attributed to the engine, 13 percent to tires, 9 percent to aerodyn amics, two percent to******* **E.O. 12866 Review**

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258 of transmission losses, and the remaining four percent of losses to axles and acce ssories for a medium
- duty

truck traveling at 30 mph. 289 Low Rolling Resistance Tires: Tires are the second largest contributor to energy losses of vocational vehicles, as found in the energy audit conducted by

Argonne National Lab (as just mentioned). Th e range of rolling resistance of tires used on vocational vehicles today is large. This is in part due to the fact that the competitive pressure to improve rolling resistance of vocational vehicle tires has been less than that found in the line haul tire market. In addition, the drive cycles t ypical for these applications often lead truck buyers to value tire traction and durability more heavil y than rolling resistance. Therefore, the agencies concluded that a regulatory program that seeks to optimize ti re rolling resistance in addition to traction and durability can bring about fuel consumption and CO 2 emission reductions from this segment. The 2010 NAS report states that rolling resistance impact on fuel consumption reduces with mass of the vehicle and with drive cycles with more frequent starts and stops. The report found that the fuel consumption reduction opportunity for reduced rolling resistance ranged between one and three percent in the 2010 through 2020 time frame
. 290 The agencies estim ate that average rolling resistance from tires in 2010 model year can be reduced by 10 percent for 50 percent of the vehicles by 2014 model year based on the tire development achievements over the last several ye ars in the line haul truck market.
. Aerod ynamics: The Argonne National lab work shows that aerodyn amics have less of an impact on vocational vehicle energy losses than do engines or tires. In addition, the aerodynamic performance of a complete vehicle is significantly influenced by the body of the truck. The agencies are not regulating body builders in this phase of regulations for the reasons discussed in Section II. Therefore, we are not basing an y of the final standards for vocational vehicles on aerody namic improvements. Nor would aerod ynamic performance be input into GEM to demonstrate compliance. Weight Reduction: NHTSA and EPA are also not basing an y of the final standards on use of vehicle weight reduction. Thus, vehicle mass reductions would not be input into GEM. The vocational vehicle models are not designed to be application
specific. Therefore weight reductions are difficult to quantify
. Drivetrain: Optimization of vehicle gearing to engine performance through selection of transmission gear ratios, final drive gear ratios and tire size can play a significant role in reducing fuel consumption and GHGs. Optimization of gear selection versus vehicle and engine speed accomplished through driver training or automated transmission gear selection c an provide additional reductions. The 2010 NAS report found that the opportunities to reduce fuel consumption in heavy
- dut y vehicles due to transmission and driveline technologies in the 2015 time frame ranged between 2 and 8 percent. 291 Initially , the agencies considered reflecting transmission choices and technology

in our standard setting process for both tractors and vocational vehicles (see
289 Argonne National Lab. Evaluation of Fuel Consumption Potential of Medium and Heavy
- duty Vehicles through Modeling and Simulation. October 2009. Page 89. 290 See 2010 NAS Report, Note 213 , page 146. 291 See 2010 NAS Report, Note 213 , pp 134 and 137.******* **E.O. 12866 Review**

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259 of previous discussion above on automated manual and automatic transmissions for tractors ) . We have howeve r decided not to do so for the following reasons. The primary

factors that determine optimum gear selection are vehicle weight, vehicle aerodynamics, vehicle speed, and engine performance typically considered on a two dimensional map of engine speed and t orque. For a given power demand (determined b y speed, aerody namics and vehicle mass) an optimum transmission and gearing setup will keep the engine power delivery operating at the best speed and torque points for highest engine efficiency . Since power de livery from the engine is the product of speed and torque a wide range of torque and speed points can be found that deliver adequate power, but onl y a smaller subset will provide power with peak efficiency . Said more generall y, the design goal is for the transmission to deliver the needed power to the vehicle while maintaining engine operation within the engine’s “sweet spot” for most efficient operation. Absent information about vehicle mass and aerodynamics (which determines road load at highway speeds) it is not possible to optimize the selection of gear ratios for lowest fuel consumption. Truck and chassis manufacturers today offer a wide range of tire sizes, final gear ratios and transmission choices so that final body builders can select an optimal c ombination given the finished vehicle weight, general aerodyn amic characteristics and expected average speed. In order to set fuel efficiency and GHG standards that would reflect these optimizations, the agencies would need to regulate a wide range of sma ll entities that are final body builders, would need to set a large number of uniquely different standards to reflect the specific weight and aerod ynamic differences and finally would need test procedures to evaluate these differences that would not themsel ves be excessively burdensome. Finally , the agencies would need the underlying data regarding effectively all of the vocational trucks produced today

in order to determine the appropriate standards. Because the market is already motivated to reach these optimizations themselves today , because we have insufficient data to determine appropriate standards, and finally , because we believe the testing burden would be unjustifiably high, we are not finalizing to reflect transmission and gear ratio optimization in our GEM or in our standard setting. Idle Reduction: Episodic idling by vocational vehicles occurs during the workday , unlike the overnight idling of combination tractors (see discussion in Section III.A.2.a). Vocational vehicle idling can be divided into two ty pical t ypes. The first type is idling while waiting

– such as during a pickup or delivery . This t ype of idling can be reduced through automatic engine shut
- offs. The second ty pe of idling is to accomplish PTO operation, such as compa cting garbage or operating a bucket. The agencies have found only

one study

that quantifies the emissions due to idling conducted by Argonne National Lab based on 2002 VIUS data. 292 EPA conducted a work assignment to assist in characterizing PTO operations . The study of a utility

truck used in two different environments (rural and urban) and a refuse hauler found that the PTO operated on average 28 percent of time relative to the total time spent driving and idling. The use of hy brid powertrains to reduce idling is discussed below.

292 Gaines, Linda, A. Vyas, J. Anderson (Argonne National Laboratory). Estimation of Fuel Use by Idling Commercial Trucks . January 2006.******* **E.O. 12866 Review**

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260 of Hy brid Powertrains: Several t ypes of vocational vehicles are well suited for hy brid powertrains. Vehicles such as utility or bucket trucks, delivery vehicles, refuse haulers, and buses have operational usage patterns with eith er a significant amount of stop - and
- go activity

or spend a large portion of their operating hours idling the main engine to operate a PTO unit. The industry is currently

developing many

variations of hy brid powertrain sy stems . The hy brids developed to date have seen fuel consumption and CO 2 emissions reductions between 20 and 50 percent in the field. However, there are still some key

issues that are restricting the penetration of hy brids, includin g overall sy stem cost, battery

technology , and lack of cost
- effective electrified accessories. We have not predicated the standards based on the use of hy brids reflecting the still nascent level of technology

development and the very small fraction of veh icle sales they would be expected to account for in this time frame
-- on the order of only a percent or two. Were we to overestimate the number of h ybrids that could be produced, we would set a standard that is not feasible. We believe that it is more appropriate given the status of technology

development and our hopes for future advancements in hy brid technologies to encourage their production through incentives. However, to create an incentive for early introduction of hy

brid powertrains into the vocational vehicle fleet, the agencies are adopting the proposed advanced technology credits if hy

brid powertrains are used as a technology

to meet the vocational vehicle standard, as described in Section IV. (b ) Gasoline Engine Technologies The gasoline (or spark ignited) engines certified and sold as loose engines into the heav y - dut y truck market are t ypicall y large V8 and V10 engines produced by General Motors and Ford. The basic engine architecture of these engines is the same as the versions used in the heavy
- dut y pickup trucks and vans. Therefore, the technologies anal yz ed b y th e agencies mirror the gasoline engine technologies used in the heav y - dut y pickup truck anal ys is in Section III.B above. Building on the technical anal ys is underl yi ng the light
- dut y 2012
- 2016 MY vehicle rule, the agencies took a fresh look at t echnology effectiveness values for purposes of this anal ys is using a starting point the estimates from that rule. The agencies then considered the impact of test procedures (such as higher test weight of HD pickup trucks and vans) on the effectiveness est imates. The agencies also considered other sources such as the 2010 NAS Report, recent CAFE compliance data, and confidential manufacturer estimates of technology effectiveness. NHTSA and EPA engineers reviewed effectiveness information from the multiple sources for each technology and ensured that such effectiveness estimates were based on technology hardware consistent with the BOM components used to estimate costs. The agencies note that the effectiveness values estimated for the technologies may rep resent average values, and do not reflect the potentially
- limitless spectrum of possible values that could result from adding the technology to different vehicles. For example, while the agencies have estimated an effectiveness of 0.5 percent for low fric tion lubricants, each vehicle could have a unique effectiveness estimate depending on the baseline vehicle’s oil viscosity rating. For purposes of this final rulemaking, NHTSA and EPA believe that emplo ying average values for technology effectiveness esti mates is an******* **E.O. 12866 Review**

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261 of appropriate way

of recognizing the potential variation in the specific benefits that individual manufacturers (and individual engines) might obtain from adding a fuel
- saving technology
. Baseline Engine: Similar to the gasoline engine used a s the baseline in the light
duty rule, the agencies assumed the baseline engine in this segment to be a naturally aspirated, overhead valve V8 engine. The agencies did not receive any comments regarding the baseline engine assumptions in the proposal. The following discussion of effectiveness is generall y in comparison to 2010 baseline engine performance. For the final rulemaking, the agencies considered the same set of technologies for loose gasoline engines at proposal. The agencies did not r eceive an y significant comments suggesting the consideration of other technologies to reduce the fuel consumption and CO 2 emissions from heavy
- duty gasoline engines. The technologies the agencies considered include the following: Engine Friction Reduction : Inaddition to low friction lubricants, manufacturers can also reduce friction and improve fuel consumption by improving the design of engine components and subs ys tems. Examples include improvements in low
- tension piston rings, piston skirt design, roll er cam followers, improved crankshaft design and bearings, material coatings, material substitution, more optimal thermal management, and piston and cylinder surface treatments. The 2010 NAS, NESCCAF 293 and EEA 294 reports as well as confidential manufacturer d ata used in the light
- duty vehicle rulemaking suggested a range of effectiveness for engine friction reduction to be between 1 to 3 percent. NHTSA and EPA continue to believe that this range is accurate. Coupled Cam Phasing: Valvetrains with coupled (or coordinated) cam phasing can modify

the timing of both the inlet valves and the exhaust valves an equal amount by phasing the camshaft of a single overhead cam engine or an overhead valve engine. Based on the light
- dut y 2012
- 2016 MY vehicle ru le, previousl y - received confidential manufacturer data, and the NESCCAF report, NHTSA and EPA estimated the effectiveness of couple cam phasing CCP to be between 1 and 4 percent. NHTSA and EPA reviewed this estimate for purposes of the NPRM, and continue to find it accurate. Cylinder Deactivation: In conventional spark
- ignited engines throttling the airflow controls engine torque output. At partial loads, efficiency can be improved by using cylinder deactivation instead of throttling. Cylinder deactivati on can improve engine efficiency

by disabling or deactivating (usually) half of the cylinders when the load is less than half of the engine’s total torque capability

– the valves are kept closed, and no fuel is injected

– as a result, the trapped air withi n the deactivated cylinders is simply compressed and expanded as an air spring, with reduced friction and heat losses. The active cylinders combust at almost double the load required if all of the cylinders were operating. Pumping losses are significantl y reduced as long as the engine is
293 Northeast States Center for a Clean Air Future. “Reducing Greenhouse Gas Emissions from Light
- Duty Motor Vehicles.” September 2004. 294 Energy and Environmental Analysis, Inc. “Technology to Improve the Fuel Economy of Light Duty Trucks to 2015.” May 2006.******* **E.O. 12866 Review**

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262 of operated in this “part cylinder” mode. Effectiveness improvements scale roughl y with engine displacement
- to - vehicle weight ratio: the higher displacement
- to - weight vehicles, operating at lower relative loads for normal dri ving, have the potential to operate in part
cylinder mode more frequently . C yl inder deactivation is less effective on heavily
- loaded vehicles because they

require more power and spend less time in areas of operation where only partial power is required. The technology also requires proper integration into the vehicles which is difficult in the vocational vehicle segment where often the engine is sold to a chassis manufacturer or body builder without knowing the t ype of transmission or axle used in the veh icle or the precise dut y c ycl e of the vehicle. The cylinder deactivation requires fine tuning of the calibration as the engine moves into and out of deactivation mode to achieve acceptable NVH. Additionally , cylinder deactivation would be difficult to ap ply to vehicles with a manual transmission because it requires careful gear change control. NHTSA and EPA adjusted the 2010 light
- dut y rule estimates using updated power to weight ratings of heav y - dut y trucks and confidential business information and downwardl y adjusted the effectiveness to 0 to 3 percent for these vehicles to reflect the differences in drive cycle and operational opportunities compared to light
- dut y vehicles. Because of the complexiti es associated with integrating cylinder deactivation in a non
- integrated vehicle assembly process and the low effectiveness of the technology , the agencies did not include cylinder deactivation in the final gasoline engine technology package. Stoichiometric gasoline direct injection: SGDI (also known as spark
- ignition direct injection engines) inject fuel at high pressure directl y into the combustion chamber (rather than the intake port in port fuel injection). Direct injection of the fuel into the cylinder improves cooling of the air/fuel charge within the cylinder, which allows for higher compression ratios and increased thermodynamic efficiency without the onset of combustion knock. Recent injector design advances, improved electronic engine management s ys tems and the introduction of multiple injection events per cylinder firing cycle promote better mixing of the air and fuel, enhance combustion rates, increase residual exhaust gas tolerance and improve cold start emissions. SGDIengines achieve higher power density

and match well with other technologies, such as boosting and variable valvetrain designs. Th e light
- dut y 2012
- 2016 MY vehicle rule estimated the effectiveness of SGDI to be between 2 and 3 percent. NHTSA and EPA revised these estimated accounting for the use and testing methods for these vehicles along with confidential busines s information estimates received from manufacturers while developing the program . Based on these revisions, NHTSA and EPA estimate the range of 1 to 2 percent for SGDI. (c) Diesel Engine Technologies Different ty

pes of diesel engines are used in vocational v ehicles, depending on the application. They

fall into the categories of Light, Medium, and Heavy Heavy
- duty Diesel engines. The Li ght Heav y - dut y Diesel engines t ypicall y range between 4.7 and 6.7 liters displacement. The Medium Heav y - duty Diesel engines ty picall y have some overlap in displacement with the L ight Heavy
- duty Diesel engines and range between 6.7 and 9.3 liters. The Heavy Heavy
- dut y Diesel engines ty picall y are represented by engines between 10.8 and 16 liters.******* **E.O. 12866 Review**

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263 of Baseline Engine: There are three baseline diesel engines, a Light, Medium, and a Heav y Heav y - dut y Diesel engine. The agencies developed the baseline diesel engine as a 2010 model year engine with an aftertreatment s ystem which meets EPA’s 0.2 grams of NO X/bhp
- hr standard with an SC R sy stem along with EGR and meets the PM emissions standard with a diesel particulate filter with active regeneration. The engine is turbocharged with a variable geometry turbocharger. As noted above in Section III.A.1.b, the agencies received comments f rom N avistar stating that the agencies used an artificially

low baseline CO 2 emissions level which was tilted toward the use of SCR aftertreatment s ys tem. As discussed in Section III.A.1.b, the agencies disagree with the statement that SCR is infeasible. Additional responses from the agencies are ava ilable in the Response to Comments document, Section 6.2. 295 The following discussion of technologies describes improvements over the 2010 model year baseline engine performance, unless otherwise noted. Furthe r discussion of the baseline engine and its performance can be found in Section III.C.2.(c)(i) below. The following discussion of effectiveness is generall y in comparison to 2010 baseline engine performance, and is in reference to performance in terms of the Heav y - duty FTP that would be used for compliance for these engine standards. This is in comparison to the steady state SET procedure that would be used for compliance purposes for the engines used in Class 7 and 8 tractors. See Section II.B.2.(i) abo ve. Turbochargers: Improved efficiency of a turbocharger compressor or turbine could reduce fuel consumption by approximately 1 to 2 percent over today’s variable geometry turbochargers in the market today . The 2010 NAS report identified technologies suc h as higher pressure ratio radial compressors, axial compressors, and dual stage turbochargers as design paths to improve turbocharger efficiency. Low Temperature Exhaust Gas Recirculation: Most LHDD, MHDD, and HHDD engines sold in the U.S. market today us e cooled EGR, in which part of the exhaust gas is routed through a cooler (rejecting energy to the engine coolant) before being returned to the engine intake manifold. EGR is a technology employed to reduce peak combustion temperatures and thus NO X . L ow - te mperature EGR uses a larger or secondary EGR cooler to achieve lower intake charge temperatures, which tend to further reduce NO X formation. If the NO X requirement is unchanged, low
- temperature EGR can allow changes such as more advanced injection timing that will increase engine efficiency slightly more than one percent. Because low
- temperature EGR reduces the engine’s exhaust temperature, it may not be compatible with exhaust energy recovery sy stems such as turbocompound or a bottoming cycle. Engine Fric tion Reduction: Reduced friction in bearings, valve trains, and the piston
- to - liner interface will improve efficiency . Any friction reduction must be carefully

295 U.S. EPA. Greenhouse Gas Emiss ions Standards and Fuel Efficiency Standards for Medium
and Heavy
- Duty Engines and Vehicles
- EPA Response to Comments Document for Joint Rulemaking . EPA
- 420
- R
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264 of developed to avoid issues with durability or performance capabilit y. Estimates of fuel consump tion improvements due to reduced friction range from 0.5 to 1.5 percent. 296 Selective catal yt ic reduction: This technology is common on 2010 heavy
- duty diesel engines. Because SCR is a highly effective NO X aftertreatment approach, it enables engines to be optimized to maximize fuel efficiency , rather than minimize engine
- out NO X . 2010 SCR sy stems are estimated to result in improved engine efficiency of approximately

4 to 5 percent compared to a 2007 in
- cyl inder EGR
- based emissions sy stem and by

an even greater percentage compared to 2010 in
- cylinder approaches. 297 As more effective low
- temperature cataly sts are developed, the NO X conversion efficiency

of the SCR sy stem will increase. Next
- generation SCR sy st ems could then enable still further efficiency improvements; alternativel y, these advances could be used to maintain efficiency while down
- sizing the aftertreatment. We estimate that continued optimization of the catal ys t could offer 1 to 2 percent reducti on in fuel use over 2010 model year s ystems in the 2014 model year. 298 The agencies also estimate that continued refinement and optimization of the SCR sy stems could provide an additional 2 percent reduction in the 2017 model y ear. Improved Combustion Proces s: Fuel consumption reductions in the range of 1 to 4 percent are identified in the 2010 NAS report through improved combustion chamber design, higher fuel injection pressure, improved injection shaping and timing, and higher peak cylinder pressures. 299 Red uced Parasitic L oads: Accessories that are traditionally gear or belt driven by a vehicle’s engine can be optimized and/or converted to electric power. Examples include the engine water pump, oil pump, fuel injection pump, air compressor, power
- steering p ump, cooling fans, and the vehicle’s air
- conditioning s ys tem. Optimization and improved pressure regulation may significantl y reduce the parasitic load of the water, air and fuel pumps. Electrification may result in a reduction in power demand, because el ectrically

powered accessories (such as the air compressor or power steering) operate only when needed if they are electrically powered, but they

impose a parasitic demand all the time if they

are engine driven. In other cases, such as cooling fans or an e ngine’s water pump, electric power allows the accessory to run at speeds independent of engine speed, which can reduce power consumption. The TIAX study used 2 to 4 percent fuel consumption improvement for accessory electrification, with the understanding that electrification of accessories will have more effect in short
- haul/urban applications and less benefit in line
- haul applications. 300

296 TIAX, Assessment of Fuel Economy Technologies for Medium
- and Heavy
- duty Vehicles, Final Report, Nov. 19, 2009, pg 4
- 15 297 Stanton, D. “Advanced Diesel Engine Technology Development for High Efficiency, Clean Com bustion.” Cummins, Inc. Annual Progress Rep ort 2008 Vehicle Technologies Program: Advanced Com bustion Engine Technologies, US Department of Energy. Pp 113
- 116. December 2008. 298 TIAX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, N ov 19, 2009, pg. 4
- 9 299 See 2010 NAS Report , Note 213 , p age 56. 300 TIAX. 2009. Pages 3
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265 of **(2) What Is the Projected Technology Package’s Effectiveness and Cost?**  (a ) Vocational Vehicles (i ) Baseline Vocational Vehicle Perfo rmance The baseline vocational vehicle model is defined in the GEM, as described in RIA Chapter 4.4.6. At proposal, the agencies used a baseline rolling resistance coefficient for today ’s vocational vehicle fleet of 9 .0 kg/metric ton. 301 As discussed in Section II.D. 1, the agencies conducte d a tire rolling resistance evaluation of tires used in vocational vehicles. The agencies found that the average rolling resistance of the tires w as lower than the agencies’ assessment at proposal. The agencies are as suming for the final rulemaking that the baseline tire rolling re sistance is 8.1 kg/metric ton which reflect an aggregate improvement of 5 percent in rolling resistance. Further vehicle technology is not included in this baseline, as discussed below in the discussion of the baseline vocational vehicle. The baseline engine fuel consumption represents a 2010 model year diesel engine, as described in RIA Chapter 4. Using these values, the baseline performance of these vehicles is included in Table III
- 12
. The agencies note that the baseline performance derived for the final rule slightly differs from the values derived for the NPRM
. The first difference is due to the change in rolling resi stance from 9. 0 to 8.1 kg/metric ton based on the agencies’ test results. Second, the re are minor differences in the fuel consumption and CO 2 emissions due to the small modifications made to the GEM, as noted in RIA Chapter 4. In addition, the HHD vocati onal vehicle baseline performance for the final rule uses a revised payload assumption from 38,000 to 15,000 pounds , as described in Section II. D.3.c.iii.

**Table III**  **- 12**  **: Baseline Vocational Vehicle Perform ance**  Vocational Vehicle Li ght Heav y Duty Medium

Heav y - Duty Heav y

Heav y - Duty Fuel Consumption Baseline (gallon/1 , 000 ton
- mile) 40. 0 24. 3 23. 2 CO 2 Baseline (grams CO 2 /ton
- mile) 4 08 2 47 236 (ii) Vocational Vehicle Technology Package The final program for vocational vehicles for this phase of regulatory standards is based on the performance of tire and engine technologies. Aerody namics technology ,

301 The baseline tire rolling resistance for this segment of vehicles was derived for the proposal based on the current baseline tractor and passenger car tires. The baseline tractor drive tire has a rolling resistance of 8.2 kg/metric ton based on SmartWay testing. The average passenger car has a tire rolling resistance of 9.75 kg/metric ton based on a presentation made to CARB by the Rubber Manufacturer’s Association. Additional details are available in the RIA Chapter 2.******* **E.O. 12866 Review**

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266 of weight reduction, drive train improvement, and h ybrid power trains are not included for the reasons discussed above in Section III.C (1) and Section II.D
. The assessment of the final technology effectiveness was developed through the use of the GEM. To account for the two final engine standards, EPA is finalizing the use of a 2014 model year fuel consumption map in the GEM to derive the 2014 model year truck standard and a 2017 model y ear fuel consumption map to derive the 2017 mo del ye ar truck standard. (These fuel consumption maps reflect the main standards for HD diesel engines, not the alternative engine standards.) The agencies estimate that the rolling resistance of 50 percent of the tires can be reduced b y 10 percent in the 2014 model year , for an overall reduction in rolling resistance of 5 percent
. The vocational vehicle standards for all three regulatory categories were determined using a tire rolling resistance coefficient of 7.7 kg/metric ton in the 2014 model y ear. The set of input parameters which are modeled in GEM are shown in Table III
- 13
.

**Table III**  **- 13**  **: GEM Inputs for Final Vocational Vehicle Standards**

2014 MY 2017 MY Engine 2014 MY 7Lfor LH D /MH D and 15L for HH D Trucks 2017 MY 7Lfor

LH D /MH D and 15L for HH D Trucks Tire Rolling Resistance (kg/metric ton) 7.7 7.7 The agencies developed the final standards by using the engine and tire rolling resistance inputs in the GEM, as shown in Table III
- 13 . The percent reductions shown in Table III
- 14 reflect improvements ov er the 2010 model y ear baseline vehicle with a 2010 model year baseline engine.

**Table III**  **- 14**  **: Final Vocational Vehicle Standards and Percent Reductions**  Vocational Vehicle Light Heavy - Duty Medium

Heavy - Duty Heavy

Heavy - Duty 2016 MY Fuel Consumption Standard (gallon/1 , 000 ton - mi le) 38. 1 23.0 22.2 2017 MY Fuel Consumption Standard (gallon/1 , 000 ton - mi le) 36. 7 22.1 21.8 2014 MY CO 2 Standard (grams CO 2 /ton mi le) 388 234 226 2017 MY CO 2 Standard (grams CO 2 /ton mi le) 373 225 222 Percent Reduction from 2010 baseline in 2014 MY 5 % 5 % 4 % Percent Reduction from 2010 baseline in 2017 MY 8 % 9 % 6 %******* **E.O. 12866 Review**

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267 of (iii) Technology Package Cost The agencies did not receive an y substantial comments on the engine costs proposed. Thus the agencies are projecting the costs of the technologies used to develop the final standards based on the costs used in the proposal, but revised to reflect 2009$ , new ICMs , and a 50 percent penetration rate of low rolling resistance tires (as explained above) . EPA and NHTSA developed the costs of LRR tires based on the ICF r eport. The estimated cost per truck is $ 81 (2009$) for LHD and MHD trucks and $ 97 (2009$) for HHD trucks. These costs include a low complexity I CM of 1.18 and are applicable in the 2014 model year. (iv) Reasonableness of the Final Vocational Vehicle S tandards The final standards would not only add onl y a small amount to the vehicle cost, but are highly

cost effective, an estimated $20 ton of CO 2 e q per vehicle in 2030. 302 This is even less than the estimated cost effectiveness for CO 2 e q removal under the light
- dut y vehicle rule, already considered b y the agencies to be a highly cost effective reduction. 303 Moreover, the modest cost of controls is recovered almost immediately due to the associated fuel savings, as shown in the pay back analy sis included in Ta ble VIII
- 7. Given that the standards are technicall y feasible within the lead time afforded by the 2014 model year, are inexpensive and highl y cost effective, and do not have other adverse potential impacts (e.g., there are no projected negative impacts o n safet y or vehicle utility ), the final standards represent a reasonable choice under section 202(a) of the CAA and NHTSA’s EISA authority under 49 U.S.C. 32902(k)(2), and the agencies believe that the standards are consistent with their respective authori ties
. Based on the discussion above, NHTSA believes these standards are the maximum feasible under EISA. (v) Alternative Vehicle Standards Considered The agencies are not finalizing vehicle standards less stringent than the final standards because the agencies believe these standards are highl y cost effective, as just explained. The agencies considered finalizing truck standards which are more stringent reflecting the inclusion of hy brid powertrains in those vocational vehicles where use of hy brid powertrains is appropriate. The agencies estimate that a 25 percent utilization rate of hy brid powertrains in MY 2017 vocational vehicles would add, on average, $30,000 to the cost of each vehicle and more than double the cost of the rule for this sector. See the RIA at Chapter 6.1.8. The emission reductions associated with these very high costs appear to be modest. See the RIA Table 6
- 14. In addition, the agencies are finalizing flexibilities in the form of generally applicable credit opportunities for advanced t echnologies, to encourage use of h ybrid powertrains. See Section IV.C. 2 below. For

302 See Section VIII.D. 303 As note d above, the light
- duty rule had an estimated cost per ton of $50 when considering the vehicle program costs only and a cost of
- $210 per ton considering the vehicle program costs along with fuel savings in 2030. See 75 FR 25515, Table III.H.3
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268 of these reasons, the agencies are not adopting more stringent standards for vocational vehicles. (b ) Gasoline Engines (i ) Baseline Gasoline Engine Performance EPA and NHTSA develo ped the reference heavy
- duty gasoline engines to represent a 2010 model year engine compliant with the 0.20 g/bhp
- hr NO X standard for on - highway

heavy
- dut y engines. NHTSA and EPA developed the baseline fuel consumption and CO 2 emissions for the gasoline engines from manufacturer reported CO 2 values used in the certification of non
- GHG pollutants. The baseline engine for the anal ys is was developed to represent a 2011 model year engine, because this is the most current informati on available. The average CO 2 performance of the heav y - dut y gasoline engines was 660 g/bhp
- hour, which will be used as a baseline. The baseline gasoline engines are all stoichiometric port fuel injected V
- 8 engines without cam phasers or other variable v alve timing technologies. While they

may reflect some degree of static valve timing optimization for fuel efficiency they do not reflect the potential to adjust timing with engine speed. (ii) Gasoline Engine Technology Package Effectiveness The gasoline engine technology package includes engine friction reduction, coupled cam phasing, and SGDIto produce an overall five percent reduction from the reference engine based on the Heav y - duty Lumped Parameter model. The agencies are projecting a 100 percent applicat ion rate of this technology package to the heavy
- dut y gasoline engines, which results in a CO 2 standard of 627 g/bhp
- hr and a fuel consumption standard of 7.05 gallon/100 bhp
- hr. As discussed in Section II.D.b.ii, the agencies are adopting gasoline engine standards that begin in the 2016 model y ear based on the agencies’ projection of the engine redesign schedules of the small number of engines in this category
. (iii) Gasoline Engine Technology Package Cost For the proposed costs, the agencies considered both th e direct or “piece” costs and indirect costs of individual components of technologies. For the direct costs, the agencies followed a BOM approach employ ed by NHTSA and EPA in the light
- dut y 2012
- 2016 MY vehicle rule. In th is final action , the agenc ies are using marked up gasoline engine technology costs developed for the HD Pickup Truck and Van segment because these engines are made b y the same manufacturers (primarily b y Ford and GM) and are simpl y, sold as loose engines rather than as complete veh icles. Hence the engine cost estimates are fundamentally the same. The agencies did not receive any comments recommending adjustments to the proposed gasoline engine technology costs. The costs summarized in Table III
- 15 are consistent with the proposed values, but updated to reflect 2009$ and new ICMs. The costs shown in Table III
- 15 include a low complexity I CM of 1.24 and are applicable in the 2016 model year. No learning effects are applied to engine friction reduction costs, while flat
- portion of the curve learning is considered app licable to both coupled cam phasing and SGDI.******* **E.O. 12866 Review**

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269 of **Table III**  **- 15**  **: Heavy -**  **duty Gasoline Engine Technology Costs inclusive of Indirect Cost Markups**  **(2009$)** 2016MY Engine Friction Reduction $95 Coupled Cam Phasing $46 Stoichiometric Gas Direct Injection $452 Total $594 (iv) Reasonableness of the Final Standard The final engine standards are reasonable and consistent with the agencies’ respective authorities. With respect to the 2016 MY standard, all of the technologies on which the standards are predicated have been demonstrated and their effectiveness is well documented. The final standards reflect a 100 percent application rate for these technologies. The costs of adding these technologies remain modest across the various engine classes as shown in Table III
- 15 . Use of these technologies would add only a small amount to the cost of the vehicle, 304 and the associated reductions are highl y cost effective, an estimated $20 per ton of CO 2 e q per vehicle. 305 This is even more cost effective than the estimated cost effectiveness for CO 2 e q removal and fuel econom y improvement under the light
- dut y vehicle rule, already considered b y the agencies to be a highl y cost effective reduction. 306 Accordingl y, EPA and NH TSA view these standards as reflecting an appropriate balance of the various statutory factors under section 202(a) of the CAA and under NHTSA’s EI SA authorit y at 49 U.S.C. 32902(k)(2). Based on the discussion above, NHTSA believes these standards are the maximum feasible under EI SA. (v) Alternative Gasoline Engine Standards Considered The agencies are not finalizing gasoline standards less stringent than the final standards because the agencies believe these standards are feasible in the lead time provided, inexpensive, and highl y cost effective. The final rule reflects 100 percent pe netration of the technology package on whose performance the standard is based, so some additional technology would need to be added to obtain further improvements. The agencies considered finalizing gasoline engine standards which are more stringent refl ecting the inclusion of cylinder deactivation and other advanced technologies. However, the agencies are not finalizing this level of stringency

because our assessment is that these technologies would not be available for production by the 2017 model ye ar .
304 Sam ple 2010 MY vocational vehicles range in price between $40,000 for a Class 4 work truck to approximately $200,000 for a Class 8 refuse hauler. See pages 16
- 17 of ICF’s “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy
- Duty O n - Road Vehicles.” July 2010. 305 See Vocational Vehicle CO 2 savings and technology costs in Table 7
- 4 in RIA Chapter 7. 306 The light
- duty rule had an estimated cost per ton of $50 w hen considering the vehicle program costs only and a cost of
- $210 per ton considering the vehicle program costs along with fuel savings in 2030. See 75 FR 25515, Table III.H.3
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270 of (c) Diesel Engines (i ) Baseline Diesel Engine Performance EPA and NHTSA developed the baseline heavy
- duty diesel engines to represent a 2010 model year engine compliant with the 0.20 g/bhp
- hr NO X standard for on
- highway heav y - dut y engines. The agencies utili zed 2007 through 2011 model year CO 2 certification levels from the Heav y - dut y FTP cycle as the basis for the baseline engine CO 2 performance. The pre - 2010 data are subsequently adjusted to represent 2010 model year engine maps by using predefined technologies includ ing SCR and other sy stem s that are being used in current 2010 production . The engine CO 2 results were then sales weighted within each regulatory

subcategory

to develop an industry

average 2010 model year reference engine, as shown in Table III
- 16 . The level of CO 2 emissions and fuel consumption of these engines varies significantly , where the engine with the highest CO 2 emissions is est imated to be 20 percent greater than the sales weighted average. Details of this anal ys is are included in RIA Chapter 2. **Table III**  **- 16**  **: 2010 Model Year Reference Diesel Engine Perform ance Over the Heavy**  **- duty FTP**  **Cycle** CO 2 Emissions (g/bhp
- hr) Fuel Consumption (gallon/100 bhp
- hr) LHD Diesel 630 6.19 MHD Diesel 630 6.19 HHD Diesel 584 5.74 (ii) Diesel Engine Packages The diesel engine technology packages for the 2014 model year include engine friction reduction, improved aftertreatment effectiveness, improved combustion processes, and low temperature EGR s ys tem optimization. The improvements in parasitic and friction losses come through piston designs to reduce friction, improved lubrication, and improved water pump and oil pump designs to reduce parasitic losses. The aftertreatment improvements are available through lower backpressure of the sy stems and opti mization of the engine
- out NO X levels. Improvements to the EGR sy stem and air flow through the intake and exhaust sy stems, along with turbochargers can also produce engine efficiency improvements. It should be pointed out that individual technology

improv ements are not additive to each other due to the interaction of technologies. The agencies assessed the impact of each technology over the Heav y - duty FTP and project an overall cycle improvement in the 2014 model year of 3 percent for HHD diesel engines and 5 percent for LHD and MHD diesel engines, as detailed in RIA Chapter 2.4.2.9 and 2.4.2.10. EPA used a 100 percent application rate of this technology package to determine the level of the final 2014 MY standards Recently , EPA’s heavy
- duty highway engine program for criteria pollutants provided new emissions standards for the industry in three year increments. The heav y -******* **E.O. 12866 Review**

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271 of duty engine manufacturer product plans have fallen into three year cycles to reflect this envir onment. EPA is finalizing set CO 2 emission standards recognizing the opportunity for technology

improvements over this time frame while reflecting the ty pical heav y - dut y engine manufacturer product plan cycles. Thus, the agencies are finalizing to establish initial standards for the 2014 model year and a more stringent standard for heavy
- dut y engines beginning in the 2017 model year. The 2017 model year technology package for LHD and MHD diesel engine includes continued development and refinement of the 2014 model year technology package, in particular the additional improvement to aftertreatment s ys tems. This package leads to a projected 9 percent reduction for LHD and MHD diesel engines in the 2017 model year. The HHD diesel engine technology packages for the 2017 model y ear include the continued development of the 2014 model year technology package . A similar approach to evaluating the impact of individual technologies as taken to develop the overall reduction of the 201 4 model year package was taken with the 2017 model ye ar package. The Heavy
- dut y FTP cycle improvements lead to a 5 percent reduction on the cycle for HHDD, as detailed in RIA Chapter 2.4.2.13. The agencies used a 100 percent application rate of the techn ology package to determine the final 2017 MY standards. The agencies believe that bottom cycling technologies are still in the development phase and will not be ready for production by the 2017 model year. 307 Therefore, these technologies were not included in determining the stringency of the final standards. However, we do believe the bottoming cycle approach represents a significant opportunity

to reduce fuel consumption and GHG emissions in the future. EPA and NHTSA are therefore both finalizing provis ions described in Section IV to create incentives for manufacturers to continue to invest to develop this technology. The overall projected improvements in CO 2 emissions and fuel consumption over the baseline are included in Table III
- 17
. **Table III**  **- 17**  **: Percent Fuel Consumption and CO 2**  **Emission Reductions Over the Heavy -**  **duty FTP Cycle**  2014 2017 LHD Diesel 5% 9% MHD Diesel 5% 9% HHD Diesel 3% 5% (iii) Technology Package Costs NHTSA and EPA jointly developed costs associated with the engine technologies to assess an overall package cost for each regulatory category . Our engine cost estimates for diesel engines used in vocational vehicles include a separate anal ys is of the incremental part costs, research and development activ ities, and additional equipment, such as emissions equipment to measure N 2 O emissions. Our general approach used

307 TIAX noted in their report to the NAS panel that the engine improvements beyond 2015 model year included in their report are highly uncertain, though they include waste heat recovery in the engine package for 2016 through 2020 (page 4
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272 of elsewhere in this action (for HD pickup trucks, gasoline engines, Class 7 and 8 tractors, and Class 2b
- 8 vocational vehicles) estimates a dire ct manufacturing cost for a part and marks it up based on a factor to account for indirect costs. See also 75 FR 25376. We believe that approach is appropriate when compliance with final standards is achieved generall y b y installing new parts and s ys tems purchased from a supplier. In such a case, the supplier is conducting the bulk of the research and develo pment on the new parts and sy stems and including those costs in the purchase price paid by the original equipment manufacturer. The indirect costs incurred b y the original equipment manufacturer need not include much cost to cover research and development since the bulk of that effort is already done. For the MHD and HHD diesel engine segment, however, the agencies believe we can make a more accurate estimate of technology cost using this alternate approach because the primary cost is not expected to be the purchase of parts or sy stems from suppliers or even the production of the parts and sy stems, but rather the development of the new technology by the original equipment manufacturer itself. Therefore, the agencies believe it more accurate to directly e stimate the indirect costs. EPA commonly

uses this approach in cases where significant investments in research and development can lead to an emission control approach that requires no new hardware. For example, combustion optimization may significantly reduce emissions and cost a manufacturer millions of dollars to develop but will lead to an engine that is no more expensive to produce. Using a bill of materials approach would suggest that the cost of the emissions control was zero reflecting no new har dware and ignoring the millions of dollars spent to develop the improved combustion sy stem. Details of the cost analy sis are included in the RIA Chapter 2. To reiterate, we have used this different approach because the MHD and HHD diesel engines are expe cted to compl y in large part via technology

changes that are not reflected in new hardware but rather knowledge gained through laboratory

and real world testing that allows for improvements in control sy stem calibrations

– changes that are more difficult t o reflect through direct costs with indirect cost multipliers. The agencies developed the engineering costs for the research and development of diesel engines with lower fuel consumption and CO 2 emissions. The aggregate costs for engineering hours, techni cian support, dynamometer cell time, and fabrication of prototy pe parts are estimated at $6.8 million (2009$) per manufacturer per year over the five years covering 2012 through 2016. In aggregate, this averages out to $284 per engine during 2012 through 2016 using an annual sales value of 600,000 light , medium , and heav y heavy
- dut y engines. The agencies received comments from Horriba regarding the assumption the agencies used in the proposal that said manufacturers would need to purchase new equipme nt for measuring N 2 0 and the associated costs. Horriba provided information regarding the cost of stand
- alone FT IR instrumentation (estimated at $50,000 per unit) and cost of upgrading existing emission measurement s ys tems with NDIR anal yz ers (estimated at $25,000 per unit). The agencies further anal yz ed our assumptions along with Horriba’s comments. Thus, we have revised the equipment costs estimates and assumed that 75 percent of manufacturers would update existing equipment while the other 25 percent would require new equipment. The agencies are estimating costs of $63,087 (2009$) per engine manufacturer per engine subcategory (light , medium , and heav y HD) to cover the cost of purchasing photo
- acoustic measurement equipment for two engine test cell s. This would be a one
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273 of implementation of the standard (i.e., the cost would be incurred in 2013). In aggregate, this averages out to less than $1 per engine in 2013 using an annual sales value of 600,000 light , med ium , and heav y HD engines. EPA also developed the incremental piece cost for the components to meet each the 2014 and 2017 standards. These costs shown in Table III
- 18 which include a low complexity

I CM of 1.15; flat
- portion of the curve learning is considered applicable to each technology
. **Table III**  **- 18**  **: Heavy**  **- duty**  **Diesel Engine Component Costs inclusive of Indirect Cost Markups (2009$)**  2014 Model Year 2017 Model Year Cylinder Head (flow optimized, increased firing pressure, improved thermal management) $6 (MHD & HH) $1 1 (LHD) $6 (MHD &

HHD) $ 10 (LHD) Exhaust Manifold (flow optimized, improved thermal management) $0 $0 Turbocharger (improved efficiency) $1 8 $1 7 EGR Cooler (improved efficiency) $ 4 $3 Water Pump (optimized, variable vane, variable speed) $ 91 $ 84 Oil Pump (optimized) $ 5 $4 Fuel Pump (higher working pressure, increased efficiency , improved pressure regulation) $ 5 $4 Fuel Rail (higher working pressure) $10 (MHD & HHD) $ 12 (LHD) $9 (MHD &

HHD) $ 11 (LHD) Fuel Injector (optimized, improved multiple event control, higher working pressure) $1 1 (MHD & HHD) $1 5 (LHD) $ 10 (MHD &

HHD) $13 (LHD) Piston (reduced friction skirt, ring and pin) $3 $ 3 Aftertreatment s ys tem (improved effectiveness SCR, dosing, dpf) a $0 (MHD & HHD) $111 (LHD) $0 (MHD &

HHD) $101 (LHD) Valve Train (reduced friction, roller tappet) $ 82 (MHD) $10 9 (LHD) $7 6 (MHD)

$ 101 (LHD) Note: a Note that costs for aftertreatment improvements for MH D and HH D diesel engines are covered via the engineering costs (see text). For LH diesel engines, w e have included the cost of aftertreatment im provements as a technology cost. The overall costs for each diesel engine regulatory subcategory

are included in Table III
- 19
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274 of **Table III**  **- 19**  **: Diesel Engine Technology Costs per Engine (2009$)** 2014 2017 LHD Diesel $ 388 $ 358 MHD Diesel $2 34 $ 216 HHD Diesel $ 234 $ 216 (iv) Reasonableness of the Final Standards The final engine standards appear to be reasonable and consistent with the agencies’ respective authorities. With respect to the 2014 and 2017 MY standards, all of the technologies on which the standards are based have already been demonstrated and their effectiveness is well documented. The final standards reflect a 100 percent application rate for these technologies. The costs of adding these technologies remain modest across the various engine classes as shown in Table III
- 19 . Use of these technologies would add only a small amount to the cost of the vehicle, 308 and the associated reductions are highl y cost effective, an estimated $20 per ton of CO 2 e q p er vehicle. 309 This is even more cost effective than the estimated cost effectiveness for CO 2 e q removal and fuel econom y improvement under the light
- duty vehicle rule, already considered b y the agencies to be a highly cost effective reduction. 310 Accordingl y, EPA and NHTSA view these standards as reflecting an appropriate balance of the various statutory factors under section 202(a) of the CAA and under NHTSA’s EISA authority at 49 U.S.C. 32902(k)(2). Based on the discussion above, NHTSA believes these standards are the maximum feasible under EISA. (v) Alternative Diesel Engine Standards Considered Other than the specific option related to legacy engine products, the agencies are not finalizing diesel engine standards less stringent than the final standards because the agencies believe these standards are highl y cost effective. The agencies conside red finalizing diesel engine standards which are more stringent reflecting the inclusion of other advanced technologies. However, the agencies are not finalizing this level of stringency because our assessment is that these technologies would not be avail able for production by the 2017 model ye ar.

308 Sam ple 2010 MY vocational v ehicles range in price betw een $40,000 for a Class 4 work truck to approximately $200,000 for a Class 8 refuse hauler. See pages 16
- 17 of ICF’s “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy
- Duty On
- Road Vehicles.” Ju ly 2010. 309 See RIA Chapter 7, Table 7
- 4. 310 The light
- duty rule had a cost per ton of $50 w hen considering the vehicle program costs only and a cost of
- $210 per ton considering the vehicle program costs along with fuel savings in 2030. See 75 FR 25515, Table III.H.3
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275 of 

## IV. **Final Regulatory Flexibility Pr**  **ovisions** This section describes flexibility provisions intended to achieve the goals of the overall program while providing alternate pathway s to achieve those goals, consistent with the agencies’ statutory authority , as well as with Executive Order 13563. 311 The primary flexibility

provisions for combination tractors and vocational vehicles and the engines manufactured for use in these vehicles are incorporated in a program of ave raging, banking, and trading of credits that EPA and NHTSA developed in association with each agency ’s respective CO 2 and fuel consumption standards (see Section II above). For HD pickups and vans, the primary flexibility

provision is the fleet averag e form of the standards, along with provisions for credit and deficit carry
- forward and for trading, patterned after the agencies’ light
- duty GHG and CAFE programs. Furthermore, EPA will allow manufacturers to compl y with the N 2 O and CH 4 standards using CO 2 credits and is providing an opportunity for engine manufacturers to earn N 2 O credits. However , EPA is not adopting an emission credit program associated with the CH 4 or HFC standards
. This section also describes other flexibility provisions that apply , including advanced technology credits, innovative technology credits and early compliance credits. 

### A. **Averaging ,**  **Bank**

**ing , and Trading Program**  Averaging, Banking, and Trading (ABT) of emissions credits have been an important part of man y EPA mobile source programs under CAA Title II, including engine and vehicle programs. NHTSA has also long had an averaging and banking program for light
- dut y C AFE under EPCA, and recently gained authorit y t o add a trading program for light
- dut y C AFE through EISA. ABT programs are useful because they can help to address man y issues of technological feasibility and lead
- time, as well a s considerations of cost. They provide manufacturers flexibilities that assist the efficient development and implementation of new technologies and therefore enable new technologies to be implemented at a more aggressive pace than without ABT. ABT programs are more than just add
- on provisions included to help reduce costs, and can be, as in EPA’s Title II programs an integral part of the standard setting itself. A well
designed ABT program can provide important environmental and energy security benefits by

increasing the speed at which new technologies can be implemented (which means that more benefits accrue over time than with slower
- starting standards) and at the same time increase flexibility for , and reduce costs to, the regulated industry
. American Council for an Energy
- Efficient Econom y (ACEEE) has commented that ABT and related flexibilities should not be offered for this program because the agencies are not promoting the use of new technologies but rather the use of existing technologies. However, w ithout ABT provisions (and other related flexibilities), standards would ty picall y have to be numericall y less stringent since the numerical standard would have to be adjusted to accommodate issues of feasibility and available lead time. See 75 FR at

311 Section 4 of EO 13563 states that “ Where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, each agency shall identify and consider regulatory approaches that reduce burdens and maintain fle xibility and freedom of choice for the public.” 76 FR 3821 (Jan. 21, 2011).******* **E.O. 12866 Review**

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276 of 25412
- 13. By

offering ABT credits and additional flexibilities the agencies can offer progressivel y more stringent standards that help meet our fuel consumption reduction and GHG emission goals at a faster pace. Section II above describes EPA’s GHG emission standards and NHTSA’s fuel consumption standards. For each of these respective sets of standards, the agencies also offer ABT provis ions , consistent with each agency’s statutory authority . The agencies worked closel y together to design these provisions to be essentially identical to each other in form and function. Because of this fundamental similarity , the remainder of this section refers to these provisions collectively as “the ABT program” except where agency - specific distinctions are requi red. As discussed in detail below, the structure of th e GHG and fuel consumption ABT program for HD engines was based closel y on EPA’s earlier ABT programs for HD engines; the program for HD pickups and vans was built on the existing light
- duty GHG program flexibility provisions; and the first
- time ABT provisions for combination tractors and vocational vehicles are as consistent as possible with EPA’s other HD vehicle regulations . The flexibility provisions associated with this new regulatory category were intended to build sy stematically upon the structure of the existing programs. As an overview, “averaging ” means the exchange of emission or fuel consumption credits between engine families or truck families within a given manufacturer’s regulatory subcategories and averaging sets
. For example, specific “ engine families ,” which manufacturers create by dividing their product lines into groups expected to have similar emission characteristics throughout their useful life , would be contained within an averaging set
. Averaging allows a manufacturer to certify one or more engine families (or vehicle families, as appropriate) within the same averagin g set at levels worse than the applicable emission or fuel consumption standard. T he increased emissions or fuel consumption over the standard would need to be offset by one or more engine (or vehicle) families within that manufacturer’s averaging set that are certified better than the same emission or fuel consumption standard, such that the average emissions or fuel consumption from all the manufacturer’s engine families, weighted by engine power, regulatory useful life, and production volume, are at or below the level of the emission or fuel consumption standard 312 Total credits for each averaging set within each model ye ar are determined by summing together the credits calculat ed for every engine famil y within that specific averaging set. “Banking” means the retention of emission credits by the manufacturer for use in future model ye ar averaging or trading. “Trading” means the exchange of emission credits between manufacturers , which can then be used for averaging purposes, banked for future use, or traded to another manufacturer. In EPA’s current HD engine program for criteria pollutants, m anufacturers are restricted to averaging, banking and trading onl y credits generated b y the engine families
312 The inclusion of engine pow er, useful life, and production volume in the averaging calculations allows the emissions or fuel consumption credits or debits to be expressed in tota l emissions or consumption over the useful life of the credit
- using or generating engine sales
.******* **E.O. 12866 Review**

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277 of within a regulatory subcategory , and EPA and NHTSA proposed to continue this restriction in the GHG and fuel consumption program for engines and vehicles
. However, the agencies sought comment on potential alternative approaches in which fewer restrictions are placed on the use of credits for averaging, banking, and trading. Particularl y, the agencies requested comment on removing prohibitions on averaging a nd trading between some or all regulatory categories in the proposal, and on removing restrictions between some or all regulatory subcategories that are within the same regulatory

category (e.g., allowing trading of credits between Class 7 day cabs and Cla ss 8 sleeper cabs). The agencies received many comments on the restrictions proposed for the ABT program, namel y on the proposal that credits could only be averaged within the specified vehicle and engine subcategories and not averaged across subcategori es or between vehicle and engine categories. Man y commenters, including Union of Concerned Scientist (UCS), NY Dept of Transportation, Natural Resources Defense Council, Oshkosh, Autocar, and Eaton, requested that the agencies maintain the restrictions as proposed in the NPRM. UCS argued that allowing credits to be used across categories could undermine further technology advancements, and that manufacturers that have broad portfolios would have advantages over those manufacturers that do not. The Center for Biological Diversity (CBD) argued that because of the various credit opportunities in the ABT program and the potential that manufacturers will pay penalties rather than comply

with the standards, the program could actuall y cause an increase in emissi ons and a decrease in fuel efficiency . On the other hand, several commenters, including EMA/TMA, Cummins, Volvo, and ATA, requested that the agencies maintain the proposed restrictions of averaging credits between the engine and vehicle categories, but re duce the restrictions on credit averaging across vehicle subcategories or engine subcategories or averaging sets within similar vehicle and engine weight classes (LHD, MHD and HHD). Cummins requested that the agencies allow credit averaging between engine subcategories within the same weight classes (LHD, MHD and HHD). Cummins explained that tractor and vocational engines in the corresponding weight classes not only share the same useful life but also use the same emission and fuel consumption technologie s and therefore should be placed into the same engine averaging set. EMA/TMA argued that the NPRM restrictions would inhibit a manufacturer’s ability to use credits to address market fluctuations, which would reduce the flexibility that the ABT program was intended to provide. As an example, EMA/TMA stated that if the line
- haul market were depressed for a period of time a manufacturer could make up any deficit selling more low
- roof tractors with regional hauling operations. The same market shift could elim inate a manufacturer’s ability to generate credits using its aerody namic high
- roof sleeper cab tractors and could create a credit deficit if there is a demand for more of the less aerodyn amic low
- roof tractors. EMA/TMA argued that credit exchanges across vehicle categories within the same weight classes within the tractor subcategories and across vocational vehicle and tractor subcategories would allow a manufacturer more flexibility to deal with these ty

pes of market and customer demand situations. Final ly , several commenters, including Ford, DTNA NAD A , NTEA and Navistar, requested that the agencies reduce the proposed restrictions even further b y allowing credit averaging between vehicle categories and engine categories. Navistar argued that more flexibi lity******* **E.O. 12866 Review**

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278 of was necessary

for manufacturers like itself to increase innovation at a reasonable cost, stating that that more restrictions would increase costs within a shorter time frame
. After considering these comments , the age ncies continue to believe that the ABT program developed b y the agencies increases and accelerates the technological feasibility of the GHG and fuel consumption standards by providing manufacturers flexibility in implementing new technologies in a way that may be more consistent with their business practices and cost considerations
. In response to the comments submitted by CBD, the agencies disagree with CBD’s statements that the ABT program will adversely affect the fuel efficiency

and GHG emission goals of this regulation. This joint final action requires vehicle and engine manufacturers to meet increasingl y more stringent emission and fuel consumption standards which will result in emission reductions and fuel consumption savings. Manufacturers wil l not have the option of not meeting the standards. The ABT program simply provides each manufacture the flexibility to meet these standards based upon their individual products and implementation plans. By assuming the use of credits for compliance, the agencies were able to set the fuel consumption/GHG standards at more stringent levels than would otherwise have been feasible. Greater improvements in fuel efficiency will occur under more stringent standards; manufacturers will simply have greater flexibility

to determine where and how to make those improvements than they would have without credit options. Further, this is consi stent with the directi ve in EO 13563 to “seek to identify , as appropriate, means to achieve regulatory

goals that are designed to promote innovation.” The agencies further agree that certain restrictions on use of ABT which were proposed are unnecessary . The proposed ABT program for engines was somewhat more restrictive, in its definition of averaging sets, than EPA’s parallel ABT program for criteria pollutant emissions from the same engines. The final rule s conform to the ABT provisions f

or GHG heavy
- dut y engine emissions to be consistent with the parallel ABT provisions for criteria pollutants with same weight engines treated as a single averaging set regardless of the vehicles in which they are installed. We have applied this same principle with respect to combination tractors and vocational vehicles: treating like weight classes as an averaging set. The agencies have determined that these additional flexibilities will help to reduce manufacturing costs further and encourage technology implementation without creating an unfair advantage for manufactures with larger portfolios including engines and vehicles. EPA’s experience in administering the ABT program for heav y - duty diesel engine criteria pollutant emissions supports this conclusion. Therefore, the agencies have decided to allow credit averaging within and across vocational vehicle and tractor subcategories within the same weight class groups, as well as credi t averaging across the same weight class vocational and tractor engine groups. This added flexibility beyond what was proposed in the NPRM will not be extended to the HD pickup truck and van category because this group of vehicles is comprised of onl y one subcategory and is not broken down like the other categories and corresponding subcategories into different weight classes , and the standard applies to the entire vehicle, so that there are no separate engine and vehicle standards . In essence, the HD pic kup truck and van category is one large averaging set that will remain as proposed.******* **E.O. 12866 Review**

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279 of However, the agencies are maintaining the restrictions against averaging vehicle credits with engine credits or between vehicle weight classes or engine subcategories. EPA and NHTSA believe that the use of credits beyond these designated averaging sets could create an advantage that currently does not exist in the market for large integrated manufacturers
. For example, a manufacturer that produces both engines and heav y - dut y highway vehicles could mix credits across engine and vehicle cat egorie s to gain an advantage over competitors that are not integrated. L imiting credit ABT to within each engine averaging set and not allowing it between engines and vehicles will help prevent a competitive advantage due solely to the regulatory

structur e. 314 Similarly , large volume manufacturers of engines could shift credits between heav y heavy
- dut y diesel engines and light heavy
- dut y diesel engines to gain an advantage in one s ubcategory over other manufacturers that may

not have multiple engine offerin gs over several regulatory engine s ubcategories
. Finall y, relating credits between averaging sets would be problematic because of the diversit y of applications involved . This diversity creates large differences in the real world conditions that impact li fetime emissions
-- such as actual operating life, load cycles, and maintenance practices. In lieu of conducting extensive and burdensome real world tracking of these parameters, along with corrective measures to provide some assurance of parity

between c redits earned and credits redeemed, averaging sets provide a reasonable amount of confidence that t ypical engines or vehicles within each set have comparable enough real world experience to make such follow
- up activity unnecessary . The agencies believe this approach will ensure that CO 2 emissions are reduced and fuel consumption is improved in each engine subcategory without interfering with the ability of manufacturers to engage in free trade and competition. Again, EPA’s experience in administering its ABT program for criteria pollutant emissions from heavy
- duty diesel engines confirms these views. The agencies also note that no commenter of fered an explanation of why

the restrictions on this ABT program should differ from the parallel ABT program respecting criteria pollutants
. As part of the planned follow
- up rulemaking, the agencies intend to re - evaluate the appropriateness of the ABT ave raging sets and credit use restrictions we are adopting here for the HD GHG and fuel consumption program
. Under previous ABT programs for other rulemakings, EPA and NHTSA have allowed manufacturers to carry forward credit deficits for a set period of time

– if a manufacturer cannot meet an applicable standard in a given model year, it may make up its shortfall by

overcomplying in a subsequent ye ar. In the NPRM the agencies proposed to allow manufacturers of engines, tractors, HD pickups and vans, and vocational vehicles to carry

forward deficits for up to three years before reconciling the shortfall
- the same period allowed in numerous other EPA rules
- but sought comments on alternative approaches for reconciling deficits. DTNA supported the three year period and stated that it was sufficient for reconciling deficits. CBD did not support the use of the carry forward of deficits because it would delay the investments and technological inno vation. The agencies respectfull y disagree with CBD and believe this provision has

314 These concerns were not present in the 2012
- 2016 MY light
- duty vehicle rule, where most manufacturers offer diverse product lines because there are no separate vehicle and engine standards (with differing manufacturers of each) and there is not as much disparity among vehicle useful lives. That rule consequently does not restrict CO 2 credit trading opportunities between light
- duty v ehicle sectors.******* **E.O. 12866 Review**

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280 of enabled the agencies to consider overall standards that are more stringent and that will become effective sooner than we could consider with a more rigid program, one in wh ich all of a manufacturer’s similar vehicles or engines would be required to achieve the same emissions or fuel consumption levels, and at the same time. T herefore the agencies included in the final rule making the proposed 3 year reconciliation peri od. However, the agencies’ respective credit programs require manufacturers to use credits to offset a shortfall before credits may be banked or traded for additional model years. This restriction reduces the chance of manufacturers passing forward defic its before reconciling shortfalls and exhausting those credits before reconciling past deficits. For the heav y - dut y pickup and van category, the agencies proposed a 5
- ye ar credit life provision, as adopted in the light
- dut y vehicle GHG /CAF E program. N avistar requested that the agencies drop the 5
- ye ar credit expiration date proposed for the heavy
duty pickup and van category and not specify

an expiration date for earned credits. Navistar stated that such credits are necessary to further improve the fl exibilities of this program in order to meet the new stringent standards within the limited lead time provided. The agencies disagree. The 5
- ye ar credit life is substantial, and allows credits earned early

in the phase
- in to be held and used without disc ounting throughout the phase
- in period. We do not see how extending the life of credits can assist manufacturers in dealing with lead time issues For engines, vocational vehicles and tractors, EPA also proposed that CO 2 credits generated during this first phase of the HD National Program could not be used for later phases of standards, but NHTSA did not expressly specify the potential expiration of fuel consumption credits. DTNA and Cummins requested that the surplus credits from the first phase of the program not expire. DTNA suggested that the agencies drop an y reference to credit expiration until the next rulemaking, at which time the agencies would have a better understanding of actual credit balances and what kind of lif espan for credits might be necessary

or appropriate. DTNA argued that in some of EPA’s past programs, EPA had delayed a final decision about credit expiration until development of the subsequent rule when, EPA had a better understanding of associated cred it balances, along with the stringency of the standards being proposed for future model y ears. EPA had proposed to limit the lifespan of credits earned to the first phase of standards in the interest of ensuring a level playing field before the next phase begins. Upon further consideration, the agencies recognize that this is a new program and it is unknown whether an y m anufacturers will have credit surpluses by the end of the first phase of standards, much less whether some manufacturers will have signif icantly larger credit surpluses that might create an unlevel playing field going into the next phase. The agencies are adopting a 5
- ye ar credit life provision for all regulatory categories , as adopted in the light
- dut y vehicle program and proposed for the HD pickup trucks and vans. Consistent with past EPA practice, the agencies will address credit life in an y follow
- on rulemaking. 315

315 Note, however, that manufacturers have no property right in these credits, so no issues of deprivation of property arise if later rules choose not to recognize those credits. See 69 FR at 39001
- 002 (June 29, 2004).******* **E.O. 12866 Review**

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281 of The following sections provide further discussions of the flexibilities provided in this action under the ABT program and the agencies’ rationale for providing them. **(1) Heavy**  **- duty**  **Engines** For the heav y - dut y engine ABT program, EPA and NHTSA proposed to use six averaging sets per 1036.740 for EPA and 49 CFR 535.7(d) for NHTSA, which aligned with the proposed re gulatory engine subcategories. As described above, the agencies have decided that these engine averaging sets should be the same as for criteria pollutants under the EPA heavy
- duty diesel engine rules, and agree with commenters that increasing the size of averaging sets from within subcategories to across subcategories within the same engine weight class would provide important additional flexibilities for engine manufacturers without negativel y impacting fuel savings or emissions reductions
. The agencies are therefore finalizing an approach which aggregates the six proposed engine averaging sets into four averaging sets. The four engine averaging sets are light heav y duty (LHD) diesel, medium heavy
- dut y (MHD) diesel, heav y heav y - dut y (HH D) diesel, and gasoline or spark ignited engines. The final ABT program will allow for averaging, banking, and trading of credits between HHD diesel engines which are certified for use in vocational vehicles and HHD diesel engines which are certified for i nstallation in tractors. Similarly , the MHD diesel engines certified for use in either vocational vehicles or tractors will be treated as a single averaging set. The agencies intend to monitor this program and may

consider revisiting the ABT averaging se ts if appropriate in a potential future rulemaking (should there be some persuasive reason that there is a difference in averaging sets for GHGs and criteria pollutants)
. Credits generated b y engine manufacturers under this ABT program are restricted for u se onl y within their engine averaging set, based on performance against the standard as defined in Section II.B and II.D \ \J2756DAAEC001.AA.AD.EPA.GOV \ Share \ Project\GHG Heavy

Duty Truck Rule 2009 \ 1NPRM \

Preamble \Primary

Working Documents \

P02 Proposed Standards.doc
. Thus, LHD diesel engine manufacturers can onl y use thei r LHD diesel engine credits for averaging, banking and trading with LHD diesel engines, not with MHD diesel or HHD diesel engines. As noted, this limitation is consistent with ABT provisions in EPA’s existing criteria pollutant program for engines and wi ll help avoid problems created by the diversity

of applications that the broad spectrum of HD engines go es into , as discussed above
. The compliance program for the final rule s adopts the proposed method for generating a manufacturer’s CO 2 emission and fuel consumption credit or deficit. The manufacturer’s certification test results would serve as the basis for the generation of the manufacturer’s Famil y Certification Level (FC L). The agencies did not receive comment on this , and continue to believe that it is the best approach. The FCL is a new term we proposed for this program to differentiate the purpose of this credit generation technique from the Family

Emission Li mit (FEL) previousl y used in a similar context in other EPA rules. A manufacturer may define its FCL at any

level at or above the certification test results. Credits for the ABT program are generated when the FCL is compared to its CO 2 and fuel consump tion standard, as discussed in Section II. Credit calculation for the******* **E.O. 12866 Review**

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282 of Engine ABT program, either positive or negative, is based on Equation IV
- 1 and Equation IV
- 2 : **Equation IV**  **- 1**  **: Final HD Engine CO**  **2 credit (deficit)**  HD Engine CO 2 credit (deficit) (metric tons) = (Std
- FCL) x (CF) x (Volume) x (UL) x (10 - 6 ) where Std = the standard associated with the specific engine regulatory subcategory (g/bhp
- hr) FCL= Family

Certification L evel for the engine family CF = a transient cycle conve rsion factor in bhp
- hr/mile which is the integrated total cycle brake horsepower
- hour divided by the equivalent mileage of the Heavy
- dut y FTP cycle. For gasoline heav y - dut y engines, the equivalent mileage is 6.3 miles. For diesel heav y - dut y engines, the equivalent mileage is 6.5 miles. The CF determined b y the Heav y - dut y FTP cycle is used for engines certifying to the SET standard. Volume = (projected or actual) production volume of the engine family UL= useful life of the engine (miles) 10 - 6 converts the grams of CO 2 to metric tons **Equation IV**  **- 2**  **: Final HD Engine Fuel Consumption credit (deficit) in gallons** HD Engine Fuel Consumption credit (deficit) (gallons) = (Std

– FCL) x (CF) x (Volume) x (UL ) x 10 2 where Std = the standard associated with the specific engine regulatory subcategory (gallon/100 bhp
- hr) FCL= Family

Certification L evel for the engine family (gallon/100 bhp
- hr) CF = a transient cycle conversion factor in bhp
- hr/mile which is the integrated total cycle brake horsepower
- hour divided by the equivalent mileage of the Heavy
- dut y FTP cycle. For gasoline heav y - dut y engines, the equivalent mileage is 6.3 miles. For diesel heav y - dut y engines, the equivalent mileage is 6.5 miles. The CF determi ned b y the Heav y - dut y FTP cycle is used for engines certifying to the SET standard. Volume = (projected or actual) production volume of the engine family UL= useful life of the engine (miles) 10 2 = conversion to gallons******* **E.O. 12866 Review**

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283 of To calculate credits or deficits, m anufacturers will determine an FCL for each engine famil y the y have designated for the ABT program. The agencies have defined engine families in 40 CFR 1036.230 and 49 CFR 535.4 and manufacturers may designate how to group their engines for certification and compliance purposes. The FCLmay be above or below its respective subcategory standard and is used to establish the CO 2 credits earned in Equation IV
- 1 or the fuel consumption credits earned in Equation IV
- 2. The final CO 2 and fuel consumption standards are associated with specific regulatory subcategories as described in Sections II.B and II.D (gasoline, light heav y - duty diesel, medium heav y - dut y diesel, and heav y heav y - dut y diesel). In the ABT program, engines certified with an FCL below the standard generate positive credits and an FCLabove the standard generates negative credits. As discussed in Section II.B and II.D, engine averaging sets that include engine families for which a manufacture elects to use the alternative standard of a percent red uction from the engine family ’s 2011 MY baseline are ineligible to either generate or use credits. Credit deficits accumulated in an averaging set where engine families have used the alternate standard can carry that deficit forward for three ye ars follow ing the model ye ar for which that deficit was generated at which time the deficit must be reconciled with surplus credits. The volume used in Equations IV
- 1 and IV
- 2 refers to the total number of eligible engines sold per family participat ing in the ABT program during that model year. The useful life values in Equation IV
- 1 and IV
- 2 are the same as the regulatory classifications previously

used for the engine subcategories. Thus, for LHD diesel engines and gasoline engines, the useful life v alues are 110,000 miles; for MHD diesel engines, 185,000 miles; and for HHD diesel engines, 435,000 miles. As described in Section II .E above, for purposes of EPA’s standards, an engine manufacturer may

choose to comply

with the N 2 O or CH 4 cap standards using CO 2 credits. 316 A manufacturer choosing this option would convert its N 2 O or CH 4 test results into CO 2 eq to determine the amount of CO 2 credits required. This approach recognizes the correlation of these elements in impacting global climate change . To account for the different global warming potential of these GHGs, manufacturers will determine the amount of CO 2 credits required b y multiplying the shortfall by the GWP. For example, a manufacturer would use 25 kg of positive CO 2 credits to offset 1 kg of negative CH 4 credits. Or a manufacturer would use 298 kg of positive CO 2 credits to offset 1 kg of negative N 2 O credits. Ingeneral the agencies do not expect manufacturers to use this provision, but are providing it as an alt ernative in the event an engine manufacturer has trouble meeting the CH 4 and/or N 2 O emission caps. There are no ABT credits for performance that falls below the CH 4 or N 2 O caps. Manufacturers of engines that generate a credit deficit at the end of the model ye ar for any

of its averaging sets can carry that deficit forward for three ye ars following the model year for which that deficit was generated at which time the deficit must b e reconciled with surplus credits. Manufacturers must use credits once those credits have been generated to offset a shortfall before those credits can be banked or traded for

316 This option does not apply to the NHTSA fuel consumption program, since NHTSA is not regulating N 2 O or CH 4 emissions, since they are irrelevant to fuel consumption reductions.******* **E.O. 12866 Review**

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284 of additional model years. This restriction reduces the chance of an engine manuf acturer passing forward deficits before reconciling their shortfalls and exhausting those credits before reconciling past deficits. Deficits will need to be reconciled at the reporting dates for model year three. S urplus credits earned in the engi ne categories will expire after five model years . The agencies may re consider 5 year credit life during the next phase of rulemaking
. Under the EPA and NHTSA programs, engine manufacturers are provided flexibilities in complying with compression ignition (CI) engine standards. These flexibilities are provided in order to: 1) s ynchronize the implementation schedules for the upcoming EPA OBD regulatory changes with the GHG and fuel consumption r egulatory requirements; 2) aid manufacturers that produce legacy engines in the early

years of the HD program; and 3) provide an opportunity for manufacturers to earn earl y credits as mentioned in sections II.B.( 2)(b), II.D.(1)(b)(i) and IV.B.(1) of this document. The flexibilities provide manufacturers of CI engines with four different and distinct paths that can be followed to meet the EPA and NHTSA emission and fuel consumption standards. Manufacturers do no t have these flexibility mechanisms for gasoline engines, since the standards for gasoline engines go into effect after the flexibility mechanisms have expired. As a general guideline applicable for each of these four compliance paths, if a manufacturer ch ooses to opt into the NHTSA program prior to MY 2017, which is the year the NHTSA combustion ignition engine standards become mandatory , the path chosen must be the same path chosen to meet the EPA emission standards. Each of the four paths are discussed below. The first path is for a manufacturer to meet the regular or “primary” standards that become mandatory

in MY 2014 under the EPA regulations. These standards are voluntary in 2014, 2015, and 2016 under the NHTSA program, and become mandatory in 2017 in the NHTSA program. The primary path standards become more stringent in model year 2017 in both the EPA and NHTSA regulations. For the NHTSA program, an engine manufacturer may choose to voluntarily opt into the program early , in any of the MYs 2014, 2 015 or 2016 allowing that manufacturer to earn credits for those model ye ars. In the NHTSA program however, once the manufacturer has made the decision to opt into the program early it must remain in the program during the subsequent model ye ars. Path two allows manufacturers to earn early credits as part of the “primary” MY 2014 emission standard path. Earl y credits can be earned in MY 2013, as discussed in section IV.B.(1). Under the NHTSA fuel consumption program, an engine manufacturer may also cho ose to opt into the primary standards program beginning in MY 2013 to obtain earl y credits, but once the decision has been made to opt into the program in MY 2013 the manufacturer must remain in the program in the subsequent model years. If a manufacturer chooses to opt into the NHTSA program prior to the mandatory 2017 model year it must follow that same path chosen to meet the EPA emission standards. If a manufacturer produces “legacy” engines, which ty pically have 2011 baseline emissions that are signif

icantly higher than the 2010 baseline for this regulation, the manufacturer may

choose path three. This path allows a manufacturer to meet alternate******* **E.O. 12866 Review**

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285 of CIengine standards in MYs 2014 through 2016 for specific engine families. More details about this path are provided in section II.B.(2)(b) and II.D.(1)(b)(i). This path can only be taken if all other credit opportunities have been exhausted and the manufacturer still cannot meet the primary standards under the first path. Again, if a manufacturer chooses this path to meet the EPA emission standards in MY 2014

– 2016, and wants to opt into the NHTSA fuel consumption program in these same MYs it must follow the exact path followed under the EPA program. The fourth path that a CI engine manufacturer can take is referred to as the alternative “OBD phase
- in” path. Manufacturers that wish to “bundle” or combine design changes needed for the 2013 and 2016 heavy
- dut y OBD requirements with design changes needed for the GHG and fuel consumption requirements may choo se this path. The EPA standards in this path become mandatory in MY 2013 instead of 2014. In addition, in this path emission and fuel consumption standards increase in stringency in 2016 rather than in 2017. While the OBD phase
- in schedule requires engi nes built in MYs 2013 and 2016 to achieve greater reductions than those engines built in the model ye ars under the primary

program (path one above), it requires lower reductions for engines built in 2014 and 2015. Under the NHTSA program, an engine manufa cturer may choose to opt into the “OBD phase
- in” path only if this is the same path chosen under the EPA program and only if the manufacturer is opting into the program in MY 2013 and staying in the program through MY 2016. If a manufacturer chooses the O BD phase
- in path to meet the EPA emission standards and decides to opt into the NHTSA program prior to the mandatory MY 2017 requirement, the manufacturer must follow the same path under both the EPA and NHTSA programs. Under this path the earl y credit MY 2013 flexibility

as discussed in path two above is not available. Additional flexibilities for engines are discussed later in Section IV(B) which provide manufacturers the opportunity to generate earl y, advanced and innovative technology

credits. **(2) Heavy**  **- Duty Vocational Vehicles and Tractors**  In addition to the engine ABT program described above, the NPRM also proposed a heav y - dut y vehicle ABT program to facilitate reductions in GHG emissions and fuel consumption based on heavy
- duty vocational vehicle and tractor design changes and improvements. EPA and NHTSA had proposed averaging sets which aligned with the proposed tw elve regulatory subcategories; however in response to the comments described, which requested that averaging sets be expanded across subcategories within similar weight classes, (analogous to the principle on which ABT is structured un d er EPA’s h eav y - dut y diesel engine program for criteria pollutants), the agencies are finalizing only

three averaging sets

– LHD, MHD, and HHD based upon the three weight classes. In other words, all HHD (Class 8) tractors , HHD vocational tractors, and HHD vocationa l vehicles will be treated as a single averaging set. Similarly , all MHD (Class 7) tractors , MHD vocational tractors, and MHD (Class 6
- 7) vocational vehicles will be treated as a single averaging set , and LHD vocational vehicles (Class 2b
- 5) will be treat ed as a single averaging set. . For this category , the structure of the final ABT program should create incentives for vehicle manufacturers to advance new, clean******* **E.O. 12866 Review**

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286 of technologies, or existing technologies earlier than they otherwise would. ABT provides manufacturers the flexibility to deal with unforeseen shifts in the marketplace that affect sales volumes. This structure also a llows for a straightforward compliance program for each sector , with aspects that are independentl y quantifiable and verifiable
. Credit calculation for the final HD Vocational Vehicle and Tractor CO 2 and fuel consumption credits, either positive or negative, will be generated according to Equation IV
- 3 and Equation IV
- 4 : **Equation IV**  **- 3**  **: The Final HD Vocational Vehicle and Tractor CO**  **2 Credit (Deficit)**  HD Vocational Vehicle and Tractor CO 2 credit (deficit)( metric tons ) = (Std
- F E L) x (Payload To ns) x (Volume) x (UL ) x (10 - 6 )

where Std = the standard associated with the specific regulatory subcategory

(g/ton
- mile) Payload tons = the prescribed payload for each class in tons (12.5 tons for Class 7 tractors, 19 tons for Class 8 tractors, 2.85 tons for LHD vocational, 5.6 tons for MHD vocational, and 7.5 tons for HHD vocational vehicles) FEL = Famil y Emission Limit for the vehicle family which is equal to the output from GEM (g/ton
- mile) Volume = (projected or actual) production volume of the vehicle family UL= useful life of the vehicle (435,000 miles for HHD, 185,000 miles for MHD, and 110,000 miles for LHD) 10 - 6 converts the grams of CO 2 to metric tons **Equation IV**  **- 4**  **: Final HD Vocational Vehicle and Tractor Fuel Consumption credit (deficit) in**  **gallons:** HD Vocational Vehicle and Tractor Fuel Consumption credit (deficit)( gallons ) = (Std
F E L) x (Payload Tons) x (Volume) x (UL) x 10 3 where Std = the standard associated with the specific regulatory subcategory (gallons/1,000 ton
- mile) Payload tons = the prescribed payload for each class in tons (12.5 tons for Class 7 tract ors, 19 tons for Class 8 tractors, 2.85 tons for LHD vocational, 5.6 tons for MHD vocational, and 7.5 tons for HHD vocational vehicles) FEL = Famil y Emission Limit for the vehicle family (gallons/1,000 ton
- mile) Volume = (projected or actual) production vo lume of the vehicle family******* **E.O. 12866 Review**

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287 of UL= useful life of the vehicle (435,000 miles for HHD, 185,000 miles for MHD, and 110,000 miles for LHD) 10 3 = conversion to gallons Manufacturers of vocational vehicles and tractors that generate a credit deficit at the end of the model ye ar for an y of its averaging sets can carry that deficit forward for three ye ars following the model y ear for which that deficit was generated at which time the deficit must be reconciled with surplus credits. Manufacturers must use credits onc e those credits have been generated to offset a shortfall before those credits can be banked or traded for additional model years. This restriction reduces the chance of a vehicle manufacturer passing forward deficits before reconciling their shortfalls and exhausting those credits before reconciling past deficits. Deficits will need to be reconciled at the reporting dates for model ye ar three. Surplus credits earned in the vehicle categories will have a five year expiration date. The agencies may recon sider the 5 year credit life during the next phase of the rulemaking. Additional flexibilities for HD vocational vehicles and tractors are discussed later in Section IV.B which provide manufacturers the opportunity to generate early , advanced, and innovative technology credits. **(3) Heavy**  **- Duty Pickup Truck and Van Flexibility Provisions**  The NPRM included specific flexibility provisions for manufacturers of HD pickups and vans, similar to provisions adopted in the recent rulemaking for light
- duty car and truck GHGs and fuel econom y. T he agencies are finalizing the flexibilities as proposed . In the heav y - duty pickup and van category a manufacturer’s credit or debit balance will be determined by calculating their fleet average performance and comparing it to the manufacturer ’s CO 2 and fuel consumption standards, as determined by their fleet mix, for a given model year. A target standard is determined for each vehicle. These targets, weighted b y their associated production volumes, are summed at the end of the model year to derive the production volume
- weighted manufacturer annual fleet average standard. A manufacturer will generate credits if its fleet average CO 2 or fuel consumption level is lower than its standard and will generate debits if its fleet average CO 2 or fuel consumption level is above that standard. To receive the benefit of the advanced technology

provisions, if the manufacturer’s fleet includes conventional and advanced technology

vehicles, the manufacturer will divide this fleet of vehicles into two sep arate fleets for calculation of fleet average credits. The end
- of
- ye ar reports will provide the appropriate data to reconcile pre
- compliance estimates with final model year figures (see 40 CF R Part 1037.730 and 49 CFR Part 535.8)
. The EPA credit calculation is expressed in metric ton s and considers production volumes, the fleet standards and performance , and a factor for the vehicle useful life, as in the light
- duty

GHG program. The NHTSA credit calculation uses the fleet standard and performance levels in fuel consumpti on units (gallons per 100 miles), as opposed to fuel econom y units (mpg) as done in the light
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288 of useful life, in miles, allowing the expression of credits in gallons. The total model y ear fleet credit (debit) calculations will use the following equations: CO 2 Credits (Mg) = [( CO 2 St d

– CO 2 Act) × Volume × UL ] ÷ 1,000,000 Fuel Consumption Credits (gallons) = (FC Std

– FC Act) × Volume × UL × 100 Where: CO 2 Std = Fleet average CO 2 standard (g/mi) FC Std = Fleet average fue l consumption standard (gal/100 mile) CO 2 Act = Fleet average actual CO 2 value (g/mi) FC Act = Fleet average actual fuel consumption value (gal/100 mile) Volume = the total production of vehicles in the regulatory c ategory UL= the useful life for the regulatory category (miles) As described above, HD pickup and van manufacturers will be able to carry forward deficits from their fleet
- wide average for three years before reconciling the shortfall. Manufacturers will be required to provide a plan in their pre
- model year reports showing how they

will resolve projected credit deficits. However, just as in the engine category , manufacturers will need to use credits earned once those credits have been generated to offset a s hortfall before those credits can be banked or traded for additional model years. This restriction reduces the chance of vehicle manufacturers passing forward deficits before reconciling their shortfalls and exhausting those credits before reconciling pas t deficits. Deficits will need to be reconciled at the reporting dates for model year three. Surplus credits earned in the HD pickup and van categories will have a five year expiration date. The agencies may reconsider the 5 y ear credit life during the n ext phase of the rulemaking. Additional flexibilities for heav y - dut y pickup and van category are discussed below in Section IV. B which provides manufacturers the opportunity to generate earl y, advanced and innovative technology credits
. 

### B. **A dditional**  **F lexibil**  **ity Provisions** The agencies proposed additional provisions to facilitate reductions in GHG emissions and fuel consumption beginning in the 2014 model year. While EPA and NHTSA believed the ABT and flexibility structure would be sufficient to encourage reduction efforts by

heavy
- dut y highway

engine and vehicle manufacturers, the agencies understood that other efforts could create additional opportunities for manufacturers to reduce their GHG emissions and fuel consumption. These provisions would provide additional incenti ves for manufacturers to innovate and to develop new strategies and******* **E.O. 12866 Review**

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289 of cleaner technologies. The agencies requested comment on these provisions, as described below. **(1) Early Credit Option**  The agencies proposed that manufacturers of HD engines, HD pickup trucks and vans, combination tractors, and vocational vehicles be eligible to generate early credits if they demonstrate improvements in excess of the standards prior to the model year the standards become effective. As an example, if a manufacturer’s MY 2013 subcategory of tractors exceeds the EPA mandatory MY 2014 standard for those same vehicles, then that manufacturer could claim MY 2013 credits or “earl y credits” to utilize in its ABT program starting in the MY 2014 . As noted in the NPRM, the start dates for EPA’s GHG standards and NHTSA’s fuel consumption standards vary by regulatory

category (see Section II for the model years when the standards become effective), meaning that the earl y credits provision, if selected b y a manufacturer, could begin during different model ye ars. The NPRM stated that manufacturers would need to certify their engines or vehicles to the standards at least six months before the start of the first model year of the mandatory

standards and that limitations on the use of c redits in the ABT programs

– i.e., limiting averaging to within each vehicle or engine averaging set

– would apply for the earl y credits as well. In the NPRM, NHTSA and EPA requested comment on whether a credit multiplier, specifically a multiplier of 1.5 , would be appropriate to apply to early credits from HD engines, combination tractors, and vocational vehicles (but not to early credits from HD pickups and vans) , as a greater incentive for earl y compliance. See 75 FR at 74255
. The agencies receive d comments from Cummins, DTNA, EMA/TMA, Navistar, Eaton, Bosch, CBD and CAL START relating to these earl y credit provisions. All of these commenters supported the earl y credit provision for the most part, but many requested that the agencies eliminate some of the restrictions relating to this provision. EMA/TMA argued that MY 2012 should also be considered for earl y credits and that the requirement to certify six months before the start of the first model y ear would unnecessarily restrict manufacturers from earning credits for technology introduced within six months of the respective model y ear. In a ddition , EMA/TMA stated that requiring certification of the entire averaging set instead of individual vehicle configurations would not allow for earl y introduction of new technologies. Cummins stated that the six month lead time requirement should be removed and that manufacturers be allowed to earn earl y credits for individual engine families rather than onl y for the entire averaging set, stating that remo val of these restrictions would further benefit the environment. CBD stated that earl y credits should only be granted if the emission and fuel consumption benefits are in addition to or above the existing performance levels and are quantifiable and verifia ble. EPA and NHTSA have reviewed these comments and decided to clarify the earl y credit provision as proposed in the NPRM to account for the above concerns. Early credits are intended to be an incentive to manufacturers to introduce more efficient engin es and vehicles earlier than they otherwise would be . However, the agencies do not want to provide a windfall of credits to manufacturers that may already have one or more products that meet the standards. Therefore, the final rule s include the option for a******* **E.O. 12866 Review**

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290 of manufacturer to obtain early credits for products if they certify their entire subcategory

at GHG emissions and fuel consumption levels below the standards. Thus, for example, earl y credits could be generated for all HHD engines installed in combination tractors. The agencies are making a clarification in this action that the manufacturers must certify their entire subcategory , not necessaril y their entir e averaging set, because the averaging sets are broadened under the final rulemaking from the categories proposed in the NPRM. In addition, the agencies are providing the flexibility for combination tractor manufacturers to obtain early credits f or their additional sales, as compared to their 2012 model year sales, of SmartWay designated combination tractors in 2013 model year. The agencies view this subcategory of vehicles as the only

segment of vehicles or engines where the true addit ional reductions due to the early credits can be quantified outside of certifying an entire subcategory , because the benefit is tied directly to the increase in the SmartWay

vehicles manufactured in MY 2013 in excess of those manufactured in MY 2012. A manufacturer may opt to apply

for early credits from their 2013 model y ear SmartWay designated combination tractor sales by first calculating the difference between the number of SmartWay designated combination tractors sold in 2012 model ye ar versu s 2013 model year. The increment in sales determines the number of 2013 model year SmartWay designated tractors which can be used to certify for early credits , at the manufacturer’s choice of which vehicles to consider . The manufacturer would then determ ine each tractor configuration’s performance by modeling in GEM, using each vehicle configuration’s appropriate inputs for coefficient of drag, tire rolling resistance, idle reduction, weight reduction, and vehicle speed limiter. Next, the difference betw een a specific tractor configuration’s performance and the 2014 MY standard for the appropriate regulatory

subcategory

( e.g., Class 8 sleeper cab high roof tractors) would be calculated. The CO 2 and fuel consumption credits are calculated using Equation IV
- 4 and IV
- 5. As discussed above and in Section II, manufacturers may opt into the NHTSA voluntary program prior to when the program becomes mandatory . Manufacturers that opt in become subject to NHTSA standards for all regulatory c ategories. This provides manufacturers the option of complying with NHTSA fuel consumption standards equivalent to the EPA emission standards in order to accumulate credits in the ABT program. If a manufacturer opts into the EPA early credit program, it may also opt into an equivalent NHTSA early credit program. In this case, the manufacturer must enter the program concurrently

with the EPA program and will be subject to the full MY 2014
- 2015/2016 NHTSA voluntary program. NHTSA would like to clarify that for the earl y credit provision, implem entation must occur in MY 2013 exactly as implemented under the EPA emission program, and not in the model year immediatel y before the NHTSA standards become mandatory (since otherwise manufacturers would generate credits under the fuel consumption program as a result of complying with mandatory GHG standards

– a windfall) . Further, once a manufacturer opts into the NHTSA program it must stay in the program for all the optional MYs and remain standardized with the implementation approach being used to meet the EPA emission program. EPA and NHTSA intend for manufacturers’ ABT credit balances to remain equivalent wherever possible.******* **E.O. 12866 Review**

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291 of The agencies also received comments from EMA/TMA and Cummins opposing the requirement to certify six months prior to the first m odel year of the mandatory standards for earl y credits. The commenters argued and the agencies agree that this restriction could cause some delay s in technology rollout and are therefore not adopting this provision . The agencies reviewed the restriction and evaluated the light
- duty 2012
- 2016 MY vehicle earl y credit program. No such restriction exists for LD vehicles. We therefore believe that this requirement is not necessary for our implementation of the program . In addition, we are adopting a provisi on which allows manufacturers to generate earl y credits for certifying less than a full model year earl y. Several commenters, including DTNA, Edison Electric Institute, Eaton, and Bosch, supported using a 1.5 multiplier for earl y credits , stating that it would encourage earl y introduction of technology . Cummins and UCS opposed the multiplier stating that the opportunity

to earn credits at their normal value should be sufficient incentive for earl y compliance. The agencies believe that this incentive will further encourage faster implementation of emission and fuel savings technology and help to reduce th e costs manufacturers will incur in efforts to compl y with th e s e rule s . The agencies have therefore decided to finalize a 1.5 multiplier for early credits earned in MY 2013. 317 However, the agencies note that manufacturers may not apply an additional 1.5 multiplier for advanced technology credits which are also certified as earl y credits. With respect to heav y - duty pickups and vans, the agencies proposed that early credits could be generated on a fleetwide basis by comparison of the manufacturer’s 20 13 heav y - dut y pickup and van fleet with the manufacturer’s fleetwide targets, using the target standards equations for the 2014 model year. 75 FR at 74255. The agencies are finalizing these provisions as proposed. Under the structure for the fleet avera ge standards, this credit opportunity entails certifying a manufacturer’s entire HD pickup and van fleet in model year 2013. Industry commenters argued that earl y credits should be calculated against a target curve that is less stringent than the 2014 cur ve. We disagree. Because it is the first year of a 5
- year phase
- in, the 2014 model year has quite modest emissions and fuel consumption reductions targets of onl y 15 percent of the 201 8 model year standard s stringency . Targeting even less significant improvements over the baseline would unduly

increase the prospect for windfall credits by individual manufacturers who may

have better than average baseline fleets. On the other hand, we are confident that the early credit program, based as it is on full fl eet compli ance with the MY 2014 targets , will not result in windfall credits as it represents, in effect, a complete b ringing forward of the program start date by one model year for manufacturers who choose to pursue it. Again, the agencies consider the availability of early credits to be a valuable complement to the overall program to the extent that they encourage earl y implementation of effective technologies.

317 There is no multiplier for the early credit provisions in the light
- duty vehicle rule. However, the situation there was more com plicated, since early credits needed to be correlated with credit opportunities under the California GHG program for light
- duty vehicle, and also needed to be integrated with statutory credits under EPCA/EISA for flexible fuel vehicles. See 75 FR at 25440
- 443.. Thus, the light
- duty vehicle rule early credit provisions are not analogous to those adopted in this rule for the heavy duty sector.******* **E.O. 12866 Review**

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292 of **(2) Advanced Technology Credits**  The NPRM proposed targeted provisions that were expected to promot e the implementation of advanced technologies. Specifically , manufacturers that incorporate these technologies would be eligible for special credits that could be applied to other heav y - dut y vehicles or engines, including those in other heav y - duty categories. The credits are thus ‘special’ in that they can be applied across the entire heavy
- duty sector, unlike the ABT and early credits discussed above. The eligible technologies were:

 Hy brid powertrain designs that include energy storage sy stems
 Rankine cycle engines 318

 All
- electric vehicles

 Fuel cell vehicles NHTSA and EPA requested comment on the list of technologies identified as advanced technologies and whether additional technologies should be added to the list. In addition to the increased fungibility of advanced technology

credits, NHTSA and EPA requested comment on whether a credit multiplier, specificall y a multiplier of 1.5, would be appropriate to appl y t o advanced technology credits, as a greater incentive for the technologies’ introduction. MEMA asked that the agencies expand the list of technologies that are eligible for Advanced Technology

Credits to include advanced transmission and drivetrain technologies, tire and wheel accessories, and advanc ed engine accessories technologies (such as electronic air control sy stems and clutched turbocharged air compressor). Bendix requested that weight reduction approaches, improved transmission and drivetrains, driver management and coaching, and tire and wh eel improvements be allowed to receive credit through the Advanced Technology Credit Program. The advanced technology credit program is intended to encourage development of technologies that are not yet commerciall y available. Inorder to provide incent ives for the research and development needed to introduce these technologies, Advanced Technology

Credits can be applied to an y heav y - duty vehicle or engine and are not limited to the vehicle or engine categories generating the credi t. Because of this flexibility in the application of these credits , it is important that the list of eligible technologies only

include technolg ies that are not yet available in the market. In addition, the technologies must len d themselves to straight forward methodologies for quantifying emissions and fuel consumption reductions. For some of the technologies that MEMA and Bendix asked be included in the program, such as electrified accessories and improved tires, the agencies have already established a mechanism for quantifying reductions associated with these approaches. For example, the agencies assumed in the regulatory

impact anal ys is that some electrified accessories will be used to comply with
318 Although as noted in Section III above and in Chapter 2 of the RIA, this technology is still under development and so is not presently available.******* **E.O. 12866 Review**

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293 of the regulations. Specifica lly , improved water and oil pumps are assumed to be used for 2014 LHD, MHD, and HHD FTP and SET diesel engines to comply with standards and if used, their performance would be assessed in the engine certification process. (See R IA Chapter 2 .4 ). An y reductions in engine load and resulting emissions and fuel consumption resulting from accessory electrification thus will be accounted for in engine dy namometer testing. However, other electrified accessories, such as air conditioning do not impact engine operation over the FTP and SET cycles. As such, we are allowing credit to be established through the Innovative Technology Credit Program described in section IV. B ( 3 ) below
. Wi th regard to tire rolling resistance improvements, light weight wheels, and weight reduction associated with the use of super single tires, these are already part of the technology basis for the standard for combination tractors and are accounted for in the GEM , and are also part of the technology basis for the standards for heav y - dut y pickups and vans (See RIA Chapter 2.3) . Some improved transmissions

– such as automatic manuals
- have been available commercially for ten y e ars and as such, does not meet the criteria to be included on the list of advanced technologies. However, as described in Section IV.B. (3), advanced transmissions and drivetrains could be eligible for credits in the Innovative Technology Credit Program, and the agencies acknowledge the importance of including advanced transmissions and drivetrains in the program. W ith regard to weight reduction, the agencies are allowing additional weight reduction approaches to be used for tractors through modeling using GEM and through the innovative technology program . Weight saving approaches will not be credited for vocational vehicles given the very small percentage improvement that weight reduction provides for vocational vehicles. And finall y, for driver management and coaching

– while we recognize that there could be signi ficant benefits to this, the difficulty in establishing a baseline condition for driver behavior limits the agencies’ ability to establish a reduction for this approach at this time. The agencies have decided not to change the proposed list of technologies evaluated as advanced technologies , but are providing additional clarity in the advanced technology

list. The agencies proposed that Rankine cycle engines be included, but the agencies are adopting the wording of Rankine cycle waste heat recovery s ys tem attached to an engine
. The agencies received comments from Bendix, Bosch, MEMA, Navistar, Ody ne, Green Truck Association, Eaton, ArvinMeritor and Calstart, which supported the 1.5 multiplier for advanced technology credits. MEMA argued that these added fl exibilities are absolutel y necessary

to help advanced technologies penetrate the marketplace and are the primary

impetus to integrate these technologies onto vehicles. The agencies also received comments from several stakeholders, including ACEEE and Cumm ins opposing the 1.5 multiplier for advanced technology credits. ACEEE argued that multipliers should be avoided because they

lessen the total emission reductions by allowing a greater increase in the emissions of other vehicles than they offset. After rev iewing these comments, the agencies have determined that the relativel y low volumes expected in this time frame are likel y to mitigate an y potential dilution of environmental benefits and be outweighed b y the benefits of introduction of advanced technology into the heav y - dut y sector . Further, the credit multiplier will provide enough added benefit to the nascent heav y - dut y hy

brid community

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294 of technologies. Therefore, the final rule s include a multiplier of 1.5 for advanced technology

credits. However, the agencies are also capping the amount of advanced credits that can be brought into any averaging set into any

model year at 60,000 Mg to prevent market distortions. (a ) HD Pickup Truck and Van Hybrids and all Electric Vehicles For HD pickup and van hybrids, the agencies proposed that testing would be done using adjustments to the test procedures developed for light
- dut y h ybrids. NHTSA and EPA also proposed that all
- electric and other zero tailpipe emission vehicles produced in model years before 2014 be able to earn credits for use in the 2014 and later HD pickup and van compliance program, provided the vehicles are covered b y an EPA certificate of conformity

for criteria pollutants. These credits would be calculated based on the 2014 diesel standard targets corresponding to the vehicle’s work factor, and treated as though they were earned in 2014 for purposes of credit life. Manufacturers would not have to earl y - certify

their entire HD pickup and van fleet in a model y ear as f or other earl y complying vehicles. NHTSA and EPA also proposed that model year 2014 and later EVs and other zero tailpipe emission vehicles be factored into the fleet average GHG and fuel consumption calculations based on the diesel standards targets fo r their model year and work factor. A manufacturer also has the option to subtract these vehicles out of its fleet and determine their performance as advanced technology credits that can be used for all other HD vehicle categories, but these credits would , of course, not then be reflected in the manufacturer’s pickup and van category credit balance. Commenters generall y supported the introduction of hy brid and zero tailpipe emission vehicles, but did not comment on the specific provisions discussed above. The NPRM also proposed in determining advanced technology credits for electric and zero emission vehicles that in the credits equation the actual emissions and fuel consumption performance be set to zero (i.e. that emissions be considered on a tailpipe basis exclusively )
. We are f

inalizing these provisions as proposed. The proposal also solicited comment on the handling of upstream GHG emissions. Some commenters argued that EPA should maintain its traditional focus in mobile source rulemakings on vehicle tailpipe emissions and leave the consideration of GHG emissions from upstream fuel production and distribution
- related sources such as refineries and powerplants to EPA regulatory programs which could focus specificall y on those sources. Others argued that, since EPA accounts for upstream GHG emissions in its benefits assessments, the agency should reflect upstream GHG emissions impacts in vehicle compliance values as well. After considering these comments, the agencies have decided to base the credit accounting on tailpipe em issions only . The agencies believe that introduction of EV technology into the heav y - duty

pickup and van sector in these model years will be unusual and that incentives are important to encourage such introduction. Similarly , the agencies believe that us e of EV technology for these vehicles in these model years will be so infrequent that there is no need to adopt a cap whereby upstream emissions would be counted after a certain volume of sales. See 75 FR at 25434
- 438 (adopting such a cap for light
- dut y vehicles under the 2012
- 2016 MY GHG******* **E.O. 12866 Review**

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295 of standards). We also recognize that the ongoing EPA/NHTSA rulemaking to reduce GHGs and fuel consumption in MY 2017 and later light
- duty vehicles is examining this issue, and may

yield informatio n and policy direction relevant to the planned follow
- on rulemaking for the heav y - duty sector. (b ) Vocational Vehicle and Tractor Hybrids For vocational vehicles or combination tractors incorporating h ybrid powertrains, we proposed two methods for establishin g the number of credits generated

– chassis dy namometer and engine dy namometer testing
- each of which is discussed next. As discussed in the NPRM the agencies are not aware of models that have been adequatel y peer reviewed with data that can assess this technology without the conclusion of a comparison test of the actual phy sical product. (i ) Chassis Dynamometer Evaluation For h ybrid certification to generate credits we proposed to use chassis testing as an effective way

to compare the CO 2 emissions and fuel consumption performance of conventional and h ybrid vehicles. We proposed that heav y - dut y h ybrid vehicles be certified using “A to B” vehicle chassis dy namometer testing. This concept allows a hy brid vocational vehicle manufacturer to directly quantify th e benefit associated with use of its hy

brid s ys tem on an application
- specific basis. The concept would entail testing the conventional vehicle, identified as “A”, using the cycles as defined in Section V. The “B” vehicle would be the h ybrid version of ve hicle “A”. The “B” vehicle would need to be the same exact vehicle model as the “A” vehicle. As an alternative, if no specific “A” vehicle exists for the h ybrid vehicle that is the exact vehicle model, the most similar vehicle model would need to be used for testing. We proposed to define the “most similar vehicle” as a vehicle with the same footprint, same payload, same testing capacity , the same engine power s ys tem, the same intended service class, and the same coefficient of drag. We did not receive an y adverse comments to this approach and are therefore adopting the same criteria as proposed. To determine the benefit associated with the h ybrid system for GHG performance, the weighted CO 2 emissions results from the chassis test of each vehicle would define the benefit as described below:

1. (CO 2 _A

– CO 2 _B ) / (CO 2_A ) = ______ (Improvement Factor) 2. Improvement Factor x GEM CO 2 Result_ A = ___ (g/ton mile benefit) Similarly , the benefit associated with the hy brid sy stem for fuel consumption would be determined from the weighted fuel consumption results from the chassis tests of each vehicle as described below:

3. (Fuel Consumption_

A

– Fuel Consumption_B )/ (Fuel Consumption_ A )= ______ (Improvement Factor)******* **E.O. 12866 Review**

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296 of 4. Improvement Factor x GEM Fuel Consumption Result_A = ___ (gallon/1,000 ton mile benefit) The credits for the h ybrid vehicle would be calculated as described in the ABT program except that the result from Equation 2 and Equation 4 above replaces the (Std
FEL) value. The agencies proposed two sets of duty cycles to evaluate the benefit depending on the vehicle application to assess hy brid vehicle performance

– without and with PTO sy stems. The key

difference between these two sets of vehicles is that one set (e.g., delivery trucks) does not operate a PTO while the other set (e.g., bucket and refuse trucks) does. The first set of dut y c ycl es would appl y to the hybrid powertrains used to improve the motive performance of the vehicles without a PTO sy stem (such as pickup and delivery trucks). The t ypica l operation of these vehicles is very similar to the overall drive cycles final in Section II. Therefore, the agencies are finalizing to use the same vehicle drive cycle weightings for testing these vehicles, as shown in Table IV
- 1
.

**Table IV**  **- 1**  **: Final Drive Cycle Weightings for Hybrid Vehicles Without PTO** Transient 55 mph 65 mph Vocational Vehicles 75 % 9 % 16 % Day Cab Tractors 19 % 1 7 % 64 % Sleeper Cab Tractors 5% 9% 86% The second set of duty

cycles appl y to testing h yb rid vehicles used in applications such as utility

and refuse trucks which tend to have additional benefits associated with use of stored energy , in terms of avoidin g main engine operation and related CO 2 emissions and fuel consumption during PTO operation. To appropriatel y address benefits, exercising the conventional and h ybrid vehicles using their PTO would help to quantify the benefit to GHG emissions and fuel co nsumption reductions. The duty cycle proposed to quantify

the hy brid CO 2 and fuel consumption impact over this broader set of operation was the three primary drive cycles plus a PTO duty cycle. The PTO duty

cycle as proposed took into account the sales impact and population of utility trucks and refuse haulers. As described in RIA Chapter 3, th e agencies proposed to add an additional PTO cycle to measure the improvement achieved for this ty pe of hy brid powertrain application. T he agencies welcomed comments on the final drive cycle weightings and the final PTO cycle. The agencies received comments from Cummins stating that the proposed weighting of the PTO cycle used a time
- based weighting instead of a VMT
- based weighting. For the final rules, the agencies derived new PTO cycle weighting b y calculating the average speed of a vehicle during the motive portion of its operation, as detailed in RIA Chapter 3.7.1.1. The average speed is used in a conversion factor to convert the e missions from the PTO operation measured in grams per hour into grams per ton - mile.******* **E.O. 12866 Review**

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297 of A number of comments were received on the proposed hy brid chassis testing approach. The agencies received comments from engine manufacturers, h ybrid manufacturers, and indus try associations, as well as non
- governmental organizations related to proper characterization of hy brid performance. To ad dress concerns raised by commenters regarding h ybrid testing several updates have been made to clarify a hy brid engine and / or s ys tem for pre
- transmission, post
- transmission, and chassis dy namometer testing. As described in 40 CFR 1036. 801 , a hy brid engi ne or hy

brid power train means an engine or powertrain that includes energy storage features other than a conventional battery s ys tem or conventional fly wheel. Supplemental electrical batteries and hydraulic accumulators are examples of h ybrid energy storage s ys tems. A h yb rid ve hicle is defined in 40 CFR 1037.801 and it means a vehicle that includes energy storage features (other than a conventional battery s ys tem or conventional fly wheel) in addition to an internal combustion engine or other engine using consumable chemical fuel . The duty cycles used for testing h ybrid s ystems as either the post
- transmission or complete chassis configuration will be retained from the proposal, however the weighting factors have been adjusted so that the performance of applications expected to be hy bridized in the near term is better reflected. The testing provisions for evaluating the performance including the driver model definition, vehicle model, and overall cycle performance have been enhanced as described in 40 CFR 10 36. 525 and 40 CFR 1037. 525. Additionally , provisions for evaluating power take
- off performance improvement have been addressed for charge
- sustaining testing. For those hy brid s ys tems which utilize shore power (e.g. plug
- in hy

brids), an innovative technology approach in which the certifier characterizes the performance associated with the operation of the sy s tem in a charge
- depleting and charge
- sustaining mode is most appropriate given the potential for variability in performance between applications and sy stem designs. To addr ess the issue of parit y between methods it should be clarified that the approach taken for h yb rid testing is consistent for chassis cycle based testing. This method used for both post
- transmission and complete vehicle chassis testing is the development of an improvement factor which is then related to the base sy stem performance. The pre
- transmission approach relies on work based assessment of performance as with the current engine standards. Comments were received from EMA/TMA, ACEEE, stating that the h ybrid definition and test methodology needs to be more clearl y defined. Cummins and EMA/TMA asked that the control volumes for the chassis test procedure be specified. Allison stated that the baseline configuration in A to B testing needs clarificati on – as an example they

said it is not clear if the baseline vehicle needs to be the same model year as the hy brid configuration. They added that it is unclear how to account for hotel or accessory loads. EMA/TMA, Allison, Odyne, and American Trucking Association said that the hy brid drive cycles do not match real world hy brid applications, and as such, will result in an underestimation of benefits resulting from hy brid use. Some or all of these commenters asked that a hy brid drive cycle be developed that consists mainly of transient cycle, increased idle time, low steady state operation, and high acceleration and deceleration rates. EMA/TMA said the proposed cycle

– the CARB heav y - heav y dut y******* **E.O. 12866 Review**

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298 of truck transient mode cycle, was developed as a composite cyc le based on a wide range of medium
- and heav y - duty vehicles but does not reflect the high acceleration and deceleration of vehicles used in urban applications and which is ty pical for hy

brid vehicles and does not reflect the level of acceleration and deceleration typical of hybrids. Eaton asked that the agencies establish four separate test cycles for hy brids rather than two that more closel y match what actual hybrids do in use. Hino said that energy recapture from regenerative braking needs to be built into the test cycle and as currently designed it is not. Hino also urged the agencies to create test cycles that capture variations in different ty

pes of hy brids. Cummins said that more representative vehicle test cycles should be developed based on the FTP and SET to ensure that the test cycles are func tionally

equivalent between vehicles and engines to ensure fair evaluation of the technology . I CCT articulated the same point on the need for parit y between engine and vehicle test cycles. EMA/TMA, DTNA, and Cummins asked that manufacturers not be requi red to conduct coast down testing for hy brid vehicles to establish road loads for each ty pe of vehicle. Instead, they

asked that the agencies define default road load values for manufacturers to use for hy brids. EMA/TMA said that conducting coast down te sts is expensive. They

also argued that road load is irrelevant to determining hy brid performance since the chassis dy namometer method requires a comparison of a vehicle that is identical in all respects except those factors directly relating to the hy

bri d powertrain. Cummins, I CCT, and Center for Clean Air Policy expressed general support for chassis dy

namometer testing. Allison said that the lack of dy namometer infrastructure could limit the ability

of manufacturers to certify and get hy

brids into the market place. BAE said that h ybrids should not have to be tested on a chassis dynamometer. Given the options available for certification of h ybrid systems, the constraints on available infrastructure for traditional chassis testing and coastdown testing h as been mitigated. Should a manufacturer contemplate chassis testing or powerpack testing to assess hy brid vehicle performance, coast down testing will still be needed for vocational applications to develop the road load values. To address concerns regar ding the baseline vehicle definition, the following clarifications are provided
. The baseline vehicle must be identical to the hy

brid, with the exception being the presence of the hy brid vehicle. Should an identical vehicle not be available as a baseline , the baseline vehicle and hy brid vehicle must have equivalent power or the h yb rid vehicle must have greater power. Additionally , the sales volume of the conventional vehicle from the previous model year (the vehicle being displaced b y the h ybrid), must b e substantial such that there can be a reasonable basis to believe the h ybrid certification and related improvement factor are authentic. Should no previous y ear baseline or otherwise existing baseline vehicle exist, the manufacturer shall produce / or provide a prototy pe equivalent test vehicle. For pre
transmission hy

brid certification, drivetrain components will be not included in the testing as is the case for criteria pollutant engine certification today on a brake
- specific basis. Manufacturers are expected to submit A to B test results for the h yb rid vehicle certification being sought for each vehicle famil y. Manufacturers may choose the worst case performer as a basis for the entire famil y. The agencies continue to expect to use******* **E.O. 12866 Review**

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299 of existing preceden ce regarding treatment of accessory loads for purposes of chassis testing. Accessory

loads for A to B testing will not need to be accounted for differently for h ybrid A to B chassis testing from criteria pollutant chassis testing. Based on the descriptio n of the h ybrid engines and vehicles as found in 40 CFR 1036 and 1037.801, the agencies will not restrict hy brid configuration certification. The expectation is that hy brid engines and vehicles certified under the provisions for GHG will use certified eng ines . As stated previously , based on data provided by commenters and industry associations, the agencies have revised the duty cycles for complete vehicle and post transmission powerpack testing b y revising the weighting factors such that the performance of the hy

brid sy stem is more appropriately characterized. The new weighting factors result in a performance assessment that more closel y matches performance seen in
- use by man y of the applications most likely to be h yb ridized in the near - term. At this time the requirement to conduct coastdown testing remains in place for the vehicle to be chassis tested or for the simulated vehicle in powertrain testing. Absent appropriate coeffi cients that accuratel y reflect vehicle performance, making an as sumption about vehicle performance could lead to erroneous results and/or errors in the performance assessment. The a gencies have provided numerous flexibility so the options available to those manufacturers who choose to certify hy brid engines or vehicle s, are not contrained to a single test method for which limited infrastructure may exist. (ii) Engine Dynamometer Evaluation The engine test procedure proposed in the NPRM for h ybrid evaluation involved exercising the conventional engine and h ybrid
- engine s ys tem based on an engine testing strategy . The basis for the sy stem control volume, which serves to determine the valid test article, would need to be the most accurate representation of real world functionality
. An engine test methodology would be consi dered valid to the extent the test is performed on a test article that does not mischaracterize criteria pollutant performance or actual sy stem performance. Energy inputs should not be based on simulation data which is not an accurate reflection of actual real world operation. Pre
- transmission test protocols will include both the engine and the hy brid sy stem for assessing GHG performance, however EPA is not changing criteria pollutant certification at this time for engines. In effect, the engine will nee d to be certified for criteria pollutant performance, while the engine and hy brid s ys tem in combination may be certified for GHG performance. It is clearl y important to be sure credits are generated based on known phy sical sy stems. This includes testing using the appropriate recovered vehicle kinetic energy . Additionally , the duty cycle over which this engine
- hy brid s ys tem would be exercised would need to reflect the use of the application, while not promoting a proliferation of duty cycles which prevent a standardized basis for comparing hy brid s ys tem performance. The agencies proposed the use of the Heav y - dut y FTP cycle for evaluation of hy brid vehicles, which is the same test cycle final for engines used in vocational vehicles. For powerpack testing, which includes the engine and h yb rid sy stems in a pre
- transmission format, the engine based testing is applicable for determination of brake
- specific emissions benefit versus the engine standard. For post
- transmission powertrain s ys tems and vehicles, the comparison evaluation based on the Improvement Factor and the GEM result based on a vehicle drive trace in a powertrain test cell or chassis dy namometer test cell seem to accuratel y reflect the performance improvements associated with these test******* **E.O. 12866 Review**

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300 of configurations. It is important that introduction of clean technology be incentivized without compromising the program intent of real world improvements in GHG and fuel consumption performance. In the NPRM the agencies asked for comments on the most appropriate te st procedures to accuratel y reflect the performance improvement associated with hy brid s ys tems tested using these or other protocols. A number of comments were received on the proposed engine testing approaches. Comments were received from EMA/TMA, Cummi ns, Allison, Hino, and ICCT, stating that the hy

brid test methodology

needs to be more clearl y defined. EMA/TMA, Cummins, and Allison stated that the agencies have not defined what they will accept as a “complete h ybrid s ys tem” and a clearer definition fo r h ybrids needs to be developed. For example, Allison stated that the DRIA say s that a “complete h ybrid s ys tem” can exclude the transmission. They

added that a hy

brid s ys tem must include a transmission. EMA/TMA stated that simulated engine dynamometer t esting should include hy brid components. EMA/TMA stated that the agencies’ proposal that part 1065 may be amended, but did not provide specifics on how it might be amended. They suggested the following changes to part 1065: 1) all engine and hybrid compo nents capable of providing or recovering traction power be included in the control volume; 2) use of hy brid s ys tem torque curves rather than engine torque curves; 3) reference to J2711 for management of energy

storage devices; 4) adhere to conventional cal culation of emissions with only

positive work counted; and 5) provide an estimate of maximum available kinetic energy

in 1065 to ensure that energy capture is consistent with real world operation of h yb rids. Hino said that energy

recapture from regenerat ive braking needs to be built into the test cycle and as currently designed it is not. Regenerative braking provides fuel consumption and GHG reduction benefits. Eaton said that the proposed powerpack testing does not capture true performance of h yb rid v ehicles. As noted above, I CCT commented on the need for parit y between engine and vehicle test cycles. They supported hardware
- in
- the
- loop post
- transmission testing, but only if an equivalent cycle is used as is used for chassis testing. Concerns were raised b y hy brid s ys tem manufacturers that the potential for a competitive advantage could exist for hy brids using different methods for certification based solel y on the test method chosen. For determination of the allowa ble brake energy that may be used for the test cycle with hy brid engines, it is important to provide consistency

between test methods. For that reason EPA is setting a brake energy fraction limit based on the engine FTP duty cycle which would apply to the pre - transmission hy brid and defining that as the limit for the post
- transmission maximum available brake energy as well. The brake energy fraction will need to be determined based on the engine performance and the brake energy fraction limit will apply

f or all powertrain test cell (powerpack) testing. This limit on the brake energy fraction will be ratio of negative work to positive work as a function of engine rated power. The agencies are also finalizing that the proposed duty cycles considered for the proposal will continue to be used with this final action. The a gencies proposed a transient duty

cycle, a 55 mile
- per - hour steady state cruise and a 65 mile
- per - hour steady******* **E.O. 12866 Review**

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301 of state cruise. The transient duty cycle , which has been corrected to address a concern related to shift events , is essentially the same transient cycle proposed in the NPRM with the exception that it minimizes inappropriate shift events. Additionally , the steady state cycles proposed by

the Agencies remain essentially unchanged. Th e modification being adopted with today ’s final action is to address the distribution of the emissions impact associated with each duty cycle. However, i n response to the concerns detailed above and raised b y engine manufacturers, hy brid s ys tem manufactur ers, environmental groups, and NGOs regarding the lack of transient operation in the hy brid cycles, the agencies are finalizing a change in the weighting of the h yb rid vehicle cycles. The weighting factors will be changed such that a greater emphasis on the ty pe of transient activity

seen as more characteristic of h yb rid applications will be evident. The new weighting factors between duty cycles for h yb rid certification (without PTO) will be 75% for the transient, 9% for the 55 mph cruise cycle, and 16% f or the 65 mph cruise cycle. The basis for this change may be seen in the memorandum to OAR Docket EPA
- HQ
- OAR
- 2010
- 0162 which describes the data set used to describe real world vehicle performance. Additionally , provisions for addressing brake energy frac tion have been provided in 40 CFR 1036.525 for h ybrid engine testing. The control volume for testing h ybrid s ys tems for GHG and fuel consumption assessment ha s included all hybrid power s ys tems and for powertrain testing that is post
- transmission, simulat ed components including tires and regenerative brakin g impacts. Additionally , provisions for accounting for the h yb rid sy stem and engine torque curve are available in the hy brid test procedures of 40 CFR 1036. In addition, the final rules allow manufacturers that want to certify a hy brid on a different test cycle than the cycles described above for chassis and engine dy namometer testing to seek under Innovative Technology Credit provisions
. Li kewise, a manufacturer seeking to certify a h yb rid using an alternative approach, such as simulation modeling, would need to follow the procedure described in the Innovative Technology Credit section. Ho wever, m anufacturers whose alternative h ybrid testing procedure is approved through the Innovative Technology Credit Program would receive credits through the Advanced Technology Credit Program so such credits would be fungible across all vehicle and engi ne categories and would receive the 1.5 multiplier
. EMA/TMA also asked that in addition to the above
- described engine, chassis, and powerpack testing, other y et - to - be
- defined methods should be allowed so that a novel application of h ybrids can be evaluated for credit. They included hydraulic, kinetic, electro
- mechanical, and genset hy brids as examples of additional configurations that should be accommodated by additional test cycles. Allison asked how emissions and fuel consumption changes associated w ith ageing of h ybrid systems will be accounted for. ACEEE encouraged the agencies to finalize the three approaches outlined in the NPRM for h ybrid testing in the final rule s . Cummins supported three proposed options for evaluating h ybrids. ICCT supported option 1 and 3, but not 2. IC CT stated that EPA and NHTSA need to ensure that: 1) each h yb rid test method/test cycle combination requires the same amount of total energy to run the cycle (for a specific vehicle weight), 2) each test method/test cycle combination has the same amount of total energy available for capture as regeneration by******* **E.O. 12866 Review**

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302 of a hy brid sy stem, and 3) that this available regeneration energy appears in similar increments in each test method/test cycle combination. In allowing for three options for certification of h ybrids , two of those options require the use of a baseline vehicle. The post
- transmission hy brid certification and the chassis dy

namometer certification options are designed to allow for an assessment of the improvement offered b y incorporating a h ybrid s ystem into the vehicle. Determination of an improvement factor for hy brid vehicle performance is significantl y influenced b y the selection of the baseline vehicle, test article “A”. The Agencies received comments from engine and h ybrid s ys tem manufacturers that the options for selection of the baseline should be carefully

considered to avoid an unintended consequence of limited real world improvement due to selection of a baseline that was inappropriate. Several concerns regarding an inappropriate baseline wer e broached including selection of technology that is not actually

available in the market, selection of baseline technology that is not representative of the application(s) either b y s ales volume or use, or selection of a baseline that in other way s provid es an advantage to a manufacturer which creates an unfair competitive advantage. To address the concern of improvement factors that have a basis in reality

and demonstrate real world improvements, as well as to continue to create incentives fo r the introduction of new technology the Agencies are addressing the issue of the baseline selection, as well as the determination of a “most similar” vehicle basis in the case where there may not be an existing production vehicle upon which the hy brid veh icle was based. In making the determination of an appropriate baseline, four options were considered b y the Agencies. These options included a fixed baseline weight and definition by

vehicle class, a non
- hy

brid baseline intended for production vehicle a nd transmission sy stem, a best in class conventional application, or vehicle based on highest sales volume. Each of these options has benefits and each raises potential concerns. The determination based solely on a single vehicle b y class has the advanta ge of providing a fixed baseline the entire industry may easily target for assessing improvements. It raises concerns regarding the suitability of the vehicle selection for all applications in the weight class, as well as the appropriateness of the select ion based on performance across the full range of vehicles and weights in the weight class. The “intended for production” conventional vehicle baseline ensures the baseline and hy brid vehicle pair will represent a real improvement for the specific application. The challenge exists when the conventional vehicle version of the hy brid may not exist. Another issue would exist if the conventional vehicle in the pair had performance characteristics such that the hybrid version does not represent significant improvements beyond other conventional vehicles. The best in class baseline vehicle approach provides some assurance that the improvement factor generated b y the h ybrid vehicle or system would in fact represent introduction of advanced technology with impro vements beyond existing conventional technology . The opportunity for confusion that exists with a best in class determination includes matching all of the appropriate performance metrics with the appropriate applications in a way

that is consistent with h ow the market values those improvements. This can become a moving target which could represent an ever evolving design target and eventuall y prove difficult for the Agencies to implement in a way that ensured a level playing field. The last option attemp ts to include the benefits of the previous options,******* **E.O. 12866 Review**

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303 of while maintaining the clarity needed for manufacturers to design and build with a clear understanding of design targets. The highest sales volume application by weight class for the previous model year e nsures benefits are measured based on how the market values performance. This has the potential to avoid ambiguity regarding which vehicle technology

should serve as the baseline and it addresses a concern raised by some commenters regarding the use of a baseline vehicle that clearly is not a class leader. The presumption being that the market will value the conventional technology that provides the best value over the lifetime of the vehicle for its intended service class and application. This approach is intended to be used in conjunction with the basic premise that the “A” vehicle will be the vehicle most similar to the h ybrid “B” vehicle. Should no apparent baseline be available, the vehicle being displaced b y the hy brid may be determined based on several characteristics including but not limited to vehicle class, vehicle application, and complete power s ys tem rated power (e.g. engine rated power for the base vehicle versus combined rated power for the engine
- hy brid sy stem). The agencies will continue to use the primary method of highest sales volume, by application and vehicle weight class in its assessment of the manufacturers selection of a baseline, however should there be a new application introduced with no apparent existing baseline , the closest baseline vehicle may be selected b y the manufacturer and will be evaluated b y the agencies
. The commenters' concerns will continue to be reviewed by the agencies as the program is implemented , however the approach suggested may not be appropriate across every method. To the extent that the pre
- transmission testing is a work based assessment consistent with today 's engine testing, we are remaining consistent with current practices in which the engine certification has applicability a cross applications. With that said we have defined a regenerative brake limit that will align the relative energy (regenerative to tractive) across all three methods. This can be found in 40 CFR 1036.525. Given the use of the same duty cycles for both post - transmission and chassis dy namometer testing, we are capturing the performance of the powertrain by exercising it in the same manner for both methods, so the methods will be equivalent in all three aspects that were mentioned by the commenter. **(3) Innovat**  **ive Technology Credits**  The agencies proposed a credit opportunity intended to apply

to new and innovative technologies that reduce fuel consumption and CO 2 emissions, but for which the reduction benefits are not captured over the test procedure , including the GEM, used to determine compliance with the standards (i.e., the benefits are “off
- cycle”). See 75 FR at 74257
- 58; see also 75 FR 25438
- 25440 where EPA adopted a similar credit program for MY 2012
- 2016 light
- duty vehicles. The agencies explained in the NPRM that EPA and NHTSA are aware of some emerging and innovative technologies and concepts in various stages of development with CO 2 emissions and fuel consumption reduction potential that might not be adequatel y captured on the final certification tes t cycles or are not inputs to the GEM , and******* **E.O. 12866 Review**

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304 of that some of these technologies might merit some additional CO 2 and fuel consumption credit generating potential for the manufacturer. Eligible innovative technologies are those technologies that are newl y introd uced in one or more vehicle models or engines, but that are not yet widely implemented in the heavy
- dut y fleet. Examples of such technologies mentioned in the NPRM include predictive cruise control , gear - down protection, active aerodynamic feature s , and a djustable ride height. Innovative technologies can include known , commercialized technologies if they are not yet widel y utilized in a particular heavy
- duty sector subcategory
. An y credits for these technologies would need to be base d on real
- world fuel consumption and GHG reductions that can be measured with verifiable test methods using representative driving conditions ty pical of the engine or vehicle application. In the NPRM, the agencies stated that we would not consider technolo gies to be eligible for these credits if the technology has a significant impact on CO 2 emissions and fuel consumption over the primary test cycles, or it is one of the technologies on whose performance the various vehicle and engine standards are premised . The agencies believe it is appropriate to provide an incentive to encourage the introduction of these ty pes of technologies and that a credit mechanism is an effective way to do so. Further, there needs to be a mechanism to account for the emission redu ctions and fuel efficiencies resulting when an innovative technology is used. The agencies proposed that this optional credit opportunity would be available through the 2018 model year reflecting that technologies which are now uncommon may be more widel y utilized by then, but the agencies sought comment on the need to extend the ability to earn credits beyond the model year 2018
. EPA and NHTSA also proposed that credits generated using innovative technol ogies be restricted within the subcategory averaging set where the credit was generated but requested comments on whether these innovative technology credits should be fungible across vehicle and engine categories. The agencies also propos ed that manufacturers quantify CO 2 and fuel consumption reductions associated with the use of the off
- cycle technologies such that the credits could be applied based on the metrics (such as g/mile and gal/100 mile for pickup trucks, g/ton
- mile and gal/1,000 ton - mile for tractors and vocational vehicle s, and g/bhp
- hr and gal/100 bhp
- hr for engines). Credits would have to be based on real additional reductions of CO 2 emissions and fuel consumption and would need to be quantifiable and verifiable with a repeata ble methodology . Such data would be submitted to EPA and NHTSA , and would be subject to a public evaluation process in which the public would have opportunity for comment. See 75 FR at 74258
. We propose d that the technologies upon which the c redits are based would be subject to full useful life compliance provisions, as with other emissions controls. Unless the manufacturer can demonstrate that the technology would not be subject to in
- use deterioration over the useful life of the vehicle, th e manufacturer would have to account for deterioration in the estimation of the credits in order to ensure that the credits are based on real in
- use emissions reductions over the life of the vehicle
.******* **E.O. 12866 Review**

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305 of In cases where the benefit of a technological approach t o reducing CO 2 emissions and fuel consumption cannot be adequately represented using existing test cycles, it was proposed that EPA and NHTSA would review and approve as appropriate test procedures and anal yt ical approaches to estimate the effectiveness of the technology for the purpose of generating credits. The demonstration program would have to be robust, verifiable, and capable of demonstrating the real
- world emissions benefit of the technology with strong statistical significance. Finally , the agencies explained in the NPRM that the CO 2 and fuel consumption benefit of some technologies may have to be demonstrated with a modeling approach. In other cases manufacturers might have to design on
- road test programs that are statistically

robust and based on real world driving conditions. As with the similar procedure for alternative off
- cycle credits under the light
- dut y 2012
- 2016 MY vehicle program, the agencies would include an opportunity for public comment as part of an y approval process. The agencies requested comments on the proposed approach for off
- cycle emissions credits, including comments on how best to structure the program. EPA and NHTSA particularly

requested comments on how the case
- by
- case approach to assessing off
- cycle innovative technology credits could best be d esigned, including way s to ensure the verification of real
- world emissions benefits and to ensure transparency in the process of reviewing manufacturer’s proposed test methods. In response to the NPRM, the agencies received numerous comments relating to al l aspects of the innovative technology credit flexibility

provision. The vast majority of the commenters supported this provision as proposed, but have requested further clarification, so the agencies are adopting the full provision as proposed and provid ing further discussion that addresses and clarifies the provision in response to the comments solicited and the comments received. We also note generally that man y comments asserting that the GEM or certain of the engine standards failed to account for ce rtain ty pes of emission reductions associated with technology improvements did not consider the availability

of innovative technologies for such technologies. These comments are addressed specifically

in the Response to Comment Document or elsewhere in th is preamble. A number of organizations, including DTNA, MEMA, Navistar, Green Truck Association, Eaton, ACEEE, and NESCAUM, commented that technologies such as advanced transmissions, engine cooling strategies, idle reduction, light
- weight components (including light
- weight engines), and advanced drivelines should be able to receive credit through the innovative technology program. The agencies agree with these commenters. The NPRM did not provide a specific list of technologies that the agencies would con sider “innovative” because the agencies intended that a innovative technology could be an y technology that can be proven to reduce CO 2 emissions and fuel consumption but for which the benefits are not captured utilizing the FTP procedures, SET procedures an d GEM methodology used to determine compliance with the emission and fuel consumption standards. An y of the suggested technologies could be considered as an innovative technology if the associated emission and fuel consumption benefit has******* **E.O. 12866 Review**

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306 of not already been considered, if the associated emission and fuel savings can be measured and validated, and if the technology and measurement methodology have been approved by the agencies. NHTSA and EPA will determine the impact of the technology and each agency in turn will accept the credits either jointly or independentl y depending upon whether the technology

has a direct bearing upon GHG or fuel consumption performance. A number of commenters, including Bendix, Bosch, Cummins, EMA/TMA, Eaton, DTNA, Navistar, Volvo, ArvinMeritor and USC requested that the innovative technology

process and procedures be more clearly structured and defined. Bendix requested that the agencies prescribe specific processes and procedures in the final rule s by which innovative technologie s can be submitted for review and approval. EMA/TMA requested that the agencies provide guidance on the certification process, and suggested that existing fuel consumption test procedures developed jointly by the Society

of Automotive Engineers (SAE) and the Technology & Maintenance Council (TMC), specificall y that the T yp e II and Ty pe III procedures be used. Eaton requested that the agencies identify

test methods that can be used for certification in order to provide transparency

and certainty , and promo te earl y technology introduction. In response to these comments, the agencies have further defin ed the process in the final action
. In cases where the benefit of a technological approach to reducing CO 2 emissions and fuel consumption canno t be adequately represented using existing test cycles, EPA and NHTSA will review and approve test procedures and anal yt ical approaches as appropriate to estimate the effectiveness of the technology for the purpose of generating credits. The innovative te chnologies will be evaluated in an A
- to - B comparison. The baseline engine and/or vehicle configuration must represent a configuration which is equivalent to the engine and/or vehicle with the innovative technology in terms of the other aspects of the engi ne and/or vehicle to prevent double counting of emissions reductions or gaming. Since innovative credits will be available for use within the same averaging set as the engine or vehicle which employ the innovative technology (for reasons explained below) , the agencies are defining innovative credit approaches b y regulatory category. (a ) Heavy
-Duty Pickup Truck and Van Innovative Technology Credits For HD pickups and vans, EPA and NHTSA proposed that they would review and approve manufacturer
- provided test pr ocedures and anal yt ical approaches to estimate the effectiveness of a technology for the purpose of generating credits. The proposal also expressed the view that the 5
- c ycl e approach currently used in EPA’s fuel econom y labeling program for light
- duty veh icles may

provide a suitable test regime, provided it can be reliabl y conducted on the dynamometer and can capture the impact of the off
cycle technology

(see 71 FR 77872, December 27, 2006)
. EPA established the 5
- cycle test methods to better represent re al
- world factors impacting fuel econom y, including higher speeds and more aggressive driving, colder temperature operation, and the use of air conditioning. Because we have not firml y established the suitability of the 5
- cycle approach for HD pickups and vans at this time, and we received no comments or data helping to establish it, we are not adopting provisions to specify its use. However, it******* **E.O. 12866 Review**

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307 of remains a candidate approach that manufacturers may pursue in making their demonstrations for innovative technol ogy credits, described below. Manufacturer data submitted to the agencies in pursuit of innovative technology credits would be subject to a public evaluation process in which the public would have opportunity

for comment. 319 Whether the approach involves on
- road testing, modeling, or some other analy

tical approach, the manufacturer would be required to present a final methodology

to EPA and NHTSA. EPA and NHTSA would approve the methodology and credits onl y if certain criteria were met. Baseline emissions and fuel consumption 320 and control emissions and fuel consumption would need to be clearl y demonstrated over a wide range of real world driving conditions and over a sufficient number of vehicles to address issues of uncertainty with the data. Data would need to be on a vehicle model
specific basis unless a manufacturer demonstrated model
- specific data was not necessary
. The agencies would publish a notice of availability in the Federal Register notifying the public of a manufacturer’ s proposed alternative off
- cycle credit calculation methodology and provide opportunit y for comment. The notice will include details regarding the methodology , but not include any Confidential Business Information. The agencies did not receive an y adverse comments on using the proposed approach for HD pickup trucks and vans. Consistent with the proposal, the agencies are adopting the proposed innovative technology credit provisions for HD pickup trucks and vans. (b ) Heavy
-Duty Engine, Combination Tractor, and Vocational Vehicle Innovative Technology Credits Innovative technology

credits developed in the HD engine, combination tractor, and vocational vehicle categories will need to be applied to the subcategory in which they were generated. The agencies are ad opting provisions in § 1037.611 to determine the separation of engine credits and vehicle credits based on the method which is selected by the manufacturer to determine the effectiveness of the innovative technology. For example, improvements to the engine that are demonstrated in either the engine dy namometer test or powerpack test will clearl y be engine credits. Improvements that are demonstrated using chassis dy namometer or on - road test will be considered vehicle credits. However, the agencies recogniz e that there may be exceptions to this approach, and will allow for the manufacturer to request an alternate classification of credits. A change in credit allocation will require approval from the agencies and would be subject to a public evaluation proce ss. Furthermore, to address the concerns of some commenters mentioned above, the agencies are adopting an approach for HD engines and vehicles that provides two paths for approval of the test procedure to measure the CO 2 emissions and fuel consumption reductions of an innovative off
- cycle technology used in the HD engine or vehicle
. These alternative approaches are similar to those adopted in the light
- duty vehicle rule. The
319 See 75 FR 25440. 320 Fuel consumption is derived from measured CO 2 emissions usi ng conversion factors of 8,887 g CO 2 /gallon for gasoline and 10,180 g CO 2 /gallon for diesel fuel.******* **E.O. 12866 Review**

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308 of first path will not require a public approval process of the test method. The “pre
approved” test methods for HD engines and vehicles will include the A
- to - B chass is testing, powerpack testing, and on
- road testing. The agencies are also adopting as proposed a second test method approval path that provides a manufacturer the ability to submit an alternative evaluation approach to EPA and NHTSA , which must be a pproved by the agencies prior to the demonstration program. As with HD pickup trucks and vans, s uch submissions of data should be submitted to the agencies and would be subject to a public evaluation process in which the public would have opportunity for comment. 321 Baseline emissions and control emissions would need to be clearl y demonstrated over a wide range of real world driving conditions and over a sufficient number of vehicles to address issues of uncertainty with the data. The agencies will publish a notice of availability

in the Federal Register notifying the public of a manufacturer’s proposed alternative off

- cycle credit calculation methodology and provide opportunity

for comment. The notice will include details regarding the methodology , but not include an y Confidential Business Information. Approval of the approach to determining a CO 2 and fuel consumption benefit would not imply approval of the results of the program or methodology ; when the testing, modeling, or analy ses are complete the results would likewise be subject to EPA and NHTSA review and approval. The pre
- approved test procedures include engine dy namometer, powerpack, chassis dy

namometer, and on
- road testing. Each of the test procedures require the evaluation of a baseline and control eng ine or vehicle (A vs. B testing) to quantify the improvement. Manufacturers may use the engine dy

namometer test procedures using the HD engine FTP or SET cycle. The chassis testing and powerpack testing would be conducted the same as described above for HD vocational vehicle and tractor hy brid testing in Section IV.B.2.b using the drive cycles and weightings finalized in this action for the primary

program. If a manufacturer requires the use of an alternate duty cycle, then it will require prior approva l from the agencies. The on
- road testing would be tested according to SAE J1321 Joint TMC/SAE Fuel Consumption Test Procedure Ty pe II Reaffirmed 1986
- 10 or SAE J1526 Joint TMC/SAE Fuel Consumption In - Service Test Procedure Ty pe III Issues 1987
- 06, with a dditional constraints to improve the test repeatability . The first constraint requires that the minimum route distance be set at 100 miles. In addition, the route selected must be representative in terms of grade. The agencies will take into account pub lished and relevant research in determining whether the grade is representative. 322 Similarly , the speed of the route must be representative of the drive cycle weighting adopted for each regulatory

subcategory . For example, if the route selected for an eva luation of a combination tractor with a sleeper cab contains only interstate driving, then the improvement factor would only appl y to 86 percent of the weighted result. Lastl y, the
321 See 75 FR 25440. 322 The agencies would consider information such as the study conducted by Oak Ridge National Lab which found that 72 percent of their data records w ere driven on flat terrain of less than 1 percent grade to determine the representativeness of the route. See Capps, G., O. Franzes, B.Knee, M.B. Lascurain, and P. Otaduy. Class 8 Heavy Truck Duty Cycle Project Final Report. ORNL/TM
- 2008/122, Oak Ridge National Laboratory. Last accessed on April 14, 2011 at page 5
- 14 of http://cta.ornl.gov/data/tedb29/Edition29_Chapter05.pdf******* **E.O. 12866 Review**

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309 of ambient air temperature must be between 5 and 35°C. The agencies also wou ld allow the use of a Portable Emissions Measurement (PEMS) device for the measurement of CO 2 emissions during the on
- road testing. The agencies are not pre
- approving any routes for the on
- road testing. Manufacturers will be required to submit the propos ed route prior to testing for approval.

The age ncies requested comments on whether credits generated using innovative technologies should be fungible across vehicle and engine categories and received comments both supporting and opposing the limited fungibility of these credits. Cummins did not support the fungibility of innovative technology credits across subcategories, arguing that it is not advisable given the large number and variability of different technology

ty pes and the uncertainty

in this provision. DTNA stated that the credits should be fung ible across engine and vehicle classes to be treated the same as advanced technology credits. EPA and NHTSA acknowledge that the HD program is a new program and , though the agencies continue to believe the credit provision is an important flexibility , the agencies are implementing inno vative technology credits based on the ability

to assign a value for future technologies and test methods that are as yet to be defined. Given the fact that the agencies cannot make a determination at this time of , what innovative technologies wi ll be offered, and thus the impa ct of increased fungibility to sectors outside the original application of the innovative technology might be, it is premature to allow that credit to be traded without restriction and with additional credit. Until such un certaint y can be understood and quantified , the agencies believe the final rule s should continue to include restriction s on the fubgibility of innovative technology credits across service classes and categories
. The agencies proposed that this optional credit opportunity be available through the 2018 model y ear , reflecting that technologies may be common by

then, but sought comment on the need to extend beyond model year 2018
. The agencies received comments from DTNA, Navist ar, Eaton, Cummins and Bosch supporting the extension of this provision beyond model year 2018. Eaton stated that though some technologies will be more common in 2018, new technologies will evolve facing the same difficulties concerning implementation and would benefit from this provision. Bosch explained that extension of the provision past 2018 is important because at the time of the final rule the GEM will not incorporate an y newer technology until it is updated in phase two of the program, and manufa ctures will therefore continue to need the innovative technology provision for receiving credits for technologies not accounted for in GEM. The agencies have reviewed these concerns and believe that they are valid. Therefore, the final rule do es not state that this provision ends in model year 2018. An y action taken on these credits in a subsequent rulemaking will be addressed by the agencies at that time in that future rulem aking. **(4) N**  **2 O Credit**  EPA received a comment from an industry stakeholder requesting a provision to a llow manufacturers of heavy
- dut y engines manufacturers to gain credit for redesigning aftertreatment s ys tems to reduce N 2 O emissions . It can be argued that such credit s would be necessary

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310 of emissions , since both are greenhouse gas emissions. EPA agrees that it is appropriate to consider all greenhouse gas emissions together for such situations where trade
- offs among the emissions exist due to technology selections. Thus, EPA is adopting a provision which allows engine manufacturers to generate CO 2 credits for very low N 2 O emissions. Specifically , manufacturers that certif y engines with full useful life N 2 O FEL emissions which are less than 0.04 g/hp
- hr could generate 2.98 grams of CO 2 credit for 0.01 grams of N 2 O reduced (consistent with the relative global warming potentials of CO 2 and N 2 O). For example, where a manufact urer certifies an engine family to have low per - brake horsepower hour N 2 O emissions of 0.01 g/hp
- hr and applies the 0.02 g/hp
hr assigned deterioration factor, it could certify the engine famil y to a 0.03 g/hp
- hr N 2 O FEL and generate enough CO 2 credits to offset CO 2 emissions 2.98 g/hp
- hr above the standard. The agency

is limiting this provision to model years 2014 through 2016, the same years that NHTSA’s program is voluntary , to maintain alignment between the CO 2 emissions and fuel consumption standards. 

## V. **NHTSA**

**and EP A**  **Com pliance, Certification, and**  **Enfor cement Pr**  **ovisions A.**  **Overview** (1) **Compliance Approach** This section describes EPA’s and NHTSA’s final program to ensure compliance with EPA’s final emission standards for CO 2 , N 2 O, and CH 4 and NHTSA’s final fuel consumption standards, as described in S ection II. To achieve the goals projected in the proposal , it is important for the agencies to have an effective and coordinated compliance program for our respective standards. As is the case with the l ight
- d ut y vehicle rule , the final compliance program for heav y - duty vehicles and engines has two central priorities : (1) to address the agencies’ respective statutory requirements; and (2) to streamline the compliance process for both manufacturers and the agencies b y building on existing practice wherever possible, and b y structuring the program such that manufacturers can use a single data set to satisfy the requirements of both agencies. It is also important to consider the provisions of EPA’s existing criteria pollutant program and NHTSA’s existing LD program in the development of the approach used for heavy
- duty certification and compliance. The existing EPA heavy
- dut y highway engine emissions program has an established infrastructure and methodology that will allow for an effective integration with this fin al GHG and fuel consumption program, without needing to create new unique processes in man y instances. The HD compliance program will address the importance of the impact of new control methods for heav y - duty vehicles as well as other control s ys tems and strategies that may extend beyond the traditional purview of the criteria pollutant program. Section 202(b)(3)(A) of the Clean Air Act (CAA) defines “model ye ar” to mean “ . . . the manufacturer’s annual production period (as determined by the Administrator) which includes January

1 of such calendar ye ar” or to mean calendar ye ar if the manufacturer has no annual production period. Section 32901(a)(16) of EISA defines “model year” with almost identical language. Section 202(b)(3)(A) of the CAA also******* **E.O. 12866 Review**

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311 of allo ws the EPA Administrator to define model year differently to assure “. . . that vehicles and engines manufactured before the beginning of a model ye ar were not manufactured for purposes of circumventing the effective date of a standard . . .” Consistent w ith this statutory language, the NPRM proposed regulatory text to define “model year,” in 40 CFR 1036.801, 40 CFR 1037.801 and 49 CFR 535.4. All three codified the primary

CAA and EISA definition, but differed with respect to language intended to prevent circumvention of the standards. The proposed definition for engines was: Model year means the manufacturer’s annual new model production period, except as restricted under this definition. It must include January 1 of the calendar year for which the model year is named, may not begin before January 2 of the previous calendar year, and it must end by December 31 of the named calendar year. Manufacturers may not adjust model years to circumvent or delay compliance with emission or standards or to avoid the o bligation to certify annually. The proposed definition for vehicles was: Model year means the manufacturer’s annual new model production period, except as restricted under this definition and 40 CFR part 85, subpart X. It must include January 1 of the cal endar year for which the model year is named, may not begin before January 2 of the previous calendar year, and it must end by December 31 of the named calendar year. Use the date on which a vehicle is shipped from the factory in which you finish your asse mbly process as the date of manufacture for determining your model year. For example, where a certificate holder sells a cab
- com plete vehicle to a secondary vehicle manufacturer, the model year is based on the date the vehicle leaves the factory as a cab
c omplete vehicle. EPA’s and NHTSA’s vehicle model y ear definitions differed slightly in wording but were essentially

the same for §§ 1037.801 and 535.4. In creating the model year definition for vehicles, the agencies were mindful of the confusion chassis manufacturers may face in determining their model years in a given period of production, for example, due to manufacturing and shipping products at different levels of completion and involving multiple manufacturers. The agencies included the term “ship d ate” in order to provide chassis manufacturers a clear reference date (“in which you finish your assembly process”), as well as to decrease the risk of gaming that might occur if no reference date was specified and there were therefore no parameters on the choice of model year. The engine definition was chosen based on consistency with prior EPA definitions for other mobile source programs. The agencies received comments on the definitions from EMA/TMA and Navistar expressing concern over the potential for unintended consequences. The commenters argued that the use of “ship date” for vehicles could create difficulty and uncertaint y for manufacturers for whom the ship date can be delay ed for reasons outside of their control, such as late
- arriving components. They also argued that the differences between the vehicle and engine definitions would increase the likelihood that a single vehicle would be subject to different fuel efficiency requirements during certain ye ars of transition in the standards, as it wou ld not be unlikely that a vehicle would be a later model y ear than******* **E.O. 12866 Review**

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312 of an engine. For example, during the 2016
- 2017 period, an engine may be model year 2016 while the vehicle is model y ear 2017. NHTSA and EPA have considered further whether there are benefits to maintaining separate definitions for “model y ear” for the engine and vehicle standards based on these comments. We continue to believe that differences in manufacturing practices for engines and vehicles support the use of separate definitions. Howev er, for this final action , we have decided to modify the definitions to account for the above concerns, address circumstances of multiple manufacturers, and provide increased consistency

and clarity . Thus, instead of “ship date,” the vehicle definition for model ye ar will refer to the date when the certifying manufacturer’s “manufacturing operations were completed,” within the specified ye ar. The final definition also specifies that each vehicle must be assigned a model year before introducti on into U.S. commerce, but allow a manufacturer to redesignate a later model year if it does not complete its manufacturing operations for the vehicle within the initial model year. To further standardize with EPA definitions, NHTSA will add the EPA engine model year definition to its corresponding regulation 49 CFR 535.4. We believe that this will address the concerns raised b y commenters because it will provide standardization, more specificit y and account for current manufacturer practices. The agenci es are aware that the designation of a model y ear on a chassis for the purposes of this heav y - duty truck emission and fuel consumption program may result in a complete vehicle that has one model year associated with its chassis for emission/f uel consumption purposes and another model ye ar designation in its vehicle identification number (VIN) for a motor vehicle’s certification to Federal motor vehicle safety standards. However, as the chassis model year designation would only be used on the certificate of conformity

by the responsible manufacturer for the purpose of complying with th e s e rule s , it would not contradict other purposes for which a VIN model y ear may be used. EMA/TMA also argued that the proposed dates used to specify the model year would shorten the lead time provided for manufacturers, because production for HD vehicles often begins in the earl y months of the ye ar preceding the model year. We are addressing these concerns by finalizing January

1, 2014 as the date certain when manufacturers are required to comply . Prior to this date, certification of the vehicle would be optional. Thus, a manufacturer could produce uncertified model year 2014 vehicles through December 31, 2013. The heavy
- duty compliance program uses a varie ty of mechanisms to conduct compliance assessments, including preproduction certification and postproduction testing and in
- use monitoring once vehicles enter customer service. Specificall y, the agencies are establishing a compliance program that utilizes existing EPA testing protocols and certification procedures. Under the provisions of this program, manufacturers will have significant opportunit y to exercise implementation flexibility , based on the program schedule and design, as well as the credit prov isions in the program for advanced technologies. This program includes a process to foster the use of innovative technologies, not y et contemplated in the current certification process. EPA and NHTSA will conduct compliance preview meeti ngs which provide the agencies an******* **E.O. 12866 Review**

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313 of opportunity

to review a manufacturer’s new product plans and ABT projections. Given the nature of the final compliance program that involves both engine and vehicle compliance for some categories, it is necessary f or manufacturers to begin pre
certification meetings with the agencies early enough to address issues of certification and compliance for both integrated and non
- integrated product offerings. Based on feedback EPA and NHTSA received during the light
- dut y GHG comment period, both agencies are seeking to ensure transparency in the compliance process of this program. In addition to providing information in published reports annually regarding the status of credit balances and compliance on an industry basis, EPA and NHTSA sought comments in the NPRM on additional strategies for providing information useful to the public regarding industry’s progress toward reducing GHG emissions and fuel consumpti on from this sector while protecting sensitive business information. In response, commenters (Sierra Club and UCS) also had strong interests for the agencies to ensure that any collected data is made available to the public with an interest especially

for providing details on the credit balances for each manufacturer and for data on specific vehicle configuration information data to better understand the market and help with the development of future programs. Additional requests (ALA and EDF) were also made for the agencies to expand consumer education and outreach for medium
- and heav y - duty vehicles thereb y empowering fleet purchasers to make better informed choices. Another commenter (ACEEE) specificall y requested that th e agencies publish a heav y - dut y truck trend report describing vehicles and engines sold, including fuel efficiency

and GHG performance and the use of advanced technology
. Itwas further recommended (by ALA and EDF) that the agencie s should create consumer education and outreach programs for medium and heav y - duty vehicles such as fuel consumption and GHG emissions information for all vehicles and engines covered by the rule s , in buyers guide similar to the fuel economy guid es that EPA and NHTSA provide for the light
- duty CAFE program. IC CT and UCS also requested having a consumer based label for heav y - dut y pickup trucks and vans providing fuel econom y and emission information like in the light
- duty CAFE program
. The agencies agree that there is a need for sharing heav y - dut y emissions and fuel consumption information and therefore will make information publically available under this program. (a ) Heavy
-Duty Pickup Trucks and Vans The final compliance regulations (for certification, testing, reporting, and associated compliance activities) for heav y - dut y pickup trucks and vans closely track both current practices and the recently adopted greenhouse gas regulations for light
- dut y veh icles and trucks. Thus they are familiar to manufacturers. EPA already oversees testing, collects and processes test data, and performs calculations to determine compliance with both CAFE and CAA standards for L ight
- Dut y. For Heavy
- Duty products that clo sel y parallel light
- dut y pickup s and vans, under a coordinated approach, the compliance mechanisms for both programs for NHTSA and EPA would be consistent and non
- duplicative for GHG pollutant standards and fuel consumption requirements.******* **E.O. 12866 Review**

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314 of Vehicle emi ssion standards established under the CAA apply throughout a vehicle’s full useful life. Under EPA ’s existing criteria pollutant emission standard program for heavy
- dut y pickup trucks and vans, vehicle manufacturers certify a group of vehicles called a t est group. A test group t ypically includes multiple vehicle lines and model types that share critical emissions
- related features. The manufacturer generall y selects and tests a single vehicle, t ypicall y considered “worst case” for criteria pollutant emissi ons, which is allowed to represent the entire test group for certification purposes. The test vehicle is the one expected to be the worst case for the emission standard at issue. Emissions from the test vehicle are assigned as the value for the entire tes t group. However, the compliance program in the recent GHG regulations for light
- duty vehicles, which is essentially the well
- established CAFE compliance program, allows and may require manufacturers to perform additional testing at finer levels of vehic le models and configurations in order to get more precise model
- level fuel econom y and CO 2 emission levels. The agencies are adopting this same approach for heavy
- dut y pickups and vans. Additionally, like the light
- duty program ’s use of anal yt icall y derived fuel econom y (ADFE) data, we will allow manufacturers to predict CO 2 levels (and corresponding fuel consumption) of some vehicles in lieu of testing , using a methodology deemed appropri ate b y the agencies. Based on manufacturer input, a method for calculating anal yt ically derived carbon dioxide (ADCO 2 ) is specified in § 1037.104 of this rule. 323 At a manufacturer’s request, EPA may approve anal yt ical methods alternate to the method described in this rule if said alternate methods are deemed to be more accurate than the anal yt ical method described in this rule
. (b ) Heavy
- duty Engines Heav y - dut y engine certification and compliance for traditional criteria pollutants has been established by

EPA in its current general form since 1985 . In developing a program to address GHG pollutants, it is important to build upon the infrastructure for certification and compliance that exists today . At the same time, it is necessary to develop additional tools to address compliance with GHG emissions requirements, since the final standard reflect control strategies that extend beyond those of traditional criteria pollutants. In so doing, the agencies are finalizing use of EPA’s current engine test based strategy

– currentl y used for criteria pollutant compliance
-- to also m easure compliance for GHG emissions. The agencies are also finalizing to add new strategies to address vehicle specific designs and hardware which impact GHG emissions. The traditional engine approach would largel y match the existing criteria pollutant c ontrol strategy . This would allow the basic tools for certification and compliance, which have already been developed and implemented, to be expanded for carbon dioxide, methane, and nitrous oxide. Engines with similar emissions control technology may be certified in engine families, as with criteria pollutants. For EPA, the final approach for certification will follow the current process, which require s manufacturer submission of certification applications, approval of the

323 Memorandum from Don Kopinski, U.S. EPA to docket EPA
- HQ
- OAR
- 2010
- 0162 , July 7, 2011.******* **E.O. 12866 Review**

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315 of application, and receipt of the certificate of conformity prior to introduction into commerce of an y engines. EPA proposed the certificate of conformit y be a single document that would be applicable for both criteria pollutants and greenhouse gas pollutants. For NHTSA, a manufacturer must submit certification applications with equivalent fuel consumption information. NHTSA will assess compliance with its fuel consumption standards based on the results of the EPA GHG emissions compliance process for each en gine family
. (c) Class 7 and 8 Combination Tractors and Class 2b
- 8 Vocational Vehicles Currently , except for HD pickups and vans, EPA does not directl y regulate exhaust emissions from heav y - dut y vehicles as a complete entity
. Instead, a compliance assessme nt of the engine is undertaken as described above. Vehicle manufacturers installing certified engines are required to do so in a manner that maintains all functionality

of the emission control sy stem. While no process exists for certifying these heav y - duty

vehicles, the agencies believe that a process similar to the one we propose d to use for heav y - dut y engines can be applied to the vehicles. The agencies are finalizing related certification programs for heav y - dut y vehicles. Manufacturers will divide their vehicles into families and submit applications to each agency

for certification for each family . However, the demonstration of compliance will not require emission testing of the complete vehicle, but will instead involve a c omputer simulation model, GEM. This modeling tool uses a combination of manufacturer
- specified and agency
- defined vehicle parameters to estimate vehicle emissions and fuel consumption. This model is then exercised over certain drive cycles. EPA and NHTSA are finalizing the duty cycles over which Class 7 and 8 combination tractors would be exercised to be: 65 mile per hour steady state cruise cycle, the 55 mile per hour steady state cruise cycle, and the California ARB transient cycle. Additional details regarding these duty cycles will be addressed in Section V.D(1)(b) below. Over each dut y c yc le, the simulation tool will return the expected CO 2 emissions, in g/ton
mile, and fuel consumption, gal/1,000 ton
- mile, which would then be compared to the standards. 

### B. **Heavy -**  **duty Pickup Trucks and Vans (1)**  **Compliance Approach**  EPA and NHTSA are finalizing, largel y as proposed, new emission standards to control greenhouse gases (GHGs) and reduce fuel consumption from heav y - duty vehicles with gross v ehicle weight rating between 8,500 and 14,000 pounds that are not already covered under the MY 2012
- 2016 medium
- duty passenger vehicle standards. Inthis section “trucks” refers to heav y - dut y pickup trucks and vans between 8,5 00 and 14,000 pounds not alread y covered under the light
- dut y rule. First, EPA is finalizing fleet average emission standards for CO 2 on a gram per mile (g/mile) basis and NHTSA is finalizing fuel consumption standards on a gal/100 mile basis that would apply to a manufacturer’s fleet of heavy
- duty trucks and vans with a GVWR from 8,500 pounds to14,000 pounds (Class 2b and 3). CO 2 is the primary******* **E.O. 12866 Review**

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316 of pollutant resulting from the combustion of vehicular fuels , and the amount of CO 2 emitted is highly

correlated to the amount of fuel consumed . In addition, the EPA is finalizing separate emissions standards for three other GHG pollutants: CH 4 , N 2 O, and HFC. CH 4 and N 2 O emissions relate closel y to the design and efficient use of emission control hardware (i.e., cataly tic converter s ). The standards for CH 4 and N 2 O would be set as caps that would limit emissions increases and prevent backslidin g from current emission levels. In lieu of meeting the caps, EPA is allowing manufacturers the option of offsetting an y N 2 O emissions or any CH 4 emissions above the cap by taking steps to further reduce CO 2 . Separatel y, EPA is finalizing to set standards to control the leakage of HFCs from air conditioning s ys tems. Previously , complete vehicles with a Gross Vehicle Weight Rating of 8,500
- 14,000 pounds could be certified according to 40 CFR part 86, subpart S. These heavy
duty chassis certified vehicles were required to pass emissions on both the Light
- dut y FTP and HFET (California requirement) 324 . These rules will use the same testing procedures already required for heav y - dut y chassis certification, namely the L ight
- dut y FTP and the HFET . Using the data from these two tests, EPA and NHTSA will compare the CO 2 emissions and fuel consumption results against the attribute
- based target. The attribute upon which the CO 2 standard is based is a function of vehicle payload, vehicle towing capacit y and two
- wheel versus four
- wheel drive configuration. The attribute
ba sed standard targets will be used to determine a manufacturer fleet standard
. As discussed in section IV above, manufacturers may use the ABT program and other flexibilities in achieving and demonstrating compliance. Th ese rule s will generally require complete HD pickups and vans to have CO 2 , CH 4 and N 2 O values assigned to them, either from actual chassis dynamometer testing or from the results of a representative vehicle in the test group with appropriate adjustments made for differences. Manufacturers will be allowed to exclude vehicles they sell to secondary manufacturers as incomplete vehicles, unless these vehicles are chassis
certified for criteria (non
- GHG) pollutants. To the extent manufacturers are allowed to engine
- or chassis
- certify for criteria pollutant requirements today , they will be allowed to continue to do so under the final regulations. See subsection V.B( 1)(e) for discussion of special provisions for c hassis
- certification to GHG and fuel consumption standards. Because this program for heav y - dut y pickup trucks and vans is so similar to the program recentl y adopted for light
- dut y trucks and codified in 40 CFR part 86, subpart S, EPA will apply

most of those subpart S regulatory provisions to heavy
- duty pickup trucks and vans and not recodify them in the new part 1037. Most of the new part 1037 thus would not apply

for heav y - dut y pickup trucks and vans. How 40 CFR part 86 applies, and which provisions of the new 40 CFR part 1037 appl y for heavy
- dut y pickup trucks and vans is described in §10 37.104
. S imilarly NHTSA’s requirements for these vehicles in Part 535.6(a) are based on 40 CFR part 86
.

324 Diesel engines are engine
- certified with the option to chassis certification Federally and for California******* **E.O. 12866 Review**

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317 of (a ) Certification Process CAA section 203(a)(1) prohibits manufacturers from introducing a new motor vehicle into commerce unless the vehicle is covered by an EPA
- issued certificate of conformity . Section 206(a)(1) of the CAA describe s the requirements for EPA issuance of a certif icate of conformity , based on a demonstration of compliance with the emission stan dards established b y EPA under s ection 202 of the Act. The c ertification demonstration requires emission testing , and certification is required for each model ye ar. 326 Under existing heav y - duty chassis certification and other EPA emission standard programs , vehicle manufacturers certify a group of vehicles called a test group. A test group ty pically includes multiple vehicle car lines and model ty pes that share critical emis sions
- related features. 327 EPA requires the manufacturer to make a good faith demonstration in the certification application that vehicles in the test group will both 1) comply throughout their useful life with in the e missions bin assigned, and 2) contribute to fleetwide compliance with the applicable emissions standards when the ye ar is over. EPA issues a certificate for the vehicles included in the test group based on this demonstration, and include s a condition in the certificate that if the manufacturer does not comply with the fleet average , then production vehicles from that test group will be treated as not covered by the certificate to the extent needed to bring the manufacturer’s fleet average into compliance with the applicable standards
. Th e cert ification process often occurs sev eral months prior to production and manufacturer testing may occur months before the certificate is issued. The certification process for the existing heav y - dut y chassis program is an efficient way for manufacturers to conduct the needed testing well in advance of certification, and to receive certificates in a time frame which allow s for the orderl y production of vehicles. The use of condi tions on the certificate has bee n an effective way to ensure that manufacturers comply throughout their useful life and meet fleet standards when the model year is complete and the accounting for the individual model sales is performed
. EPA has also adopted this approach as part of its light
- dut y vehicle GHG compliance program. Th e s e rule s will similarly condition each certificate of conformity for the GHG program upon a manufacturer’s good faith demonstration of compliance with the manufacturer’s fleetwide average CO 2 standard. The following discussion explains how the agencies will integrate this new vehicle certification program into the existing certification program. An integrated approach with NHTSA has been undertaken to allow manufacturers a single point of entry

to a ddress certification and compliance. Vehicle manufacturers

326 CAA Section 206(a)(1). 327 The specific test group criteria are described in 40 CFR 86.1827
- 01, car lines and model types have the meaning given in 40 CFR 86.1803
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318 of will initiate the formal certification process with their submission of application for a certificate of conformity

to EPA , similar to the light
- duty program. (b ) Certification Test Groups and Test Vehicle Selection For heav y - dut y chassis certification to the criteria emission standards, manufacturers currentl y, as mentioned above, divide their fleet into "test groups" for certification purposes. The test group is EPA ’ s unit of cer tificatio n; one certificate is issued per test group / evaporative famil y combination
. These groupings cover vehicles with similar emission control sy stem designs expected to have similar emissions performance (see 40 CFR 86.1827
- 01) . The factors considered for de termining test groups include Gross Vehicle Weight, combustion cycle, engine ty pe, engine displacement, number of cylinders and cylinder arrangement, fuel ty pe, fuel metering sy stem, catal ys t construction and precious metal composition, among others. Vehi cles having these features in common are generall y placed in the same test group. 328 This program will retain the current test group structure for heavy
- duty pickups and vans in the certification requirements for CO 2 and fuel consumption
. At the time of certification, manufacturers will use the CO 2 emission level from the Emission Data Vehicle as a surrogate to represent all of the models in the test group. However, following certification further testing will generally be allowed for comp liance with the fleet average CO 2 and fuel consumption standard s as described below. EPA’s issuance of a certificate will be conditioned upon the manufacturer’s subsequent model level testing and attainment of the actual fleet average, much like light
- dut y CAFE and GHG compliance requires. Under the current program, complete heav y - duty Otto
- cycle vehicles under 14,000 pounds Gross Vehicle Weight Rating are required to chassis certify (s ee 40 CFR 86.1801
- 01(a)). The current program allows complete heav y - d ut y diesel vehicles under 14,000 pounds GVWR to optionally chassis certify (s ee 40 CFR 86.1863
- 07(a)). The new regulations we are adopting will not change these existing EPA certification options for complete (or incomplete) HD vehicles . EPA recognizes that the existing heav y - dut y chassis test group criteria do not necessarily relate to CO 2 emission levels. See 75 FR 25472 (addressing the same issue for light
- duty vehicles)
. For instance, while some of the criteria, such as combustion cycle, engine ty pe and displacement, and fuel metering, may have a relationship to CO 2 emissions, others, such as those pertaining to the some exhaust aftertreatment features , may not. In fact, there are many vehicle design factors that impact CO 2 generation and emissions but are not major factors includ ed in EPA ’ s test group criteria. 329 Most important among these may be vehicle wei ght, horsepower, aerod ynamics, vehicle size, and performance features. To remed y this, EPA will allow manufacturers provisions that are similar to the light
- duty vehicle rule that would yi eld more accurate CO 2 estimates than only using the test group emission data vehicle CO 2 emissions.

328 EPA provides for other groupings in certain circumstances, and can establ ish its own test groups in cases where the criteria do not apply. See 40 CFR 86.1827
- 01(b), (c) and (d). 329 EPA noted this potential lack of connection between fuel economy testing and testing for emissions standard purposes when it first adopted fuel econ omy test procedures. See 41 FR 38677, Sept. 10, 1976.******* **E.O. 12866 Review**

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319 of EPA believes that the current test group concept is appropriate for N 2 O and CH 4 because the technologies that would be employed to control N 2 O and CH 4 emissions may generall y be the same as those used to co ntrol the criteria pollutants. However, manufacturers will determine if this approach is adequate method for N 2 O and CH 4 emissions compliance or if testing on additional vehicles is required to ensure their entire fleet meets applicable standards. As just discussed, the “worst case” vehicle a manufacturer selects as the Emissions Data Vehicle to represent a test group under the existing regulations (40 CFR 86.1828
- 01) may not have the highest levels of CO 2 in that group. Fo r instance, there may be a heavier, more powerful configuration that would have higher CO 2 , but may , due to the way

the catal yt ic converter has been matched to the engine, actually have lower NO X , CO, PM or HC emissions
. Therefore, EPA is allowing the use of a single Emission Data Vehicle to represent the test group for both criteria pollutant and CO 2 certification. The manufacturer will be allowed to initially apply the Emission Data Vehicle’s CO 2 emissions value to all models in the test group, even if o ther models in the test group are expected to have higher CO 2 emissions. However, as a condition of the certificate, this surrogate CO 2 emissions value will generally be replaced with actual, model
- level CO 2 values based on results from additional testing that occurs later in the model y ear much like the light
- dut y CAFE program, or through the use of approved methods for anal yt ically

derived fuel econom y. This model level data will become the official certifi cation test results (as per the conditioned certificate) and will be used to determine compliance with the fleet average. If the test vehicle is in fact the worst case CO 2 vehicle for the test group , the manufacturer may elect to apply

the Emission Data Vehicle emission levels to all models in the test group for purposes of calculating fleet average emissions. Manufacturers may be unlikely

to make this choice, because doing so would ignore the emissions performance of vehicle models in their fleet with lo wer CO 2 emissions and would unnecessarily inflate their CO 2 fleet average. Testing at the model level, in order to better represent the improved performance of vehicles within a test group other than the Emission Data Vehicle, will necessarily increase te sting burden beyond the minimum EDV testing. As explained in earlier Sections, there are two standards that the manufacturer will be subject to, the fleet average standard and the in
- use standard for the useful life of the vehicle. Compliance with the f leet average standard is based on production weighted averaging of the test data that applies for each model. To address commenter concerns regarding test variability

due to facility

and build variation for each model, the in
- use and SEA standards are se t at 10 percent higher than the level used for that model in calculating the fleet average. The certificate covers both of the fleet and in
- use standards, and the manufacturer has to demonstrate compliance with both of these standards for purposes of rece iving a certificate of conformity . The certification process for the in
- use standard is discussed above. (c) Pre
- Model Year (or Compliance Plan) Reporting EPA and NHTSA are requiring that manufacturers submit a compliance plan for their entire fleet prior t o the certification of any test group in a given model year.******* **E.O. 12866 Review**

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320 of Preferably , this compliance plan would be submitted at the manufacturer’s annual certification preview meeting. This preview meeting is t ypicall y held before the earliest date that the model year can begin. The earliest a model year can begin is January 2 nd of the calendar ye ar prior to the model year. This plan should include the manufacturer’s estimate of its attribute
- based standard, along with a demonstration of compliance with the standard based on projected model
- level CO 2 emissions and fuel consumption, and production estimates. This information will be similar to the information submitted to NHTSA and EPA in the pre
- model year report required for CAFE compliance for light
duty vehicles. Included in the compliance plan, manufacturers seeking to take advantage of credit flexibilities will include these in their compliance demonstration. Similarly , the compliance demonstration will need to include a credible plan for addressing deficits a ccrued in prior model years. EPA and NHTSA will review the compliance plan for technical viability

and conduct a certification preview discussion with the manufacturer. The agencies will view the compliance plan as part of the manufacturer’s good faith d emonstration, but understands that initial projections can vary considerably

from the reality of final production and emission results. In addition, the compliance plan must be approved b y the EPA Administrator prior to any certificate of compliance being issued. (d ) Demonstrating compliance (i ) CO2 and Fuel Consumption Fleet Standards As noted, attribute
- based CO 2 and fuel consumption standards result in each manufacturer having fleet average CO 2 and fuel consumption standard s unique to its heav y - dut y truck fleet of GVWR between 8,500
- 14,000 pounds and that standard will be separate from the stand ard for passenger cars, light
- trucks , and other heav y - duty trucks. The standards depend on those attributes corresponding to the relative capability, or “work factor”, of the vehicle models produced by that manufacturer. The final attributes used to determine the stringency of the CO 2 and fuel consumption standard s are payload and towing capacity

as described in Section II.
. Generally , fleets with a mix of vehicles with increased payloads or greater towing capacity (or utilizing four wheel drive configurations ) w ill face numericall y less stringent standards (i.e., higher CO 2 grams/mile standards or fuel consumption gallons/100 miles standards ) than fleets consisting of less powerful vehicles. (However, the standards will be expected to be equally challenging and achieve similar percent reductions.) Although a manufacturer’s fleet average standard could be estimated throughout the model year based on projected production volume of its vehicle fleet, the final compliance values w ill be based on the final model ye ar production figures. A manufacturer’s calculation of fleet average emissions and fuel consumption at the end of the model year w ill be based on the production
- weighted average emissions and fuel consumption of each model in its fleet. The payload and towing capacit y inputs used to determine manufacturer compliance will be the advertised values. The agencies will use the same general vehicle category definitions that are used in the current EPA HD chassis certification ( See 40 CFR 86.1816
- 05). The new vehicle category definitions differ slightly from the EPA definitions for Heavy
- duty Vehicle definitions for the existing program, as well as other EPA vehicle programs. Mainly ,******* **E.O. 12866 Review**

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321 of manufacturers will be able to test, and possibly model, more configurations of vehicles than were historically possible . The existing criteria pollutant program requires the worst case configuration be tested f or emissions certification. For HD chassis certification, this usually meant onl y testing the vehicle with the highest ALVW, road
- load, and engine displacement within a given test group. This worst case configuration may only represent a small fraction o f the test group production volume. By testing the worst case, albeit possibly small volume, vehicle configuration, the EPA had a reasonable expectation that all represented vehicles would pass the given emissions standards. Since CO 2 standards are a fle et standard based on a combination of sales volume and work factor (i.e., payload and towing capabilit y) , it may be in a manufacturer ’ s best interest to test multiple configurations within a given test group to more accurately estimate the fleet average CO 2 emission levels and not accept the worst case vehicle test results as representative of all models. Additionally , vehicle models for which a manufacturer desires to use anal yt ically

derived fuel econom y (ADFE) to estimate CO 2 emission levels may need add itional actual test data for vehicle models of similar but not identical configurations. The agencies are allowing the use of ADFE similar to that allowed for light
- duty vehicles in 40 CFR 600.006
- 08(e). Some commenters, including the American Automotive Policy Council, were concerned that adopting the light
- dut y ADFE program with i ts current minimum test requirements would unduly increase testing burden. In addition to concerns over implementing the light
- duty ADFE program for heavy
- duty GHG compliance, commenters noted the need to develop a new HD ADFE methodol ogy that addressed unique HD concerns. EPA and NHTSA have continued to work with stakeholders to address the above concerns with using a modified LD ADFE program. To address these concerns, the agencies will expand the allowed use of ADFE beyond that whi ch is allowed in the LD program. Since ADFE equations are not final at the time of this action , updates to the HD ADFE program will be made through guidance or future rulemaking. The GHG and fuel econom y rulemaking for light
- dut y vehicles adopted a c arbon balance methodology used historically to determine fuel consumption for the light
- duty labeling and CAFE p rograms, whereby the carbon
- related combustion products HC and CO are included on an adjusted basis in the compliance calculations, along with C O 2 . The resulting carbon
- related exhaust emissions (CREE) of each test vehicle are calculated and it is this value, rather than simply CO 2 emissions, that is used in compliance determinations. The difference between the CREE and CO 2 is ty picall y very sma ll. See generally

75 FR at 25472. NHTSA and EPA are not adopting the CREE methodology for HD pickups and vans, and so will not adjust CO 2 emissions to further account for additional HC and CO. The basis of the CREE methodology in historical labeling and CAFE programs is not relevant to HD pickups and vans, because these historical programs do not exist for HD vehicles. Furthermore, test data used in this rulemaking for standards
- setting has not been adjusted for this effect, and so it would create an inconsistency , albeit a small one, to apply it for compliance with the numerical standards we are finalizing. Finally , it would add complexity

to the program with littl e real world benefit.******* **E.O. 12866 Review**

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322 of (ii) CO2 In
- Use Standards and Testing Section 20 2(a)(1) of the CAA requires emission standards to appl y to vehicles throughout their statutory useful life . Section II discusses in
- use standards. Currently , EPA regulations require manufa cturers to conduct in
- use testing as a condition of certification for heav y - dut y trucks between 8,500 and 14,000 gross vehicle weight that are chassis certified. The vehicles are tested to determine the in
- use levels of criteria pollutants when they are i n their first and third y ears of service. This testing is referred to as the In
- Use Verification Program , which was first implemented as part of EPA’s CAP 2000 certification program (s ee 64 FR 23906, May 4, 1999 )
. An in
- use program was already set forth in the light
- duty 2012
- 2016 MY vehicle rule similar to the heav y - duty pickups and vans
. The In
- Use Verification Program for heav y - dut y pickups and vans will follow the same general provisions of the light
- dut y program in regard to t esting, vehicle selection, and reporting. See 75 FR 25474
- 25476. (e) Special Provisions for Chassis Certification We proposed to include most cab
- chassis Class 2b and 3 vehicles ( vehicles sold as i ncomplete vehicles with the cab substantially in place but without the primary load
carryi ng enclosure ) in the complete HD pickup and van program. Because their numbers are relativel y small, and to reduce the testing and compliance tracking burden to manufacturers, we proposed to treat these vehicles as equivalent to the complete van or truck product from which they are derived . The manufacturer would determine which complete vehicle configuration it produces most closely matches the cab
- chassis product leaving its facility , and would include each of these cab
- chassis vehicles in the fleet averaging calculations as though it were identical to the corresponding complete “sister” vehicle
. See 75 FR at 74263. Commenters opposed this proposed requirement for a number of reasons: (1) it would have the unintended consequence of dual certification for some of these vehicles

— engine certification for criteria pollutants and vehicle certification for GHGs, and vice
ve rsa for some other vehicles, (2) it would be of modest benefit because most of these cab
- chassis vehicles would receive the desired aerody namic and other non
- engine improvements even without chassis certification, in virtue of their derivation from complet e vehicles, and (3) a readily
- identifiable sister vehicle may not exist in every case. Based on the comments, the agencies have re
- evaluated the proposed approach for cab
- chassis c ertification and are restructuring our compliance approach to provide sign ificantl y more flexibility while still ensuring comparable or better GHG and fuel consumption performance overall
. We are not requiring that cab
- chassis vehicles be chassis
- certified, but are retaining chassis
- certification for them as an option using the proposed sister vehicle concept. We are instead requiring that vehicles that are chassis
- certified for criteria pollutants be chassis
- certified for GHGs and fuel consumption, and likewise that vehicles with engines certified for criteria pollutants (which in this case would be engines installed in vocational vehicles exclusively) be certified to the vocational vehicle standards for******* **E.O. 12866 Review**

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323 of GHGs and fuel consumption, with minor exceptions detailed below. We believe that this approach involving consis tent chassis
- and engine
- certification for criteria pollutants and GHG ’s is the most sensible way to structure a program to minimize both the testing burden and the potential for gaming
. We are allowing use of the sister vehicle concept for incomplete vehicle certificat ion to include the selection of sister vehicles not actually produced for sale by the certifying manufacturer. For the great majority of vehicles this will not be an issue because the sister vehicle will obviously be the complete pickup truck or van from which the cab
- chassis vehicle is derived. However if the complete sister vehicle ceases production but the corresponding incomplete vehicle does not, a manufacturer may continue to use the sister vehicle emissions data through the carryover process that i s already practiced today . If carryover is not appropriate because of, for example, an emissions
- impacting recalibration of the engine, the manufacturer may conduct new emissions testing using the coastdown data collected on the original sister vehicle. This would still save substantial effort without sacrificing data quality because coastd own s are rather resource - intensive but are not much affected by engine c hanges
. Another relevant situation would exist where no sister vehicle exists because the manufacturer does not sell a related complete vehicle. In this case the manufacturer may coast down a mocked
up vehicle made from its incomplete vehicle and an added open or closed cargo box that simulates a complete van or pickup truck, or may coast down one of its customers ’ completed vehicles. EPA and NHTSA requested comment on whether Class 4 vehicles that are very similar to complete Class 3 pickup truck models s hould be chassis
- certified and regulated as part of the HD pickup and van category , instead of as vocational vehicles. Commenters argued convincingl y that there are a number of important differences between the Class 4 and Class 3 trucks that make such re gulation inappropriate. As a result, we are keeping Class 4 trucks in the vocational vehicle category
. However, we are adding an optional provision that allows manufacturers to certify Class 4 or 5 (14,001 to 19,500 lb GVWR) complete or incomplete vehicl es to GHG and fuel consumption standards, in the same way as Class 2b and 3 vehicles and thus included within the Class 2b/3 fleet average . The engines in these vehicles will continue to be engine
- certified for criteria pollutants, but the manufacturers could include the vehicles in their fleet average standard and annual compliance calculations, using the same certification and compliance provisions as for the smaller vehicles, including the equations for determining work factors and target standards, in
- use requirements, reporting requirements, credit generation and use, and sister vehicle provisions for incomplete vehicles. Such vehicles would not be required to meet the vocational vehicle standards. Because s al es volumes of Class 4 and 5 trucks are relativel y small, and because we expect Class 4 and 5 and Class 2b and 3 trucks to g enerall y use the same technologies and face roughly the same technology

challenge in meeting the ir standards targets , we do not believe that this provision will dilute the stringency of the fleet average standards
. Finally , we are adopting a related special provision involving chassis
- certification aimed at simplifying compliance for manufacturers of complete HD pickups and vans who sell a relativel y small number of engines that are designed for these vehicle******* **E.O. 12866 Review**

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324 of products , but that are sold separately to other manufacturers as “ loose ” engines. Today the se loose engines must be engine
- certified for criteria pollutants, even though most of the vehicles that use the engine s are chassis
- certified. Our new provision does not change this, but it does provide manufacturers with an option to to focus their ener gy on improving the GHG and fuel consumption performance of their complete vehicle products (including, most likely , significant engine improvements), rather than on concurrently

calibrating for both vehicle and engine test compliance. These engines would not be certified to engine
- based GHG and fuel consumption standards, but instead be treated as though they were additional sales of the manufacturer’s complete pickup and van products, on a one
- for
- one basis. The pickup/van vehicle so chosen must be the vehicle with the highest ETW that uses the engine (as this vehicle is likely to have the highest GHG emissions and fuel consumption). However, if this vehicle is a credit
- generator under the HD pickup and van fleet average program, no credits would be gen erated by these engine
- as - vehicle contributors to the fleet average; they would be treated as just achieving the target standard. If, on the other, the vehicle is a credit
- user, the appropriate number of additional credits would be needed for the engine
- a s - vehicle contributors. The purchaser of the engine would treat it as any other certified engine, and would still need to meet applicable vocational vehicle standards for the vehicles that use the engine. Because it is our intent that this loose engine provision be for the purpose of simplifying compliance for HD pickup/van manufacturers who sell a relatively small number of engines for other applications, we are limiting its use to 10% of the total engines of the same design that a manufacturer produces in each model year for U.S.
- directed heav y - dut y application
-- including complete vehicles, incomplete vehicles, and the loose engines themselves. We are further limiting both this provision and the above
described provision for chassis certification of Class 4/5 vehicles to spark
- ignition (gasoline) engines, because we believe that the HD diesel engine business is more focused on designing for and marketing into a wide variet y of vehicles produc ts , i nstead of into the engine manufacturer’s own chassis
- certified vehicle products with a small loose engine business on the side , as is common for HD gasoline engines
. This dy namic is also reflected in the existing provision allowing complete HD vehicles to use certified diesel engines but not certified gasoline engines. Any in
- use testing of vehicles that are chassis
- certified using the sister vehicle provisions would involve loading of the tested vehicle to a total weight equal to the ALVW of the corresponding complete vehicle configuration. If the secondary manufacturer had altered or replaced an y vehicle components in a way that would substantially

affect CO 2 emissions fro m the tested vehicle (e.g., axle ratio has been changed for a special purpose vehicle), the vehicle manufacturer could request that EPA not test the vehicle or invalidate a test result. Secondary (finisher) manufacturers who finish incomplete vehicles cer tified using the sister vehicle provisions would not be subject to requirements under these regulations , other than to compl y with anti
- tampering regulations. However, if they modify vehicle components in such a way that GHG emissions and fu el consumption are substantially affected, they

become manufacturers subject to the standards we are establishing in these rules.******* **E.O. 12866 Review**

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325 of Together these provisions provide a robust approach to regulating vehicles and engines that, though not a s straightforward as the complete Class 2b/3 pickups and vans, share some characteristics with them that argue for accomplishing more improvement in GHG and fuel consumption performance than simply appl yi ng the vocational vehicle standards, but does not, o n the other hand, create a complex and burdensome program would force manufacturer to track and design for a plethora of specialized vehicle configurations. **(2) Labeling Provisions**  HD pickups and vans currently have vehicle emission control information labels showing compliance with criteria pollutant standards, similar to emission control information labels for engines. As with engines, we believe this label is sufficient. **(3) Other Certification Issues**  (a ) Carryover Certification Test Data EPA’s final certification program for vehicles allows manufacturers to carry certification test data over fro m one model ye ar to the next, when no significant changes to models are made. EPA will also apply this policy

to CO 2 , N 2 O and CH 4 certification test data. (b ) Compliance Fees The CAA allows EPA to collect fees to cover the costs of issuing certificates of conformity

for the classes of vehicles and engines covered by this rulemaking . On May 11, 2004, EPA updated its fees regulation based on a study of the costs associate d with its motor vehicle and engine compliance program (69 FR 51402). At the time that cost study was conducted the current rulemaking was not considered. At this time the extent of any added costs to EPA as a result of this rulemaking is not known. EPA will assess its compliance testing and other activities associated with the program and may

amend its fees regulations in the future to include any justif i able new costs. **(4) Compliance Reports**  **(a) Pre -**  **Model Year Report** In the NPRM, EPA and NHTSA proposed that manufacturers must submit earl y model year compliance reports demonstrating how their entire fleets of heavy
- duty pickup trucks and vans would comply with GHG emissions and fuel consumption standards. The agencies underst ood that earl y model ye ar reports would contain estimates that may

change over the course of a model year and that compliance information manufactures submit prior to the beginning of a new model ye ar may not represent the final compliance outcome. The ag encies viewed the necessity for requiring******* **E.O. 12866 Review**

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326 of earl y model reports as a manufacturer’s good faith projection for demonstrating compliance with emission and fuel consumption standards. The preamble language indicated that the compliance reports would be submitt ed prior to the beginning of the model year and prior to the certification of an y test group. Preferabl y, a manufacturer would submit its reports during its annual certification preview meeting. Precertification preview meetings are t yp ically held with a manufacturer before the earliest date that the model year can begin which is January 2nd of the calendar year prior to the model year. Manufacturers voluntarily choose to participate in precertification compliance meetings but meetings are not required by EPA and NHTSA regulations. M anufacturer s opt to participate in precertification meeting s because of the advantage it gives to exploring with the agencies an y possible compliance problems that may arise prior to seeking approval for certificates of conf ormit y. T he NPRM preamble text d id not specify an exact date for manufacturers to submit earl y compliance reports to the agency. NHTSA attempted to adopt requirements in its regulatory text for manufactures to submit their earl y compliance reports no lat er than the end of December two years prior to the model ye ar. NHTSA also proposed for manufacturers to provide compliance information for the current model year and to the extent possible two years into the future
. NHTSA chose its submission deadline an d model years for reporting based upon the same dates required b y EPA in its CAFE provisions for light
- duty pickups and vans beginning in model year 2012. The NPRM included requirements for manufacturers to submit earl y model ye ar compliance r eports separately to each agency

based upon limitations existing in the statutory authorities prescribed under EISA and CAA and the long
- standing precedent set in the LD CAFE programs for receiving reports. The EPA report, called the pre
- model ye ar report , and NHTSA report, called the pre
- certification compliance report, were proposed to include an estimate of the manufacturer’s attribute
- based standards, along with a demonstration of compliance with the standards based on projected model
- level and fleet C O 2 emissions and fuel consumption results, and were to include an estimate of the manufacturer’s production volumes. The NPRM also included a proposal for submitting a credit plan for manufacturers seeking to take advantage of credit flexibilities and a c redit deficit plan for manufacturers planning to accrue deficits during the model ye ars. Additionall y, NHTSA attempted to reduce the burden on manufacturers b y allowing them to submit copies of EPA’s proposed pre
- model year reports or applications for certifications of conformity , as a substitute to its own compliance report, so long as EPA’s reports were submitted with equivalent fuel consumption information. Ineither case, NHTSA reserved the right to a sk manufacturer s to provide additional information if necessary to verify its fuel consumption requirements under this program . EPA and NHTSA also proposed to review the compliance reports for technical viability and to conduct a certification preview discussion with the manufacturer. It was further proposed that the EPA Administrator would have to approve a manufacturer’s pre - model year report before it would consider issuing an y certificate of compliance for the manufacturer. Comments were received to the NPRM from EMA and TMA strongl y opposing providing separate reports to EPA and NHTSA and requested that the agencies implement a single uniform reporting template that could be submitted to both agencies******* **E.O. 12866 Review**

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327 of simultaneously . DTNA requested that NHTSA elimi nate its pre
- certification compliance report, arguing that report was overl y burdensome. For the final rule s , the agencies have decided to require manufacturers to submit a single report, hereafter referenced as the pre
- model year report, to satisfy both agencies requirements for receiving compliance reports in advance of the model year. The agencies considered the commenters’ requests and determined that the benefit gained b y receiving separate or distinct compliance reports would not outweigh the burden placed on manufacturers in reporting. Therefore, the final rule s establish a harmonized approach by which manufacturers will submit a single report through the EPA database sy stem as the single point of entry

for all information required for this nati onal program and both agencies will have access to the information
. If b y model year 2012, the agencies are not prepared to receive information through the EPA database s ys tem, manufacturers are expected to submit written reports to the agencies. EPA and NHTSA have determined that requiring manufacturers to submit a joint pre
- model year report for their combined fleet of heav y - dut y pickup trucks containing both emissions and equivalent fuel consumption information falls within each agencies’ statutory authority
. The final rule s require a manufacturer to submit the joint pre
- model year report as earl y as the date of the manufacturer’s annual certification preview meeting, or prior to the manufacturer submitting its first application for a certificate for the given model year . Consequently , a manufacturer choosing to comply in model year 2014 could submit its pre
- model year report during its precertification meeting , which could occur before January 2, 2013
. Alternatel y, the manufacturer could provide its pre
- model year report an y time prior to submitting its first application
. Ineither case, a manufacturer would not be able to certify any of its test groups until the EPA Administrator approves its pre
- model year report. NHTSA will use the pre
- model year report as preliminary model year data. The agen cies are adopt ing similar requirements for the pre
- model year reports as proposed
. As mention ed , the agencies proposed that reports wou ld include an estimate of the manufacturer’s attribute
- based standards, expected testing results and estimated production v olumes. The agencies agree that this information is essential for tracking compliance of manufacturers and is therefore adopted fo r the final rule s . T he final rule s require manufacturers to identify an y vehicle exclusions and other flexibilities afford ed for heav y - dut y pickup s and vans. The summary of the required information for each pre
model year report is as follows:

 A list of each unique vehicle configuration included in the manufacturer’s fleet describing the make and model designations, attribute based
- values (GVWR, GCWR, Curb Wei ght and drive configurations) and standards.  The emission and fuel consumption fleet average standard derived from the unique vehicle configurations ;  The estimated vehicle configuration, test group and fleet production volumes;  The e xpected emissions and fuel consumption test group results and fleet average performance ;******* **E.O. 12866 Review**

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328 of  A statement declaring whether the manufacturer chooses to comply earl y in MY 2013 for EPA and NHTSA. The manufacturers must acknowledg e that once selected, the decision cannot be reverse d and the manufacturer will continue to comply

with the fuel consumption standards for subsequent model y ears;  A statement declaring whether the manufacturer will use fixed or increasing standards; acknowledging that once selected, the decision cannot be r eversed and the manufacturer must continue to comply with the same alternative for subsequent model years;  A statement declaring whether the manufacturer chooses to comply voluntarily

with NHTSA’s fuel consumption standards for model ye ars 201 4 through 2015 . The manufacturers must acknowledg e that once selected, the decision cannot be reversed and the manufacturer will continue to comply

with the fuel consumption standards for subsequent model years;  The list of Cl ass 2b
- 3 cab
- complete vehicles and the method use to certify , as vocational vehicles and engines, or as complete pickups and vans identifying the most similar complete vehicles used to derive the target standards and performance test results;  The list of C lass 2b
- 3 incomplete vehicles and the method use to certify , as vocational vehicles and engines, or as complete pickups and vans identifying the most similar complete vehicles used to derive the target standards and performance test results;  The list of Cl ass 4 and 5 incomplete and complete vehicles and the method use to certify , as vocational vehicles and engines, or as complete pickups and vans identifying the most similar complete vehicles used to derive the target standards and performance test results;  List of loose engines included in the heav y - dut y pickup and van category and the list of vehicles used to derive target standards.  Copy of an y notices a vehicle manufacturer sends to the engine manufacturer to notify

the engine manufacturers that their e ngines are subject to emissions and fuel consumption standards and that it intends to use their engines in excluded vehicles; and  A credit plan identifying the manufac turers estimated credit balances, planned credit flexibilities (i.e., credit balances, planned credit trading, innovative, advanced and earl y credits and etc.) and if needed a credit deficit plan demonstrating how it plans to resolve any credit deficits th at might occur for a model year within a period of up to three model years after that deficit has occurred
.******* **E.O. 12866 Review**

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329 of **(b) Final Reports** The NPRM proposed for manufacturers participating in the ABT program to provide two ty

pes of year end reports; end
- of
- the
- ye ar (EOY) reports and final reports. The EOY reports for the ABT program were required to be submitted by manufacturers no later than 90 day s after the calendar ye ar and final report no later than 270 day s after the calendar ye ar. 330 Manufacturers not participating in the ABT program were required to provide an EOY report within 45 day s after the calendar year but no final reports were required. The submission deadline of the final ABT r eport was established to coincid e with EPA’s existing criteria pollutant report for heavy
- duty engines. The EOY report is used by the agencies to review a manufacturer’s preliminary final estimates and to identify manufacturers that might have a credit deficit for the given model year. Manufacturer s with a credit surplus at the end of each model ye ar c ould submit a request to the agencies to receive a waiver from providing EOY reports. As proposed, the remaining manufacturers were required to submit reports to EPA and send copies of those reports to NHTSA with equivalent fuel consumption values. Manufacturers requesting to exempt vehicles in accordance with the agencies’ off
- road vehicle exemption were required to a submit EOY reports to the agencies identifying the vehicle applicable to each report within 90 day s after the model y ear ended. Comments in response to the NPRM did not oppose providing EOY reports to the agencies but instead requested that they be allowed to consolidate the various EOY reports into one single submission to the agencies
. Upon consideration of commenters requests, the agencies agree that only one consolidated EOY report should be submitted in place of the separate reports proposed in the NPRM. The consolidated EOY report should include the combination of all the required information that is applicable to a manufacturer’s fle et. T he agencies also agree to allow manufacturers to no longer provide separate EOY reports to each agency independentl y but rather to submit the single report through the EPA database system as the single point of entry

for all information required for this national program . The consolidate d EOY report is required to contain both GHG emissions and fuel consumption information. EPA will provide access to the information for both agencies
. Likewise, manufacturers will be required to electronically provi de one single final report through the EPA database sy stem. If by model year 2012, the agencies are not prepared to receive information through the EPA database sy stem, manufacturers are expected to submit written reports to the agencies. T he required information for EOY and final reports that manufacturers must submit is as follows: A finalized list of each unique vehicle configuration included in the manufacturers fleet describing the designations, attribute based
- values (GVWR, GCWR, Curb Weight and drive c onfigurations) and standards.

 The final emission and fuel consumption fleet average standard derived

from the unique vehicle configurations;  The final vehicle configuration, test group and fleet production volumes;
330 Corresponding to the compliance model year******* **E.O. 12866 Review**

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330 of  The final emissions and fuel consumption test group results and fleet average performance;  The final list of cab
- complete vehicles and the method use to certify , as vocational vehicles and engine, or as complete pickups and vans identifying the most similar complete vehicles used to derive the target standards and performance test results;  The final list of vehicles a manufacturer is designating to include in the low volume exclusion;  A final credit plan identifying the manufacturers estimated credit balances, planned credit flexibilities (i.e., credit balances, planned credit trading, innovative, advanced and earl y credits and etc.) and if needed a credit deficit plan demonstrating how it plans to resolve any credit deficits that might occur for a model year within a period of up to three model years after that deficit h as occurred;  A plan describing the vehicles that were exempted such as for off
- road or small business purposes ; and  A plan describing an y alternative fueled vehicles that were produced for the model year identifying the app roaches used to determinate compliance and the production volumes
. 

### C. **Heavy -**  **Duty Engines**  **(1) Compliance**  **Approach** Section 203 of the CAA requires that all motor vehicles and engines sold in the United States to carry

a certificate of conformity issued by the US EPA. For heav y - dut y engines, the certificate specifies that the engine meets all requirements as set forth in the regulations (40 CFR part 86, subpart N, for criteria pollutants) including the requirement that the engine be compliant with emission standards. This demonstration is completed through emission testing as well as durability testing to determine the level of emissions deterioration throughout the useful life of the engine. In addition to compliance with emission standards, manufacturers are al so required to warrant their products against emission defects, and demonstrate that a service network is in place to correct any such conditions. The engine manufacturer also bears responsibility in the event that an emission
- related recall is necessary
. Finally , the engine manufacturer is responsible for tracking and ensuring correct installation of an y emission related components installed by a second part y (i.e., vehicle manufacturer). EPA and NHTSA believe this compliance structure is also valid for administering the final GHG regulations for heav y - duty engines. (a ) Certification Process In order to obtain a certificate of conformity , engine manufacturers must complete a compliance demonstration, normally consi sting of test data from relatively new (low
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331 of hour) engines as well as supporting documentation, showing that their product meets emission standards and other regulatory requirements. To account for aging effects, low
hour test results are coupled with test ing
- based deterioration factors (DFs), which provide a ratio (or offset) of end
- of
- life emissions to low
- hour emissions for each pollutant being measured. These factors are then applied to all subsequent low
- hour test data points to predict the emissions behavior at the end of the useful life. For purposes of this compliance demonstration and certification, engines with similar engine hardware and emission characteristics throughout their useful life may be grouped together in engine families, consistent with current criteria
- pollutant certification procedures. Examples of such engine characteristics that are normally used to combine emissions families include similar combustion cycle , aspiration method s , and aftertreatment s ys t em s . Under this sy stem, the worst
- case engine (“parent rating”) is selected based on having the highest fuel feed per engine stroke, and all emissions testing is completed on this model. All other models within the family (“child ratings”) are expected t o have emissions at or below the parent model and therefore in compliance with emission standards. Any engine within the family can be subject to selective enforcement audits, in
- use, confirmatory , or other compliance testing. We are continuing the use of this approach for the selection of the worst
- case engine (“parent rating”) for fuel consumption and GHG emissions as well. As at proposal, e believe this is appropriate because this worst case engine configuration would be expected to have the highest i n - use fuel consumption and GHG emissions within the family
. See 75 FR at 72264 for further information. We note that lower engine ratings contained within this family would be expected to have a higher fuel consumption rate when measured over the Federal Test Procedures as expressed in terms of fuel consumption per brake horsepower hour. However, this higher fuel consumption rate is misleading in the context of comparing engines within a single engine family. This apparent contradiction can be most easi ly understood in terms of an example. For a ty pical engine famil y a top rating could be 500 horsepower with a number of lower engine ratings down to 400 horsepower or lower included within the family. When installed in identical trucks the 400 and 500 ho rsepower engines would be expected to operate identically

when the demanded power from the engines is 400 horsepower or less. So in the case where in
- use driving never included acceleration rates leading to horsepower demand greater than 400 horsepower, the two trucks with the 400 and 500 horsepower engines would give identical fuel consumption and GHG performance. When the desired vehicle acceleration rates were high enough to require more than 400 horsepower, the 500 horsepower truck would accelerate fa ster than the 400 horsepower truck resulting in higher average speeds and higher fuel consumption and GHG emissions measured on a per mile or per ton
- mile basis. Hence, the higher rated engine family would be expected to have the highest in
- use fuel consumption and CO 2 emissions. As explained at proposal, the reason that the lower engine ratings appear to have worse fuel consumption relates to our use of a brake specific work metric. The brake specific metric measures power produced from the engine and delivered to the vehicle ignoring the parasitic work internal to the engine to overcome friction and air pumping work within the engine. The fuel consumed and GHG emissions produced to overcome******* **E.O. 12866 Review**

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332 of this internal work and to produce useful (brake) work are bo th measured in the test cycle but only the brake work is reflected in the calculation of the fuel consumption rate. This is desirable in the context of reducing fuel consumption as this approach rewards engine designs that minimize this internal work thro ugh better engine designs. The less work that is needed internal to the engine, the lower the fuel consumption will be. If we included the parasitic work in the calculation of the rate, we would provide no incentive to reduce internal friction and pumpin g losses. However, when comparing two engines within the very

same family

with identical internal work characteristics, this approach gives a misleading comparison between two engines as described above. This is the case because both engines have an identical fuel consumption rate to overcome internal work but different rates of brake work with the higher horsepower rating having more brake work because the test cycle is normalized to 100 percent of the engine’s rated power. The fuel consumed for interna l work can be thought of as a fixed offset identical between both engines. When this fixed offset is added to the fuel consumed for useful (brake) work over the cycle, it increases the overall fuel consumption (the numerator in the rate) without adding an y work to the denominator. This fixed offset identical between the two engines has a bigger impact on the lower engine rating. In the extreme this can be seen easily . As the engine ratings decrease and approach zero, the brake work approaches zero and the calculated brake specific fuel consumption approaches infinity . For these reasons, we are finalizing that the same selection criteria, as outlined in 40 CFR part 86, subpart N, be used to define a single engine family designation for both criteria pollutant and GHG emissions. Further, we are finalizing that for fuel consumption and CO 2 emissions only any

selective enforcement audits, in
- use, confirmatory , or other compliance testing would be limited to the parent rating for the family
. Consistent with the current regulations, manufacturers may electively

subdivide a grouping of engines which would otherw ise meet the criteria for a single family if they have evidence that the emissions are different over the useful life. The agencies received comments from engine and truck manufacturers which indicated the useful life provisions applicable to criteria poll utants seemed appropriate for GHG emissions. For that reason, the agencies are retaining man y of the same provisions for GHG certification for famil y useful life provisions as developed for criteria pollutants. EPA utilizes a 12
- digit naming co nvention for all mobile
- source engine families (and test groups for light
- duty vehicles). This convention is also shared by the California Air Resources Board which allows manufacturers to potentially use a single family

name for both EPA and California A RB certification. Of the 12 digits, 9 are EPA
- defined and provide identifying characteristics of the engine family . The first digit represents the model year, through use of a predefined code. For example, the code “A” corresponds to the 2010 model y ear and “B” corresponds to the 2011 model y ear. The 5 th position corresponds to the industry sector code, which includes such examples as light
- dut y vehicle (V) and heav y - duty diesel engines (H). The next three digits are a unique alphanumeric code assigned to each manufacturer by EPA. The next four digits describe the displacement of the engine; the units of which are dependent on the industry segment and a decimal may

be used when the displacement is in liters. For engine families with multiple displacement s, the largest displacement is used for the family name. For on
highway vehicles and engines, the tenth character is reserved for use by California ARB. The final characters (including the 10 th character in absence of California ARB guidance)******* **E.O. 12866 Review**

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333 of left to the manufacturer to determine, such that the family name forms a unique identifying characteristic of the engine family
. This convention is well understood by the regulated industries, provides sufficient detail, and is flexible enough to be used across a wide spectrum of vehicle and engine categories. In addition, the current harmonization with other regulatory bodies reduces complications for affected manufacturers. For these reasons, we are not finalizing any major changes to this naming convention for this rulemaking . There may be additional categories defined for the 5 th character to address heav y - dut y vehicle families, however that will be discussed later. As with criteria pollutant standards, the heav y - duty diesel regulatory

category is sub divided into three regulatory subcategories, depending on the GVW of the vehicle in which the engine will be used. These regulatory subcategories are defined as light
heav y - dut y (LHD) diesel, medium heav y - dut y (MHD) diesel, and heav y heavy
- duty (HHD) dies el engines. All heav y - dut y gasoline engines are grouped into a single subcategory . Each of these regulatory subcategories are expected to be in service for varying amounts of time, so they each carry

different regulatory

useful lives. For this reason, exp ectations for demonstrating useful life compliance differ b y subcategory, particularl y as related to deterioration factors. Li ght heav y - dut y diesel engines (and all gasoline heav y - dut y engines) have the same regulatory

useful life as a light
- dut y vehicle ( 110,000 miles), which is significantl y shorter than the other heavy
- dut y regulatory subcategories. Therefore, we believe it is appropriate to maintain commonality with the light
- duty vehicle rule. During the light
duty vehicle rulemaking, the conclusion was reached that no significant deterioration would occur over the useful life. Therefore, EPA is recommending that manufacturers use assigned DFs for CO 2 . For this final action, we believe appropriate values are zero (for addi tive DFs) and one (for multiplicative DFs). EPA will continue to collect data regarding deterioration of CO 2 emissions and may revisit these assigned values if necessary . For the medium heav y - duty and heav y heav y - duty

diesel engine segments, the regulatory useful lives are significantly longer (185,000 and 435,000 miles, respectivel y). For this reason, the EPA is not convinced that engine/aftertreatment wear will not have a negative impact on GHG emissions. To address useful life compliance for MHD and HHD diesel engines certified to GHG standards, we believe the criteria pollutant approach for developing DFs is appropriate. Using CO 2 as an example, many of the engine deterioration concerns previousl y identified will affect CO 2 emissions. Reduced co mpression, as a result of wear, will cause higher fuel consumption and increase CO 2 production. In addition, as aftertreatment devices age (primarily particulate traps), regeneration events may

become more frequent and take longer to complete. Since regen eration commonl y requires an increase in fuel rate, CO 2 emissions would likely increase as well. Finally , any changes in EGR levels will affect heat release rates, peak combustion temperatures, and completeness of combustion. Since these factors could rea sonabl y be expected to change fuel consumption, CO 2 emissions would be expected to change accordingl y.******* **E.O. 12866 Review**

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334 of HHD diesel engines may also require some degree of aftertreatment maintenance throughout their useful life. For example, one major heav y - dut y engine m anufacturer specifies that their diesel particulate filters be removed and cleaned at intervals between 200,000 and 400,000 miles, depending on the severity of service. Another major engine manufacturer requires servicing diesel particulate filters at 300, 000 miles. This maintenance or lack thereof if service is neglected, could have serious negative implications to CO 2 emissions. Inaddition, there may be emissions
- related warranty implications for manufacturers to ensure that if rebuilding or specific emi ssions related maintenance is necessary, it will occur at the prescribed intervals. Therefore, it is imperative that manufacturers are detailed in their maintenance instructions. L ean - NO X aftertreatment devices may also facilitate GHG reductions by allow ing engines to run with higher engine
- out NO X levels in exchange for more efficient calibrations. In most cases, these aftertreatment devices require a consumable reductant, such as diesel exhaust fluid, which requires periodic maintenance b y the vehicle o perator. Without such maintenance, the emission control sy stem may be compromised and compliance with emission standards may

be jeopardized. Such maintenance is considered to be critical emission related maintenance and manufacturers must therefore demon strate that it is likely to be completed at the required intervals. One example of such a demonstration is an engine power de
- rating strategy that will limit engine power or vehicle speed in absence of this required maintenance. If the manufacturer determ ines that maintenance is necessary on critical emission
related components within the useful life period, it must have a reasonable basis for ensuring that this maintenance will be completed as scheduled. This includes any adjustment, cleaning, repair , or replacement of critical emission
- related components. Ty pically , EPA has only

allowed manufacturers to schedule such maintenance if the manufacturer can demonstrate that the maintenance is reasonabl y likely to be done at the recommended inter

vals. This demonstration may be in the form of survey

data showing at least 80 percent of in
- use engines get the prescribed maintenance at the correct intervals. Another possibility is to provide the maintenance free of charge. We see no reason to depart from this approach for GHG
- related critical emission
- related components. For reasons stated previously regarding the useful life provisions, the agencies are retaining many of the same provisions for GHG certification for family useful life provisions as developed for criteria pollutants. (b ) Demonstrating Compliance With the Standards (i ) CO2 Standards The final test results (adjusted for deterioration, if applicable) form the basis for the Famil y Certification Limit (FCL), which the manufacturer must specify to be at or above the certification test results. This FCLbecomes the emission standard for the family and any certification or confirmatory testing must show compliance with this limit. In addition, manufacturers may choose an FCLat an y l evel above their certified emission level to provide a larger compliance margin. If subsequent certification or******* **E.O. 12866 Review**

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335 of confirmatory

testing reveals emissions above the FCL , the new, higher result becomes the FCL
. A s proposed, the FCLis also used to determine the Famil y Emission L imit (FEL), which serves as the emission limit for any subsequent field testing conducte d after the time of certification. This would primarily include selective enforcement audits, but also may include in
- use testing for GHGs. The FEL differs from the FCL in that it includes an EPA
- defined compliance margin; which has been defined at 3 per cent for the final rule. Our proposal included a two percent margin based on round
- robin testing of the same engine at several laboratories. Since that time, additional data has indicated that it may be more appropriate to use a three percent margin to also account for production variability

between engines. Under this final action , the FEL will alway s be threepercent higher than the FCL. Engine Emission Testing Under current non
- GHG engine emissions regulations, manufacturers are re quired to demonstrate compliance using two test methods: the heav y - dut y transient cycle and the heav y - dut y stead y state test. Each test is an engine speed versus engine torque schedule intended to be run on an engine dynamometer. Over each test, emissions are sampled using the equipment and procedures outlined in 40 CFR part 1065, which includes provisions for measuring CO 2 , N 2 O, and CH 4 . Emissions may be sampled continuously or in a batch configuration (commonly known as “bag sampling”) and the total mass of emissions over each cycle are normalized by the engine power required to complete the cycle. Following each test, a validation check is made comparing actual engine speed and torque over the cycle to the commanded values. If these values do not align well, the test is deemed invalid. The transient Heav y - dut y FTP cycle is characteristic of ty pical urban stop
- and
- go driving. Also included is a period of more steady s tate operation that would be ty pical of short cruise intervals at 45 to 55 miles per hour . Each transient test consists of two 20 minute tests separated b y a “soak” period of 20 minutes. The first test is run with the engine in a “cold” state, which involves letting the engine cool to ambient conditions either b y sitting overnight or by forc ed cooling provisions outlined in §86.1335
- 90 (or 40 CFR part 1036)
. This portion of the test is meant to assess the ability of the engine to control emissions during the period prior to reaching normal operating temperature. This is commonly

a challenging area in criteria pollutant emission control, as cold combustion ch amber surfaces tend to inhibit mixing and vaporization of fuel and aftertreatment devices do not tend to function well at low temperatures. Following the first test, the engine is shut off for a period of 20 minutes, during which emission anal yz er checks are performed and preparations are made for the second test (also known as the “hot” test). After completion of the second test, the results from the cold and hot tests are weighted and a single composite result is calculated for each pollutant. Based o n t ypi cal in
- use dut y c ycl es, the cold test results are given a 1/7 weighting and the hot test results are given a 6/7 weighting. Deterioration factors are******* **E.O. 12866 Review**

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336 of applied to the final weighted results and the results are then compared to the emission standards. Prior to 2007, compliance only needed to be demonstrated over the Heavy
- duty FTP. However, a number of events brought to light the fact that this transient cycle may not be as well suited for engines which spend much of their duty c ycl e at steady cruise co nditions, such as those used in line
- haul semi
- trucks. As a result, the steady
- state SET procedure was added, consisting of 13 steady - state modes. During each mode, emissions were sampled for a period of five minutes. Weighting factors were then applied to each mode and the final weighted results were compared to the emission standards (including deterioration factors). Inaddition, emissions at each mode could not exceed the NTE emission limits. Alternatively , manufacturers could run the test as a rampe d
- modal cycle. In this case, the cycle still consists of the same speed/torque modes, however linear progressions between points are added and instead of weighting factors, each mode is sampled for various amounts of time. The result is a continuous cycle lasting approximately

40 minutes. With the implementation of part 1065 test procedures in 2010, manufacturers are now required to run the modal test as a ramped
- modal cycle. In addition, the order of the speed/torque modes in the ramped
- modal cycle have c hanged for 2010 and later engines. It is well known that fuel consumption, and therefore CO 2 emissions, are highl y dependent on the drive cycle over which they are measured. Steady cruise conditions, such as highway

driving, tend to be more efficient, hav ing lower fuel consumption and CO 2 emissions. In contrast, highl y transient operation, such as cit y driving, tends to lead to lower efficiency

and therefore higher fuel consumption and CO 2 emissions. One example of this is the difference between EPA
- measured cit y and highway fuel econom y ratings assigned to all new light
- dut y passenger vehicles. For this heav y - duty

engine and vehicle rule , we believe it is important to assess CO 2 emissions and fuel consumption over both transient and steady state test cycles, as all vehicles will operate in conditions ty pical of each cycle at some point in their useful life. However, due to the drive cycle dependence of CO 2 emissions, we do not believe it is reasonable to have a single CO 2 standard which must be m et for both cycles. As we discussed at proposal, a single CO 2 standard would likely prove to be too lax for steady
state conditions while being too strict for transient conditions. Therefore, the agencies are finalizing that all heavy
- dut y engines be te sted over both transient and steady
- state tests. However, onl y the results from either the transient or steady - state test cycles will be used to assess compliance with GHG standards, depending on the t ype of vehicle in which the engine will be used. Engines that will be used in Class 7 and 8 combination tractors will use the ramped
- modal cycle for GHG certification, and engines used in vocational vehicles will use the Heav y - dut y FTP cycle. In both cases, results from the other test cycle will be reported but not used for a compliance decision. Engines will continue to be required to show criteria pollutant compliance over both cycles, in addition to NTE requirements. The agencies propose d that manufacturers submit both data sets fr om the transient test at the time of certification. This include s providing both cold start and hot start******* **E.O. 12866 Review**

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337 of transient heav y - dut y FTP emissions results, as well as the composite emissions at the time of certification. The proposed rules also required that m anufacturers submit modal data from the ramped
- modal cycle test.
. This was proposed in an effort to improve the accuracy of the simulation model being used for assessing CO 2 and fuel consumption performance and overall engine emissions performance
. However several comment er s were concerned that modal data was non
discernable when batch sampling was used for certification testing. Thus, an additional certification test (or tests) would need to be done using either continuous analyzers or batch sampling at each mode; each option raising the cost and complexity of certification testing. The agencies agree that (at this time) this raises practical issues for certification testing, however we also believe that manufacturers have s ignificant data from these modal points which could be used to satisfy our model refinement goals. Therefore, we believe it is appropriate to still require the submission of modal data, however manufacturers may

submit development data from production
- leve l engine calibrations to satisfy this modal data requirement. The agencies also recognize that even minor variations in test fuel properties can have an impact on measured CO 2 emissions. Therefore, measured CO 2 results are to be corrected using a refere nce energy content, which is defined in the regulations. This correction must be performed for each test and each batch of test fuel. However, manufacturers may

develop robust testing procedures that reduce the variation in test fuel properties to within the level of measurement uncertainty of the fuel properties themselves. If this is the case, an annual review is still necessary to confirm the validity of this constant value. As explained above in Section II, the agencies are finalizing an alternative standard whereb y manufacturers may elect that certain of their engine families meet an alternative percent reduction standard, measured from the engine famil y’s 2011 baseline, instead of the main 2014 MY standard. As part of the certification process, manufacturers electing this standard would not only have to notify the agency

of the election but also demonstrate the derivation of the 2011 baseline CO 2 emission level for the engine famil y. Manufacturers would also have to demonstrate that they have exhau sted all credit opportunities. Durability testing Another element of the current certification process is the requirement to complete durability

testing to establish DFs. As previously mentioned, manufacturers are required to demonstrate that their engin es compl y with emission standards throughout the regulatory

compliance period of the engine. This demonstration is commonly made through the combination of low
- hour test results and testing based deterioration factors. For engines without aftertreatment d evices, deterioration factors primaril y account for engine wear as service is accumulated. This commonly includes wear of valves, valve seats, and piston rings, all of which reduce in
- cylinder pressure. Oil control seals and gaskets also deteriorate with age, leading to higher lubricating oil consumption.******* **E.O. 12866 Review**

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338 of Additionally , flow properties of EGR sy stems may change as deposits accumulate and therefore alter the mass of EGR inducted into the combustion chamber. These factors, amongst others, may

serve to reduc e power, increase fuel consumption, and change combustion properties; all of which affect pollutant emissions. For engines equipped with aftertreatment devices, DFs take into account engine deterioration, as described above, in addition to aging affects on the aftertreatment devices. Oxidation cataly sts and other catal yt ic devices rely on active precious metals to effectivel y convert and reduce harmful pollutants. These metals may become less active with age and therefore pollutant conversion efficiencies may decrease. Particulate filters may also experience reduced trapping efficiency with age due to ash accumulation and/or degradation of the filter substrate, which may lead to higher tailpipe PM measurements and/or increased regeneration frequency . If a pollutant is predominantly controlled by aftertreatment, deterioration of emission control depends on the continued operation of the aftertreatment device much more so than on consistent engine
- out emissions. At this time, we anticipate that most engine c omponent wear will not have a significant negative impact on CO 2 emissions. However, wear and aging of aftertreatment devices may

or may not have a significant negative impact on CO 2 emissions. In addition, future engine or aftertreatment technologies may experience significant deterioration in CO 2 emissions performance over the useful life of the engine. For these reasons, we believe that the use of DFs for CO 2 emissions is both appropriate and necessary . As with criteria pollutant emissions, these DFs are preferabl y developed through testing the engine over a representative duty cycle for an extended period of time. This is ty

pically either half or full useful life, depending on the regulatory c ategory . The DFs are then calculated by comparing the hi gh
- hour to low
- hour emission levels, either b y division or subtraction (for multiplicative & additive DFs, respectively). This testing process may

be a significant cost to an engine manufacturer, mainly due to the amount of time and resources required to run the engine out to half or full useful life. For this reason, durability testing for the determination of DFs is not commonly

repeated from model year to model year. In addition, some DFs may be allowed to carry

over between families sharing a common architecture and aftertreatment sy stem. EPA prefers to have manufacturers develop testing
- based DFs for their products. However, we do understand that for the reasons stated above , it may be impractical to expect manufacturers to have testing
- based deteri oration factors available for these final rules. Therefore, we are allowing manufacturers to use EPA
- assigned DFs for CO 2 . However, we also understand that CO 2 is traditionally measured as part of normal engine dy namometer testing. Therefore, we are requiring that manufacturers include CO 2 data over their criteria pollutant durability demonstrations (if available), which will aid the agency in developing more ac curate assigned DFs. This action is being taken in the context of engine manufacturers’ concerns regarding the impact of deterioration of emissions components relative to the GHG standards. Engine manufacturers commented that there would be no deteriorat ion of components used to reduce GHG emissions in Phase 1. As part of the Clean Air Act responsibility to demonstrate compliance throughout the useful life, manufacturer will need to provide data already collected during traditional criteria pollutant tes ting for full useful life performance.******* **E.O. 12866 Review**

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339 of IRAFs/Regeneration Impacts on CO 2 Heav y - dut y engines may be equipped with exhaust aftertreatment devices which require periodic “regeneration” to return the device to a nominal state. A common example is a diesel particulate filter, which accumulates PM as the engine is operated. When the PM accumulation reaches a threshold such that exhaust backpressure is significantl y increased, exhaust temperature is actively increased to oxidize the stored PM. The increase in exhaust temperature is commonly facilitated through late combustion phasing and/or raw fuel injection into the exhaust sy stem upstream of the filter. Both methods impact emissions and therefore must be accounted for at the time of certification. In accord ance with §86.004
- 28(i), this ty pe of event would be considered infrequent because in most cases they onl y occur once every

30 to 50 hours of engine operation (rather than once per transient test cycle), and therefore adjustment factors must be applied at certification to account for these effects. Similar to DFs, these adjustment factors are based off of manufacturer testing; however this testing is far less time consuming. Emission results are measured from two test cycles: with and without regeneration occurring. The differences in emission results are used, along with the frequency at which regeneration is expected to occur, to develop upward and downward adjustment factors. Upward adjustment factors are added to all emission results derived from a tes t cycle in which regeneration did not occur. Similarly , downward adjustment factors are subtracted from results based on a cycle which did experience a regeneration event. Each pollutant will have a unique set of adjustment factors and additionally , separ ate factors are commonly developed for transient and steady
- state test cycles. The impact of regeneration events on criteria pollutants varies b y pollutant and the aftertreatment device(s) used. In general, the adjustment factor can have a very significant impact on compliance with the NO X standard. For this reason, heavy
- dut y vehicle and engine manufacturers are already very well motivated to extend the regeneration frequency

to as long an interval as possible and to reduce the dur ation of the regeneration as much as possible. Both of these actions significantl y reduce the impact of regeneration on CO 2 emissions and fuel consumption. We do not believe that adding an adjustment factor for infrequent regeneration to the CO 2 or fuel efficiency standards would provide a significant additional motivation for manufacturers to reduce regenerations. Moreover, doing so would add significant and unnecessary uncertaint y to our projections of CO 2 and fuel consumption performance in 2014 and beyond. In addressing that uncertainty , the agencies would have to set less stringent fuel efficiency and CO 2 standards for heavy
- duty trucks and engines. Therefore, we are not requiring the use of infrequent regeneration adjustment factors for CO 2 or fuel effic iency in this program. This is consistent with comments received from engine manufacturers. Auxiliary Emission Control Devi c es As part of the engine control strategy , there may be devices or algorithms which reduce the effectiveness of emission control sy stems under certain limited circumstances. These strategies are referred to as Auxiliary Emission Control Devices (AECDs). One******* **E.O. 12866 Review**

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340 of example would be the reduced use of EGR during cold engine operation. In this case, low coolant temperatures may cause the elec tronic control unit to reduce EGR flow to improve combustion stability . Once the engine warms up, normal EGR rates are resumed and full NO X control is achieved. At the time of certification, manufacturers are required to disclose all AECDs and provide a full explanation of when the AECD is active, which sensor inputs effect AECD activation, and what aspect of the emission control sy stem is affected b y the AECD. Manufacturers are further required to attest that their AECDs are not “defeat
- devices,” which are intentionall y targeted at reducing emission control effectiveness. Several common AECDs disclosed for criteria pollutant certification will have a similarly negative influence on GHG emissions as well. One such example is cold
- start enrichment, with provides additional fueling to stabilize combustion shortly after initially starting the engine. From a criteria pollutant perspective, HC emissions can reasonabl y be expected to increase as a result. From a GHG perspective, the extra fuel does not resu lt in a similar increase in power output and therefore the efficiency of the engine is reduced, which has a negative impact on CO 2 emissions. In addition, there may be AECDs that uniquely reduce GHG emission control effectiveness. Therefore, consistent wi th today ’s certification procedures, we are finalizing that a comprehensive list of AECDs covering both criteria pollutant, as well as GHG emissions is required at the time of certification. (ii) EPA’s N

2 O and CH

4 Standards In 2009, EPA issued rules requiring manufacturers of mobile
- source engines to report the emissions of CO 2 , N 2 O, and CH 4 (74 FR 56260, October 30, 2009). Although CO 2 is commonly

measured during certification testing, CH 4 and N 2 O are not. CH 4 has traditionally

not been included in cri teria pollutant regulations because it is a relativel y stable molecule and does not contribute significantly to ground
- level ozone formation. In addition, N 2 O is commonly a b yproduct of lean
- NO X aftertreatment s ys tems. Until recentl y, these types of syste ms were not widel y used on heav y - dut y engines and therefore N 2 O emissions were insignificant. As noted in section II above, b oth species, while emitted in small quantities relative to CO 2 , have much higher global warming potential than CO 2 and therefore must be considered as part of a comprehensive GHG regulation. EPA is requiring that CH 4 and N 2 O be reported at the time of certification, however we will allow manufacturers to submit a compliance statement based on good engineering judgment for the firs t year of the program in lieu of direct measurement of N 2 O. However, beginning in the 2015 model ye ar, the agency is requiring the direct measurement of N 2 O for certification. The intent of the CH 4 and N 2 O standards are more focused on prevention of future increases in these compounds, rather than forcing technologies that reduce these pollutants. As one example, we envision manufacturers satisfying this requirement by continuing to use cataly st designs and formulations that appropriatel y control N 2 O emissions rather than pursuing a catal ys t that may increase N 2 O. In man y way s this becomes a design
- based criterion in that the decision of one******* **E.O. 12866 Review**

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341 of catal ys t over another will effectivel y determine compliance with N 2 O standards over the useful life of the eng ine. Since catal yt ic activity

generall y changes with age and service accumulation, it is not unreasonable to expect changes in N 2 O and CH 4 emissions over the useful life of the engine. We also believe that low
- hour test results coupled with deterioration factors provides an adequate representation of end
- of
- life emission levels for these pollutants. However, the requirement to measure N 2 O and CH 4 during testing is relatively new and we do not expect that manufacturers have consistent durability data to for

mulate deterioration factors for t oday ’s action . We also do not believe it is appropriate to require all new durability

testing to satisfy

this requirement, as this would result in a nontrivial burden to engine manufacturers. Instead we wi ll be assigning deterioration factors for N 2 O and CH 4 for this action . I f the use of assigned deterioration factors jeopardizes compliance with the emission standards, we will also allow manufacturers to propose unique testing
- based deterioration fact ors for these pollutants. Inresponse to comments received from engine manufacturers regarding the timing needed to generate deterioration factors the agencies are taking this approach. Concerns had also been raised by engine manufacturers regardin g measurement techniques for quantifying N 2 O emissions. In an effort to expand testing options , w e are adding an allowance to use laser infrared anal yz ers for N 2 O measurement in 40 CFR part 1065 .275. This is to reflect the recent development of this technology for N 2 O measurement. We would also like to serve notice that in an upcoming rulemaking, we will be tightening the interference tolerance (both positive and negative) for engines and vehic les that are required to certify to an N 2 O standard. This will consist of an interference limit based on interference as a percentage of the flow weighted mean concentration of N 2 O expected at the standard. For example we may set the interference limit at ±10 % of the flow weighted mean concentration of N 2 O expected at the standard and strongl y recommend a lower interference that is within ±5 %. (c) Additional Compliance Provisions (i ) Warranty & Defect Reporting Under section 207 of the CAA, engine manufacturers are required to warrant that their product is free from defects that would cause the engine to not comply with emission standards. This warranty must be applicable from when the engine is introduced into commerce through a period generally defined as hal f of the regulatory useful life (specified in hours and years, whichever comes first). The exact time of this warranty is dependent on the regulatory c ategory of the engine. In addition, components that are considered “high cost” are required to have an extended warranty. Examples of such components would be exhaust aftertreatment devices and electronic control units. Current warrant y provisions in 40 CFR p art 86 define the warrant y periods and covered components for heav y - dut y engines. The current list of components is comprised of an y device or s ys tem whose failure would result in an increase in criteria pollutant emissions. We remain convinced that this lis t is adequate for addressing GHG emissions******* **E.O. 12866 Review**

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342 of as well , based on comments received from the proposed rules
. The following list identifies items commonly defined as critical emission
- related components :
 Electronic control units  Aftertreatment devices  Fuel met ering components  EGR
- Sy stem components  Crankcase
- ventilation valves  All components related to charge
- air compression and cooling  All sensors and actuators associated with an y of these components When a manufacturer experiences an elevated rate of failure of an emission control device, they

are required to submit defect reports to the EPA. These reports will generall y have an explanation of what is failing, the rate of failure, and any possible corrections taken b y the manufacturer. Based on how successful EPA believes the manufacturer to be in addressing these failures, the manufacturer may need to conduct a product recall. In such an instance, the manufacturer is responsible for contacting all customers with affected units and repairing the defect at no c ost to them. We believe this structure for the reporting of criteria pollutant defects, and recalls, is appropriate for components related to complying with GHG emissions as well. (ii) Maintenance Engine manufacturers are required to outline maintenance sche dules that ensure their product will remain in compliance with emission standards throughout the useful life of the engine. This schedule is required to be submitted as part of the application for certification. Maintenance that is deemed to be critical t o ensuring compliance with emission standards is classified as “critical emission
- related maintenance.” Generally , manufacturers are discouraged from specifying that critical emission
- related maintenance is needed within the regulatory useful life of the e ngine. However, if such maintenance is unavoidable, manufacturers must have a reasonable basis for ensuring it is performed at the correct time. This may demonstrated through several methods including survey data indicating that at least 80% of engines rec eive the required maintenance in
- use or manufacturers may

provide the maintenance at no charge to the user. During durability testing of the engine, manufacturers are required to follow their specified maintenance schedule. Maintenance relating to components relating to reduction of GHG emissions are not expected to present unique challenges. Therefore, we are not finalizing any changes to the provisions for the specification of emission
- related maintenance as outlined in 40 CFR part 86.******* **E.O. 12866 Review**

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343 of **(2) Enforcemen**  **t Provisions** (a ) Emission Control Information Labels Current provisions for engine certification require manufacturers to equip their product with permanent emission control information labels. These labels list important characteristics, parameters, and spec ifications related to the emissions performance of the engine. These include, but are not limited to, the manufacturer, model, displacement, emission control sy stems, and tune
- up specifications. In addition, this label also provides a means for identifyin g the engine family name, which can then be referenced back to certification documents. This label provides essential information for field inspectors to determine that an engine is in fact in the certified configuration. We do not anticipate an y major ch anges needing to be made to emission control information labels as a result of new GHG standards and a single label is appropriate for both criteria pollutant and GHG emissions purposes. Perhaps the most significant addition will be the inclusion of Famil y Certification L evels or Family Emission L imits for GHG pollutants, if the manufacturer is participating in averaging, banking, and trading. In addition, the label will need to indicate whether the engine is certified for use in vocational vehicles, trac tors, or both. Finally , if an engine family is uniquely

certified for use in h ybrid powertrain applications, a compliance statement indicating this will need to be included on the emissi on control label. In response to comments from engine and truck manuf acturers that tractors should be allowed to obtain engines certified for vocational use and likewise a limited number of engines certified for tractor use should be available for the appropriate vocational applications, the agencies are allowing limited us e of engines certified in other categories. To address compliance needs and to discourage abuse of the provisions, proper labeling of the engines is essential. (b ) In
- Use Standards In
- use testing of engines provides a number of benefits for ensuring useful life compliance. In addition to verifying compliance with emission standards at any given point in the useful life, it can be used along with manufacturer defect reporting, to indentify components failing at a higher than normal rate. In this case, a prod uct recall or other service campaign can be initiated and the problem can be rectified. Another key benefit of in
- use testing is the discouragement of control strategies catered to the certification test cycles. In the past, engine manufacturers were foun d to be producing engines that performed acceptabl y over the certification test cycle, while changing to alternate operating strategies “off
- cycle” which caused increases in criteria pollutant emissions. While these strategies are clearl y considered defeat devices, in
- use testing provides a meaningful way of ensuring that such strategies are not active under normal engine operation. Currently , manufacturers of certified heav y - duty engines are required to conduct in
- use testing programs. The intent of these programs is to ensure that their products are******* **E.O. 12866 Review**

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344 of continuing to meet criteria pollutant emission standards at various points within the useful life of the engine. Since initial certification is based on engine dy namometer testing, and removing in
- use engines from their respective vehicles is often impractical, a unique testing procedure was developed. This includes using portable emission measurement s ys tems (PEMS) and testing the engine over t ypical in
- situ drive routes rather than a prescribed test cycle. T o assess compliance, emission results from a well defined area of the speed/torque map of the engine, known as the NTE zone, are compared to the emission standards. To account for potential increases in measurement and operational variability, certain all owances are applied to the standard which results in the standard for NTE measurements (NTE limit) to be at or above the duty cycle emission standards. In addition, EPA conducts an annual in
- use testing program of heavy
- dut y engines. Testing procured vehicles with specific engines over well
- defined drive routes using a constant trailer load allows for a consistent comparison of in
- use emissions performance. If potential problems are identified in
- situ, the engine may be removed from the vehicle and t ested using an engine dynamometer over the certification test cycles. If deficiencies are confirmed the agency will either work with the manufacturer to take corrective action , possibly involving a product recall, or proceed with enforcement action against the manufacturer. The GHG reporting rule requires manufacturers to submit CO 2 data from all engine testing (beginning in the 2011 model year), which we believe is equally applicable to in
- use measurements. Methods of CO 2 in
- situ measurement are well estab lished and most, if not all, PEMS devices measure and record CO 2 along with criteria pollutants. CH 4 and N 2 O present in
- situ measurement challenges that may be impractical to overcome for this testing, and therefore they are not included in in
- use testing requirements at this time. While measurement of CO 2 may be practical and important, implementing an NTE emission standard for CO 2 is challenging. As previously discussed, CO 2 emissions are highl y dependent on the drive cycle of the vehicle, which does not lend itself well to the NTE
- based test procedure. Therefore, we propose d and are adopting that manufacturers be required to submit CO 2 data from in
- situ testing, in both g/bhp
- hr and g/ton
- mile, but these data will be u sed for reference purposes only (there would be no NTE limit/standard for CO 2 ). For the purposes of calculating the g/ton
- mile metric, we prefer that manufacturers use the measured vehicle weight. However it has been brought to our attention that this may not alway s be available, in which case an estimated vehicle weight can be used along with a written justification for the basis of the estimation. For engine
- based (dy namometer) in
- use testing, compliance with CO 2 emission standards will be judged off of the FCL of the engine family
. **(3) Other**  **Certification Provisions**  (a ) Carryover/Carry Across Certification Test Data EPA’s current certification program for heavy
- duty engine s allows manufacturers to carry certification tes t data over and across certification testing from one model year to the next, when no significant changes to models are made. EPA will also apply this policy to CO 2 , N 2 O and CH 4 certification test data.******* **E.O. 12866 Review**

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345 of (b ) Certification Fees The CAA allows EPA to collect fee s to cover the costs of issuing certificates o f conformity

for the classes of engines covered b y this rulemaking . On May 11, 2004, EPA updated its fees regulation based on a study of the costs associated with its motor vehicle and engine compl iance program (69 FR 51402). At the time that cost study was conducted , the current rulemaking was not considered. At this time the extent of any added costs to EPA as a result of this program is not known. EPA will assess its compliance testing and other activities associated with the rule s and may amend its fees regulations in the future to include an y justifiable new costs. (c) Onboard Diagnostics Beginning with the 2010 model y ear, manufacturers have been phasing in on
board dia gnostic (OBD) sy stems on heavy
- dut y engines pursuant to the heavy
- duty OBD rulemaking finalized by

the EPA in 2009. 331 These sy stems monitor the activity of the emission control sy stem and issue alerts when faults are detected. These diagnostic sy stems are currentl y being developed based around components and s ys tems that influence criteria pollutant emissions. Consist ent with the light
- duty vehicle rule, we believe that monitoring of these components and systems for criteria pollutant emissions will have an equally

beneficial effect on CO 2 emissions. 332 Therefore, we have not finalized any

additional unique onboard diagnostic provisions for heav y - duty GHG emissions. In the NPRM , EPA did not propose new or different diagnostic requirements from those finalized in the 2009 heav y - duty OBD rule
. The a gencies received comments from engine manufacturers, hy brid s ys tem manufacturers, and related trade groups which broached concerns regarding the feasibility of applying on
- board diagnostics to h yb rid applications starting in 2013
. The commenters stated that engine manufacturers would need several y ears to adapt their engine OBD s ys tems to hy brids, and therefore requested a delay of OBD requirements until 2020 with a phase
- in of enforcement liability starting that same ye ar. Details, which the agencies believe have merit, are set out below. In res ponse , EPA is taking an approach that is consistent with certain provisions of the exis ting final action for heav y duty OBD, finalized in 2009. To that end, manufacturers who certify hy brid sy stems will continue to have the responsibility of implementing compliant diagnostic sy stems , however, we are extending the OBD phase
- in for engines with hy brid sy stems to allow time for them to be able to address communication protocol development concerns (e.g. SAE J1939 , communication with diagnostic scantools ), component development concerns (e.g. hardware and software), and to address the availabilit y of heavy
- duty OBD compliant engines with sufficient lead
- time for additional hy brid diagnostic sy stem

331 U.S. EPA, “Control of Air Pollution from New Motor Vehicles and New Motor Vehicles Engines; Final Rule Regulations Requiring Onboard Diagnostic Systems on 2010 and Later Heavy
- Duty Engines Used in Highway Applications Over 14,000 Pounds; Revisions to Onboard Diagnostic Requirements for Diesel Highway Heavy
- Duty Vehicles Under 14,000 Pounds ,” published February 24, 2009. Available here: http://www.epa.gov/otaq/regs/im/obd/regtech/hd
- obd
- frm
- 02
- 24
- 09
- notice
- 74
- fr
- 8310.pdf 332 Light
- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule 75 FR 25323,(May 7, 2010.******* **E.O. 12866 Review**

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346 of development given resource constraints as engine manufacturers are focused on meeting the 2013 re quirements for conventional products at this time
. Since publication of the NPRM, the EPA has undertaken extensive outreach to hy brid manufacturers , engine manufacturers , and related industry groups to further understand the technical issues involved with the implementing full OBD with hy brid sy stems. Hy

brid manufacturers have indicated that the interaction between hy brid sy stems and OBD compliant engines are not well understood at this time, for example if the sy stem shuts down the vehicle at idle (as is c ommon) , the idle diagnostics cannot run. In addition, there are many different h yb rid sy stems being developed which make much of this technology

both immature and low volume, engine manufacturers are concerned that this would result in high costs due to f requent design changes that could result as this technology

develops and have asked for flexibility for unique h ybrid applications. Consistent with the goal to incentivize the development of hy brid designs (sy stems designed to capture wasted e nergy and re d u c e fuel consumption) the EPA is allowing hy brid manufacturers time to develop their s ys tems while simultaneously developing the capability to meet HD OBD requirements. Communication protocol development is an integral part of developi ng h yb rid OBD capability

for the heavy
- dut y industry which is not vertically

integrated. There are different protocols required to be used for OBD communication in a vehicle depending on the ty pe of engine (gasoline or diesel). These protocols are develo ped in part to standardize the transmission of electronic signals and control information among vehicle components. The J1939 communication protocol is developed b y committee through SAE and is required for use with diesel engines. J1939 defines communications messages, diagnostic messages for co mmunications between a module and diagnostic scantool , and fault codes
. Messages sent through a J1939 network contain a series of information (e.g. an identifier, message priority , data, etc.) and these parameters must be agreed upon through the SAE committee and tailored to work for all manufacturers . The d evelopment of this communication protocol including criteria for the messages , and d etermining a single set of fault codes that can work for all manufac turers can take a substantial amount of time. OBD cannot exist without fault codes to report . Hy brid manufacturers have stated that until such time as ‘plug and play scheme’ is available, hy brid volumes will not be able to increase significantly
. At th is time, there are onl y a few such messages that have been developed for use in hy brid s ys tems, and there is much additional development needs to take place. The type of messages needed must first be identified once 2013 HDOBD compliant engines are availa ble for use in HD hy

brid OBD sy stem development. After needed messages are identified, the content of each message must be developed and agreed upon through a ballot process. Manufacturers have stated that this will be an iterative process that will like ly take at least 2 ye ars to develop the protocol for use with different variations of hy brid sy stems and architectures, different ty pes of energy

storage sy stems, and for s ys tems used in the wide variety of applications in the heav y - dut y market, and we agree with this assessment. While a level of communication exists today between engines and transmissions for this industry , the level of control and impact on engine s ys tem operation becomes much more significant once h ybrid technology is introduced. The purpose of the h ybrid energy s ystem is to su pplement overall vehicle power demands. As such, the methods used for integrating******* **E.O. 12866 Review**

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347 of the energy

from the hy

brid sy stem into overall vehicle operation vary from allowing additional internal combustion engine lower power operation to potentially decreasing the amount of engine “on” time. This range of performance impacts will serve to reduce GHG emissions by

reducing demands on the engine. Existing transmission sy stems and other powertrain components do not exercise the level of control the h yb rid will need t o exercise to effectivel y reduce GHG emissions and improve fuel consumption performance for internal combustion engines. Component development concerns raised b y h yb rid manufacturers include both changes that may

be required to software and/or hardware s y stems on both existing hy brid products and on hy

brid sy stems currentl y under development. Software s ys tems in existing products have been developed to provide proprietary diagnostic capability

(as no standardized sy stem such as J1939 had been developed fo r these s ys tems), however, these software s ys tems are not OBD complaint. These products will likely have to have entirely new software s ys tems developed for them which may result in hardware changes as well. Manufacturers have stated that a complete software s ys tem can take up to 2 ye ars to develop and to validate. Hardware may also need to be changed to accommodate OBD on hybrid s ys tems, in particular, affecting current production sy stems which may

not have controllers that can support full OBD. The low volume sales and high cost of a controller program (which can reach in the millions of dollars) cannot support a hardware change for h ybrids alone, rather, existing hybrid systems will have to wait until such a hardware upgrade is planned for other r easons. In addition, new hardware programs, such as developing a new ECU can take 3
- 4 ye ars. While it is possible for some of this work to be done concurrently , how much can be done this way is dependent on the configuration of each individual sy stem. In addition, manufacturers may have contractual agreements with hardware and software suppliers that will have to be reconfigured to address a complete OBD program. Hy brid manufacturers have stated that they will be unable to produce h ybrid sy stems that will be OBD complaint in 2013. Given the concerns discussed above and the general lack of availability of OBD compliant engines until the completion of the HD OBD pha se - in, to require manufacturers of s ys tems that depend on the availability of the OBD compliant engines to then be able to immediately implement additional requirements may

be impractical or infeasible in many instances. Given the phase
- in HD OBD that already exists however, we do not believe a delay to 2019 or 2020 is warranted. While not all of the engines that would potentially have hy brid s ys tems incorporated into their design are available in their final OBD configuration at the time of this action, it is clear that some engine s ystems will be available. Additionally , there is an expectation that engine manufacturers, their suppliers and customers will have to continue to work cooperativel y to deliv er products for the market. This cooperation must include a level of concurrent engineering prior to products being brought to market. At this time we believe a delay

to 2016 for the phase
- in of OBD for heavy
- dut y engines equipped with hy brid s ys tems sho uld provide the requisite lead time from the date of this action to the date of implementation provides adequate time for development of components and protocols necessary

for successful integration of complete OBD s ys tems for engines equipped with hy

brid sy stems.******* **E.O. 12866 Review**

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348 of Manufacturers will be required to implement feasible controls for these h ybrid sy stems that do not adversely impact emissions performance in 2013 and by 2016
- 17 more fully

developed OBD sy stems will need to be applied to certified engine sy ste m configurations. The phase in period takes into account that current production sy stems are likel y to be smaller in terms of sales volume than newl y developed s ys tems, and may require more hardware and software development as some of these s ys tems have b een in production for nearl y a decade and have developed proprietary s ys tem diagnostic capability that does not meet OBD requirements, and provides them an additional y ear of time to comply

with the heav y - dut y OBD regulations. Hy brid s ys tems put into prod uction after January

1, 2013 will be required to meet the 2009 heav y - duty OBD requirements in 2016 consistent with the next phase
- in date for heav y - dut y OBD, while those hy brid s ys tems released prior to Janu ary 1, 2013 have until 2017 to be compliant with these OBD requirements. In the interim , engine s ys tem diagnostics must show that they meet or exceed CARB’s Engine Manufacturer Diagnostic Sy stems Requirements (EMD) including sy stem monitoring requirements for NOx aftertreatment, fuel sy stems, exhaust gas recirculation, particulate matter traps, and emission
- related electronic components. 333 Most manufa cturers have already certified their engines with EMD for the 2 011 model ye ar, and full OBD as required in 2013 exceed s EMD requirements , therefore no new cost burden is expected as a result of this provision
. Inaddition, new engines may be introduced in 2013 for h ybrid
- only use , i n lieu of meeting full OBD, meeting EMD would result in a cost savings because of the flexibility in scan
- tool reporting and diagnostic content. Specific EMD requirements will be considered met if they are redundant due to the installed engine's full y functioning OBD content. If a manufacturer certifies an engine h ybrid package with CARB OBD, and it's diagnostics meet o r exceed the requirements for full 2013 OBD, the manufacturer must either use their CARB certified package for Federal release or phase in the package and certify it with full EPA OBD by MY 201 6
. In addition, when submitting EMD certification to the EPA each ye ar during the interim part of the phase
- in , manufacturers must also submit a compliance plan for 2016 wh ich describ es their progress towards full compliance with HD OBD requirements. This plan must include information on : protocol, software , hardware , and other component development status. If these compliance plans are not submitted each year prior to ful l OBD phase in by a manufacturer and full OBD compliance is not demonstrated when required (i.e. 2016 or 2017 depending on the sy stem) these sy stems will not be certified
. Finally, these sy stems must maintain existing OBD capability for certified engines used in h ybrid applications with the exception of having liability for failure to meet detection thresholds and in
- use performance frequency requirements
. Hy brid s ys tems must also continue to maintain existing diagnostic capability to ensure proper function consistent with the performance for which the h yb rid sy stem is certified as well as, safe operation of the hy brid sy stem.

333 California Air Resources Board, Final Regulation Order for EMD, Section 1971 of Title 13, California Code of Regulations, effective December 30, 2004. Available here; http://www.arb.ca.gov/regact/emd2004/fro.pdf******* **E.O. 12866 Review**

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349 of (d ) Applicability of Current High Altitude Provisions to Greenhouse Gases EPA is requiring that engines covered by this pro gram must meet CO 2 , N 2 O and CH 4 standards at elevated altitudes. The CAA requires emission standards under section 202 for heav y - dut y engines to apply at all altitudes. EPA does not expect engine CO 2 , CH 4 , or N 2 O emissions to be significantly different at high altitudes based on engine calibrations commonly

used at all altitudes. Therefore, EPA will retain its current high altitude regulations so manufacturers will not normally be required to submit engine CO 2 te st data for high altitude. Instead, they will be required to submit an engineering evaluation indicating that common calibration approaches will be utilized at high altitude. Any deviation in emission control practices employed onl y at altitude will need t o be included in the AECD descriptions submitted by manufacturers at certification. In addition, any

AECD specific to high altitude will be required to include emissions data to allow EPA to evaluate and quantify any emission impact and validity of the AEC D. (e) Emission
-Related Installation Instructions Engine manufacturers are currently required to provide detailed installation instructions to vehicle manufacturers. These instructions outline how to properly install the engine, aftertreatment, and other supp orting s ystems, such that the engine will operate in its certified configuration. At the time of certification, manufacturers may be required to submit these instructions to EPA to verify that sufficient detail has been provided to the vehicle manufacturer
. We do not anticipate an y major changes to this documentation as a result of regulating GHG emissions. The most significant impact will be the addition of language prohibiting vehicle manufacturers from installing engines into vehicle categories in which they are not certified for. An example would be a tractor manufacturer installing an engine certified for onl y vocational vehicle use. Explicit instructions on behalf of the engine manufacturer that such acts are prohibited will serve as sufficient notic e to the vehicle manufacturers and failure to follow such instructions will in the vehicle manufacturer being in non
- compliance. (f ) Alternate CO2 Emission and Fuel Consumption Standards Under the final rule s , engine manufacturers have the option of certifying to alternate CO 2 emission and fuel consumption standards for model ye ars 2014 through 2016. These alternate standards are defined as a certain percentage below a baseline value established from their corresponding 2011 model
- ye ar products. Fo r instance, the alternate emission standard for light and medium heav y dut y FTP
- certified (vocational) engines is equal to 0.97 5 times the baseline value
. If a manufacturer elects to participate in this program it must indicate this on its certification application. In addition, sufficient details must be submitted regarding the baseline engine such that the agency can verify that the correct optional CO 2 emission and fuel consumption standards have been calculated. Th e s e data will need to include the engine family name of the baseline engine, so references to the original certification application can be made, as well as test data showing the CO 2 emissions and fuel consumption of the baseline engine.******* **E.O. 12866 Review**

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350 of **(4) Compliance Reports (a) Early Model**  **Year Data** NHTSA’s regulatory

text in the NPRM included specifications for manufacturers to submit pre
- certification compliance reports for heav y - dut y en gines. The pre
certification reports included requirements for manufactures to submit information to identify the t ypes of e ngine s, expected test results, production volumes and credits
. The reporting requirements were general in nature despite there being an existing emissions program for heavy
- duty engines. The existing ABT program for NO x and PM emissions for heav y - dut y engines has existed since 2001 (see 66 FR 5002 signed on January 18, 2001 ) but does not require reporting earl y model year compliance information. The agencies sought comments on the report provisions i n the NPRM but commenters failed to offer recommendations on what content should be required. As a result, the agencies have decided to eliminate the pre
- certification report because engine manufacturers have no experience in providing GHG information and the proposed information may not be available until subsequent model years. For the next phase of this GHG program, the agencies may

adopt a pre
- model year report for engines. As an alternative to receiving earl y compliance model year information in the precertification reports, the agencies have decided to use manufacturer’s application for c ertificate s of conformity to obtain earl y model estimates. Currently , the applications for certificates are not required to include the fuel consumption informatio n required by NHTSA. Therefore, the agencies are adopting provisions in the final rule s for manufacturers to provide emission and equivalent fuel consumption estimates in the manufacturer’s applications for certification. The agencies will treat informat ion submitted in the applications as a manufacturer’s demonstration of providing earl y compliance information, similar to the pre
- model year report submitted for heavy
- dut y pick trucks and vans. T he final rule s establishe a harmonized approach by which m anufacturers will submit applications through the EPA Verify database s ys tem as the single point of entry

for all information required for this national program and both agencies will have access to the information
. If b y model year 2012, the agencies are not prepared to receive information through the EPA Verify database s ys tem, manufacturers are expected to submit written applications to the agencies. This approach should streamline this process and reduce industry burden and provide sufficient information for the agenc ie s to carry

out their earl y compliance activities. **(b) Final Reports** For engines, the agencies proposed that manufacturers would submit EOY report s and final reports. An EOY report for manufacturers using the ABT program was required to be submitted no later than 90 day s after the calendar year and final report no later than 270 day s after the calendar year. 336 Manufacturers not participating in the ABT program were requir ed to provide an EOY report within 45 day s after the calendar year but no final reports were required. The final ABT report due date was established

336 Corresponding to the compliance model year******* **E.O. 12866 Review**

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351 of coinciding with EPA’s existing criteria pollutant report for heav y - dut y engines complying with NO X and PM standards
. Similar to that program, the proposed EOY and final report s required receiv ing engine ty pe designation, engine famil y and credit plans for engine manufacturers
. T here were no comments received on the final r eports for engines. For the final rule s , the agencies will retain the provisions as propos ed for the EOY and final reports. However, the agencies will consolidate the reporting as done for other vehicle categories and will require emissions and equ ivalent fuel consumption information to be submitted to EPA. T he final rule s establish a harmonized approach b y which manufacturers will submit applications to EPA as the single point of entry for all information required for this national program and both agencies will have access to the appropriate information
. If b y model year 2012, the agencies are not prepared to receive information through a database s ys tem, manufacturers are expected to submit written applications to the agencies. The agen cies are also combining the EOY reports for manufacturers not using ABT to provide a product volume report due 90 day s after the end of the model year and the ABT report required 90 day s after the model year. A summary of the required information in the f

inal rule s for EOY and final reports is as follows:

 E ngine family designation and averaging set.  E ngine emissions and fuel consumption standards including any alternative standards used  E ngine family FCLs.  Final production volumes  Certified test cycles  Us eful life values for engine families  A credit plan identifying the manufacturers actual credit balances, credit flexibilities, credit trades and a credit deficit plan if needed demonstrating how it plans to resolve any credit deficits that might occur for a model year within a period of up to three model years after that deficit has occurred (c) Additional Required Information Throughout the model y ear, manufacturers may be required to submit various reports to the agencies to compl y w ith various aspects of the program . These reports have differing criteria for submission and approval. Table V
- 1 below provides a summary of the t ypes of submission , required submission date s and the EPA and NHTSA regulations that apply for engines and engine manufacturers
. The agencies will review and grant an y appropriate request s considering the time li ness of the submissions and the completeness of the requests.******* **E.O. 12866 Review**

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352 of **Table V**  **- 1**  **: Summary of Required**  **Information for HD**  **Engine Compliance**  Submission Applies to Required Submissions Date EPA

Regulation Reference NHTSA

Regulation Reference Small business exemptions E ngine manufacturers

meeting the Small Business Administration (SBA) size criteria of a small business as described in 13 CFR 121.201. Before introducing any excluded vehicle into U.S. for commerce §1036.150 §535.8

In centives for early introduction The provisions apply with respect to tractors and vocational vehicles produced in model years before 2014 EPA must be notified before the manufacturer submits it applications for certificates of conformity §1036.150 §535.8

Voluntary compliance for NHTSA standards Engine manufacturers

seeking early

compliance in model years 2014 to 2016. NHSAT must be notified before the manufacturer submits it applications for certificates of conformity NA §535.8

Model year 2014 N2O standards. M anufacturers that choose to

show compliance with the MY 2014 N2O standards requesting to use an engineering anal ys is EPA must be notified before the manufacturer submits it applications for certificates of conformity §1036.150 NA

Exemption from EOY reports Manufactures with surplus

credits at the end of the model year 90
- day s after the calendar year ends §1036.730 §535.8
Alternative engine standards Engine manufacturers not

able to comply

with 1036.104 and wanting to use the alternative engine standard
. EPA and NHTSA must be notified before the manufacturer submits it applications for certificates of conformity §1036.150 §535.8

Alternate phase
- in Engine manufacturers want

to comply

with alternate phase in standards
. EPA and NHTSA must be notified before the manufacturer submits it applications for certificates of conformity §1036.150 §535.8******* **E.O. 12866 Review**

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353 of 

### D. **Class 7 and 8 Combination Tractors (1)**  **Compliance Approach**  In addition to requiring engine manufacturers to certify their engines, manufacturers of Class 7 and 8 combination tractors must also certify that their vehicles meet the CO 2 emission and fuel consumption standards. This vehicle certification will ensure that efforts beyond just engine efficiency improvements are undertaken to reduce GHG emissions and fuel consumption. Some examples include aerodyn amic improvements, rolling resistance reduction, idle reduction technologies, and vehicle speed limiting sy stems. Unlike engine certification however, this certification will be based on a load
specific basis (g/ton
- mile or gal/1,000 ton
- mile as opposed to work
- based, or g/b hp
- hr). This would take into account the anticipated vehicle loading that would be experienced in use and the associated affects on fuel consumption and CO 2 emissions. Vehicle manufacturers w ill also be required to warrant their products against emission control sy stem defects, and demonstrate that a service network is in place to correct any such conditions. The vehicle manufacturer also bears responsibility in the event that an emission
- relate d recall is necessary
. (a ) Certification Process In order to obtain a certificate of conformity for the tractor, the tractor manufacturer will complete a compliance demonstration, showing that their product meets emission standards as well as other regulatory requirements. For purposes of this demonstration, vehicles with similar emission characteristics throughout their useful life are grouped together in vehicle families, which are defined primarily by the regulatory subclass of the vehicle
. Manufacturers may further classify

vehicles together into sub
families within a given vehicle famil y for a given regulatory subcategory . Examples of characteristics that would define a vehicle sub
- family for heav y - dut y vehicles are wheel and tire packag e, aerodynamic profile, tire rolling resistance, and vehicle speed limiting sy stem. Compliance with the emission standards (or FEL) will be determined at the sub
family level. Under this sy stem, the worst
- case vehicle configuration would be selected based on having the highest fuel consumption, and all other configurations within the family or sub
- family

are assumed to have emissions and fuel consumption at or below the parent model and therefore in compliance with CO 2 emission an 2 d fuel consumption standards. Any vehicle within the family can be subject to selective enforcement auditing in addition to confirmatory

or other administrator testing. V ehicle families for Class 7 and 8 combination tractors will utilize the standardized 12
- di git naming convention, as described along with the engine certification process in Section V.C.1.a , above . As with engines, each certifying vehicle manufacturer will have a unique three digit code assigned to them. Currently , there is no 5 th digit (industry sector) code for this class of vehicles, for which we propose d to use the next available character, “2.” The agencies originall y proposed that engine displacement be******* **E.O. 12866 Review**

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354 of included in the vehicle family name, however th e wide range of engines available across most regulatory

subcategories makes this requirement irrelevant and unnecessary at the time of this rulemaking. Therefore, we are reserving the remaining characters for California ARB and/or manufacturer use, such that the result is a unique vehicle family name. Class 7 and 8 tractors share several common traits, such as the trailer attachment provisions, number of wheels, and general construction. However, further inspection reveals key

differences related to GHG emissions. Payl oads hauled by Class 7 tractors are significantl y less than Class 8 tractors. In addition, Class 8 vehicles may have provisions for hoteling (“sleeper cabs”), which results in an increase in size as well as the addition of comfort features like power and climate control for use while the truck is parked. Both segments may have various degrees of roof fairing to provide better aerod ynamic matching to the trailer being pulled. This is a feature which can help reduce CO 2 emissions significantly when properl y matched to the trailer, but can also increase CO 2 emissions if improperly matched. Based on these differences, it is reasonable to expect differences in CO 2 emissions, and therefore these properties form the basis for the final combination tractor regul atory subcategories. The various combinations of payload, cab size, and roof profile result in nine final regulatory

subcategories for Class 7 and 8 tractors. Class 7 tractors are divided into three regulatory

subcategories: one for low , one for mid roof height profiles, and one for high roof profiles. The Class 7 tractors are subject to a 10 y ear, 185,000 regulatory useful life. Class 8 tractors are split into six regulatory subcategories reflecting two cab sizes (day and sleeper) and three roof height profiles (low, mid, and high). All Class 8 tractors are subject to a 10 year, 435,000 mile regulatory useful life. (b ) Demonstrating Compliance With the Final Standards (i ) CO2 and Fuel Consumption Standards As discussed at proposal, although whole
- vehicle certification may be ultimately desirable for these vehicles, it is essentially infeasible to require it now. See 75 FR at 74270
- 71. Most commenters agreed, as did the NAS Report. Accordingl y, again consistent with the NAS Report, the agencies have developed a predictive model for demonstrating compliance with these initial standards for combination tractors. The agencies will continue to work toward improved methods for whole vehicle performance characterization , as s uggested by some commenters .
Model Vehicle modeling will be conducted using the agencies’ simulation model, the GEM, which is described in detail in Chapter 4 of the RIA with responses to comments in the Summary

and Anal ys is of Comments Document Section 7 . Basicall y, this model functions by defining a vehicle configuration and then exercises the model over various drive cycles. Several initialization files are needed to define a vehicle, which include******* **E.O. 12866 Review**

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355 of mechanical attributes, control algorithms, and driver inputs. The majority of these input s will be predetermined b y EPA and NHTSA for the purposes of vehicle certification. The net results from the GEM are weighted CO 2 emissions and fuel consumption values over the drive cycles. The CO 2 emission result will be used for demonstrating compliance with vehicle CO 2 standards while the fuel consumption result will be used for demonstrating compliance with the fuel consumption standards. The vehicle manufacturer will be responsible for entering up to seven inputs relating to the GHG performance of a vehicle configuration although, depending on the regulatory

c ategory , fewer inputs may be required. These inputs include the regulatory c ategory , coefficient of drag, steer tire rolling resi stance, drive tire rolling resistance, vehicle speed limit, vehicle weight reduction, and idle reduction credit. For the GEM inputs relating to aerodynamics, the agencies have finalized lookup tables for frontal area and coefficient of drag based on t ypic al performance levels across the industry
. Manufacturers are responsible for assessing the aerody namic performance of their vehicles through testing or a combination of testing and modeling. This test data is then used to select the most appropriate agency
- defined bin for entry into the GEM. Tire rolling resistance is simply the measured rolling resistance of the tire in kg per metric ton as described in I SO 28580:2009. This measured value is expected to be the result of three repeat measurements of three different tires of a given design, giving a total of nine data points. It is the average of these nine results that will be entered into the GEM. Tire rolling resistance may be determined by

either the vehicle or tire manufacturer. In the latter case, a signed statement from the tire manufacturer confirming testing was conducted in accordance with this part is required. As previously

described, limiting vehicle speed can have a significant effect on fuel consumption and we believe that manufacturers shou ld be recognized for including technology

that facilitates these limits. Also as described, these vehicle speed limiters are not likely to be a simple device with a fixed top speed. “Soft top ” limits based on driver behavior and limit expiration dates (o r mileage) are two of the most common scenarios. To properl y assess the GHG and fuel consumption benefits in light of these features, we are defining the proper methodology for entering the vehicle speed limit into the GEM. This is based on an equation in cluding terms for VSLexpiration (expiration factor) and VSLsoft
- top (soft
- top factor and soft
- top VSL). The result will be an effective vehicle speed limit reflecting the expected mileage and time that the limit will be used for. Additional details regarding this equation and its derivation can be found in RIA C hapter 2. For vehicle weight reduction, the agencies are primarily addressing the reduction of weight and perhaps number of wheels. This reduction is assessed relative to a standard combination tractor configuration with dual
- wide rear tires with conventional steel wheels. Manufacturers may elect to use single
- wide tires/wheels and/or aluminum (or light
- weight aluminum) wheels or other components to reduce the weight of their vehicles. The agencies have defined standard weight reduction levels associated with each weight reduction technology for entry into the GEM. These reductions are listed in******* **E.O. 12866 Review**

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356 of pounds per component , so manufacturers will need to multiply this reduction by

the number of affected components for their total weight reduct ion entry into the GEM
. Manufacturers of sleeper cabs electing to limit idle time to 300 seconds or less can claim a GHG benefit of 5 g/ton
- mile and should be entered into the GEM as such. This benefit cannot be scaled to reflect shorter or longer allowed idle times , but can be scaled based upon expiration date
. The agencies will utilize the appropriate engine map ref lecting use of a certified engine in the truck (and will enter the same value even if an engine family is certified to the temporary

percent reduction alternative standard, in order to evaluate vehicle performance independently of engine performance.) We believe this approach reduces the testing burden placed upon manufacturers, yet adequatel y assesses improvements associated with select technologies. The model will be publicly available and will be found on EPA’s website. The agencies reserve the right to independently evaluate the inputs to the model by way of Administrator testing to validate those model inputs. The agencies also reserve the right to evaluate vehicle performance using the inputs to the model provided by the manufacturer to confirm the performance of the sy stem using GEM. This could include generating emissions results using the GEM and the inputs as provided by the manufa cturer based on the agency ’s own runs. This could also include conducting comparable testing to verify the inputs provided by

the manufacturer. In the event of such testing or evaluation, the Administrator’s results become the official certification resu lts , the exception being that the manufacturer may continue to use their data as initially submitted, provided it represents a worst
- case condition over the Administrator’s results. To better facilitate the entry of onl y the appropriate parameters, the agencies will provide a graphical user interface in the model for entering data specific to each vehicle. In addition, EPA will provide a template that facilitates batch processing of multiple vehicle configurations within a given family . It is expected that this template will be submitted to EPA as part of the certification process for each certified vehicle famil y or subfamily
. For certification, the model will exercise the vehicle over three test cycles; one transient and two steady - state. For the tran sient test, we are using the heavy
- heavy
- dut y diesel truck (HHDDT) transient test cycle, which was developed by the California Air Resources Board and West Virginia University to evaluate heavy
- dut y vehicles. The transient mode simulates urban, start
- stop driving, featuring 1.8 stops per mile over the 2.9 mile duration. The two steady state test points are reflective of the tendency for some of these vehicles to operate for extended periods at highway speeds. Based on data from the EPA’s M OVES database, and common highway speed limits, we are finalizing these two points to be 55 and 65 mph. The model will predict the total emissions results from each configuration using the unique properties entered for each vehicle. These results are the n normalized to the******* **E.O. 12866 Review**

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357 of payload and distance covered, so as to yield a gram/ton
- mile result, as well as a fuel consumption (gal/1,000 ton
- mile) result for each test cycle. As with engine and vehicle testing, certification will be based on the worst
- case confi guration within a vehicle famil y The results from all three tests are then combined using weighting factors, which reflect ty pical usage patterns. The t ypical usage characteristics of Class 7 and 8 tractors with day cabs differ significantly

from Class 8 tractors with sleeper cabs. The trucks with day cabs tend to operate in more urban areas, have a limited travel range, and tend to return to a common depot at the end of each shift. Class 8 sleeper cabs, however, are ty picall y used for long distance trips which consist of mostly highway driving in an effort to cover the highest mileage in the shortest time. For these reasons, we propose d that the cycles are weighted differently for these two groups of vehicles. For Class 7 and 8 trucks with day cabs, we propose weights of 64%, 17%, and 19% (65 mph, 55 mph, and transient, resp.). For Class 8 with sleeper cabs, the high speed cruise tendency results in final weights of 86%, 9%, and 5% (65 mph, 55 mph, and transient, respectively). These final, weighted emission results are compared to the emission standard to assess compliance. The agencies received comments regarding the duty cycles and the weighting factors used for assessing emissions compliance. In making final determination for the cycle weightin g factors, the agencies considered those comments, as well as the agencies’ own data in determining the final weighting factors and duty cycles to be used for determining emissions compliance. Demonstration of comp liance is also available through the use of credits generated as part of the Averaging, Banking, and Trading Program (ABT) as described earlier in this Preamble. Additionally, compliance may demonstrated through the u se of a Vehicle Speed Limiter (VSL) and the application of the VSLis accounted for as another input to the GEM for assessing GHG and fuel consumption emissions performance. Durability Testing As with engine certification, a manufacturer must provide evidence of compliance through the regulatory

useful life of the vehicle. Factors influencing vehicle
- level GHG performance over the life of the vehicle fall into two basic categories: vehicle attributes and maintenance items. Each category merits different treatment from the perspective of assessing useful life compliance, as each has varying degrees of manufacturer versus owner/operator responsibility
. The category

of vehicle attributes generall y refers to aerodynamic features, such as fairings, side
- skirts, air dams, air foils, etc, which are installed b y the manufacturer to reduce aerodynamic drag on the vehicle. These features have a significant impact on GHG emissions and their emission reduction properties are assessed early in the useful life (at the time of certification). These features are expected to last the full li fe of the vehicle without becoming detached, cracked/broken, misaligned, or otherwise not in a state whi ch provides the original GHG emissions reduction . In the absence of the aforementioned failure modes, the performance of these features is not expected to degrade over time and the benefit to reducing GHG emissions is expected to last for the life of the vehicle with no special maintenance requirements. To assess useful life compliance, we are following a design
- based approach which will ensure that the******* **E.O. 12866 Review**

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358 of manufacturer has robustly designed these features so they can reasonabl y be expected to last the useful life of the vehicle. The category

of maintenance items refers to items that are replaced, renewed, cleaned, inspected, or otherwise addressed in the preventative maintenance schedule specified b y the vehicle manufacturer. Replacement i tems that have a direct influence on GHG emissions are primarily tires and lubricants. Sy nthetic engine oil may be used b y vehicle manufa cturers to reduce the GHG emissions of their vehicles. Manufacturers may specify that these fluids be changed throughout the useful life of the vehicle. If this is the case, the manufacturer should have a reasonable basis that the owner/operator will use fluids having the same properties. This may be accomplished by

requiring (in service documentation, labeling, etc) that onl y these fluids can be used as replacements. If the vehicle remains in its original certified condition throughout its useful life, it is not believed that GHG emissions would increase as a result of service accumulation. This is based on the assumption that as components such as tir es wear, the rolling resistance due to friction is likely to stay the same or decrease. With all other components remaining equal (tires, aerody namics, etc), the overall drag force would stay the same or decrease, thus not significantly changing GHG emissions at the end of useful life. It is important to remember however, that this vehicle assessment does not take into account any engine
- related wear affects, which may in fact increase GHG emissions over time. The agencies received comments from engine and tractor manufacturers requesting an assigned deterioration factor of zero for GHG emissions. As discu ssed previously , the agencies will allow the use of an assigned deterioration factor of zero where appropriate in Phase 1, however this does not negate the responsibility of the manufacturer to ensure compliance with the emissions standards throughout the useful life. For the reasons explained above, we be lieve that for the first phase of this program, it is most important to ensure that the vehicle remain in its certified configuration throughout the useful life. This can most effectivel y be accomplished through engineering analy sis and specific maintenan ce instructions provided by the vehicle manufacturer. The vehicle manufacturer would be primarily responsible for providing engineering analy sis demonstrating that vehicle attributes will last for the full useful life of the vehicle. We anticipate this dem onstration will show that components are constructed of sufficiently robust materials and design practices so as not to become dy sfunctional under normal operating conditions. For instance, we expect aerodynamic fairings to be constructed of materials sim ilar to that of the main body of the vehicle (fiberglass, steel, aluminum, etc) and have sufficient support and attachment mechanisms so as not to become detached or broken under normal, on
- highway driving. (ii) EPA’s Air Conditioning Leakage Standards Heav y - d ut y vehicle air conditioning sy stems contribute to GHG emissions in two way s. First, operation of the air conditioning unit places an accessory load on the engine, which increases fuel consumption. Second, most modern refrigerants are HFC
- based, which have significant global warming potential (GWP=1430). For heavy
- duty vehicles, the load added b y the air conditioning system is comparativel y small compared to other******* **E.O. 12866 Review**

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359 of power requirements of the vehicle. Therefore, we are not targeting an y GHG reduction due to de creased air conditioning usage or higher efficiency A/C units for this final action . However, refrigerant leakage, even in very small quantities, can have significant adverse effects on GHG emissions. Refrigerant leakage is a concern for heav y - dut y v ehicles, similar to light
- duty vehicles. To address this, EPA is finalizing a design
- based standard for reducing refrigerant leakage from heav y - dut y pickups and vans and combination tractors. This standard is based off using the best practices f or material selection and interface sealing, as outlined in SAE publication J2 727. Based on design criteria in this publication, a leakage “score” can be assessed and an estimated annual leak rate can be made for the A/C sy stem based on the refrigerant ca pacity
. (There is no requirement for vocational vehicle AC leakage for reasons explained at 75 FR 74211.) At the time of certification, manufacturers w ill be required to outline the design of their sy stem, including the specif ication of materials and construction methods. They will also need to supply

the leakage score developed using SAE J2727 and the refrigerant volume of their sy stem to determine the leakage rate per year. If the certifying manufacturer does not complete installation of the air conditi oning unit, detailed instructions must be provided to the final installer which ensures that the A/C sy stem is assembled to meet the low
- leakage standards. These instructions will also need to be provided at the time of certification, and manufacturers mu st retain all records relating to auditing of the final assembler. (c) In
- Use Standards As previously

addressed, the drive
- cycle dependence of CO 2 emissions makes NTE
- based in
- use testing impractical. In addition, we believe the reporting of CO 2 data from the criteria pollutant in
- use testing program will be helpful in future rulemaking efforts. For these reasons, we are not finalizing an NTE
- based in
- use testing program for Class 7 and 8 combination tractors for this program . In the absence of NTE
- based in
- use testing, provisions are necessary for verifying that production vehicles are in the certified configuration, and remain so throughout the useful life. Perhaps the easiest method for doing this is to verify the presence of installed emission
- relate d components. This would basically consist of a vehicle audit against what is claimed in the certification application. This includes verifying the presence of aerod ynamic components, such as fairings, side
- skirts, and gap
- reducers. In addition, the prese nce of idle
- reduction and speed limiting devices would be verified. The presence of LRR tires could be verified at the point of initial sale; however verification at other points throughout the useful life would be non
- enforceable for the reasons mentione d previously
. The category

of wear items primarily

relates to tires. It is expected that vehicle manufacturers will equip their trucks with LRR tires, as they may provide a reduction in GHG emissions. The tire replacement intervals for this class of vehi cle is normally in the range of 50,000 to 100,000 miles, which means the owner/operator will be replacing the******* **E.O. 12866 Review**

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360 of tires at several points within the useful life of the vehicle. We believe that as LRR tires become more common on new equipment, the aftermarket prices of these tires will also decrease. The primary

barrier to the introduction of more fuel efficient tire designs into the truck market is the upfront costs of tire development and upfront capital costs for new production machinery

(e.g., new tire mold s). Once manufacturers have sunk these costs into new tire designs and production facilities in order to meet our vehicle standards, there is little barrier for bringing these better products into the replacement tire market as well. Our regulations will effectivel y force OEMs to make these investments in tire designs and, having done so, should lead to better tires not only for new vehicles but in the replacement tire market as well. Along with decreasing tire prices, the fuel savings realized through u se of LRR tires will ideally provide enough incentive for owner/operators to continue purchasing these tires. Thus, the inventory modeling in this final action reflects the continued use of LRR tires through the life of the vehicle
. **(2) Enforcement Provisions**  As identified above, a significant amount of vehicle
- level GHG reduction is anticipated to come from the use of components specificall y designed to reduce GHG emissions. Examples of such components include LRR tires, aerody namic fairings, idle reduction s ys tems, and vehicle speed limiters. At the time of certification, vehicle manufacturers w ill specify which components will be on their vehicle when introduced into commerce. Based on this list of installed components, GHG emissions performance of the vehicle will be assessed using the GEM, and compliance with the family (or subfamily) emission s limit will need to be shown. Given the ability of manufacturers to demonstrate compliance through the use of flexibility provisions, as previously described, that will be taken into account when assessing the performance for purposes of enforcement. Add itionally , should enforcement action be necessary against sy stems certified using the flexibility provisions, credit balance s generated through the use of the provisio ns may

be reduced as a consequence of enforcement activity
. As described in the in
- use testing section, it is important to have the ability to determine if the vehicle is in the certified configuration at the time of sale
. Perhaps the most practical and basic method of verifying that a ve hicle is in its certified configuration is through a vehicle emissions control information label, similar to that used for engines and light
- duty vehicles. We proposed that this label list identifying features of the vehicle, including model ye ar, vehicl e model, certified engine family , vehicle manufacturer, test group, and GHG emissions category . In addition, this label would list emission
- related components that an inspector could reference in the event of a field inspection. Possible examples may inc lude LRR (for LRR tires), ARF (aerod yn amic roof fairing), and ARM (aerodynamic rearview mirrors). With this information, inspectors could verify the presence and condition of attributes listed as part of the certified configuration. Several comments were r eceived voicing concern that the large number of vehicle permutations within a given vehicle family (and perhaps vehicle subfamil y) would lead to a large number of unique labels, at significant cost and labor burden to the manufacturer. In addition, includ ing generic emission control s ystem (EC) identifiers for vehicles would******* **E.O. 12866 Review**

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361 of add a significant burden while providing little usable information for inspectors. A common example given in the comments was that simply identifying “ARF” for a roof fairing would not be sufficiently detailed for an inspector to know whether the correct roof fairing is present. As a result of these concerns, commenters suggested that vehicle labels only

include a minimal amount of information such as a compliance statement, vehicle family

name, and date of manufacture. The agencies generall y agree with the concerns raised by the commenters and do not wish to add burdensome and arbitrary labeling requirements. Concurrently , we also remain committed to giving agency inspectors adequate tools to ensure a vehicle is in its certification at least at the time of sale. Therefore, we are finalizing a vehicle label requirement that includes:

- Compliance statement

- Vehicle manufacture r

- Vehicle family

(and subfamily)

- Date of manufacture

- Regulatory

subcategory

- Emission control sy stem identifiers To address the concerns from vehicle manufacturers identified above, particularly related to emission control (EC) identifiers, we believe a combination of selectable information on the label as well as a set of EPA
- defined EC identifiers will provide a useful, but not overly

burdensome labeling scheme. Since the intent of these identifiers is to provide inspectors with a means for simpl y verifying the presence of a component, we do not believe o verl y detailed identifiers are necessary , particularl y for tires and aerod ynamic components. For instance, current engine regulations require that three
- way catal ys ts be identified on engine labels as “TWC.” However, unique details such as catal ys t size, loading, location, and even the number of catal ys ts are not on the label. In similar fashion, we believe that identifying tires and aerody namic components in a general sense will prove similarly effective in determining if a vehicle has been built as inten ded or if it has been modified prior to being offered for sale. EPA is requiring that components for which vehicle certification is dependent upon be identified on the label. This includes limited aerodyn amic components (roof fairings, side skirts, & gap reducers), vehicle speed limiters, LRR tires, and idle reduction components . If vehicle certification also depends on the use of innovative or advanced technologies, this too must be included on the label. The following id entifiers must be used for the emission control label: Vehicle Speed Limiters

- VSL

– Vehicle speed limiter******* **E.O. 12866 Review**

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362 of - VSL S

– “Soft
- top” vehicle speed limiter

- VSLE

– Expiring vehicle speed limiter

- VSLD

– Vehicle speed limiter with both “soft
- top” and expiratio n Idle Reduction Technology

- IR T5

– Engine shutoff after 5 minutes or less of idling

- IR TE

– Expiring engine shutoff Tires

- LRRD

– Low rolling resistance tires

– Drive ( RR C of 8.2 kg/metric ton or less)

- LRRS

– Low rolling resistance tires

– Steer ( RR C of 7.8 kg/metric ton or less)

- LRRA

– Low rolling resistance tires

– All (meeting appropriate criteria for steer & drive) Aerod ynamic Components

- ATS

– Aerod yn amic side skirt and/or fuel tank fairing

- ARF

– Aerody

namic roof fairing

- ARFR

– Adjustable height aerodynamic roof fairing

- TGR

– Gap reducing fairing (tractor to trailer gap) Other Components

- ADV

– Vehicle includes advance d technology components

- ADVH

– Vehicle includes hy brid powertrain

- INV

– Vehicle includes innovative technology components On the vehicle label, several (if not all), available EC identifiers available in a given subfamily

can be listed and the appropriate selections can be made at the time of assembly based on each unique vehicle configuration. This practice is common on engine ECIlabels (normall y for month/year of manufacture) and selections are made using a punch, stamp, check mark or other permanent method. This provides inspectors with the information they

need while still affording flexibility to manufacturers with several unique vehicle configurations.******* **E.O. 12866 Review**

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363 of At the time of certification, manufacturers will be required to submit a n example of their vehicle emission control label such that EPA can verify that all critical elements mentioned above are present. In addition to the label, manufacturers will also need to describe where the unique vehicle identification number and date of production can be found on the vehicle (if the date is not present on the label) The agencies received several comments requesting the inclusion of consumer
focused labels for heav y - duty vehicles. These requests mainly involved labels similar to th ose found on passenger vehicles, allowing consumers to easily determine and compare fuel efficiency

between vehicles. While we agree that such labels proven to be valuable to consumers in the light
- duty market when shopping and comparing vehicles, the vast arr ay of in
- use drive cycles for heavy
- dut y vehicles and significant impact on GHG emissions reduce the intrinsic value of such fuel efficiency data to consumers. Additionally , man y heavy
- dut y vehicles are unique and purpose
- built which prevents direct comparison to other vehicles. The agencies may revisit this topic for future rulemaking activities, however there is no consumer label requirement in this final action
. **(3) Other Certification**  **Provisions** (a ) Warranty Section 207 of the CAA requires manufacturers to warrant their products to be free from defects that would otherwise cause non
- compliance with emission standards. For purposes of this regulation, vehicle manufacturers must warrant all components which form the basis of the certification to the GHG emission standards
. The emission
related warranty

covers vehicle speed limiters, idle shutdown sy stems, fairings, h ybrid sy stem components, and other components to the extent such components are included in the certified emission controls. The emissio n - related warrant y also covers tires and all components whose failure would increase a vehicle's evaporative emissions (for vehicles subject to evaporative emission standards , which could include components which received innovative or advanced technology credits)
. In addition, the manufacturer must ensure these components and sy stems remain functional for the warranty period defined in 40 CFR Part 86 for the engine used in the vehicle, generally defined as half of the regulatory

useful life. As with heavy
- dut y engin es, manufacturers may offer a more generous warranty , however the emissions related warranty may not be shorter than an y other warrant y offered without charge for the vehicle. If aftermarket components are installed (unrelated to emissions performance) wh ich offer a longer warranty , this will not impact emission related warranty obligations of the vehicle manufacturer. NHTSA , for this phase of the program , is not finalizing an y warranty requirements relating to its fuel consumption rule
. S everal comments were received from vehicle manufacturers voicing concern that tire warranties should be the responsibility of the tire manufacturer, not the vehicle manufacturer. It has been, and remains, EPA policy to hold the certifying entities responsible for warrant y obligations. In this case, tire manufacturers are not certificate holders and therefore we do not believe it is appropriate for them to independently warrant their products. The agencies see this as no different than requiring turbocharger******* **E.O. 12866 Review**

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364 of or fuel injector manufacturers to provide warranties related to heav y - dut y engines. However, we do believe that vehicle manufacturers can and should hold tire manufacturers responsible for warranty of their products as part of their sourcing and purchasing agreements. As proposed , tires are only required to be warranted for the first life of the tires (vehicle manufacturers are not expected to cover replacement tires). For heav y - dut y pickups and vans and combination tractors, the vehicle manufacturer is also required to warrant the A/C sy stem against design or manufacturing defects causing refrigerant leakage in excess of the standard. The warranty period for the A/C s ys tem is identical to the vehicle warrant y period as described above. At the time of certification, manufacturers must supply a copy of the warranty statement that will be supplied to the end customer. This document should outline what is covered under th e GHG emissions related warranty as well as the length of coverage. Customers must also have clear access to the terms of the warranty, the repair network, and the process for obtaining warrant y s ervice. (b ) Maintenance Vehicle manufacturers are required to o utline maintenance schedules that ensure their product will remain in compliance with emission standards throughout the useful life of the vehicle. For heav y - dut y vehicles, such maintenance may include fluid/lubricant service, fairing adjustments, or serv ice to the GHG emission control sy stem. This schedule is required to be submitted as part of the application for certification. Maintenance that is deemed to be critical to ensuring compliance with emission standards is classified as “critical emission
- rel ated maintenance.” Generally , manufacturers are discouraged from specifying that critical emission
- related maintenance is needed within the regulatory useful life of the engine. However, if such maintenance is unavoidable, manufacturers must have a reasona ble basis for ensuring it is performed at the correct time. This may be demonstrated through several methods including survey data indicating that at least 80% of engines receive the required maintenance in
- use or manufacturers may

provide the maintenance at no charge to the user. Manufacturers will be required to submit the recommended emission
- related maintenance schedule (and other service related documentation) at the time of certification. This documentation should provide sufficient detail to allow the owner/operator of the vehicle to maintain the emission control sy stem in a way that will ensure functionality

as intended. This would include items such as periodic inspection of aerod ynamic components and maintenance unique to advanced or innovative technologies. In addition, these instructions should provide the owner/operator with adequate information to replace consumable components (such as tires) with comparable replacements. Since low rolling resistance tires are key emission control components under this program , and will likel y require replacement at multiple points within the life of a vehicle, it is logical to clarify how this fits into the emission
- related maintenance requirements. While the agencies encourage the exclusive use of LRR t ires throughout the life of heav y - dut y vehicles, we recognize that it is inappropriate at this time to hold******* **E.O. 12866 Review**

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365 of vehicle manufacturers responsible for ensuring that this occurs. Additionally , we believe that owner/operators have a legitimate financial motivati on for ensuring their vehicles are as fuel efficient as possible, which includes purchasing LRR replacement tires. However owner/operators may

not have a sound knowledge of which replacement tires to purchase to retain the as
- certified fuel efficiency of their vehicle. To address this concer n and in response to comments from vehicle manufacturers, we are requiring that vehicle manufacturers suppl y adequate information in the owner’s manual to allow the owner/operator of the vehicle to purchase t ires meeting or exceeding the rolling resistance performance of the original equipment tires. We expect that these instructions will be submitted to EPA as part of the application for certification. (c) Certification Fees Similar to engine certification, the a genc y will assess certification fees for heav y duty vehicles. The proceeds from these fees are used to fund the compliance and certification activities related to GHG regulation for this regulatory category . In addition to the certification process, othe r activities funded by certification fees include EPA
administered in
- use testing, selective enforcement audits, and confirmatory testing. At this point, the exact costs associated with the heavy
- dut y vehicle GHG compliance are not well known. EPA will as sess its compliance program cost associated with this program and assess the appropriate level of fees. We anticipate that fees will be applied based on vehicle families, following the light
- dut y vehicle approach. (d ) Requirements f

or Conducting Aerodynamic Assessment Using the Modified Coastdown Reference Method and Alternative Aerodynamic Methods The requirements for conducting aerodynamic assessment using the modified coastdown reference method and alternative aerody namic metho ds includes two key components: adherence to a minimum set of standardized criteria for each allowed method and submittal of aerodynamic values and supporting information on an annual basis for the purposes of certifying vehicles to a particular aerody nam ic bin as discussed in Section II. First, we are finalizing requirements for conducting the modified coastdown reference method and each of the alternative aerody namic assessment methods. We will cite approved and published standards and pract ices, where feasible, but will define criteria where none exists or where more current research indicates otherwise. A description of the requirements for each method is discussed later in this section. The manufacturer will be required to provide performance data on its vehicles and attest to the accuracy of the information provided. Second, to ensure continued compliance, manufacturers will be required to provide a minimum set of information on an annual basis at certification time 1) to support continued use of an aerodyn amic assessment method and 2) to assign an aerod ynamic value based on the applicable aerodynamic bins. The information supplied to the agencies should be based on an approved a erody namic assessment method and adhere to the requirements for conducting aerodynamic assessment mentioned above.******* **E.O. 12866 Review**

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366 of The annual submission may be based on coastdown testing conducted consistent with the modified protocol detailed in this rulemaking or with an approved alternative method. The coastdown testing must be conducted using the Modified Protocol which uses SAE J1263 as a basis with some elements of SAEJ22 63 (e.g., post
- processing and anal ys is techniques) , in addition to the modifications developed in response to industry comments which raised concerns regarding test to test variability
. In addition to 8 valid coastdown runs in each direction, manufacturers using in
house test methods should provide an adjustment factor for relating their drag coefficient based on their in
- house method to the reference method, modified coastdown. The basis for the adjustment factor is: Adjustment Factor = Cd coastdown Cd in
- house For the test article used for certification that differs from the test article used for reference method testing, determine Cd to use for aerodynamics bin determination as described below. Cd certification BI

N = Adjustment Factor x Cd in
- house measured The specific requirements for the test article used in reference method testing using the coastdown procedures should meet the requirements listed in Table V
- 2 through Table V
- 5, below
.******* **E.O. 12866 Review**

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367 of **Table V**  **- 2**  **: Reference**  **Method Test Vehicle Specifications** 

**53’ Air Ride Dry Vans** Length: 53 feet (636 inches) +/
- 1 inch Width: 102 inches +/
- 0.5 inches Height: 102 inches (162 inches or 13 feet, 6 inches (+0.0 inch/
- 1 inch) from the ground) Capacity : 3800 cubic feet Assumed trailer load/capacity : 45,000 lbs. Suspension: Any (see “trailer ride height” below) Corners: Rounded with a radius of 5.5 inches +/
- 0.5 inches Bogie/Rear Axle Position: Tandem axle (std), 146 inches +/
- 3.0 inches from rear axle centerline to rear of trailer. set to California position Skin: Generally smooth with flush rivets Scuff band: Generally smooth, flu sh with sides (protruding ≤ 1/8 inch) Wheels: 22.5 inches. Double wide. Std mudflaps Doors: Swing doors Undercarriage/Landing Gear: Std landing gear, no storage boxes, no tire storage, 105 inches +/
- 4.0 inches from front of trailer to centerline of landing gear Underride Guard Equipped in accordance with per 49 CFR §393.86 Tires for the Standard Trailer and the Tractor: a. Size: 295/75R22.5 or 275/80R22.5 b. CRR<5.1 kg/metric ton (In addition, the CRR for trailer tires in GEM should be updated to 5 .0 kg/metric ton.) c. Broken in per section 8.1 of SAE J1263 d. Pressure per section 8.5 of SAE J1263 e. No uneven wear f. No re
- treads g. Should these tires or appropriate Smart Way tires not be available, the Administrator testing may include tires used by

the manufacturer for certification. Test Conditions: 1. Tractor
- trailer gap: 45 inches +/
- 2.0 inches 2. King pin setting: 36 inches +/
- 0.5 inches from front of trailer to king pin center line 3. Trailer ride height: 115 inches +/
- 1.0 inches from top of trailer to fifth wheel plate, measured at the front of the trailer, and set within trailer height boundary from ground as described above 4. Mudflaps: Positioned immediately following wheels of last axle******* **E.O. 12866 Review**

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368 of **Table V**  **- 3**  **Reference Method Test Track Condition Specifications**

**Table V**  **- 4**  **: Standard Tanker Trailer for Special Testing** 

**Tanker** Length: 42 feet ± 1 foot, overall 40 feet ± 1 foot, tank Width: 96 inches ± 2 Height: 140 inches (overall, from ground) Capacity : 7,000 gallons Suspension: Any (see “trailer ride height” below) Tank: Generally cylindrical with rounded ends. Bogie: Tandem axle (std). Set to furthest rear position. Skin: Generally smooth Structures: (1) Centered, manhole (20 inch opening), (1) ladder generall y centered on side, (1) walkway (extends lengthwise) Wheel fairings: Wheels: 24.5 inches. Double wide. Tanker Operation Empty Co as td own Trac k Spe ci fi ca ti on s Pa ra me te r Rang e Co astd own spe ed ra nge 70 mph t o 15 mph Averag e win d s pe

ed a t the test si

te ( fo r ea ch ru n i n eac

h dir ec ti on ) < 10 mp h Maxim um wi nd sp eed (f or each ru n i n e ac

h dir ec ti on ) <1 2. 3 mp h Averag e cr os s wi nd s pe

ed (f or ea ch ru n i n e ac

h dir ec ti on at t he si

te ) < 5 mph All va li d c oa st

down run s i

n one d ire ct

ion Wit

hi n 2 s ta nd a rd dev ia ti on s of

t he ot he r v al id co as td own run s i

n th at sa me di

re ct ion Grad e of t he t es t tr ac k <. 02% or a cco un t fo r t he i mp ac t of g ravit y a s desc ri be d in

SAE J2 263 E qua ti on 6.******* **E.O. 12866 Review**

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369 of **Table V**  **- 5**  **: Standard Flatbed Reference Trailer**  **for Special Testing Flatbed**  Length: 53 feet Width: 102 inches Flatbed Deck Heights: Front: 60 inches ± 1⁄2 inch Rear: 55 inches ± 1⁄2 inch Wheels / Tires 22.5 inch diameter tire with steel or aluminum wheels Bogie Tandem axles, may be in “spread” configuration up to 10 feet ± 2 inches. Air suspension Load Profile: 2 5 inches from the centerline to either side of the load; Mounted 4.5 inches above the deck. Load height 31.5 inches above the load support.******* **E.O. 12866 Review**

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370 of **Figure V**  **- 1**  **: Standard Flatbed Trailer Diagram** **for Special Testing**  Regardless of the method, all testing using high
- roof sleepers should be performed with a tractor
- trailer combination to mimic real world usage. Accordingl y, it is important to match the ty pe of tractor with the correct trailer. Although, as d iscussed elsewhere in this rulemaking , the correct tractor
- trailer combination is not alway s present or tractor - only

operation may

occur, the majority

of operation in the real world involves correctly matched tractor
- trailer combinations and w e will attempt to reflect that here. Therefore, when performing an aerodyn amic assessment for a Class 7 and 8 tractor with a high roof, a standard box trailer must be used.******* **E.O. 12866 Review**

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371 of The definitions of the standard trailer are further detailed in §1037.501(g). This ensures consistency

and continuity

in the aerody

nam ic assessments, and maintains the overlap with real world operation. As mid
- roof and low
- roof coastdown testing will be conducted without the trailer if the aerodynamic bin is not extrapolated from a high
- roof version, then testing using other methods sho uld also be conducted based on the tractor alone. (e) Standardized Criteria for Aerodynamic Assessment Methods (i ) Coastdown Procedure Requirements For coastdown testing, the test runs should be conducted in a manner consistent with SAE J1263 with additional modif ications as described in the 40 CFR part 1066, subpart C, and in Chapter 3 of the RIA using the mixed model analy sis method. Since the coastdown procedure is the primary aerody namic assessment method, the manufacturer would be required to conduct the coas tdown procedure according to the requirements in this final action and supply the following information to the agency for approval:

 Facilit y information: name and location, description and/or

background/history , equipment and capability , track and facili ty elevation, track grade and track size/length;

 Test conditions for each test result including date and time, wind speed and direction, ambient temperature and humidity , vehicle speed, driving distance, manufacturer name, test vehicle/model ty pe, model year, applicable model engine family , tire t yp e and rolling resistance, test weight and driver name(s) and/or ID(s);

 Average C d result as calculated in 40 CFR 1037.520(b) from valid tests including, at a minimum, ten valid test results, with no maximum number, standard deviation, calculated error and erro r bands, and total number of tests, including number of voided or invalid tests. (ii) Wind Tunnel Testing Requirements Wind tunnel testing would conform to the following procedures and modifications, where applicable, including:

 SAE J1252, “ SAE WI ND TUNNEL TEST PROCEDURE FOR TRUCKS AND BUSES” (July 1981) shall be followed with the following exceptions: section 5.2 is modified to specify a minimum Rey

nold's number (Re min ) of 1.0 x 10 6 ; section 6.0 is modified to add the requirement that, for reduced
- scale wind tunnel tes ting, a one
- eighth (1/8th) or larger scale model of a heav y - dut y tractor and trailer must be used; for reduced
- scale wind tunnel testing, section 6.1 is modified to add the requirement that the model be of sufficient design to simulate airflow******* **E.O. 12866 Review**

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372 of through the radiator inlet grill and across an engine geometry representative of those commonly in your test vehicle. ;
 J1594, “VEHI CL E AERODYNAMICS TERMINOLOGY” (December 1994); and

 J2071, “AERODYNAMIC TESTI NG OF ROAD VEHICLES
- OPEN THROAT WI

ND TUNNELADJUSTMENT” (June 1994). In addition, the wind tunnel used for aerodyn amic assessment would be a recognized facility

by the Subsonic Aerody

namic Testing Association
. If your wind tunnel is not capable of testing in accordance with these EPA modified SAE procedures, you may request EPA approval to use this wind tunnel and must demonstrate that your alternate test procedures produce data sufficiently accurate for compliance. This must be approved b y EPA prior to method validation and correlation factor development
. We are finalizing the provisions that manufacturers that perform wind tunnel testing do so based on the requirements detailed in this action. The wind tunnel tests should be conducted at a zero yaw angle and, if so equipped, utilizing the moving/rolling flo or (i.e., the moving/rolling floor should be on during the test as opposed to static ) for comparison to the coastdown procedure, which corrects to a zero yaw angle for the oncoming wind. However, m anufacturers may be required to test at yaw angles other than zero (e.g., positive and negative six) if they voluntarily

seek to improve their GHG emissions score for a given model using additional yaw sweep. The manufacturer is required to supply the following:

 Facilit y information: name and location, descrip tion and background/history , layout, wind tunnel ty pe, diagram of wind tunnel layout, structural and material construction;

 Wind tunnel design details: corner turning vane type and material, air settling, mesh screen specification, air straightening metho d, tunnel volume, surface area, average duct area, and circuit length;

 Wind tunnel flow quality : temperature control and uniformity , airflow quality , minimum airflow velocity , flow uniformity , angularit y and stability , static pressure variation, turbulenc e intensity , airflow acceleration and deceleration times, test duration flow quality , and overall airflow qualit y achievement;

 Test/Working section information: test section ty pe (e.g., open, closed, adaptive wall) and shape (e.g., circular, square, oval), length, contraction ratio, maximum air velocity , maximum dy namic pressure, nozzle width and height, plenum dimensions and net volume, maximum allowed model scale, maximum model height above road, strut movement rate (if applicable), model support, primary boundary layer slot, boundary

layer elimination method and photos and diagrams of the test section;******* **E.O. 12866 Review**

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373 of  Fan section description: fan ty pe, diameter, power, maximum rotational speed, maximum top speed, support ty pe, mechanical drive, sectional total weight

 Data acquisition and control (where applicable): acquisition ty pe, motor control, tunnel control, model balance, model pressure measurement, wheel drag balances, wing/body panel balances, and model exhaust simulation

 Moving ground plane or Rolling Road (if applicable): construction and material, yaw table and range, moving ground length and width, belt type, maximum belt speed, belt suction mechanism, platen instrumentation, temperature control, and steering; and

 Facilit y correction factors and purpose. (iii) C FD Requirements Currently , there is no existing standard, protocol or methodology governing the use of CFD. Therefore, we are establishing a minimum set of criteria based on today ’s practices and coupling the use of CFD with empirical measurements from co astdown and, for gaining innovative technology credits, wind tunnel procedures. Since there are primarily two - ty pes of CFD software code, Navier
- Stokes based and Lattice
- Boltzman based, we are outlining two sets of criteria to address both ty pes. Therefo re, the agencies are requiring that manufacturers use commercially
- available CFD software code with a turbulence model included or available. . Further details and criteria for each ty pe of commerciall y - available CFD software code follows immediately and general criteria for all CFD anal ys is are subsequently described. For Navier
- Stokes based CFD code, manufacturers must perform an unstructured, time
- accurate anal ys is using a mesh grid size with total vo lume element count of at least fifty million cells of hexahedral and/or pol yh edral mesh cell shape, surface elements representing the geometry consisting of no less than six million elements and a near wall cell size corresponding to a y+ value of less than three hundred with the smallest cell sizes applied to local regions of the tractor and trailer in areas of high flow gradients and smaller geometry features.
. Navier
- Stokes
- based anal ys is should be performed with a turbulence model (e.g., k
- epsilon (k
- ε), shear stress transport k
- omega (SST k
- ω) or other commerciall y - accepted method) and mesh deformation (if applicable) enabled with boundary layer resolution of +/
- 95 percent . Finally , Navier
Stokes based CFD anal ys is for the purposes of determining the Cd should be performed once result convergence is achieved. Manufac turers should demonstrate convergence b y supplying multiple, successive convergence values. For Lattice
- Boltzman based CFD code, manufacturers must perform an unstructured, time
- accurate anal ys is using a mesh grid size with total number of volume elements of at least fifty

million with a near wall cell siz e of no greater than six millimeters on local regions of the tractor and trailer in areas of high flow gradients and******* **E.O. 12866 Review**

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374 of smaller geometry

features , with cell size s in other areas of the mesh grid starting at tweleve millimeters and increasing in size from this value as the distance from the tractor - trailer model increases
. In general for CFD, all analy sis should be conducted using the following conditions: a tractor
- trailer combination using the manufacturer’s tractor and the trailer according to the trailer specifications in this regulation, an environment with a blockage r ation of less than or equal to 0.2 percent to simulate open road conditions, a zero degree yaw angle between the oncoming wind and the tractor
- trailer combination, ambient conditions consistent with the modified coastdown test procedures outlined in this r egulation, open grill with representative back pressures based on data from the tractor model, turbulence model and mesh deformation enabled (if applicable), and tires and ground plane in motion consistent with and simulating a vehicle moving in the forward direction of travel. For any CFD anal ys is, the smallest cell size should be applied to local regions on the tractor and trailer in areas of high flow gradients and smaller geometry features (e.g., the a
- pillar, mirror, visor, grille and accessories , trailer leading and trailing edges, rear bogey , tires, tractor
- trailer gap)
. Finally , with administrator approval, a manufacturer may request and perform CFD anal ys is using parameters and criteria other than stated above if the manufacturer can demonstrate that the conditions above are not feasible (e.g., insufficient computing power to conduct such analy sis, inordinate length of time to conduct anal ys is, equivalent flow characteristics with more feasible criteria/parameters) or improved criteria may yi eld better results (e.g., different mesh cell shape and size). A manufacturer must provide data and information that demonstrates that their parameters/criteria will provide a sufficient level of detail to yield an accurate analy sis including comparison of ke y characteristics between the manufacturer’s criteria/parameters and those stated above (e.g., pressure profiles, drag build
- up, and/or turbulent/laminar flow at key points on the front of the tractor and/or over the length of the tractor
- trailer combinati on). Alternative Aerodynamic Method Comparison to the Coastdown Test Procedure Reference Method If a manufacturer uses any alternative aerody

namic method, or an y method other than the coastdown reference method, the manufacturer would have to provide a co mparison to the coastdown test procedure reference method
. T he manufacturer would be required to perform the alternative aerodyn amic method and the coastdown test procedure reference method on the same model and compare the Cd results. The alternative ae rod ynamic method , or an y other method using good engineering judgement , and the coastdown test procedure reference method must be conducted under similar test conditions and adhere to the criteria discussed above for each aerodyn amic assessment method
. Th is demonstration would be performed in the initial year of rule implementation and would require agency review and approval prior to use of the alternative aerod ynamic method in future years and for other models
.******* **E.O. 12866 Review**

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375 of The comparison would occur on one model of the manufacturer’s highest sales volume, Class 8, high roof, sleeper cab family with a full aerodyn amics package, either equipped at the factory

or sold through a dealer specificall y for that model as an OEM part. If the manufacturer does not have such a model, the manufacturer may select a comparable model in that family or a model from another highest sales volume family in the manufacturer’s fleet. For the comparison , the manufacturer would be required to provide information on the test conditions for each test result including but not limited to: test date and time, wind speed (if applicable), temperature, humidity , manufacturer and model, model year, applicable model engine family , tire t yp e and rolling resistance for actual model, model test weight, equivalent vehicle test weight, actual and simulated or equivalent vehicle speed, Rey

nolds number (if applicable), yaw angle (if applicable), blockage ratio , either calculated or measured (if applicable), model mounting (if applicable), model geometry , body axis force and moments (if applicable), total test duration, test vehicle and ty pe and operator name(s) and/or ID(s). In addition, the manufacturer must provide the Cd results from valid tests. Once the comparison is performed in the initial year , the manufacturer is required to perform this comparison every three years on the highest sales volume, Class 8, high roof, sleeper cab famil y equipped with a full aerodynamics package unless any or all of the following occurs: the Class 8, high roof, sleeper cab famil y/model used for the original comparison is no longer commercially available, and/or significantly redesigned, with the meaning of “significantly” based on good engineering judgment, a fundamental change is made to the current alternative aero dy namic method (e.g., change from facilit y A to facility

B as a source), and/or the alternative aerodynamic method is changed to something other than the coastdown test procedure reference method (e.g., switch to wind tunnel testing from coastdown, change wind tunnel testing facilities or CFD software code ). However, the agency reserves the right and has the authorit y under the Clean Air Act (CAA) to request and have the manufacturer perform a comparison in any year and on any model that the manufacturer h as certified. Finally , the data generated for the purpose of this comparison can be used in annual certification for that model, also called the base model, and for determining Cd for other models and/or sub
- families in the base model family , or other fam ilies in the manufacturer’s fleet. Annual Certification Data Submittal for Aerodynamic Assessment For each model in the manufacturer’s fleet, the manufacturer is required to supply aerod ynamic information on an annual basis to the agencies in their certi fication application. Once the manufacturer has performed the coastdown test procedure or the comparison for an alternative aerodyn amic method, the aerodyn amic assessment method can be used to generate C d values for all models the manufacturer plans to ce rtify and introduce into commerce. For each model, the manufacturer would determine a predicted aerod ynamic drag (C d times the frontal area, A). This reduces burden on the manufacturer to perform aerodynamic assessment but provides data for all the model s in******* **E.O. 12866 Review**

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376 of a manufacturer’s fleet. If a manufacturer has previously performed aerodyn amic assessment on the other models, the manufacturer may submit an experimental C d in lieu of a predicted C d . The aerod ynamic assessment data will be used in one of two ways: the manufacturer will use the C d ( times A ) values to determine the correct GEM input according to agency
- defined tables, or the agencies will use the manufacturer’s input data into the model and assign a GHG value/score. Since the agencies may

input the data into the model, manufacturers are required to provide the information from the coastdown test procedure, alternative aerodynamic method or the meth od comparison described above for annual certification. In addition, the manufacturer would supply manufacturer fleet information to the agency for annual certification purposes along with the acceptance demonstration parameters: manufacturer name, model year, model line (if different than manufacturer name), model name, engine family , engine displacement, transmission name and ty pe, number of axles, axle ratio, vehicle dimensions, including frontal area, predicted or measured coefficient of drag, assumpt ions used in developing the predicted or measured C d , justification for carry
across of aerod yn amic assessment data, photos of the model line
- up, if available, and model applications and usage options. Finally , the agencies reserve the right to request that a manufacturer generate or provide additional data, prior to certification, to support and receive annual certification approval. (f ) Aerodynamic Validation and Compliance Audit The agencies reserve the right to perform aerodyn amic validation and complian ce audit of the manufacturer ’ s aerod yn amic results. The agencies may conduct a vehicle confirmatory

evaluation using a vehicle recruited from the in
- use fleet and performing the reference method, coastdown test procedures, either at the manufacturer’s fac ility or an independent facility

using the agencies equipment and tools. If there is a discrepancy between the manufacturer’s data submitted for certification and the agencies’ validation results, the agency

may perform a full audit of the manufacturer’s source data and aerod ynamic assessment methods and tools used by the manufacturer to produce the data. The manufacturer would be required to make all equipment and tools available to the agencies to conduct the full audit. Based on this audit, the agencies may require the manufacturer to make changes to their aerodyn amic assessment methods ranging from minor adjustments to method criteria to switching allowed aerodynamic assessment methods. For the purposes of aerod ynamic validation and compliance audit, manufacturers will be allowed an additional compliance margin of one bin from the certified bin for the model evaluated (e.g., if a manufacturer certifies a model to Bin IV, the results of the aerody namic valid/compliance audit must fall within the next highest bin, in this case Bin III) . In******* **E.O. 12866 Review**

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377 of addition, the agencies may select an y model from the manufacturer’s fleet/vehicle famil y to perform the aerodyn amic validation and compliance. (g ) Aerodynamic Bin Category Adjustment Using Yaw Sweep Information As discussed in Section II.B.2, the agen cies are finalizing aerody namic drag values which represent zero degree yaw (i.e., representing wind from directly in front of the vehicle, not from the side). We recognize that wind conditions, most notably wind direction, have a greater impact on real w orld CO2 emissions and fuel consumption of heav y - dut y trucks than of light
- dut y vehicles. To provide additional incentive for manufacturers using aerody namic techniques (i.e., techniques that use assessment at yaw angles more or less than zero degrees to capture the influence of side winds and calculate wind average drag coefficient), the agencies are defining an approach to allow manufacturers to account for improve d aerod ynam ic performance in crosswind conditions similar to those experienced b y vehicles in use. If a manufacturer can benefit from having a model that performs in regimes or conditions other than the scope of the test parameters in this rulemaking, this creates an incentive for the entire industry
. As a result, we are allowing manufacturers to use the coefficient of drag values at positive six, negative six, and zero degrees yaw to improve their GHG score. The Yaw Sweep Adjustment would be determined using the following steps and equations:

 Step 1: Determine your aero method adjustment f actor as described above in paragraph (d) of this section and using the equation; Adjustment Factor = Cd coastdown , model

Cd in
- house , model
 Step 2: Apply

the aerody

namic method adjustment factor to the positive six, negative six and zero degrees yaw Cd values for that model using the equation; Cd Adjusted = Adjustment Factor x Cd( +6 degrees/
- 6 de grees/0 degrees, model)

 Step 3: Calculate your Adjusted zero yaw Cd*A Adjusted Zero Yaw Cd*A (model) = adjusted +/
- Six Yaw Cd ( average , model ) *A (model) x Zero Yaw Cd*A (industry average) +/
- Six Yaw Cd ( average) *A ( industry average )******* **E.O. 12866 Review**

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378 of  Step 4: Use the adjusted zero yaw Cd*A for the model to determine appropriate bin and the associated Cd input for the GEM to determine your Yaw Sweep Adjusted GHG score. Essentially , this equation becomes y = x * C where y

is the adjusted zero yaw Cd, x is the corrected average of the +/
- six degree yaw Cds for the manufacturer’s model, and C is a constant value based on the ratio of the zer o yaw Cd and WACd ratio for the industry
. The current default value for th is industry baseline ratio for this is rulemaking is 0.8065 based on the Cd values of current Class 8, high
- roof, aero sleeper cab models in the fleet. The agencies may periodicall y review this industry baseline ratio and adjust it, if necessary , with notification to the industry
. The yaw sweep adjustment described above onl y applies to Class 7, high
roof day cab and Class 8 high
- roof day or sleeper cab tractors and a manufacturer seeking yaw sweep adjustment must use an approved, alternative aerodyanmic method to generate the yaw sweep data. Manufacturers may use a more yaw sweep angles (e.g., zero, +/
- 1, 3, 6, 9) for their yaw sweep adjustment and, in this case, must calculate the wind
- average Cd (WACd) according to SAE J1252 and use this value in lieu of the average of the +/
- six degree yaw Cds in the equations above. As stated elsewhere in this regulation, the Agencies reserve the right to review a manufacturer’s proposed adj ustment and discuss the proposed adjustment with the manufacturer. The Agencies will notify the manufacturer of the need for a review and the manufacturer must provide all information requested by the Agencies to support the review and subsequent discussi on(s). The agencies also reserve the right to den y aerod yn amic bin category adjustment independent or as a result of the review/discussions with the manufacturer. In such case, the Agencies will notify the manufacturer of denial prior to certification to ensure the proper inputs to the GEM are used. **(4) Compliance Reports**  (a ) Early Model Year Data The regulatory

text of the NPRM included specifications for manufacturers to submit pre
- certification compliance reports for each of a manufacturer’s fleet of heav y duty tractors. Navistar and Volvo commented that the requirements specified in the NHTSA pre
- certification reports are overbroad and should be eliminated. The pre
certification reports included requirements for manufactures to submit a wi de variet y of information on these vehicles. The variety of information was believed to be necessary given that these vehicles had no previous compliance information for meeting fuel efficiency and emission standards and the agencies wanted to ensure that enough information was obtain to ensure sufficient compliance with the program. The a gencies have since reviewed the level of detail required in the precertification reports and are in******* **E.O. 12866 Review**

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379 of agreement with commenters that the required information may be overl y broad for compliance purposes and given that this is the first time these manufacturers have been regulated, the level of information required may not be available until subsequent model ye ars. Therefore, as discussed previously for pick up trucks and vans, the agencies have removed the requirement for manufactures to submit pre
- certification compliances reports for these classes of vehicles. As an alternative to receiving earl y compliance model year information in the precertification reports, the agencies have decided to use manufacturer’s application for c ertificate s of conformity to obtain earl y model estimates. Currently , the applications for certificates are not required to include th e fuel consumption information required by NHTSA. Therefore, the agencies are adopting provisions in the final rule s for manufacturers to provide emission and equivalent fuel consumption estimates in the manufacturer’s applications for certification. The agencies will treat information submitted in the applications as a manufacturer’s demonstration of providing earl y compliance information, similar to the pre
- model year report submitted for heavy
- dut y pick up trucks and vans. T he final rule establishes a harmonized approach by which manufacturers will submit applications through an EPA
- administered database, such as the Verify

s ys tem, as the single point of entry for all information required for this national program and both agencies will have access to the information
. If by model year 2012, the agencies are not prepared to receive information through the EPA Verify database s ys tem, manufacturers are expected to submit written applications to the agencies. This appr oach should streamline this process and reduce industry burden and provide sufficient information for the agenc ie s to carry out their early

compliance activities. (b ) Final Reports The NPRM proposed for manufacturers participating in the ABT program to provide EOY and final reports. The EOY reports for the ABT program were required to be submitted by

manufacturers no later than 90 day s after the calendar y ear and final report no later than 270 day s after the calendar year. 337 Manufacturers not partic ipating in the ABT program were required to provide an EOY report within 45 days after the calendar year but no final reports were required. The final ABT report due was established coinciding with EPA’s existing criteria pollutant report for heavy
- dut y e ngines. The EOY report was required in order to receive preliminary final estimates and identifies manufacturers that might have a credit deficit for the given model year. Manufacturers with a credit surplus at the end of each model could receive a waiver from providing EOY reports. As proposed, the remaining manufacturers were required to submit reports to EPA and send copies of those reports to NHTSA with equivalent fuel consumption values. In response to the NPRM, commenters recommended collectin g additional data. One commenter requested collecting information to develop and refine test cycles that more accurately

reflect actual driving cycles for medium
- and heav y - duty trucks. Several

337 Corresponding to the compliance model year******* **E.O. 12866 Review**

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380 of other commenters ( ACEE, Eaton, CAL START, NRDC and UCS) recommended collecting advanced data on in
- service vehicles and that the collected data be anal yz ed and characterized for each vocational application, especiall y for h yb rid vehicles, in a cooperative government and industry effort. Commenters (ACEE, DTNA, NRGDC, UCS and Volvo) also requested that the agency ’s data collection ensure to include information on actual vehicle configurations sold in the fleet. M any commenters argued against the burden placed upon the industry in meeting the agencies ’ proposed required reporting provisions. One commenter argued against providing actual production information due to the variability that exists in building heav y - dut y vehicles and in the influence of changing fleet interest each y ear indicating that only estimated information should have to be provided. C ommenters (Volvo and Navistar) generally

objected stating that the agency requirements in its reports are both unnecessary

and overl y burdensome. Comments in response to the NPRM requested that for manufacturers not using ABT provisions , the EOY report due 45 day s after the end of the calendar ye ar should be combined with the ABT report due 90 day s after the same model year . Commenters also requested that the exempted off
- road vehicle report be consolidated with the EOY report. Other concerns raised by commenters were for the agencies to remove an y differences in reporting provisions and implement a single uniform reporting template that manufacturers can submit to both agencies. One commenter ( Volvo ) requested that the agencies simpl if y the reporting requirements for vehicle configurations in both the EOY and final reports , commenting that the proposal as outlined was extremel y burdensome to vehicle manufacturers. Th e NPRM regulation state d that the manufacturer must identify each distinguishable vehicle configuration in the vehicle famil y or sub
- family and identification of FELs for each subfamily . The regulation calls for reporting of results and modeling inputs f or each subfamily
. The comme n ter believe d that the burden of meeting these requirements for the vast number of families/subfamilies is substantial and unjustified. For this commenter, there is a potential for almost 45 million sub
- families in the vocatio n and tractor categories. This approach should reduce the number of vehicle families to an amount that is be suitable for reporting. T he BlueGr e en Alliance and ACEEE also requested the agencies to implement a program as part of the final rule to collect data, actual vehicle configurations sold and their performance as estimated by simulation modeling, which will provide information required to develop a full
- vehicle program in the future. For the final rule s , the agenc ies will retain the NPRM proposal for EOY and final reports. However, the agencies will consolidate the reporting as requested by comments and is requiring equivalent fuel consumption information for all reports submitted to EPA. The final rule s establishe a harmonized approach b y which manufacturers will submit reports through an EPA
- administered database, such as the Verify sy stem, as the single point of entry

for all information required for this national program and both agencies will have access to the information. If b y model year 2012, the agencies are not prepared to receive information through the EPA V erify database s ys tem, manufacturers are expected to submit written reports to the agencies. The agencies are also combining the EOY reports for manufacturers not using ABT provisions with other EOY reports and******* **E.O. 12866 Review**

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381 of are requiring a submission date 90 day s after the calendar ye ar. The agencies view the adopted requirements in the final rule s for EOY and final reports will provide sufficient data requests to satisfy

these requests. The agencies also agree with Volvo ’s concerns and have adopted a new classification sy stem for selecting vehicle families as described elsewhere in this Section
. A summary of the required information in the final rule s for EOY and final reports is as follows:

 Vehicle family

designation and averaging set.  Vehicle emissions and fuel consumption standards including an y alternative standards used  V ehicle family

FELs.  Final production volumes  Certified test cycles  Useful life values for vehicle families  A credit plan identifying the manufacturers actual credit balances, credit flexibilities, credit trades and a credit deficit plan if needed demonstrating how it plans to resolve any credit deficits that might occur for a model ye ar within a period of up to three model years after that deficit has occurred  A plan describing the vehicles that were exempted such as for off
- road or small business purposes  A plan describing an y alternative fueled vehicles that were produced for the model year identifying the approaches used to determinate compliance and the production volumes (c) Additional Required Information Throughout the model y ear, manufacturers may be required to report various submissions to the agencies to compl y w ith various asp ects of the rule s . These requests have differing criteria for submission and approval. Table V
- 6 below provides a summary of the ty pes of submission , required submission date s and the EPA and NHTSA regulations that appl y. The agencies will review and grant request s considering the t ime liness of the submissions and the completeness of the requests.******* **E.O. 12866 Review**

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382 of **Table V**  **- 6**  **: Summary of**  **Required Information for Compliance**  Submission Applies to Required Submissions Date EPA Regulation Reference NHTSA

Regulation Reference Small business exemptions Vehicle manufacturers

meeting the Small Business Administration (SBA) size criteria of a small business as described in 13 CFR 121.201. Before introducing any excluded vehicle into U.S. commerce §1037.150 §535.8

In centives for earl y introduction The provisions apply with respect to tractors and vocational vehicles produced in model ye ars before 2014 EPA must be notified before the manufacturer submits it s applications for certificates of conformity §1037.150 §535.8

Voluntary compliance for NHTSA standards Vehicle manufacturers

seeking early

compliance in model years 2014 to 2016. NHSAT must be notified before the manufacturer submits it s applications for certificates of conformity NA §535.8

Approval of alternate methods to determine drag coefficients Tractors meeting §

1037.106 EPA must be notified before the manufacturer submits it s application s for certificates of conformity §1037.150 §535.8

Off
- road exemption M anufacturers wanting to

exclude tractors from vehicle standards EPA must be notified before the manufacturer submits it s application s for certificates of conformity §1037.150 §535.8

Vocational Tractor Manufacturers wanting to

reclassify tractor as vocational tractors making them applicable to vocational vehicle standards EPA must be notified before the manufacturer submits it applications for certificates of conformi ty §1037.150 §535.8

Exemption from EOY reports Manufactures with surplus

credits at the end of the model year 90
- day s after the calendar year ends §1037. 730 §535.8******* **E.O. 12866 Review**

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383 of 

### E. **Class 2b**  **- 8**  **Vocational Vehicles**  **(1) Final**  **Compliance Approach**  Like Class 7 and 8 combination tractors, heav y - duty vocational vehicles will be required to have both engine and chassis certificates of conformity . As discussed in the engine certification section, engines that will be used in vocational vehicles would need to be certified using the heav y - dut y FTP cycle for GHG pollutants and show compliance through the useful life of the engine. This certification is in addition to the current requirements for obtaining a certificate of conformity for criteria pollutant emissions. For this final action, the majority of the GHG reduction for vocational vehicles is expected to come from the use of LRR tires as well as increased utilization of hy brid powertrain s ys tems. Other technologies such as aerody namic improvements and vehicle speed limiting sy stems are not as relevant for this class of vehicles, since the ty pical duty cycle is much more urban, consisting of lower speeds and frequent stopping. Idle reduction strategies are expected to be encompassed by hy brid technology , which we anticipate will ultimately handle PTO operation as well. Therefore, for this final action, certification of heav y - duty vocational vehicles with conventional powertrains will focus on quantifying GHG benefits due to the use of L RR tires through the GEM. (a ) Certification Process Vehicles will be divided into vehicle families for purposes of certification. As with Class 7 and 8 combination tractors, these are groups of vehicles within a given regulatory

subcategory

that are expected to share common emission characteristics. Vocational vehicle regulatory subcategories share the same structure as those used for heav y - dut y engine criteria pollutant certification and are based on GVWR. This includes light
- heav y (LHD) with a GVWR at or b elow 19,500 pounds, medium
- heavy (MHD) with a GVWR above 19,500 pounds and at or below 33,000 pounds, and heavy
- heavy (HHD) with a GVWR above 33,000 pounds. We anticipate manufacturers will have one vehicle famil y per regulatory subcategory, however h ybrid vehicles will need to be separated into additional unique vehicle families. Manufacturers may also subdivide families into sub
- families if GHG emissions performance is expected to change significantl y within the vehicle famil y. As with Class 7 and 8 combi nation tractors, we anticipate using the standardized 12
- digit naming convention to identify vocational vehicle families. As with engines and Class 7 and 8 combination tractors, each certifying vehicle manufacturer would have a unique three digit code ass igned to them. Currently , there is no 5 th digit (industry sector) code for this class of vehicles and EPA will issue an update to the current guidance explaining which character(s) should be used for vocational vehicles. The agencies originally proposed that engine displacement be included in the vehicle family name, however the wide range of engines available across most regulat ory

subcategories makes this requirement irrelevant and unnecessary at the time of this rulemaking. Therefore, we are reserving the remaining characters for California ARB and/or manufacturer use, such that the result is a unique vehicle family name.******* **E.O. 12866 Review**

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384 of Each vehicle famil y must demonstrate compliance with emission standards using the GEM . GEM inputs for conventional (i.e. non
- hy brid) vocational vehicles primarily involves entering tire rolling resistance information. Additional provisions are availa ble for certification of h ybrid vehicles or vehicles using other advanced or innovative technologies, as detailed in Section IV. If the vehicle famil y consists of multiple configurations, only

results from the worst
- case configuration are necessary for certification in addition to an engineering evaluation demonstrating that the modeled configuration indeed reflects the worst
- case configuration. If the vehicle family is divided into subfamilies, unique GEM results are required for at leas t one configuration per subfamil y. The Agencies have received comments from engine manufacturers, truck manufacturers, and h yb rid sy stem manufacturers raising concerns regarding the duty cycle s and the weighting factors proposed for evaluating transient a pplications. The a gencies proposed three methods for evaluating hy brid sy stem performance in an effort to generate credit s . T he proposed duty cycles considered for the proposal will continue to be used with this final action. The Agencies proposed a transient dut y c ycl e, a 55 mile
- per hour stead y state cruise and a 65 mile per hour steady state cruise. The transient duty cycle , is essentiall y the same transient cycle proposed in the NPRM with the exception that it minimizes inappropriate shift events. Additionally , the steady state cycles proposed b y the Agencies remain essentiall y unchanged. In response to concerns raised by engine manufacturers and hy brid sy stem manufacturers regarding the operation of vehicles most likely

to be hy bridized in the near term , we are modifying the weighting factors for each cycle to address the distribution of the em issions impact associated with each dut y c yc le. The weighting factors will be changed such that a greater emphasis on the ty pe of transient activity

seen as more characteristic of hy brid applications will be evident. The new weighting factors between duty cycles for h yb rid certification will be 75% for the transient, 9% for the 55 mph cruise cycle, and 16% for the 65 mph cruise cycle. The basis for this change may be seen in the memorandum to Docket EPA
- HQ
OAR
- 2010
- 0162 which describes the data set used to describe real world vehicle performance. In addition to this modification, the Power
- Take
- Off (PTO) operation will be characterized for vehicles utilizing a PTO sy stem for which there is a benefit for use of the hy b rid technology . The testing provisions for the comparison in the A to B testing for complete vehicle or post
- transmission powerpack testing may be seen in 40 CFR 1037. 525 . The testing provisions for work
- specific pre
- transmission evaluation using an en gine based approach may be seen in 40 CFR 1036 .525
. (b ) Demonstrating Compliance With the Final Standards (i ) CO2 and Fuel Consumption Standards Model As stated above, the technology basis for the final standards for vocational vehicles is use of LRR tires. Similar to Class 7 and 8 combination tractors, compliance with the standards will be demonstrated using the GEM predictive model.
. However, the input parameters entered by the vehicle manufacturer would be lim ited to the properties******* **E.O. 12866 Review**

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385 of of the tires. The GEM will use the tire data, along with inputs reflecting a baseline truck and engine, to generate a complete vehicle model. The test weight used in the model will be based on the vehicle class, as identified above . L ight
- heavy
- dut y vehicles will have a test weight of 16,000 pounds; 25,150 pounds for medium heav y - dut y vehicles; and heav y heav y - dut y vocational vehicles will use a test weight of 67,000 pounds. The model would then be exercised over the HHDDT transient cycle as well as 55 and 65 mph steady
- state cruise conditions. The results of each of the three tests would be weighted at 16 %, 9 %, and 75 % for 65 mph, 55 mph, and transient tests, respectivel y. Innovative technology credits may

be used to demon strate compliance , however should the technology not be an input into GEM, alternative procedures would be needed to determine the value of the credit as described in Preamble Section 4. It may seem more expedient and just as accurate to require manufactur ers use tires meeting certain industry standards for qualifying tires as having LRR. In addition, CO 2 and fuel consumption benefits could be quantified for different ranges of coefficients of rolling resistance to provide a means for comparison to the stan dard. However, we believe that as technology advances, other aspects of vocational vehicles may warrant inclusion in future rulemakings. For this reason, we remain committed to having the certification framework in place to accommodate such additions. While the modeling approach may

seem to be overly

complicated for this phase of the rules, it also serves to create a certification pathway for future rulemakings and therefore we believe this is the best approach. Moreover, a design standard would discour age use of alternative technologies to meet the standard,, and otherwise impede desirable flexibility
. In
- use Standards The category

of wear items primarily

relates to tires. It is expected that vehicle manufacturers will equip their trucks with LRR tires, since the final vehicle standard is predicated on LRR tire performance . The tire replacement intervals for this class of vehicle is normall y in the range of 50,000 to 100,000 miles, which means the owner/operator will be replacing the tires at several points within the useful life of the vehicle. We believe that as LRR tires become more common on new equipment, the afte rmarket prices of these tires will also decrease. Along with decreasing tire prices, the fuel savings realized through use of LRR tires will ideally provide enough incentive for owner/operators to continue purchasing these tires. The inventory modeling in this rule making package reflects the continued use of LRR tires through the life of the vehicle. (ii) Evaporative Emission Standards Evaporative and refueling emissions from heavy
- duty highway engines and vehicles are currentl y regulated under 40 CFR part 86 . Even though these emission standards appl y to the same engines and vehicles that must meet exhaust emission standards, we require a separate certificate for complying with evaporative and refueling emission standards. An important related point to note is that the evaporative and refueling emission standards alway s appl y to the vehicle, while the exhaust emission standards may

appl y to either the engine or the vehicle. For vehicles other than pickups******* **E.O. 12866 Review**

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386 of and vans, the standards in this program to addre ss greenhouse gas emissions apply separately to engines and to vehicles. Since we will be applying both greenhouse gas standards and evaporative/refueling emission standards to vehicle manufacturers, we believe it will be advantageous to have the regulati ons related to their certification requirements written together as much as possible. EPA regards these final changes as discrete, minimal, and for the most part clarifications to the existing standards. We have not finalized any

changes to the evaporati ve or refueling emission standards, but we have come across several provisions that warrant clarification or correction:

 When adopting the most recent evaporative emission change we did not carry through the changes to the regulatory text applying evapor ative emission standards for methanol
- fueled compression
- ignition engine. The final regulations correct this by applying the new standards to all fuels that are subject to standards.  We are finalizing provisions to address which standards appl y when an auxiliary (nonroad) engine is installed in a motor vehicle, which is currentl y not directly addressed in the highway regulation. The final approach requires testing complete vehicles with an y auxiliary engines (and the corresponding fuel
- sy stem components). In complete vehicles must be tested without the auxiliary engines, but any

such engines and the corresponding fuel
- sy stem components will need to meet the standards that appl y under our nonroad program as specified in 40 CFR part 1060.  We have removed the option for secondary vehicle manufacturers to use a larger fuel tank capacity

than is specified by

the certifying manufacturer without re
- certifying the vehicle. Secondary

vehicle manufacturers needing a greater fuel tank capacity will need to either wor

k with the certifying manufacturer to include the larger tank, or go through the effort to re
- certify the vehicle itself. Our understanding is that this provision has not been used and would be better handled as part of certification rather than managing a separate process. We are also finalizing corresponding changes to the emission control information label.  Rewriting the regulations in a new part in conjunction with the greenhouse gas standards allows for some occasions of improved organization and clarit y, as well as updating various provisions. For example, we have finalized a leaner description of evaporative emission families that does not reference sealing methods for carburetors or air cleaners. We have also clarif ied how evaporative emission st andards affect engine manufacturers and are finalizing more descriptive provisions related to certifying vehicles above 26,000 pounds GVWR using engineering analy sis.  Since we adopted evaporative emission standards for gaseous
- fuel vehicles, we have developed new approaches for design
- based certification (see, for example, 40 CFR 1060.240). We request comment on changing the requirements related to certifying gaseous - fuel vehicles to design
- based certification. This would allow for a simpler assessm ent for certifying these vehicles without changing the standards that apply
. **(2) Final**  **Labeling Provisions**  It is crucial that a means exist for allowing field inspectors to identify whether a vehicle is certified, and if so, whether it i s in the certified configuration. As with engines******* **E.O. 12866 Review**

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387 of and tractors, we believe an emission control information label is a logical first step in facilitating this identification. For vocational vehicles, the engine will have a label that is permanentl y affixed to the engine and identify the engine as certified for use in a certain regulatory

subcategory

of vehicle (i.e., MHD, etc). The vehicle will also have a label listing the manufacturer of the vehicle, vehicle family (and subfamil y, if applicable), regul atory subcategory , date of manufacture, compliance statement, FEL , and emission control sy stem identifiers. The required content of this label is consistent with the label description provided earlier for Class 7 and 8 tractors. Since LRR tires are expect ed to be the primary means for vehicles to comply , it is expected that LRR tires will be the only component identified as part of the emission control sy stem on the label. For tires to qualify as low rolling resistance (for purposes of this vocational veh icle label), they need to have a coefficient of rolling resistance at or below 7.7 kg/metric ton. In addition, if any other emission related components are present, such as h ybrid powertrains, key components will also need to be specified on the label. L i ke the engine label, this will need to be permanently affixed to the vehicle in an area that is clearl y visible to the owner/operator. At the time of certification, manufacturers will be required to submit an example of their vehicle emission control label such that EPA can verify that all critical elements are present. In addition to the label, manufacturers will also need to describe where the unique vehicle identification number and date of production can be found on the vehicle. **(3) Other Certification Issu**  **es** Warranty As with other heav y - duty engine and vehicle regulatory categories, vocational vehicle chassis manufacturers would be required to warrant their product to be free from defects that would result in noncompliance with emi ssion standards . This warranty also covers the failure of emission related components for the warrant y period of the vehicle. For vocational vehicles, this primarily applies to tires. Manufacturers of chassis for vocational vehicles would be required to warrant tires to be free from defects at the time of initial sale. As with Class 7 and 8 combination tractors, we expect the chassis manufacturer to only warrant the original tires against manufacturing or design
- related defects. This tire warranty would not cover replacement tires or damage from road hazards or improper inflation. As with Class 7 and 8 combination tractors, all warranty documentation would be submitted to EPA at the time of certification. This should include the warranty statement provided to the owner/operator, description of the service repair network, list of covered components (both conventional and high
- cost), and length of coverage. EPA Certification Fees Similar to engine and tractor
- trailer vehicle certification, the a gency will assess certification fees for vocational vehicles . The proceeds from these fees are used to fund the compliance and certification activities related to GHG regulation for this industry******* **E.O. 12866 Review**

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388 of segment. In addition to the certification process, other a ctivities funded b y certification fees include EPA
- administered in
- use testing, selective enforcement audits, and confirmatory

testing. At this point, the exact costs associated with the heavy
- dut y vehicle GHG compliance are not well known. EPA will asses s its compliance program associated with this program and assess the appropriate level of fees. We anticipate that fees will be applied based on certification families , following the light
- dut y vehicle approach. Maintenance Vehicle manufacturers are required to outline maintenance schedules that ensures the emission control sy stem remain s functional throughout the useful life of the vehicle. For vocational vehicles, this largely involves ensuring that customers have sufficient information to purchase replacement tires that meet or exceed original equipment specifications
. As with Class 7 and 8 tractors, we believe that this information should be included in the owner’s manual to the vehicle. This statement must be submitted to EPA at the time of certification to verify that the customer i ndeed has enough information to purchase the correct replacement tires.
. 

### F. **General Regulatory Provisions (1)**  **Statutory Prohibited Acts** Section 203 of the CAA describes acts that are prohibited by law. This section and associated regulations apply equally to the greenhouse g as standards as to any other regulated emission. Acts that are prohibited b y section 203 of the CAA include the introduction into commerce or the sale of an engine or vehicle without a certificate of conformity , removing or otherwise defeating emission control equipment, the sale or installation of devices designed to defeat emission controls, and other actions. In addition, vehicle manufacturers, or an y other party, may not make changes to the certified engine that would result in it not being in the certi fied configuration. EPA will apply

§ 86.1854

– 12 to heav y - dut y vehicles and engines; this codifies the prohibited acts spelled out in the statute. A lthough it is not legally necessary to repeat what is in the CAA , EPA believes that including thi s language in the regulations provides clarity and improves the ease of use and completeness of the regulations . Since this change merel y codifies provisions that already apply, there is no burden associated with the change. **(2) Regulatory Amendments Related**  **to Heavy -**  **Duty Engine Certification** We are adopti ng the new engine
- based greenhouse gas emissions standards in 40 CFR part 1036 and the new vehicle
- based standards in 40 CFR part 1037. We are continu ing to rel y on 40 CFR parts 85 and 86 for conventional certification and compliance provisions related to criteria pollutants, but the final regulations include a variet y of amendments that will affect the provisions that apply with respect to criteria pollutants. We ar e not intending to change the stringency of, or otherwise substantively change an y existing standards.******* **E.O. 12866 Review**

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389 of The introduction of new parts in the CFR is part of a long
- term plan to migrate all the regulatory

provisions related to highway and nonroad engine and v ehicle emissions to a portion of the CFR called Subchapter U, which consists of 40 CFR parts 1 000 through 1299. We have already adopted emission standards, test procedures, and compliance provisions for several ty

pes of engines in 40 CFR parts 1033 throu gh 1074. We intend eventuall y to capture all the regulatory requirements related to heav y - duty highway engines and vehicles in these new parts. Moving regulatory provisions to the new parts allows us to publish the regulations in a way that is better org anized, reflects updates to various certification and compliance procedures, provides consistency with other engine programs, and is written in plain language. We have already taken steps in this direction for heav y - dut y highway engines b y adopting the en gine
- testing procedures in 40 CFR part 1065 and the provisions for selective enforcement audits in 40 CFR part 1068. EPA sought comment on drafting changes and additions. This solicitation related solely to the appropriate migration, translation, and enhancement of existing provisions. EPA did not solicit comment on the substance of these existing rules, and did not amend , reconsider , or otherwise re
- examin e these provisions’ substantive effect. The rest of this section describes the most significant of these final redrafting changes. The proposal includes several changes to the certification and compliance procedures, including the following:

 We are requiring that engine manufacturers provide installation instructions to vehicle manufacturers (see §1036.130). We expect this is already commonly

done; however, the regulatory language spells out a complete list of information we believe is necessary to properl y ensure that vehicle manufacturers install engines in a way that is consistent with the engine’s certificate of conformity
.  §1036.30, §1036.250, and §1036.825 spell out several detailed provisions related to keeping records and submitting information to us.

 We wrote the greenhouse gas regulations to divide heav y - dut y e ngines into “spark
- ignition” and “compression
- ignition” engines, rather than “Otto
- cycle” and “diesel” engines, to align with our terminology in all our nonroad programs. This will likely involve no effective change in categorizing engines except for natural gas engines. To address this concern, we are including a provision in §1036.150 to allow manufacturers to meet standards for spark
- ignition engines if they were regulated as Otto
- cycle engines in 40 CFR part 86, and vice versa.

 §1036.205 describes a new requirement for imported engines to describe the general approach to importation (such as identifying authorized agents and ports of entry), and identifying a test lab in the United States where EPA can perform testing on certified engines. These steps are part of our ongoing effort to ensure that we have a compliance and enforcement program that is as effective for imported engines as for domesticall y******* **E.O. 12866 Review**

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390 of produced engines. We have already adopted these same provisions for several t ypes of nonroad engine s.
 §1036.210 specifies a process b y which manufacturers are able to get preliminary

approval for EPA decisions for questions that require lead time for preparing an application for certification. This might involve, for example, preparing a plan for durab ility testing, establishing engine families, identifying adjustable parameters, and creating a list of scheduled maintenance items.

 §1036.225 describes how to amend an application for certification.

 We are revising 40 CFR 85.1 70 1 to apply the exemption pro visions described in 40 CFR part 1 068 to heav y - dut y highway engines starting in 2014. Manufacturers may optionall y use the exemption provisions from part 1068 earlier . This involves only very minor changes in the terms and conditions associated with the various ty pes of exemptions. This change will help us to implement a consistent compliance program for all engine and vehicle categories. We are similarly revising 40 CFR 85.1511 to re ference the importation
- related exemptions in part 1068 for all motor vehicles and motor vehicle engines.

 We are finalizing a provision allowing manufacturers to use the defect reporting provisions of 40 CFR part 1068 inst ead of those in 40 CFR part 85. This involves setting thresholds for investigating and report ing defect s based on defect rates rather than absolute numbers of defects. Once we gain more experience with applying the defect
- reporting provisions in 40 CFR part 1068 for motor vehicles, we will consider making those provisions mandatory , including an y appropriate adjustments
. In addition, we are revising 40 CFR 1068.21 0 and 1068.325 to address a concern raised b y engine manufacturers. The provisions for importing engines under a temporary exemption disallow selling exempted engines even though some of the situations addressed depend on engine sales (such as delegated assembl y). We have added clarifying language to the individual exemptions to describe whether or how engines may be sold or leased . In the case of the testing exemption in §1068.210, this involves a further change to specify

how a manufacturer must track the st atus and final disposiiton of exempted engines or equipment . We are also making a small change to the testing exemption to remove the administrative step of requiring an exchange of signed documents for the exemption to be effective. This will streamline the process for the testing exemption and make it more like that for other ty pes of exemptions.******* **E.O. 12866 Review**

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391 of **(3) Test**  **Procedures f** 

**or Measuring Emissions f**  **rom Heavy -**  **Duty Vehicles** We are finalizing a new part 1066 that would contain a general chassis
- based test procedures in for measuring emissions from a variety of vehicles , including vehicles over 14,000 pounds GVWR. However, we are not finalizing application of these procedures broadly at this time. The test procedures in 40 CFR part 86 would continue to apply for vehicles under 14,000 pounds GVWR. Rather, the final part 1066 proce dures would apply onl y for an y testing that would be required for larger vehicles. This could include “A to B” h ybrid vehicle testing, coastdown testing, and potentially limited innovative technology

testing. Nevertheless, we will likely consider in the future applyingthese procedures also for other heav y - dut y vehicle testing and for light
- duty vehicles, highway motorcycles, and/or nonroad recreational vehicles that rely on chassis
- based testing. As noted above, engine manufacturers are already using the test procedures in 40 CFR part 1065 instead of those originall y adopted in 40 CFR part 86. The new procedures are written to apply generically

for any ty

pe of engine and include the current state of technology

for measurement instruments, calibration p rocedures, and other practices. W e are finalizing the chassis
- based test procedures in part 1066 to have a similar structure. The final procedures in part 1066 reference large portions of part 1065 to align test specifications that apply equally to engi ne - based and vehicle
- based testing, such as CVS and anal yz er specifications and calibrations, test fuels, calculations, and definitions of many terms. Since several highway engine manufacturers were involved in developing the full range of specified proce dures in part 1065, we are confident that many of these provisions are appropriate without modification for vehicle testing. The remaining test specifications needed in part 1066 are mostly related to setting up, calibrating, and operating a chassis dy namometer. This also includes the coastdown procedures that are required for establishing the dynamometer load settings to ensure that the dy namometer accurately

simulates in
- use driving. Current testing requirements related to dynamometer specifications re ly on a combination of regulatory provisions, EPA guidance documents, and extensive know
how from industry

experience that has led to a good understanding of best practices for operating a vehicle in the laboratory to measure emissions. We attempted in this rulemaking to capture this range of material, organizing these specifications and verification and calibration procedures to include a complete set of provisions to ensure that a dy namometer meeting these specifications would allow for care fully controlled vehicle operation such that emission measurements are accurate and repeatable
. The procedures are written with the understanding that heav y - dut y highway manufacturer s have, and need to have, single
- roll electric dyn amometers for testing. We are aware that this is not the case for other applications, such as all
- terrain vehicles. We are not adopting specific provisions for testing with hydrokinetic dy namometers, we are already including a provision acknowledging that we may approve the use of dy namometers meeting alternative specifications if that is appropriate for the ty pe of******* **E.O. 12866 Review**

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3 92 of vehicle being tested and for the level of stringency represented b y the corresponding emiss ion standards. Drafting a full set of test specifications highlights the mixed use of units for testing. Some chassis
- based standards and procedures are written based largel y on the International S ys tem of Units (SI ), such as gram per kilometer (g/km) standards and kilometers per hour (kph) driving, while others are written based largel y on English units (g/mile standards and miles per hour driving). The proposal includes a mix of SIand English units with instructions about converting units appropriatel y . However, most of the specifications and examples are written in English units. While this seems to be the prevailing practice for testing in the United States, we understand that vehicle testing outside the United States is almost universally done in S I units. In an y case, dy namometers are produced with the capability of operating in either English or SI units. We believe there would be a substantial advantage toward the goal of achieving globall y harmonized test procedures if we would write the test procedures based on SIunits. This would also in several cases allow for more straightforward calculations, and reduced risk of rounding errors. For comparison, part 1065 is written almost exclusively in SI units. We sought comment on the use of units throughout part 1066. At this time we are not finalizing changes from our current approach. A fundamental obstacle toward using SI units is the fact that some duty cycles are specified based on speeds in miles per hour. To address this, it would be approp riate to convert the applicable driving schedules to meter
- per - second (m/s) values. Converting speeds to the nearest 0.01 m/s would ensure that the prescribed driving cycle does not change with respect to driving schedules that are specified to the neares t 0.1 mph. The regulations would include the appropriate mph (or kph) speeds to allow for a ready understanding of speed values (see 40 CFR part 1037, Appendix I). This would, for example, allow for drivers to continue to follow a mph
- based speed trace. The ±2 mph tolerance on driving speeds could be converted to ±1.0 m/s, which corresponds to an effective speed tolerance of ±2.2 mph. This may involve a tightening or loosening of the existing speed tolerance, depending on whether manufacturers used the full degree of flexibility allowed for a mph tolerance value that is specified without a decimal place. Similarly , the Cruise cycles for heavy
- dut y vehicles could be specified as 2 4. 5±0.5 m/s (5 4
. 8 ±1.1 mph) and 29.0 ±0.5 m/s (6 4.9 ±1.1 mph). **(4) Compliance**  **Reports** (a ) Early Model Year Data Same as Tractors early model year data in Section V.D(4)(a) . (b ) Final Reports Same as Tractors final reports in Section V.D(4)(b )
.******* **E.O. 12866 Review**

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393 of (c) Additional Required Information Table V
- 7 below provides a summary of the t ypes of requests, required application submission date s and the EPA and NHTSA regulations that apply
.

**Table V**  **- 7**  **: Summary of Required Information for Compliance**  Submission Applies to Required Submissions Date EPA Regulation Reference NHTSA

Regulation Reference Small business exemptions Vehicle or engine

manufacturers meeting the Small Business Ad ministration (SBA) size criteria of a small business as described in 13 CFR 121.201. Before introducing any excluded vehicle into U.S. commerce §1037.150 §5 35.8

Incentives for early introduction The provisions apply with

respect to tractors and vocational vehicles produced in model years before 2014 EPA must be notified before the manufacturer submits it applications for certificates of conformity §1037.150 §535.8

Air condition leakage exemption for vocational vehicles Vocational Vehicles

excluded from § 1037.115 EPA must be notified before the manufacturer submits it applications for certificates of conformity §1037.150 §535.8

Model year 2014 N 2 O standards. M anufacturers that choose

to show compliance with the MY 2014 N 2 O standards requesting to use an engineering analysis EPA must be notified before the manufacturer submits it applications for certificates of conformity §1037.150 §535.8

Exemption for electric vehicles All electric vehicles are

deemed to have zero exhaust emissions of CO 2 , CH 4 , and N 2 O End of December prior to model year §1037.150 §535.8
Off
- road exemption M anufacturers wanting to

exclude vocational vehicles from vehicle standards EPA must be notified before the manufacturer submits it applications for certificates of conformity §1037.150 §535.8

Exemption from EOY reports Manufactures with surplus

credits at the end of the mo del year 90
- days after the calendar year ends §1037.730 §535.8******* **E.O. 12866 Review**

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394 of 

### G. **Penalties (1)**  **Overview** In the NPRM, NHTSA proposed to assess civil penalties for non
- compliance with fuel consumption standards. NHTSA’s authorit y under EISA, as codified at 49 U.S.C. 32902(k), requires the agency to determine appropriate measurement metrics, test procedures, s tandards, and compliance and enforcement protocols for HD vehicles. NHTSA interprets its authority to develop an enforcement program to include the authority to determine and assess civil penalties for noncompliance that would impose penalties based on th e following discussions. In cases of noncompliance, the agency explained in the NPRM that it would establish civil penalties based on consideration of the following factors:

 Gravity

of the violation  Size of the violator’s business  Violator’s history

of co mpliance with applicable fuel consumption standards  Actual fuel consumption performance related to the applicable standard  Estimated cost to comply with the regulation and applicable standard  Quantity

of vehicles or engines not compl yi ng  Civil penalties pa id under CAA Section 205 (42 U.S.C. 7524) for non
compliance for the same vehicles or engines NHTSA proposed to consider these factors in determining civil penalties in order to help ensure, given the agency ’s wide discretion, that penalties would be fair and appropriate, and not duplicative of EPA penalties. The NPRM expressly stated that neither agency intended to impose duplicative civil penalties, and that both agencies would give consideration to civil penalties imposed by the other in the case of non
compliance with its own regulations. NPRM at 74280. EMA, Volvo, the Truck Renting and Leas ing Association ( TRALA ) , and Navistar nevertheless commented that a dual enforcement scheme with separate NHTSA and EPA penalties could result in duplicative penalties, as manufacturers could be assessed penalties twice for the same violation. The possibi lity

of more than one prosecution or enforcement action arising from the same overall body

of facts does not present a novel issue. It commonly arises where there is overlapping jurisdiction, such as where the federal government and a state government hav e jurisdiction. The issue of multiple or sequential prosecutions may be addressed as a matter of administrative policy and discretion. 338

338 A well
- known example is the Department of Justice’s petite policy , an internal guide on whether to pursue federal prosecution after a state prosecution. The petite policy is considered “merely a******* **E.O. 12866 Review**

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395 of Both NHTSA and EPA are charged with regulating medium
- dut y and heavy
- dut y trucks. NHTSA regulates them under EISA and EPA regulates them under the CAA. Both agencies have compliance review and enforcement responsibilities. The same body of evidence may establish a violation of EI SA and a violation of the CAA. A manufacturer that violates both EI SA and the CAA will be considered to have committed two distinct violations , and may not claim immunity from one simpl y because it has been subject to an enforce ment action under another. The agencies will address the concern about multiple enforcement actions both when considering initiating an action and when stating its penalt y demand. Both NHTSA and EPA are charged with regulating medium
- dut y and heav y - dut y trucks; NHTSA regulates them under EISA and EPA regulates them under the CAA. Both agencies also have compliance review and enforcement responsibilities for their respective regulatory

requirements. The same set of underl yi ng facts may result in a violation of EI SA and a violation of the CAA. The agencies recognize the above concerns, and intend to address them through appropriate consultation. The details of the consultation and coordination between the agencies regarding enforcement will be set forth in a memorandum of understanding to be developed b y EPA and NHTSA. NHTSA believes that the above description adequately describes the process by which civil penalties may be assessed by

both agencies. Therefore, for the final action , penalties for a violation of a fuel consumption standard will be based on the gravity of the violation, the size of the violator’s business, the violator’s history of compliance with applicable fuel consumption standards, the actual fuel consumption performance rel ated to the applicable standard, the estimated cost to comply with the regulation and applicable standard, and the quantity of vehicles or engines not complying. The collaborative enforcement process will ensure that the total penalties assessed will not be duplicative or excessive. NHTSA would also like to clarify that the “estimated cost to comply with the regulation and applicable standard,” will be used to ensure that penalties for non
compliance will not be less than the cost of compliance. It woul d be contrary to the purpose of the regulation for the penalty scheme to incentivize non compliance. The final civil penalt y amount NHTSA could impose would not exceed the limit that EPA is authorized to impose under the CAA. The potential maximum civil penalty for a manufacturer would be calculated as follows in Equation V
- 1: **Equation V**  **- 1**  **: Aggregate Maximum Civil Penalty** Aggregate Maximum Civil Penalty for a Non
- Compliant Regulatory Category = (CAA Limit) x

(production volume within the regulatory category) EPA has occasionally

in the past conducted rulemakings to provide for nonconformance penalties
-- monetary penalties that allow a manufacturer to sell engines housekeepin g provision,” and prosecution remains entirely within the Department’s discretion. U.S. v. Barrett , 496 F.3d 1079, 1120 (10th Cir. 2007).******* **E.O. 12866 Review**

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396 of or vehicles that do not meet an emissions standard. Nonconformance penalties are authorized for heav y - duty engines and vehicles under section 206(g) of the CAA. Three basic criteria have been established by rulemaking for determining the eligibility of emissions standards for nonconformance pena lties in any given model year: (1) the emissions standard in question must become more difficult to meet, (2) substantial work must be required in order to meet the standard, and (3) a technological laggard must be likely to develop (40 CFR 86.1103
- 87). A technological laggard is a manufacturer who cannot meet a particular emissions standard due to technological (not economic) difficulties and who, in the absence of nonconformance penalties, might be forced from the marketplace. The process to determine if these criteria are met and to establish penalty amounts and conditions is carried out via rulemaking, as required by the CAA. The CAA (in section 205) also lay s out requirements for the assessment of civil penalties for noncompliance with emissions stand ards. As discussed in detail in Section III, the agencies have determined that the final GHG and fuel consumption standards are readily feasible, and we do not believe a technological laggard will emerge in an y s ector covered b y these final standards. In addition to the standards being premised on use of already - existing, cost
- effective technologies, there are a number of flexibilities and alternative standards built into the proposal. However, in the case of potential non
- conformance, civil penalties wil l ensure that adequate deterrence for non
- conformance exists. **(2) NHTSA’s Penalty Process**  NHTSA proposed a detailed enforcement process in the NPRM. As proposed, enforcement would begin with a notice of violation, after which the respondent may either pay the penalt y proposed in the not ice of violation or dispute it by requesting an agency hearing. For a party

that did not pay

the proposed penalt y or request a hearing within 30 day s of the notice of violation, a finding of default would be entered and the penalty set forth in the notice of violation assessed. If a hearing is timely requested, the respondent would receive written notice of the time, date and location of the hearing. The respondent would have the right to counsel and to examine, respond to and rebut evidence presented b y the Chief Counsel. If civil penalties greater than $250,000,000 were assessed in the Hearing Officer’s final order, that order would contain a statement advising the part y of the right to appeal to the NHTSA Administrator. Inthe event of a timely appea l, the decision of the Administrator would be a final agency action. This structure was intended to ensure that a part y was afforded ample opportunity to be heard. Several manufacturers commented that NHTSA’s penalty procedures should be more formal than was proposed in the NPRM. EMA, Volvo and Navistar commented that the penalt y procedures should be subject to the Administrative Procedure Act (APA) review requirements
. EMA, Volvo and Navistar, and TRALA commented that the penalty procedures violated due process requirements. EMA argued that NHTSA must expressly grant a right to judicial review, and EMA and Navistar argued that the absence of an administrative appeals process for penalties under $250,000,000 would violate due process. Volvo faulted NHTSA for not classifying the hearing officer’s decision as a final agency action, and stated that specifications regarding who could be a hearing officer******* **E.O. 12866 Review**

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397 of should align with those specified for the light
- duty program, which was laid out in 49 CFR Section 511.3. As noted in the NPRM, the APA administrative hearing requirements of Sections 554, 556, and 557 are not required where formal procedures are not required by statute (generally , the organic statute must provide that the administrative proceeding must be an adjudication, determined on the record after the opportunity for an agency

hearing, sometimes referenced as an opportunity for hearing on the record). See e.g ., 5 U.S.C. Section 554. Where a formal adjudication is not required b y statute, in general, a gencies adopt and appl y informal processes. While the compliance, civil penalt y and appeals provisions of 49 U.S.C. Sections 32911 and 32914 require formal adjudication in accordance with APA requirements, those sections only appl y to the light
- duty

fuel econom y program. In contrast, for the heav y - dut y program of Section 32902(k), the Congress did not require formal adjudication in accordance with the APA. Therefore, informal adjudication procedures may be applied. NHTSA will not adopt the procedures of by 5 U.S.C. Sections 554, 556, or 557 for the final rule s . While the APA requirements for formal hearing procedures do not appl y to NHTSA’s enforcement under Section 32902(k), due process requirements do apply
. NHTSA believes that formal procedures are ne ither required by statute nor necessary

for this enforcement process to meet due process requirements. NHTSA expects that the cases will not be complex. In general, there will be one or two issues: (1) compliance with the regulations and, if not, (2) th e appropriate civil penalty . Compliance likel y will involve narrow technical questions under the regulations being adopted today. Non
compliance with applicable fuel consumption standards will be determined by utilizing the certified and reported CO 2 emi ssions and fuel consumption data provided byEPA as described in this part, and after considering all the flexibilities available under Section 535.7. Much of the evidence will be materials developed b y the respondent. There likel y will not be wide rangin g issues. The parties will have ample opportunity to present their positions. A hearing officer can readily address the sorts of questions that are likel y to arise. Second, if there is a noncompliance, there will be the question of the appropriate penal ty . NHTSA’s regulations contain factors to be considered in assessing penalties. Again, the parties will have ample opportunity to present their positions. Ultimately , the agency ’s final decision must be sufficientl y reasoned to withstand judicial revie w, based on the arbitrary and capricious standard. To address commenters’ concerns about the process provided, NHTSA made several adjustments and clarifications in the final rule. The final rule provides that there will be a written decision of the Hearing Officer, and the assessment of a civil penalty by a hearing officer shall be set forth in an accompanying final order. Together, these constitute the final agency action. NHTSA has also revisited the minimum penalty level for an administrative appeal to the NHTSA Administrator and decided to lower the level significantl y, to $1,000,000. This provides a second level of review. NHTSA believes this will promote an efficient use of administrative remedies and a further opportunity to be heard at the administrative level. Of course, if a party files an app eal with the NHTSA Administrator, the Hearing Officer’s decision and order at that juncture shall no longer be final agency

action.******* **E.O. 12866 Review**

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398 of NHTSA has considered the specifications of the Hearing Officer and determined that they are adequate for informal agency hearings of this nature. However, the agency will add a clarification to the final rule that specifies that the Hearing Officer will b e appointed by the Administrator. Further, in addition to having no prior connection with the case and no responsibility , direct or supervisory , for the investigation of cases referred for the assessment of civil penalties, the Hearing Officer will have n o duties related to the light
- duty

fuel econom y or medium
- and heav y - dut y fuel efficiency programs. NHTSA has also considered EMA’s comment that a right to judicial review must be specified in the regulatory text. The agency does not agree with this conc ern. Parties, of course, cannot confer jurisdiction; only Congress can do so. Whitman v. Department of Transportation , 547 U.S. 512, 514 (2006); Wei nberger v. Bentex Pharmaceuticals, Inc., 412 U.S. 645, 652 (1973). Moreover, judicial review of a final agency action is presumed. United States v. Fausto , 484 U.S. 439, 452 (1998), citing Abbot Laboratories v. Gardner , 387 U.S. 136, 140 (1967). See generally , 28 U.S.C. Section 1331. Therefore, NHTSA has determined that the right to judicial review does not need to be specified in the regulatory

text. 

## VI. **How W** **i l**  **l This Pr**  **ogram Impact Fuel Consumption, GHG Em**  **issions, and Clim ate Change?**  **A. What**  **Methodologies Did the Agencies Use to Project GHG**  **Emissions and Fuel Consumption Impacts?** EPA and NHTSA used EPA’s officia l mobile source emissions inventory model named Motor Vehicle Emissions Simulator (MOVES2010) 339 , to estimate emission and fuel consumption impacts of these final rules. MOVES has the capability to take in user inputs to modify

default data to better estimate emissions for different scenarios, such as different regulatory

alternatives, state implementation plans (SIPs), geographic locations, vehicle activity , and microscale projects. The agencies performed multiple MOVES runs to establish reference case an d control case emission inventories and fuel consumption values. The agencies ran MOVES with user input databases that reflected characteristics of the final rules, such as emissions improvements and recent sales projections. Some post
- processing of the m odel output was required to ensure proper results. The agencies ran MOVES for non
- GHGs, CO 2 , CH 4 , and N2 O for calendar ye ars 2005, 2018, 2030, and 2050. Additional runs were performed for just the three greenhouse gases and for fuel consumption for every calendar year from 2014 to 2050, inclusive, which fed the economy
- wide modeling, monetized greenhouse gas benefits estimation, and climate impacts anal ys es .

339 MOVES homepage: http://www.epa.gov/otaq/models/moves/i ndex.htm . Version MOVES2010 w as used for emissions impacts analysis for this action . Current version as of September 14, 2010 is an updated version named MOVES2010a, available directly from the MOVES homepage. To replicate results from this action , MOVES2010 must be used.******* **E.O. 12866 Review**

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399 of The agencies also used MOVES to estimate emissions and fuel consumption impacts for the other alternatives considered and described in Section IX. 

### B. **MOVES Analysis**  **(1) Inputs and Assumptions**  The anal ys is performed for the final action mirrors what was done for the proposal. The methods and models are the same, with differences l yi ng primarily in the inputs, as a result of updates in the program, standards, and baseline data. (a ) Reference R un U

pdates Since MOVES2010a vehicle sales and activity data were developed from AEO2009, EPA first updated these data using sales and activity estimates from AEO20 11. MOVES2010a defaults were used for all other parameters to estimate the reference case emissions inventories. (b ) Control Run Updates EPA developed additional user input data for MOVES runs to estimate control case inventories. To account for improve ments of engine and vehicle efficiency , EPA developed several user inputs to run the control case in MOVES. As explained at proposal, since MOVES does not operate based on Heav y - dut y FTP cycle results, EPA used the percent reduction in engine CO 2 emission s expected due to the final rules to develop energy

inputs for the control case runs. 75 FR at 74280. Also, EPA used the percent reduction in aerody namic drag and tire rolling resistance coefficients and reduction in average total running weight (gross c ombined weight) expected from the final rules to develop road load input for the control case. The sales and activity data update s used in the reference case were used in the control case. Details of all the MOVES runs, input data tables, and post
- processing steps are available in the docket (EPA
- HQ
- OAR
- 2010
- 0162). Table VI
- 1 and Table VI
- 2 describe the estimated expected reductions from these final rules, which were input into MOVES for estimating control case emissions inventories.******* **E.O. 12866 Review**

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400 of **Table VI**  **- 1**  **: Estim ated Reductions in Engine CO**  **2 Emission Rates**  **340** GVWR C lass Fuel Model Y ears CO 2 Reduction from 2010 MY HHD (8a
- 8b) Diesel 2014
- 2016 3% 2017+ 6% MHD (6
- 7) and LHD 4
- 5 Diesel 2014
- 2016 5% 2017+ 9% Gasoline 2016+ 5%
**Table VI**  **- 2**  **: Esti**  **ma ted Reductions in Rolling Resistance Coefficient, Aerodynam**  **ic Drag Coefficient, and Gross Combined Weight**  TRUCK TYPE REDUCTION IN TIRE ROLLING RESI STANCE COEFFI CI ENT FROM BASELINE REDUCTION IN

AERODYNAMIC DRAG COEFFICIENT FROM BASELINE WEI GHT REDUCTI ON (LBS.) Combination long
- haul 9.6% 12.1% 400 Combination short
haul 7.0% 5.9% 321 Straight trucks, refuse trucks, motor homes, transit buses, and other vocational vehicles 10.0% 0% 0

Since nearl y all HD pickup trucks and vans will be certified on a chassis dy namometer, the CO 2 reductions for these vehicles will not be represented as engine and road load reduction components , but rather as total vehicle CO 2 reductions . These estimated reductions are described in Table VI
- 3
.

340 Section II of this preamble discusses an alternative engine standard for the HD diesel engines in the 2014, 2015, and 2016 model years. To the extent that engines using this alternative are expected to have baseline emissions greater than the industry average, the reduction from the industry average projected in this program wo uld be reduced.******* **E.O. 12866 Review**

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401 of **Table VI**  **- 3**  **: Estim ated Total Vehicle CO**  **2 Reductions for HD Pickup Trucks and Vans**  GVWR C lass Fuel Model year CO 2 Reduction from Baseline HD Pickup Trucks and Vans Gasoline 2014 1.5% 2015 2% 2016 4% 2017 6% 2018+ 10% Diesel 2014 2.3%

2015 3% 2016 6% 2017 9% 2018+ 15%


### C. **What Are the**  **Projected Reductions in Fuel Consumption and GHG Emissions?**  EPA and NHTSA expect significant reductions in GHG emissions and fuel consumption from these final rules

– emission reductions from both downstream (tailpipe) and upstream (fuel production and di stribution) sources, and fuel consumption reductions from more efficient vehicles. Increased vehicle efficiency and reduced vehicle fuel consumption will also reduce GHG emissions from upstream sources. The following subsections summarize the GHG emissio ns and fuel consumption reductions expected from these final rules. **(1) Downstream (Tailpipe)**  Consistent with the proposal, EPA used MOVES to estimate downstream GHG inventories from these final rules. We expect reductions in CO 2 from all heav y - dut y vehicle c ategories. The reductions come from engine and vehicle improvements. EPA expects N 2 O emissions to increase very slightly because of a rebound in vehicle miles traveled (VMT) and because significant vehicle emissions reductions are not expected from these final rules. In the proposal, we did not account for differences in methane emissions from use of auxiliary power units (APUs) during extended idling from sleeper cab combination tractors. After accounting for these differences, EPA expects methane emis sions to decrease primarily due to differences in hydrocarbon emission characteristics between on
- road diesel engines and APUs. The amount of methane emitted as a fraction of total hydrocarbons is significantly less for APUs than for diesel engines equipp ed with diesel particulate filters. Overall, downstream GHG emissions will be reduced significantly and are described in the following subsections.******* **E.O. 12866 Review**

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402 of For CO 2 and fuel consumption, the total energy consumption “pollutant” was run in MOVES rather than C O 2 itself. The energy was converted to fuel consumption based on fuel heating values assumed in the Renewable Fuels Standard and used in the development of MOVES emission and energy rates. These values are 117,250 kJ/gallon for gasoline blended with ten percent ethanol ( E10 ) 341 and 138,451 kJ/gallon for diesel. 342 To calculate CO 2 , the agencies assumed a CO 2 content of 8,576 g/gallon for E10 and 10,180 g/gallon for diesel. Table VI
- 4 shows the fleet
- wide GHG reductions and fuel savings from reference case to control case through the lifetime of model year 2014 through 2018 heav y - dut y vehicles. Table VI
- 5 shows the downstream GHG emissions reductions and fuel savings in 2018, 2030, and 2050. The anal ys is follows what was done for the proposal. We did not receive comments indicating that this analy sis was inappropriate or insufficient for estimating downstream emissions impacts of this program.

**Table VI**  **- 4**  **Model Year 2014 through 2018 Lifetim e GHG Reductions and Fuel Savings by**  **Heavy**   ** duty Truck Category** Downstream GHG Reductions (MMT CO 2 eq) Fuel Savings (billion gallons) HD pickups/vans 18 1.9 Vocational 2 4 2. 4 Combination short
- haul (Day cabs) 50 4.9 Combination long
- haul (Sleeper cabs) 135 12.9

**Table VI**  **- 5**  **: Annual Downstream GHG Emissions Reductions and Fuel Savings in 2018, 2030, and**  **2050** Downstream GHG Reductions (MMT CO 2 eq) Diesel Savings (million gallons) Gasoline Savings

(million gallons) 2018 2 2 2, 123 5 9 2030 6 1 5, 670 34 9 2050 89 8, 158 5 22 **(2) Upstream (Fuel Production and Distribution)**  Using the same approach as used in the NPRM, the u pstream GHG emission reductions associated with the production and distribution of fuel were projected using

341 Renewable Fuels Standards assumptions of 115,000 BTU/gallon gasoline (E0) and 76,330 BTU/gallon ethanol (E100) weighted 90% and 10%, respectively, and converted to kJ at 1.055 kJ/B TU
. 342 MOVES2004 Energy and Emission Inputs. EPA420
- P
- 05
- 003, March 2005. http://www.epa.gov/otaq/models/ngm/420p05003.pdf******* **E.O. 12866 Review**

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403 of emission factors from DOE’s “Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation” ( GREET1.8 ) model, with some modifications consistent with the Li ght
- Dut y 2012
- 2016 MY v ehicle rule
. More information regarding these modifications can be found in the RIA Chapter 5. These estimates include both international and domestic emission reductions, since reductions i n foreign exports of finished gasoline and/or crude make up a significant share of the fuel savings resulting from the GHG standards. Thus, significant portions of the upstream GHG emission reductions will occur outside of the United States ; a breakdown and discussion of projected international versus domestic reductions is included in the RIA Chapter 5
. GHG emission reductions from upstream sources can be found in Table VI
- 6
.

**Table VI**  **- 6**  **: Annual Upstream GHG Emissions Reductions in 2018, 2030, and 2050**

CO 2 (MMT) CH 4 (MMT

CO 2 eq) N 2 O (MMT

CO 2 eq) Total GHG (MMT

CO 2 eq) 2018 5.1 0. 9 0.02 6.0 2030 12. 2 1.9 0.06 14. 2 2050 16.4 2.5 0. 08 19.0 **(3) HFC Emissions**  Based on projected HFC emission reductions due to the final AC leakage standards, EPA estimates the HFC reductions to be 120,000 metric tons of CO 2 eq in 2018, 440,000 metric tons of CO 2 eq emissions in 2030 and 600,000 metric tons CO 2 eq in 2050, as detailed in RIA Chapter 5.3.4. **(4) Total (Upstream + Downstream + HFC)**  Table VI
- 7 combines downstream results from Table VI
- 5 , upstream results Table VI
- 6 , and HFC results to show total GHG reductions for calendar y ears 2018, 2030, and 2050. **Table VI**  **- 7**  **: Annual Total GHG Emissions Reductions in 2018, 2030, and 2050** GHG Reductions (MMT CO 2 eq) 2018 2 9 2030 7 6 2050 1 0 8 

### D. **Overview of Climate**  **Change Impacts from GHG Emissions** Once emitted, GHGs that are the subject of this regulation can remain in the atmosphere for decades to millenia , meaning that 1) their concentrations become well
mixed throughout the global atmosphere regardless of emission origin, and 2) their effects on climate are long l asting. GHG emissions come mainly from the combustion of fossil fuels (coal, oil, and gas), with additional contributions from the clearing of forests******* **E.O. 12866 Review**

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404 of and agricultural activities. Transportation activities, in aggregate, are the second largest contributor to total U.S. GHG emissions (27 percent of total emissions ) despite a decline in emissions from this sector during 2008
. 343 This section provides a summary of observed and projected changes in GHG emissions and associated climate change impacts
. The source document for the section below is the Technical Support Document (TSD) 344 for EPA’s Endangerment and Cause or Contribute Findings Under the Clean Air Act (74 FR 66496, December 15, 2009). Below is the Executive Summary of the TSD which provides technical su pport for the endangerment and cause or contribute analy ses concerning GHG emissions under section 202(a) of the CAA . The TSD reviews observed and projected changes in climate based on current and projected atmospheric GHG concentrations and emissions, as well as the related impacts and risks from climate change that are projected in the absence of GHG mitigation actions, including this program and other U.S. and global actions. The TSD was updated and revised based on expert technical review and public co mment as part of EPA’s rulemaking process for the final Endangerment Findings
. The key findings sy nthesized here and the information throughout the TSD are primaril y drawn from the assessment reports of the Intergovernmental Panel on Climate Change (IPCC) , the U.S. Climate Change Science Program (CCSP), the U.S. Global Change Research Program (USGCRP), and NRC. 345 In May 2010, the NRC published its comprehensive assessment, “Advancing the Science of Climate Change .” 346 Itconcluded that “climate change is occurring, is caused largel y b y human activities, and poses significant risks for

— and in man y cases is already affecting

— a broad range of human and natural systems.” Furthermore, the NRC stated that this conclusion i s based on findings that are “consistent with the conclusions of recent assessments b y the U.S. Global Change Research Program, the Intergovernmental Panel on Climate Change’s Fourth Assessment Report, and other assessments of the state of scientific knowl edge on climate change.” These are the same assessments that served as the primary

scientific references underl yi ng the Administrator’s Endangerment Finding. Importantly , this recent NRC assessment represents another independent and critical inquiry

of the state of climate change science, separate and apart from the previous IPCC and USGCRP assessments **(1) Observed Trends in Greenhouse Gas Emissions and Concentrations**  The primary

long
- lived GHGs directl y emitted by human activities include CO 2 , CH 4 , N 2 O, HFCs, PFCs, and SF 6 . Greenhouse gases have a warming effect by trapping heat in the atmosphere that would otherwise escape to space. In 2007, U.S. GHG

343 U.S. EPA (2010 ) Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990

–2007. EPA
- 430
- R
- 10
- 006, Washington, DC. 344 See Endangerment TSD, Note 11 above. 345 For a complete list of core references from IPCC, USGCRP/CCSP, NRC and others relied upon for development of the TSD for EPA’s Endangerment and Cause or Contribute Findings see secti on 1(b), specifically, Table 1.1 of the TSD Docket: EPA
- HQ
- OAR
- 2009
- 0171
- 11645
. 346 National Research Council (NRC) (2010). Advancing the Science of Climate Change. National Academy Press
. Washington, DC.******* **E.O. 12866 Review**

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405 of emissions were 7,150 teragrams 347 of CO 2 equivalent 348 (TgCO 2 eq). The dominant gas emitted is CO 2 , mostly

from fossil fuel combustion. Methane is the second largest component of U.S. emissions, followed by N 2 O and the fluorinated gases (HFCs, PFCs, and SF 6 ). Electricit y generation is the largest emitting sector (34% of total U.S. GHG emissions), followed by

transportation (2 7 %) and industry (19%). Transportation sources under s ecti on 202 (a) 349 of the CAA (passenger cars, light
duty trucks, other trucks and buses, motorcycles, and passenger cooling) emitted 1,649 TgCO 2 eq in 2007, representing 23% of total U.S. GHG emissions. U.S. transportation sources under s ection 202 (a) made up 4.3% of total global GHG emissions in 2005, 350 which, in addition to the United States as a whole, ranked onl y behind total GHG emissions from China, Russia, and India but ahead of Japan, Brazil, Germany , and the rest of the world’s countries. In 2005, total U. S. GHG emissions were responsible for 18% of global emissions, ranking only behind China, which was responsible for 19% of global GHG emissions. Th e scope of this final action focuses on GHG emissions under section 202(a) from heavy
- dut y source categories (see Section II)
. The global atmospheric CO 2 concentration has increased about 38% from pre
industrial levels to 2009, and almost all of the increase is due to anthropogenic emissions. The global atmospheric concentration of CH 4 has increased by 149% si nce pre - industrial levels (through 2007); and the N 2 O concentration has increased b y 23% (through 2007). The observed concentration increase in these gases can also be attributed primarily to anthropogenic emissions. The industrial fluorinated gases, HFCs , PFCs, and SF 6 , have relativel y low atmospheric concentrations but the total radiative forcing due to these gases is increasing rapidly ; these gases are almost entirely anthropogenic in origin. Historic data show that current atmospheric concentrations of the two most important directly

emitted, long
- lived GHGs (CO 2 and CH 4 ) are well above the natural range of atmospheric concentrations compared to at least the last 650,000 years. Atmospheric GHG concentrations have been increasing because anthropogenic emissions have been outpacing the rate at which GHGs are removed from the atmosphere b y natural processes over timescales of decades to centuries.

347 One teragram (Tg) = 1 million metric tons. 1 metric ton = 1,000 kilograms = 1.102 short tons = 2,205 pounds. 348 Long
- lived GHGs are compared and summed together on a CO 2 - equivalent basis by multiplying each gas by its global warming potential (GWP), as estimated by IPCC. In accordance with United Nati ons Framew ork Convention on Climate Change (UNFCCC) reporting procedures, the U.S. quantifies GHG emissions using the 100
- year time fram e values for GWPs established in the IPCC Second Assessment Report. 349 Source categories under Section 202(a) of the CAA are a subset of source categories considered in the transportation sector and do not include emissions from non
- highway sources such as boats, rail, aircraft, agricultural equipment, construction/mining equipment, and other off
- road equipment. 350 M ore recent emission data are available for the United States and other individual countries, but 2005 is the most recent year for which data for all countries and all gases are available.******* **E.O. 12866 Review**

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406 of **(2) Observed Effects Associated With Global Elevated Concentrations of**  **GHGs** Greenhouse gases, at current (and pr ojected) atmospheric concentrations, remain well below published exposure thresholds for an y direct adverse health effects and are not expected to pose exposure risks (i.e., from breathing/inhalation)
. The global average net effect of the increase in atmos pheric GHG concentrations, plus other human activities (e.g., land
- use change and aerosol emissions), on the global energy balance since 1750 has been one of warming. This total net heating effect, referred to as forcing, is estimated to be +1.6 (+0.6 to +2.4) watts per square meter (W/m 2 ), with much of the range surrounding this estimate due to uncertainties about the cooling and warming effects of aerosols. However, as aerosol forcing has more regional variability

than the well
- mixed, long
- lived GHGs, the global average might not capture some regional effects. The combined radiative forcing due to the cumulative (i.e., 1750 to 2005) increase in atmospheric concentrations of CO 2 , CH 4 , and N 2 O is estimated to be +2.30 (+2.07 to +2.53) W/m2 . The rate of in crease in positive radiative forcing due to these three GHGs during the industrial era is very likely to have been unprecedented in more than 10,000 years. Warming of the climate system is unequivocal, as is now evident from observations of increases in gl obal average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level. Global mean surface temperatures have risen by 1.3 ± 0.32  F (0.74°C ± 0.18  C) over the last 100 years. Nine of the 10 warmest y ears on record have occurred since 2001. Global mean surface temperature was higher during the last few decades of the 20th century than during any comparable period during the preceding four centuries. Most of the observed increase in global average temperatures since the mid
- 20th century is very likel y due to the observed increase in anthropogenic GHG concentrations. Climate model simulations suggest natural forcing alone (i.e., changes in solar irradiance) cannot explain the observed warming. U.S. temperatures also warmed during the 20 th and into the 21 st century ; temperatures are now approximately 1.3°F (0.7°C) warmer than at the start of the 20 th century , with an increased rate of warming over the past 30 years. Both the IP CC 351 and the CCSP reports attributed recent North American warming to elevated GHG concentrations. In the CCSP (2008) report, 352 the authors find that for North America,

351 Hegerl, G.C. et al. (2007) Understanding and Attributing Climate C hange. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor, and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 352 CCSP (2008) Reanalysis of Historical Climate Data for Key Atmospheric Features: Implications for Attribution of Causes of Observed Change . A Report by the U .S. Climate Change Science Program and the Subcommittee on Global Change Research [Randall Dole, Martin Hoerling, and Siegfried Schubert (eds.)]. National Oceanic and Atmospheric Administration, National Climatic Data Center, Asheville, NC, 156 pp.******* **E.O. 12866 Review**

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407 of “more than half of this warming [for the period 1951
- 2006] is likely the result of human
ca used greenhouse gas forcing of climate change.” Observations show that changes are occurring in the amount, intensity , frequency and ty pe of precipitation. Over the contiguous United States, total annual precipitation increased b y 6.1% from 1901 to 2008 . It is likely that there have been increases in the number of heav y precipitation events within many land regions, even in those where there has been a reduction in total precipitation amount, consistent with a warming climate. There is strong evidence that global sea level gradually rose in the 20 th century and is currentl y rising at an increased rate. It is not clear whether the increasing rate of sea level rise is a reflection of short
- term variability or an increase in the longer
- term trend. Nearl y all of the Atlantic Ocean shows sea level rise during the last 50 years with the rate of rise reaching a maximum (over 2 millimeters [mm] per year) in a band along the U.S. east coast running east
- northeast
. Satellite data since 1979 show that annual avera ge Arctic sea ice extent has shrunk by 4.1% per decade. The size and speed of recent Arctic summer sea ice loss is highl y anomalous relative to the previous few thousands of years. Widespread changes in extreme temperatures have been observed in the last 50 ye ars across all world regions, including the United States. Cold day s, cold nights, and frost have become less frequent, while hot day s, hot nights, and heat waves have become more frequent. Observational evidence from all continents and most oceans s hows that many natural s ys tems are being affected by regional climate changes, particularly temperature increases. However, directly attributing specific regional changes in climate to emissions of GHGs from human activities is difficult, especially for p recipitation. Ocean CO 2 uptake has lowered the average ocean pH (increased acidity) level by approximately

0.1 since 1750. Consequences for marine ecos ys tems can include reduced calcification by

shell
- forming organisms, and in the longer term, the dissolution of carbonate sediments. Observations show that climate change is currently affecting U.S. phy sical and biological s ys tems in significant way s. The consistency of these observed changes in phy sical and biological sy stems and the observed significant warming likely cannot be explained entirely

due to natural variability or other confounding non
- climate factors. **(3) Projections of Future Climate Change**  **w ith Continued Increases in**  **Elevated GHG Concentrations** Most future scenarios that assume no explicit GHG mitigation actions (beyond those already enacted) project increasing global GHG emissions over the century , with climbing GHG concentrations. Carbon dioxide is expected to remain the dominant******* **E.O. 12866 Review**

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408 of anthropogenic GHG over the course of the 21 st century . The rad iative forcing associated with the non
- CO 2 GHGs is still significant and increasing over time. Future warming over the course of the 21 st century, even under scenarios of low
emission growth, is very

likely to be greater than observed warming over the pas t century . According to climate model simulations summarized by the IPCC , 353 through about 2030, the global warming rate is affected little by the choice of different future emissions scenarios. By

the end of the 21 st century , projected average global warm ing (compared to average temperature around 1990) varies significantl y depending on the emission scenario and climate sensitivity assumptions, ranging from 3.2 to 7.2  F (1.8 to 4.0  C), with an uncertainty range of 2.0 to 11.5  F (1.1 to 6.4  C). All of the United States is very likely to warm during this century , and most areas of the United States are expected to warm by more than the global average. The largest warming is projected to occur in winter over northern parts of Alaska. In western, central and eastern regions of North America, the projected warming has less seasonal variation and is not as large, especially near the coast, consistent with less warming over the oceans. It is very likel y that heat waves will become more intense, more frequent, and longer lasting in a future warm climate, whereas cold episodes are projected to decrease significantl y. In creases i n the amount of precipitation are very likely in higher latitudes, while decreases are likel y in most subtropical latitudes and the southw estern United States, continuing observed patterns. The mid
- continental area is expected to experience drying during summer, indicating a greater risk of drought. Intensit y of precipitation events is projected to increase in the United States and other regions of the world. More intense precipitation is expected to increase the risk of flooding and result in greater runoff and erosion that has the potential for adv erse water quality effects. It is likel y that hurricanes will become more intense, with stronger peak winds and more heav y precipitation associated with ongoing increases of tropical sea surface temperatures. Frequency changes in hurricanes are currently too uncertain for confident projections. By the end of the century, global average sea level is projected b y IPCC 354 to rise between 7.1 and 23 inches (18 and 59 centimeter [cm]), relative to around 1990, in the
353 Meehl , G.A. et al. (2007) Global Climate Projections. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen , M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 354 IPCC (2007) Summary for Policymakers. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New Yo rk, NY, USA.******* **E.O. 12866 Review**

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409 of absence of increased dyn amic ice sheet loss. Recent rapid changes at the edges of the Greenland and West Antarctic ice sheets show acceleration of flow and thinning. While an understanding of these ice sheet processes is incomplete, their inclusion in models would likely

lead to increased sea level projections for the end of the 21 st century . Sea ice extent is projected to shrink in the Arctic under all IPCC emissions scenarios. **(4) Projected Risks and Impacts Associated With Future Climate Change**  Risk to society , ecos ys tems, and many natural Earth p rocesses increase with increases in both the rate and magnitude of climate change. Climate warming may increase the possibility

of large, abrupt regional or global climatic events (e.g., disintegration of the Greenland Ice Sheet or collapse of the West Antarctic Ice Sheet). The partial deglaciation of Greenland (and possibly West Antarctica) could be triggered by a sustained temperature increase of 2 to 7  F (1 to 4oC) above 1990 levels. Such warming would cause a 13 to 20 feet (4 to 6 meter) rise in sea l evel, which would occur over a time period of centuries to millennia. The CCSP 355 reports that climate change has the potential to accentuate the disparities already evident in the American health care s ys tem, as many of the expected health effects are like ly

to fall disproportionatel y on the poor, the elderly , the disabled, and the uninsured. The IPCC 356 states with very high confidence that climate change impacts on human health in U.S. cities will be compounded by population growth and an aging population. Severe heat waves are projected to intensify in magnitude and duration over the portions of the United States where these events already occur, with potential increases in mortality and morbidity , especiall y among the elderly, young, and frail. Some r eduction in the risk of death related to extreme cold is expected. It is not clear whether reduced mortality from cold will be greater or less than increased heat
related mortalit y in the United States due to climate change. I ncreases in regional ozone pollution relative to ozone levels without climate change are expected due to higher temperatures and weaker circulation in the United States and other world cities relative to air quality levels without climate change. Climate change is expected to incre ase regional ozone pollution, with associated risks in respiratory

illnesses and premature death. In addition to human health effects,
355 Ebi, K.L., J. Balbus, P.L. Kinney, E. Lipp, D. Mills, M.S. O’Neill, and M. Wilson (2008) Effects of Global Change on Human Health. In: Analyses of the effects of global change on human health and welfare and human systems . A Report by the U. S. Climate Change Science Program and the Subcommittee on Global Change Research. [Gamble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J. Wilbanks, (Authors)]. U.S. Environmental Protection Agency, Washington, DC, USA, pp. 2
- 1 to 2
- 78. 356 Field, C.B. et al. (2007 ) North America. In: Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Lind en and C.E. Hanson (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.******* **E.O. 12866 Review**

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410 of tropospheric ozone has significant adverse effects on crop yi elds, pasture and forest growth, and species composition. The directional effect of climate change on ambient particulate matter levels remains uncertain. Within settlements experiencing climate change, certain parts of the population may be especially

vulnerable; these include the poor, the elderl y, those alrea dy in poor health, the disabled, those living alone, and/or indigenous populations dependent on one or a few resources. Thus, the potential impacts of climate change raise environmental justice issues. The CCSP 357 concludes that, with increased CO 2 and temp erature, the life cycle of grain and oilseed crops will likely progress more rapidly . But, as temperature rises, these crops will increasingl y begin to experience failure, especiall y if climate variability increases and precipitation lessens or becomes mo re variable. Furthermore, the marketable yi eld of many horticultural crops (e.g., tomatoes, onions, fruits) is very likel y to be more sensitive to climate change than grain and oilseed crops. Higher temperatures will very likely reduce livestock productio n during the summer season in some areas, but these losses will very likely be partially

offset by warmer temperatures during the winter season. Cold
- water fisheries will likely be negativel y affected; warm
- water fisheries will generall y benefit; and the results for cool
- water fisheries will be mixed, with gains in the northern and losses in the southern portions of ranges. Climate change has very

likely increased the size and number of forest fires, insect outbreaks, and tree mortality in the interior West, the Southwest, and Alaska, and will continue to do so. Over North America, forest growth and productivity have been observed to increase since the middle of the 20 th century , in part due to observed climate change. Rising CO 2 will very likely increa se photosy

nthesis for forests, but the increased photosy nthesis will likely

only increase wood production in young forests on fertile soils. The combined effects of expected increased temperature, CO 2 , nitrogen deposition, ozone, and forest disturbance on soil processes and soil carbon storage remain unclear. Coastal communities and habitats will be increasingl y stressed b y climate change impacts interacting with development and pollution. Sea level is rising along much of the U.S. coast, and the rate of change will very likel y increase in the future, exacerbating the impacts of progressive inundation, storm
- surge flooding, and shoreline erosion. Storm impacts are likel y to be more severe, especiall y along the Gulf and Atlantic coasts. Salt marshes, othe r coastal habitats, and dependent species are threatened b y sea level rise, fixed structures blocking landward migration, and changes in vegetation. Population growth and rising value of infrastructure in coastal areas increases vulnerability to climate v ariability

and future climate change.

357 Backlund, P., A. Janetos, D.S. Schimel, J. Hatfield, M.G. Ryan, S.R. Archer, and D. Lettenmaier (2008) Executive Summary. In: The Effects of Climate Change on Agriculture, Land Resources, Water Resources, and Biodiversity in the United States. A Report by the U.S. Climate Change Science Program and the Subcommittee on Global Change Research. Washington, DC., USA, 362 pp.******* **E.O. 12866 Review**

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411 of Climate change will likely further constrain already over
- allocated water resources in some regions of the United States, increasing competition among agricultural, municipal, industrial, and ecological uses. Although water management practices in the United States are generall y advanced, particularly in the West, the reliance on past conditions as the basis for current and future planning may no longer be appropriate, as climate change increasingl y creates conditions well outside of historical observations. Rising temperatures will diminish snowpack and increase evaporation, affecting seasonal availability of water. In the Great Lakes and major river sy stems, lower water levels are likely to exacerbate challenges relating to water quality , navigation, recreation, h ydropower generation, water transfers, and binational relationships. Decreased water suppl y and lower water levels are likel y to exacerbate challenges relating to aquatic navigation in the United States. H igher water temperatures, increased precipitation intensity , and longer periods of low flows will exacerbate man y forms of water pollution, potentially making attainment of water quality

goals more difficult. As waters become warmer, the aquatic life they now support will be replaced b y other species better adapted to warmer water. In the long term, warmer water and changing flow may result in deterioration of aquatic ecos ys tems. Ocean acidification is projected to continue, resulting in the reduced bio logical production of marine calcifiers, including corals. Climate change is likely

to affect U.S. energy

use and energy

production and phy sical and institutional infrastructures. It will also likely interact with and possibly exacerbate ongoing environm ental change and environmental pressures in settlements, particularl y in Alaska where indigenous communities are facing major environmental and cultural impacts. The U.S. energy sector, which relies heavil y on water for hydropower and cooling capacit y, may be adversel y impacted by changes to water supply and quality in reservoirs and other water bodies. Water infrastructure, including drinking water and wastewater treatment plants, and sewer and stormwater management s ys tems, will be at greater risk of floo ding, sea level rise and storm surge, low flows, and other factors that could impair performance. Disturbances such as wildfires and insect outbreaks are increasing in the United States and are likel y to intensify in a warmer future with warmer winters, drier soils, and longer growing seasons. Although recent climate trends have increased vegetation growth, continuing increases in disturbances are likely to limit carbon storage, facilitate invasive species, and disrupt ecosystem services. Over the 21 st c entury , changes in climate will cause species to shift north and to higher elevations and fundamentally rearrange U.S. ecosy stems. Differential capacities for range shifts and constraints from development, habitat fragmentation, invasive species, and brok en ecological connections will alter ecos ys tem structure, function, and services.******* **E.O. 12866 Review**

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412 of **(5) Present and Projected U.S. Regional Climate Change Impacts**  Climate change impacts will vary in nature and magnitude across different regions of the United States. Sustained high summer temperatures, heat waves, and declining air quality are projected in the Northeast, 358 Southeast, 359 Southwest, 360 and Midwest. 361 Projected climate change would continue to cause loss of sea ice, glacier retreat, permafrost thawing, and coastal eros ion in Alaska. Reduced snowpack, earlier spring snowmelt, and increased likelihood of seasonal summer droughts are projected in the Northeast, Northwest, 362 and Alaska. More severe, sustained droughts and water scarcit y are projected in the Southeast, Great Plains, 363 and Southwest. The Southeast, Midwest, and Northwest in particular are expected to be impacted by an increased frequency

of heavy downpours and greater flood risk. Ecosy stems of the Southeast, Midwest, Great Plains, Southwest, Northwest, and Alaska are expected to experience altered distribution of native species (including local extinctions), more frequent and intense wildfires, and an increase in insect pest outbreaks and invasive species. Sea level rise is expected to increase storm surge height and strength, flooding, erosion, and wetland loss along the coasts, particularly in the Northeast, Southeast, and islands. Warmer water temperatures and ocean acidification are expected to degrade important aquatic resources of islands and coasts such as coral reefs and fisheries. A longer growing season, low levels of warming, and fertilization effects of carbon dioxide may

benefit certain crop species and forests, particularl y in the Northeast and Alaska
. Projected summer rainfall increases in the Pacific islands may augment limited freshwater supplies. Cold
- related mortality is projected to decrease, especiall y in the Southeast . In the Midwest in particular, heating oil demand and snow
- related traffic accidents are expected to decrease.

358 Northeast includes West Virgi nia, Maryland, Delaware, Pennsylvania, New Jersey, Ne w York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine. 359 Southeast includes Kentucky, Virginia, Arkansas, Tennessee, North Carolina, South Carolina, southeast Texas, Louisiana, Mississippi, Alabama, Georgia, and Florida. 360 Southwest includes California, Nevada, Utah, western Colorado, Arizona, New Mexico (except the extreme eastern section), and southwest Texas. 361 The Midwest includes Minnesota, Wisconsin, Michigan, Iowa, Ill inois, Indiana, Ohio, and Missouri. 362 The Northwest includes Washington, Idaho, w estern Montana, and Oregon. 363 The Great Plains includes central and eastern Montana, North Dakota, South Dakota, Wyoming, Nebraska, eastern Colorado, Nebraska, Kansas, extreme eastern New Mexico, central Texas, and Oklahoma******* **E.O. 12866 Review**

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413 of Clim ate change impacts in certain regions of the world may exacerbate problems that raise humanitarian, trade, and national security issues for the United States. The IPCC 364 identifies the most vulnerable world regions as the Arctic, because of the effects of high rates of projected warming on natural s ys tems; Africa, especially the sub
- Saharan region, because of current low adaptive capacit y as well as climate change; small islands, due to high exposure of population and infrastructure to risk of sea level ris e and increased storm surge; and Asian mega
- deltas, such as the Ganges
- Brahmaputra and the Zhujiang, due to large populations and high exposure to sea level rise, storm surge and river flooding. Climate change has been described as a potential threat mult iplier with regard to national security issues. 

### E. **Changes in Atmospheric CO**  **2** 

### Concentrations, Global Mean **Temperature, Sea Level Rise**  **, and Ocean pH Associated with the**  **Program ’s GHG Emissions Reductions**  EPA examined 365 the reductions in CO 2 and other GHGs assoc iated with th is rulemaking and analyzed the projected effects on atmospheric CO 2 concentrations, global mean surface temperature , sea level rise , and ocean pH which are common variables used as indicators of climate change. The anal ys is projects that the preferred alternative of this program will reduce atmospheric concentrations of CO 2 , global climate warming and sea level rise relative to the reference case . Although the projected reductions and improvements are small in comparison to the total proje cted climate change , they are quantifiable , directionally consistent, and will contribute to reducing the risks associated with climate change
. Climate change is a global phenomenon and EPA recognizes that this one national action alone will not prevent it: EPA notes this would be true for an y given GHG mitigation action when taken alone. EPA also notes that a substantial portion of CO 2 emitted into the atmosphere is not removed by natural processes for millennia, and therefore each unit of CO 2 not emitte d into the atmosphere due to this program avoids essentially

permanent climate change on centennial time scales
. EPA determines that the projected reductions in atmospheric CO 2 , global mean temperature and sea level rise are meaningful in the context of this final action. In addition, EPA has conducted an anal ys is to evaluate the projected changes in ocean pH in the context of the changes in emissions from this rulemaking. The results of the anal ys is demonstrate that relative to the reference case, p rojected atmospheric CO 2 concentrations are estimated to be reduced by 0.691 to 0.787 part per million by volume (ppmv), global mean temperature is estimated to be reduced b y 0.0017 to 0.0042°C, and sea
- level rise is projected to be reduced by approximately 0.017
- 0.040 cm by 2100, based on a range of

364 Parry, M.L. et al. (2007) Technical Summary. In: Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [ M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden, and C.E. Hanson ( eds.)], Cambridge University Press, Cambridge, United Kingdom, pp. 23 S 78. 365 Using the Model for the Assessment of Greenhouse Gas Induced Climate Change (MAGICC) 5.3v2, http://www.cgd.ucar.edu/cas/wigley/magicc/), EPA estimated the effects of this rulemakin g’s greenhouse gas emissions reductions on global mean temperature and sea level. Please refer to Chapter 8.4 of the RIA for additional information.******* **E.O. 12866 Review**

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414 of climate sensitivities. The anal ys is also demonstrates that ocean pH will increase by 0.0003 pH units by

2100 relative to the reference case. **(1) Estimated Projected Reductions in**  **Atmospheric CO 2**  **Con centration,**  **Global Mean Surface Temperatures ,**  **Sea Level Rise , and Ocean pH**  EPA estimated changes in the atmospheric CO 2 concentration, global mean temperature , and sea level rise out to 2100 resulting from the emissions reductions in this rulemaking using the GCAM ( Global Change Assessment Model, formerl y MiniCAM), integrated assessment model 366 coupled with the Model for the Assessment of Greenhouse Gas Induced Climate Change (MAGICC, version 5.3 v2 ). 367 G CAM was used to create the globally and temporall y consi stent set of climate relevant variables required for running MAGI CC. MAGI CC was then used to estimate the projected change in the se variables over time. Given the magnitude of the estimated emissions reductions associated with th is action , a simple climat e model such as MAGI CC is reasonable for estimating the atmospheric and climate response. This widely
- used, peer reviewed modeling tool was also used to project temperature and sea level rise under different emissions scenarios in the Third and Fourth Ass essments of the IPCC. The integrated impact of the following pollutant and greenhouse gas emissions changes are considered: CO 2 , CH 4 , N 2 O, HFC
- 134a, NO X , CO 2 and SO 2 , and volatile organic compounds (VOC). For CO 2 , CH 4 , HFC
- 134a, and N 2 O an annual time
- series of (upstream + downstream) emissions reductions estimated from the rulemaking were input directly . The GHG emissions reductions , from Section VI .C, were applied as net reductions to a global reference case (or baseline) emissions sc enario in GCAM to generate an emissions scenario specific to this rulemaking
. For CO, VOCs, SO 2 , and NO X , emissions reductions were estimated for 2018, 2030, and 2050 (provided in Section VII.A). EPA then linearly scaled emissions reductions for these gas es between a zero input value in 2013 and the value supplied for 2018 to produce the reductions for 2014
- 2018. A similar scaling was used for 2019
- 2029 and 2031
- 2050. The emissions reductions past 2050 for all gases were scaled with total U.S. road trans portation fuel consumption from the GCAM reference scenario. Road transport fuel consumption past 2050 does not change significantly and thus emissions reductions remain relatively constant from 2050 through 2100. Specific d etails about the GCAM referenc e case scenario can be found in Chapter 8.4 of the RIA that accompanies this preamble
.

366 G CAM is a long
- term , global integrated assessment model of energy, economy, agriculture and land use, th at considers the sources of emissions of a suite of GHG ’ s, emitted in 14 globally disaggregated regions, the fate of emissions to the atmosphere, and the consequences of changing concentrations of greenhouse related gases for climate change. GCAM begins wi th a representation of demographic and economic developments in each region and combines these with assumptions about technology development to describe an internally consistent representation of energy, agriculture, land
- use, and economic developments that i n turn shape global emissions. Brenkert A, S. Smith, S. Kim, and H. Pitcher, 2003: Model Documentation for the MiniCAM. PNNL
14337, Pacific Northwest National Laboratory, Richland, Washington. 367 Wigley, T.M.L. 2008. MAGICC 5.3.v2 User Manual. UCAR

– Cl imate and Global Dynamics Division, Boulder, Colorado. http://www.cgd.ucar.edu/cas/wigley/magicc/******* **E.O. 12866 Review**

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415 of MAGI CC calculates the forcing response at the global scale from changes in atmospheric concentrations of CO 2 , CH 4 , N 2 O, HFCs, and tropospheric ozone. It also includes the effects of temperature changes on stratospheric ozone and the effects of CH 4 emissions on stratospheric water vapor. Changes in CH 4 , NO X , VOC, and CO emissions affect both O 3 concentrations and CH 4 concentrations. MAGI CC includes the relative climate forcing effects of changes in sulfate concentrations due to changing SO 2 emissions, including both the direct effect of sulfate particles and the indirect effects related to cloud interactions. However, MAGICC does not calculate the effect of changes in c oncentrations of other aerosols such as nitrates, black carbon, or organic carbon, making the assumption that the sulfate cooling effect is a prox y for the sum of all the aerosol effects. Therefore, the climate effects of changes in PM 2.5 emissions and pre cursors (besides SO 2 ) which are presented in the RIA Chapter 5 were not included in the calculations in this chapter . MAGI CC also calculates all climate effects at the global scale. This global scale captures the climate effects of the long
- lived, well
- mixed greenhouse gases, but does not address the fact that short
- lived climate forcers such as aerosols and ozone can h ave effects that vary with location and timing of emissions. Black carbon in particular is known to cause a positive forcing or warming effect b y absorbing incoming solar radiation, but there are uncertainties about the magnitude of that warming effect and the interaction of black carbon (and other co
- emitted aerosol species) with clouds. While black carbon is likely to be an important contributor to climate change, it would be premature to include quantification of black carbon climate impacts in an anal y sis of the final standards at this time. Changes in atmospheric CO 2 concentration, global mean temperature , and sea level rise for both the reference case and the emissions scenarios associated with this action were computed using MAGICC. To c alculate the reductions in the atmospheric CO 2 concentrations as well as in temperature and sea level resulting from this action , the output from the policy scenario associated with th e preferred approach of this action was subtracted from an existing Global Change As sessment Model (GCAM, formerl y MiniCAM ) reference emission scenario. To capture some key uncertainties in the climate sy stem with the MAGICC model, changes in atmospheric CO 2 , global mean temperature and sea level rise were projected across the most current IPCC range of climate sensitivities , from 1.5°C to 6.0°C
. 368 This range reflects the uncertainty for equilibrium climate sensitivity

for how much global mean temperature would rise if the concentration of carbon dioxide in the atmosphere were to double. T he information for this range come from constraints from past climate change on various time scales, and the spread of results for climate sensitivity from ensembles of models. 369 Details about this modeling anal ys is can be found in the RIA Chapter 8.4
.

368 In IPCC reports, equilibrium climate sensitivity refers to the equilibrium change in the annual mean global surface temperature following a doubling of the atmospheric equivalent carbon dioxide concentration. The IPCC states that climate sensitivity is “likely” to be in the range of 2°C to 4.5°C, “very unlikely” to be less than 1.5°C, and “values substantially higher than 4.5°C cannot be excluded.” IPCC WGI, 2007, Climate Change 2007
- The Physical Science Basis, Contribution of Working Group I to the Fourth Assessment Report of the IPCC, http://www.ipcc.ch / 369 Meehl, G.A. et al. (2007) Global Climate Projections. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel******* **E.O. 12866 Review**

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416 of The results of this modeling , summarized in Table VI
- 8 , show small, but quantifiable, reduction s in atmospheric CO 2 concentrations, projected global mean temperature and sea level resulting from this action , across all climate sensitivities. As a result of the emission reductions from the final standards for this action, relative to the reference case the atmospheric CO 2 concentration is projected to be reduced by 0.691
- 0.787 ppmv, the global mean temperature is projected to be reduced b y approximately 0.0017
- 0.0042 °C by

2100 , and global mean sea level rise is projected to be reduced b y approximately 0.017
- 0.040 cm by 2100. The range of reductions in global mean temperature and sea level rise is larger than that for CO 2 concentrations because CO 2 concentrations are onl y weakl y coupled to climate sensitivity through the dependence on temperature of the rate of ocean absorpti on of CO 2 , whereas the magnitude of temperature change response to CO 2 changes (and therefore sea level rise) is more tightly coupled to climate sensitivity in the MAGICC model. **Table VI**  **- 8**  **: Impact of GHG Emissions Reductions**  **o n Projected Changes in Global Clim**  **ate Associated with**  **the Final Rulem**  **aking (**  **Based on a range of clim**  **ate sensitiv ities**  **from 1.5**  **- 6°C)**  Variable Units Year Projected Change Atmospheric CO 2 Concentration ppmv 2100
- 0.691 to
- 0.787 Global Mean Surface Temperature o C 2100
- 0.00 17 to
- 0.0 042 Sea Level Rise cm 2100
- 0. 017 to
- 0. 040 Ocean pH pH units 2 100 0.00 03 a Note: a The value for projected change in ocean pH is based on a climate sensitivity of 3.0. The projected reductions are small relative to the change in temperature (1.8

– 4.8 oC ), sea level rise (27

– 51 cm), and ocean acidity (
- 0.30 pH units) from 1990 to 2100 from the MAGICC simulations for the GCAM reference case. However, this is to be expected given the magnitude of emissions reductions expected from the program in the context of global emissions. This uncertainty range does not include the effects of uncertaint y in future emissions. It should also be noted that the calcu lations in MAGI CC do not include the possible effects of accelerated ice flow in Greenland and/or Antarctica: the recent NRC report estimated a likely sea level increase for the A1B SRES scenario of 0.5 to 1.0 meters. 370 Further discussion of EPA’s modeling anal ys is is found in the RIA, Chapter 8
. EPA used the Program CO2SYS, 371 version 1.05 to estimate projected changes in ocean pH for tropical waters based on the atmospheric CO 2 concentration change ( reduction ) resulting from this action. The program performs calculations relating parameters of the CO 2 sy stem in seawater. EPA used the program to calculate ocean pH as a function of atmospheric CO 2 concentrations, among other specified input conditions. on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. 370 National Research Council, 2011. Climate Stabiliz ation Targets: Emissions, Concentrations, and Im pacts over Decades to Millenia. Washington, DC: National Academies Press. 371 Lewis, E., and D. W. R. Wallace. 1998. Program Developed for CO 2 System Calculations. ORNL/CDIAC
- 105. Carbon Dioxide Information Ana lysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tennessee.******* **E.O. 12866 Review**

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417 of Based on the projected atmospheric CO 2 concentratio n reductions resulting from this action, the program calculates an increase in ocean pH of 0.00 03 pH units in 2100 relative to the reference case (compared to a decrease of 0.3 pH units from 1990 to 2100 in the reference case). Thus, this analy sis indicate s the projected decrease in atmospheric CO 2 concentrations from the program will result in an increase in ocean pH. For additional validation, results were generated using different known constants from the literature. A comprehensive discussion of the m odeling anal ys is associated with ocean pH is provided in the RIA, Chapter 8. **(2) Program’s Effect on Climate**  As a substantial portion of CO 2 emitted into the atmosphere is not removed by natural processes for millennia, each unit of CO 2 not emitted into the atmosphere avoids essentially

permanent climate change on centennial time scales. Reductions in emissions in the near
- term are important in determining long
- term climate stabilization and associated impacts experienced not just over the next decades but i n the coming centuries and millennia. 372 Though the magnitude of the avoided climate change projected here is small in comparison to the total projected changes , these reductions represent a reduction in the adverse risks associated with climate change (tho ugh these risks were not formall y estimated for this action ) across a range of equilibrium climate sensitivities. EPA’s anal ys is of the program’s impact on global climate conditions is intended to quantify

these potential reductions using the best availabl e science. EPA’s modeling results show repeatable, consistent reductions relative to the reference case in changes of CO 2 concentration, temperature, sea
- level rise, and ocean pH over the next century
. 

## VII. **How Wi**  **ll This Final**  **Action Impact Non -**  **GHG Emissions and**  **Their**

**A ssociated Effects?**  **A. Emissions Inventory Impacts**  **(1) Upstream Impacts of the Program**  In creasing efficiency in heavy
- dut y vehicles will result in reduced fuel demand and therefore reductions in the emissions associated with all processes involved in ge tting petroleum to the pump. These projected upstream emission impacts on criteria pollutants are summarized in Table VII
- 1
. Table VII
- 2 shows the corresponding projected impacts on upstream air toxic emissions in 2030.

372 See NRC 2011, Note 370
. 373 Although the net im pact is small when aggregated to the national level, it is unlikely that the geographic location of increases in downstream PM 2.5 emissions will coincide with the location of decreases in upstream PM 2.5 emissions. Impacts of the emissions changes are in cluded in the air quality modeling , discussed in Section VII.D of this preamble and in Chapter 8 of the RIA.******* **E.O. 12866 Review**

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418 of **Table VII**  **- 1**  **: Overall estim ated upstream impacts on criteria pollutants for calendar years 2018,**  **2030, and 2050 (short tons)** Calendar Year NO X VOC CO PM 2.5 2018
- 6,475
- 1,765
- 2,217
- 971 2030
- 9,975
- 4, 367
- 3, 331
- 1,3 79 2050
- 14,243
- 6,379
- 4,785
- 1,998
**Table VII**  **- 2**  **: Overall estim ated upstream impacts on air toxics for calendar years 2018, 2030, and**  **2050 (short tons)** Calendar Y ear Benzene 1,3
- butadiene Formaldeh yd e Acetaldeh yd e Acrolein 2018
- 12
- 0.6
- 12
- 1
- 0.2 2030
- 19
- 0.9
- 26
- 3
- 0.5 2050
- 28
- 1.2
- 35
- 5
- 0.6 To project these impacts, EPA estimated the impact of reduced petroleum volumes on the extraction and transportation of crude oil as well as the production and distribution of finished gasoline and diesel . For the purpose of assessing domestic
- only emission reductions it was necessary to estimate the fraction of fuel savings attributable to domestic fi nished gasoline and diesel , and of this fuel what fraction is produced from domestic crude. For this anal ys is EPA estimated that 50 percent of fuel savings is attributable to domestic finished gasoline and diesel and that 90 percent of this gasoline and di esel originated from imported crude. Emission factors for most upstream emission sources are based on the GREET1.8 model, developed by DOE’ s Argonne National Laboratory but in some cases the GREET values were modified or updated by EPA to be consistent with the National Emission Inventory . These updates are consistent with those used for the upstream analy sis included in the Light
- Duty GHG rulemaking. More information on the development of the emission factors used in this anal ys is can be found in RIA Ch apter 5. **(2) Downstream Impacts of the Program**  While these final rules do not regulate non
- GHG pollutants, EPA expects reductions in downstream emissions of most non
- GHG pollutants. These pollutants include NO X , SO 2, VOC, CO, and PM. The primary reason s for this are the improvements in road load (aerodynamics and tire rolling resistance) under the program and the agency ’s anticipation of increase d use of APUs in combination tractors for GHG reduction purposes during extended idling
. APUs exhibit different non
- GHG emissions characteristics compared to the on
- road engines they would replace during extended idling. Another reason is that emissions from certain pollutants (e.g., SO 2 ) are proportional to fuel consumption. For vehi cle t yp es not affected b y road load improvements, non
- GHG emissions may increase very

slightl y due to VMT rebound. EPA used MOVES to determine non
- GHG emissions inventories for baseline and control cases. Further information about the MOVES analy sis is avai lable in Section VIand RIA******* **E.O. 12866 Review**

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419 of Chapter 5. The improvements in road load, use of APUs, and VMT rebound were included in the MOVES runs and post
- processing. Table VII
- 3 summarizes the downstream criteria pollutant impacts of this program. Most of the impacts shown are through projected increased APU use. Because APUs are required to meet much less stringent PM 2.5 standards than on
- road engines , the projected widespread use of APUs leads to higher PM 2.5 . Table VII
- 4 summarizes the downstre am air tox ics impacts of this program. **Table VII**  **- 3**  **: Overall Estim ated Downstream** **Impacts on Criteria Pollutants (short tons)** Calendar Year Downstream

NO X Downstream

VOC Downstream

SO 2 Downstream

CO Downstream

PM 2.5 a 2018
- 107, 135
- 12,95 1
- 145
- 25,6 14 8 03 2030
- 235, 046
- 25,5 02
- 423
- 52,2 12 1,7 51 2050
- 326, 413
- 35,1 26
- 614
- 72,0 49 2,4 41 Note: a Positive number means emissions would increase from baseline to control case. PM 2.5 from tire wear and brake wear is included.

**Table VII**  **- 4**  **: Overall Estim a**  **ted Downstream Impacts on Air Toxics (short tons)**  Calendar Year Benzene 1,3
- butadiene Formaldeh yd e Acetaldeh yd e Acrolein 2018
- 158
- 0.3
- 2,853
- 871
- 120 2030
- 341 0.4
- 6,255
- 1,908
- 263 2050
- 472 0.8
- 8,689
- 2,650
- 365 **(3) Total Impacts of the Program**  As shown in Table VII
- 5 and Table VI I
- 6 , the agencies estimate that this program would result in reductions of NO X , VOC, CO, PM, and air toxics
. For NO X , VOC, and CO, much of the net reductions are realized through the use of APUs , which emit these pollutants at a lower rate than on
- road engines during extended idle operation. Additional reductions are achieved in all pollutants through reduced road load (improved aerod ynamics and tire rolling resistance), which reduces the amount of work required to travel a given distance. For SO X , downstream emissions are roughly proportional to fuel consumption; therefore a decrease is seen in both upstream and downstream sources. The downstream increase in PM 2.5 due to APU use is mostly negated by

upstream PM 2.5 reductions, though our calculations show a slight net increase in 2030 and 2050. 373

373 Although the net im

pact is small when aggregated to the national level, it is unlikely that the geographic location of increases in downstream PM 2.5 emissions will coincide with the location of decreases in upstream PM 2.5 emissions. Impacts of the emissions changes are in cluded in the air quality modeling , discussed in Section VII.D of this preamble and in Chapter 8 of the RIA.******* **E.O. 12866 Review**

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420 of **Table VII**  **- 5**  **: Overall Estim**  **ated Total Impacts (Upstream Plus Downstream ) on Criteria Pollutants**  **Results are shown in both short tons and percent change from baseline to control case.**  CY NO X VOC SO 2 CO PM 2.5 short tons % short

tons % short

tons % short tons % short tons %
2 018 - 113, 610 6.2 -

14, 715 5.6 -

4,566
- 4.5 -

27, 832 1.0 -

16 7 0.2 2 030 - 245, 129 21.0 -

29,9 32 16.0 -

6,888
- 10.1 -

55, 579 2.1 3

56 .1 2 050 - 34 0,656 23.7 -

41,5 0 6 18.3 -

9,857
- 11.0 -

76, 834 2.2 4

43 .1 **Table VII**  **- 6**  **: Overall E**  **stim ated**  **T otal**  **I mpacts (**  **U pstream**  **P lus**  **D ownstream** **) I**  **mpacts on A**  **ir T**  **oxics** CY Benzene 1,3
- butadiene Formaldeh yd e Acetaldeh yd e Acrolein short tons % short

tons % short

tons % short

tons % short

tons % 2018
- 170
- 4.8
- 0.9
- 0.1
- 2,865
- 18.3
- 873
- 13.9
- 120.0
- 12.4 2030
- 3 59
- 15.0
- 0.5
- 0.1
- 6,282
- 46.2
- 1,912
- 40.2
- 263.0
- 40.0 2050
- 500
- 17.4
- 0.4
- 0.1
- 8,725
- 49.5
- 2,655
- 44.2
- 365.4
- 44.5 

### B. **Health Effects of Non -**  **GHG Pollutants** In this section we discuss health effects associated with exposure to some of the criteria and air toxic pollutants impacted by the final heavy
- dut y vehicle standards. **(1) Particulate Matter**  (a ) Background Particulate matter is a generic term for a broad class of chemicall y and ph ysically diverse substances. It can be principall y characterized as discrete particles that exist in the condensed (liquid or solid) phase spanning several orders of magnitude in size. Since 1 987, EPA has delineated that subset of inhalable particles small enough to penetrate to the thoracic region (including the tracheobronchial and alveolar regions) of the respiratory

tract (referred to as thoracic particles). Current National Ambient Air Qua lity Standards (NAAQS) use PM 2.5 as the indicator for fine particles (with PM 2.5 referring to particles with a nominal mean aerodynamic diameter less than or equal to 2.5 μm), and use PM 10 as the indicator for purposes of regulating the coarse fraction of PM 10 (referred to as thoracic coarse particles or coarse
- fraction particles; generally including particles with a nominal mean aerody namic diameter greater than 2.5 μm and less than or equal to 10 μm, or PM 10
- 2.5 ). Ultrafine particles are a subset of fine particles, generally less than 100 nanometers (0.1 μm) in aerodynamic diameter. Fine particles are produced primaril y b y combustion processes and b y transformations of gaseous emissions (e.g., SO X , NO X , and VOC) in the atmosphere. The chemical and ph ys ical properties of PM 2.5 may vary greatl y with time, region,******* **E.O. 12866 Review**

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421 of meteorology , and source category . Thus, PM 2.5 may include a complex mixture of different pollutants including sulfates, nitrates, organic compounds, elemental carbon and metal compounds. These particles can remain in the atmosphere for day s to weeks and travel hundreds to thousands of kilometers. (b ) Health Effects of PM Scientific studies show ambient PM is associated with a series of adverse health effects. These health effects are discussed in d etail in EPA’s Integrated Science Assessment for Particulate Matter (I SA)
. 374 Further discussion of health effects associated with PM can also be found in the RIA for this final action
. The ISA summarizes evidence associated with PM 2.5 , PM 10
- 2.5 , and ultrafine particles. The I SA concludes that health effects associated with short
- term exposures (hours to day s) to ambient PM 2.5 include mortality , cardiovascular effects, such as altered vasomotor function and hospital admissions and emergency department visits for ischemic heart disease and congestive heart failure, and respiratory effects, such as exacerbation of asthma symptoms in children and hospital admissions and emergency department visits for chronic obstructive pulmonary disease and respiratory

i nfections
. 375 The I SA notes that l ong - term exposure to PM 2.5 (months to y ears) is associated with the development/progression of cardiovascular disease, premature mortality , and respiratory effects, including reduced lung function growth, increased respirat ory s ymptoms, and asthma development. 376 The I SA concludes that the currentl y available scientific evidence from epidemiologic, controlled human exposure, and toxicological studies supports a causal association between short
- and long
- term exposures to PM 2. 5 and cardiovascular effects and mortality . Furthermore, the I SA concludes that the collective evidence supports likely

causal associations between short
- and long
- term PM 2.5 exposures and respiratory effects. The ISA also concludes that the scientific e vidence is suggestive of a causal association for reproductive and developmental effects and cancer, mutagenicity , and genotoxicity and long
- term exposure to PM 2. 5 . 377 For PM 10
- 2.5 , the I SA concludes that the current evidence is suggestive of a causal relati onship between short
- term exposures and cardiovascular effects, such as hospitalization for ischemic heart disease. There is also suggestive evidence of a causal relationship between short
- term PM 10
- 2.5 exposure and mortality and respiratory effects. Dat a are inadequate to draw conclusions regarding the health effects associated with long
- term exposure to PM 10
- 2.5 . 378 For ultrafine particles, the I SA concludes that there is suggestive evidence of a causal relationship between short
- term exposures and cardio vascular effects, such as

374 U.S. EPA (2009) Integrated Science Assessment for Particulate Matter (Final Report). U.S. Environmental Protection Agency, Washington, DC, EP A/600/R
- 08/139F, Docket EPA
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- 0 16 2
. 375 See U.S. EPA, 2009 Final PM ISA , Note 374 , at Section 2.3.1.1. 376 See U.S. EPA 2009 Final PM ISA , Note 374 , at page 2
- 12, Sections 7.3.1.1 and 7.3.2.1. 377 See U.S. EPA 2009 Final PM ISA , Note 374 , at Section 2.3.2. 378 See U.S. EPA 2009 Final PM ISA , Note 374 , at Section 2.3.4, Table 2
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422 of changes in heart rh ythm and blood vessel function. It also concludes that there is suggestive evidence of association between short
- term exposure to ultrafine particles and respiratory

effects. Data are inadequate to draw conclusions regarding the health effects associated with long
- term exposure to ultrafine particles. 379 **(2) Ozone**  (a ) Background Ground
- level ozone pollution is ty pically formed by

the reaction of VOC and NO X in the lower atmosphere in the presence of sunlight. Thes e pollutants, often referred to as ozone precursors, are emitted by many ty pes of pollution sources, such as highway and nonroad motor vehicles and engines, power plants, chemical plants, refineries, makers of consumer and commercial products, industrial f acilities, and smaller area sources. The science of ozone formation, transport, and accumulation is complex. Ground
- level ozone is produced and destroyed in a cyclical set of chemical reactions, many of which are sensitive to temperature and sunlight. Wh en ambient temperatures and sunlight levels remain high for several day s and the air is relativel y stagnant, ozone and its precursors can build up and result in more ozone than ty picall y occurs on a single high
- temperature day . Ozone can be transported hundreds of miles downwind from precursor emissions, resulting in elevated ozone levels even in areas with low local VOC or NO X emissions. (b ) Health Effects of Ozone The health and welfare effects of ozone are well documented and are assessed in EPA’s 2006 Air Quality

Criteria Document and 2007 Staff Paper. 380 , 381 People who are more susceptible to effects associated with exposure to ozone can include children, the elderl y, and individuals with respiratory disease such as asthma. Those with greater exposures to o zone, for instance due to time spent outdoors (e.g., children and outdoor workers), are of particular concern. Ozone can irritate the respiratory s ys tem, causing coughing, throat irritation, and breathing discomfort. Ozone can reduce lung function and ca use pulmonary

inflammation in healthy

individuals. Ozone can also aggravate asthma, leading to more asthma attacks that require medical attention and/or the use of additional medication. Thus, ambient ozone may cause both healthy

and asthmatic individual s to limit their outdoor activities. In addition, there is suggestive evidence of a contribution of ozone to cardiovascular
- related morbidity and highl y suggestive evidence that short
- term ozone exposure directl y or indirectly contributes to non
- accidenta l and cardiopulmonary
- related mortality , but additional research is needed to clarify the underlying mechanisms causing these effects. In a recent report on the estimation of
379 See U.S. EPA 2009 Final PM ISA , Note 374 , at Section 2.3.5, Table 2
- 6. 380 U.S. EPA. (2006). Air Quality Criteria for Ozone and Related Photochemical Oxidants (Final). EPA/600/R
- 05/004aF
- cF. Washington, DC: U.S. EPA. Docket EPA
- HQ
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- 20 10
- 0 16 2
. 381 U.S. EPA. (2007). Review of the National Ambient Air Quality Standards for Ozone: Policy Assessment of Scientific and Technical Information, OAQPS Staff Paper. EPA
- 452/R
- 07
- 003. Washington, DC, U.S. EPA. Docket EPA
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423 of ozone - related premature mortality published by

NRC, a panel of experts and revie wers concluded that short
- term exposure to ambient ozone is likely to contribute to premature deaths and that ozone
- related mortality should be included in estimates of the health benefits of reducing ozone exposure. 382 Animal toxicological evidence indicat es that with repeated exposure, ozone can inflame and damage the lining of the lungs, which may lead to permanent changes in lung tissue and irreversible reductions in lung function. The respiratory

effects observed in controlled human exposure studies an d animal studies are coherent with the evidence from epidemiologic studies supporting a causal relationship between acute ambient ozone exposures and increased respiratory
- related emergency

room visits and hospitalizations in the warm season. In addition, there is suggestive evidence of a contribution of ozone to cardiovascular
- related morbidity and non - accidental and cardiopulmonary mortality
. **(3) Nitrogen Oxides and Sulfur Oxides**  (a ) Background Nitrogen dioxide (NO 2 ) is a member of the NO X family of gases. Most NO 2 is formed in the air through the oxidation of nitric oxide (NO) emitted when fuel is burned at a high temperature. SO 2 , a member of the sulfur oxide (SO X ) family of gases, is formed from burning fuels containing sulfur (e.g., coal or oil derived), ex tracting gasoline from oil, or extracting metals from ore. SO 2 and NO 2 can dissolve in water droplets and further oxidize to form sulfuric and nitric acid which react with ammonia to form sulfates and nitrates, both of which are important components of ambient PM. The health effects of ambient PM are discussed in Section VII. B. (1) (b) of this preamble. NO X and NMHC are the two major precursors of ozone. The h ealth effects of ozone are covered in Section VII. B. (2) (b)
. (b ) Health Effects of NO2 In formation on the health effects of NO 2 can be found in the EPA Integrated Science Assessment (I SA) for Nitrogen Oxides. 383 The EPA has concluded that the findings of epidemiologic, controlled human exposure, and animal toxicological studies provide evidence that is sufficient to infer a likely causal relationship betw een respiratory effects and short
- term NO 2 exposure. The I SA concludes that the strongest evidence for such a relationship comes from epidemiologic studies of respiratory effects including sy mptoms, emergency

department visits, and hospital admissions. Th e I SA also draws two broad conclusions regarding airway responsiveness following NO 2 exposure. First, the I SA concludes that NO 2 exposure may enhance the sensitivity

to allergen
- induced decrements in lung function and increase the allergen
- induced airway inflammatory response following 30
- minute exposures of asthmatics to NO 2 concentrations as low as 0.26 ppm . In addition, small but significant increases in non
- specific airway
382 Nation al Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits from Controlling Ozone Air Pollution . The National Academies Press: Washington, D.C. Docket EPA
HQ
- OAR
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- 0 16 2 383 U.S. EPA (2008). Integrated Science Assessment for Oxides of Nitrogen

– Health Criteria (Final Report). EPA/600/R
- 08/071. Washington, DC: U.S.EPA. Docket EPA
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424 of hy perresponsiveness were reported following 1
- hour exposures of asthmatics to 0 .1 ppm NO 2 . Second, exposure to NO 2 has been found to enhance the inherent responsiveness of the airway

to subsequent nonspecific challenges in controlled human exposure studies of asthmatic subjects. Enhanced airway responsiveness could have important c linical implications for asthmatics since transient increases in airway responsiveness following NO 2 exposure have the potential to increase s ymptoms and worsen asthma control. Together, the epidemiologic and experimental data sets form a plausible, consi stent, and coherent description of a relationship between NO 2 exposures and an array of adverse health effects that range from the onset of respiratory s ymptoms to hospital admission. Although the weight of evidence supporting a causal relationship is so mewhat less certain than that associated with respiratory morbidity , NO 2 has also been linked to other health endpoints. These include all
- cause (nonaccidental) mortality , hospital admissions or emergency department visits for cardiovascular disease, and decrements in lung function growth associated with chronic exposure. (c) Health Effects of SO2 In formation on the health effects of SO 2 can be found in the EPA Integrated Science Assessment for Sulfur Oxides. 384 SO 2 has long been known to cause adverse respirat ory

health effects, particularl y among individuals with asthma. Other potentially sensitive groups include children and the elderl y. During periods of elevated ventilation, asthmatics may

experience s ymptomatic bronchoconstriction within minutes of exposure. Following an extensive evaluation of health evidence from epidemiologic and laboratory studies, the EPA has concluded that there is a causal relationship between respiratory health effects and short
- term exposure to SO 2 . Separatel y, based on an evalu ation of the epidemiologic evidence of associations between short
- term exposure to SO 2 and mortality , the EPA has concluded that the overall evidence is suggestive of a causal relationship between short
- term exposure to SO 2 and mortality
. **(4) Carbon**  **Monoxide** Information on the health effects of C O can be found in the EPA Integrated Science Assessment (I SA) for Carbon Monoxide
. 385 The I SA concludes that ambient concentrations of CO are associated with a number of adverse health effects. 386 This

384 U.S. EPA. (2008). Integrated Science Assessment (ISA) for Sulfur Oxides

– Health Criteria (Final Report) . EPA/600/R
- 08/047F. Washington, DC: U.S. Environmental Protection Agency. Docket EPA
- HQ
OAR
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- 0 16 2
. 385 U.S. EPA, 2010. Integrated Science Assessment for Carbon Monoxide (Final Report). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R
- 09/019F, 2010. Availabl e at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686
. Docket EPA
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- 0 16 2 386 The ISA evaluates the health evidence associated with different health effects, assignin g one of five “weight of evidence” determinations: causal relationship, likely to be a causal relationship, suggestive of a causal relationship, inadequate to infer a causal relationship, and not likely to be a causal relationship. For definitions of the se levels of evidence, please refer to Section 1.6 of the ISA.******* **E.O. 12866 Review**

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425 of section provides a summary of the health effects associated with exposure to ambient concentrations of CO
. 387 Human clinical studies of subjects with coronary artery disease show a decrease in the time to onset of exercise
- induced angina (chest pain) and electrocardiogram changes following CO exposure. In addition, epidemiologic studies show associations between short
- term CO exposure and cardiovascular morbidity , particularl y increased emergency

room visits and hospital admissions for coronary heart disease (including ischemic heart disease, myocardial infarction, and angina). Some epidemiologic evidence is also available for increased hospital admissions and emergency room visits for congestive heart failure and cardiovascular disease as a whole. T he ISA concludes that a causal relationship is likely to exist between short
- term exposures to CO and cardiovascular morbidit y. It also concludes that available data are inadequate to conclude that a causal relationship exists between long
- term exposures to CO and cardiovascular morbidity
. Animal studies show various neurological effects with in
- utero CO exposure. Controlled human exposure studies report inconsistent neural and behavioral effects following low
- level CO exposures. The I SA concludes the evidence is suggestive of a causal relationship with both short
- and long
- term exposure to CO and central nervous sy stem effects. A number of epidemiologic and animal toxicological studies cited in the ISA have evaluated associations between CO exposure an d birth outcomes such as preterm birth or cardiac birth defects. The epidemiologic studies provide limited evidence of a CO
induced effect on preterm births and birth defects, with weak evidence for a decrease in birth weight. Animal toxicological studie s have found associations between perinatal CO exposure and decrements in birth weight, as well as other developmental outcomes. The ISA concludes these studies are suggestive of a causal relationship between long
- term exposures to CO and developmental ef fects and birth outcomes. Epidemiologic studies provide evidence of effects on respiratory morbidit y such as changes in pulmonary

function, respiratory

s ymptoms, and hospital admissions associated with ambient CO concentrations. A limited number of epidem iologic studies considered copollutants such as ozone, SO 2 , and PM in two
- pollutant models and found that CO risk estimates were generally robust, although this limited evidence makes it difficult to disentangle effects attributed to CO itself from those o f the larger complex air pollution mixture. Controlled human exposure studies have not extensively evaluated the effect of CO on respiratory morbidit y. Animal studies at levels of 50
- 100 ppm CO show preliminary

evidence of altered pulmonary vascular remo deling and oxidative injury
. The I SA concludes that the evidence is suggestive of a causal relationship between short
term CO exposure and respiratory morbidity , and inadequate to conclude that a causal relationship exists between long
- term exposure and r espiratory morbidit y.

387 Personal exposure includes contributions from many sources, and in many different environments. Total personal exposure to CO includes both ambient and nonambient components; and both comp onents may contribute to adverse health effects.******* **E.O. 12866 Review**

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426 of Finally , the I SA concludes that the epidemiologic evidence is suggestive of a causal relationship between short
- term exposures to CO and mortality
. Epidemiologic studies provide evidence of an association between short
- term exposur e to CO and mortality , but limited evidence is available to evaluate cause
- specific mortality outcomes associated with CO exposure. In addition, the attenuation of CO risk estimates which was often observed in copollutant models contributes to the uncertaint y as to whether CO is acting alone or as an indicator for other combustion
- related pollutants. The I SA also concludes that there is not likely to be a causal relationship between relevant long
- term exposures to CO and mortality
. **(5) Air**  **Toxics** Heav y - dut y ve hicle emissions contribute to ambient levels of air toxics known or suspected as human or animal carcinogens, or that have noncancer health effects. The population experiences an elevated risk of cancer and other noncancer health effects from exposure to the class of pollutants known collectively as “ air toxics .” 388 These compounds include, but are not limited to, benzene, 1,3
- butadiene, formaldehyde, acetaldeh yde, acrolein, diesel particulate matter and exhaust organic gases, polycyclic organic matter, and naphthalene. These compounds were identified as national or regional risk drivers or contributors in the 2005 National
- scale Air Toxics Assessment and have significant inventory contributions from mobile sources. 389 (a ) Diesel Exhaust Heav y - dut y diesel engines emit diesel exhaust, a complex mixture composed of carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide, nitrogen compounds, sulfur compounds and numerous low
- molecular
- weight h ydrocarbons. A number of these gaseous h ydrocarbon c omponents are individually known to be toxic, including aldeh ydes, benzene and 1,3
- butadiene. The diesel particulate matter present in diesel exhaust consists mostly of fine particles (< 2.5 μm), including a significant fraction of ultrafine particles (< 0.1 μm). These particles have a large surface area which makes them an excellent medium for adsorbing organics and their small size makes them highl y respirable. Man y of the organic compounds present in the gases and on the particles, such as polycyclic o rganic matter, are individuall y known to have mutagenic and carcinogenic properties. Diesel exhaust varies significantly in chemical composition and particle sizes between different engine ty pes (heav y - duty , light
- duty), engine operating conditions (idle , accelerate, decelerate), and fuel formulations (high/low sulfur fuel). Also, there are emissions differences between on
- road and nonroad engines because the nonroad engines are generally

of older technology . After being emitted in the engine exhaust, d iesel exhaust undergoes dilution as well as chemical and phy sical changes in the atmosphere.

388 U. S. EPA. 2002 National
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427 of The lifetime for some of the compounds present in diesel exhaust ranges from hours to day s. 390 (i ) Diesel Exhaust: Potential Cancer Effects In EPA’s 2002 Diesel Health Assessment Document (Diesel HAD), 391 exposure to diesel exhaust was classified as likely to be carcinogenic to humans by inhalation from environmental exposures, in accordance with the revised draft 1996/1999 EPA cancer guidelines. A number of other agencies (National Institute for Occupational Safety and Health, the International Agency for Research on Cancer, the World Health Organization, California EPA, and the U.S. Department of Health and Human Services) have made similar classifications. However, EPA also concluded in the Diesel HAD that it is not possible currentl y to calculate a cancer unit risk for diesel exhaust due to a variety of factors that limit the current studies, such as limited quantitative exposure histories in occupational groups investi gated for lung cancer. For the Diesel HAD, EPA reviewed 22 epidemiologic studies on the subject of the carcinogenicity

of workers exposed to diesel exhaust in various occupations, finding increased lung cancer risk, although not alway s statistically signif icant, in 8 out of 10 cohort studies and 10 out of 12 case
- control studies within several industries. Relative risk for lung cancer associated with exposure ranged from 1.2 to 1.5, although a few studies show relative risks as high as 2.6. Additionally , the Diesel HAD also relied on two independent meta
- analy ses, which examined 23 and 30 occupational studies respectivel y, which found statistically significant increases in smoking
- adjusted relative lung cancer risk associated with exposure to diesel exhaus t of 1.33 to 1.47. These meta
anal ys es demonstrate the effect of pooling many studies and in this case show the positive relationship between diesel exhaust exposure and lung cancer across a variety of diesel exhaust
- exposed occupations. 392 , 393 In the absence of a cancer unit risk, the Diesel HAD sought to provide additional insight into the significance of the diesel exhaust
- cancer hazard b y estimating possible ranges of risk that might be present in the population. An exploratory analy sis was used to charac terize a possible risk range b y comparing a ty pical environmental exposure level for highway

diesel sources to a selected range of occupational exposure levels. The occupationall y observed risks were then proportionally scaled according to the exposure ratios to obtain an estimate of the possible environmental risk. A number of calculations are needed to accomplish this, and these can be seen in the EPA Diesel HAD. The outcome was that environmental risks from diesel exhaust exposure could range from a l ow of 10 - 4 to 10 - 5 to as high as 10 - 3 , reflecting the range of occupational exposures that

390 U.S. EPA (2002). Health Assessment Document for Diesel Engine Exhaust . EPA/600/8
- 90/057F Office of Research and Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060
. Docket EPA
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- 0 16 2 391 See U.S. EPA (2002) Diesel HAD , Note 390 , at pp. 1
- 1, 1
- 2. 392 Bhatia, R., Lopipero, P., Smith, A. (1998). Diesel exposure and lung cancer. Epidemiology, 9(1) , 84
- 91. Docket EPA
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- 0 16 2 393 Lipsett, M. Campleman, S. (1999). Occupational exposure to diesel exhaust and lung cancer: a meta
analysis . Am J Public Health, 80(7), 1009
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428 of could be associated with the relative and absolute risk levels observed in the occupational studies. Because of uncertainties, the anal ys is acknowledged that the ri sks could be lower than 10 - 4 or 10 - 5 , and a zero risk from diesel exhaust exposure was not ruled out. (ii) Diesel Exhaust: Other Health Effects Noncancer health effects of acute and chronic exposure to diesel exhaust emissions are also of concern to the EPA. E PA derived a diesel exhaust reference concentration (RfC) from consideration of four well
- conducted chronic rat inhalation studies showing adverse pulmonary effects. 394 , 395 , 396 , 397 The RfC is 5 μg/m 3 for diesel exhaust as measured b y diesel particulate matter . T his RfC does not consider allergenic effects such as those associated with asthma or immunologic effects. There is growing evidence, discussed in the Diesel HAD, that exposure to diesel exhaust can exacerbate these effects, but the exposure
- response data are presentl y lacking to derive an RfC. The EPA Diesel HAD states, “With [diesel particulate matter] being a ubiquitous component of ambient PM, there is an uncertaint y about the adequacy of the existing [diesel exhaust] noncancer database to identify all of the pertinent [diesel exhaust]
- caused noncancer health hazards.” (p. 9
- 19). The Diesel HAD concludes “that acute exposure to [diesel exhaust] has been associated with irritation of the eye, nose, and throat, respiratory sy mptoms (cough and phlegm), an d neuroph ys iological sy mptoms such as headache, lightheadedness, nausea, vomiting, and numbness or tingling of the extremities.” 398 (iii) Ambient PM 2.5 Levels and Exposure to Diesel Exhaust PM The Diesel HAD also briefly summarizes health effects associated with ambient PM and discusses the EPA’s annual PM 2.5 NAAQS of 15 μg/m 3 . There is a much more extensive body

of human data showing a wide spectrum of adverse health effects associated with exposure to ambient PM, of which diesel exhaust is an important component. The PM 2.5 NAAQS is designed to provide protection from the no ncancer and premature mortality

effects of PM 2.5 as a whole. (iv) Diesel Exhaust PM Exposures Exposure of people to diesel exhaust depends on their various activities, the time spent in those activities, the locations where these activities occur, and the level s of diesel

394 Ishinishi, N. Kuwabara, N. Takaki, Y., et al. (1988). Long
- term inhalation experiments on diesel exhaust. In: Diesel exhaust and health risks. Results of the HERP studies. Ibaraki, Japan: Research Committee for HERP Studies; pp.11
- 84. Docket EPA
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- 0 16 2 395 Heinrich, U., Fuhst, R., Rittinghausen, S., et al. (1995). Chronic inhalation exposure of Wistar rats an d two different strains of mice to diesel engine exhaust, carbon black, and titanium dioxide. Inhal Toxicol, 7, 553
- 556. Docket EPA
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- 0 16 2 396 Mauderly, J.L., Jones, R.K., Griffith, W.C., et al. (1987). Diesel exhaust is a pulmonary carcinogen in r ats exposed chronically by inhalation. Fundam. Appl. Toxicol., 9, 208
- 221. Docket EPA
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- 0 16 2 397 Nikula, K.J., Snipes, M.B., Barr, E.B., et al. (1995). Comparative pulmonary toxicities and carcinogenicities of chronically inhaled diesel exhaust and carbon black in F344 rats. Fundam. Appl. Toxicol, 25 , 80
- 94 . . Docket EPA
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- 0 16 2 398 See U.S. EPA (2002), Diesel HAD at Note 390 , at p. 9
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429 of exhaust pollutants in those locations. The major difference between ambient levels of diesel particulate and exposure levels for diesel particulate is that exposure accounts for a person moving from location to location, proximity to the emiss ion source, and whether the exposure occurs in an enclosed environment. Occupational Exposures Occupational exposures to diesel exhaust from mobile sources can be several orders of magnitude greater than ty pical exposures in the non
- occupationally exposed population. Over the ye ars, diesel particulate exposures have been measured for a number of occupational groups. A wide range of exposures have been reported, from 2 μg/m 3 to 1,280 μg/m 3, for a variety of occupations. As discussed in the Diesel HAD, the National Institute of Occupational Safety and Health has estimated a total of 1,400,000 workers are occupationall y exposed to diesel exhaust from on
- road and nonroad vehicles. Elevated Concentrations and Ambient Exposures in Mobile Source
- Impacted Areas Re gions immediatel y downwind of highway s or truck stops may experience elevated ambient concentrations of directl y - emitted PM 2.5 from diesel engines. Due to the unique nature of highway s and truck stops, emissions from a large number of diesel engines are c oncentrated in a small area. Studies near roadway s with high truck traffic indicate higher concentrations of components of diesel PM than other locations. 399 , 400 , 401 High ambient particle concentrations have also been reported near trucking terminals, truck st ops, and bus garages. 402 , 403 , 404 Additional discussion of exposure and health effects associated with traffic is included below in Section VII. B. (5) (j)
. (b ) Benzene The EPA’s Integrated Risk Information Sy stem ( IRI S ) database lists benzene as a known human carcinogen (causing leukemia) b y all routes of exposure, and concludes
399 Zhu, Y.; Hinds, W.C.; Kim, S.; Shen, S.; Sioutas, C. (2002) Study of ultrafine particles near a major highway with heavy
- duty diesel traffic. Atmospheric Environment 36: 4323
- 4335. Docket EPA
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- 0 16 2 400 Lena, T.S; Ochieng, V.; Holguín
- Veras, J.; Kinney, P.L. (2002) Elemental carbon and PM2.5 levels in an urban community heavily impacted by truck traffic. Environ Health Perspect 110: 1009
- 1015. Docket EPA
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- 0 16 2 401 Soliman, A.S.M.; Jacko, J.B.; Palmer, G.M. (2006) Development of an empirical model to estimate real
world fine particulate matter emission factors: the Traffic Air Quality model. J Air & Waste Manage Assoc 56: 1540
- 1 549. Docket EPA
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- 0 16 2 402 Davis, M.E.; Smith, T.J.; Laden, F.; Hart, J.E.; Ryan, L.M.; Garshick, E. (2006) Modeling particle exposure in U.S. trucking terminals. Environ Sci Techol 40: 4226
- 4232. Docket EPA
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- 0 16 2 403 Miller, T.L.; Fu, J.S.; Hromis, B.; Storey, J.M. (2007) Diesel truck idling emissions

– measurements at a PM 2.5 hot spot. Proceedings of the Annual Conference of the Transportation Research Board, paper no. 07
- 2609. Docket EPA
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- 0 16 2 404 Ramachan dran, G.; Paulsen, D.; Watts, W.; Kittelson, D. (2005) Mass, surface area, and number metrics in diesel occupational exposure assessment. J Environ Monit 7: 728
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430 of that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice
. 405 , 406 , 407 EPA states in its IRI S database that data indicate a causal relationship between benzene exposure and acute l ymphocy tic leukemia and suggest a relationship between benzene exposure and chronic non
- ly mphocy tic leukemia and chronic ly mphocy tic leukemia. The International Agency for Research on Carcinogens ( IARC ) has determined that benzene is a human carcinogen and the U.S. Department of Health and Human Services ( DHHS ) has c haracterized benzene as a known human carcinogen. 408 , 409 A number of adverse noncancer health effects including blood disorders, such as preleukemia and aplastic anemia, have also been associated with long
- term exposure to benzene. 410 , 411 The most sensitive noncancer effect observed in humans, based on current data, is the depression of the absolute ly mphocy te count in blood. 412 , 413 In addition, recent work, including studies sponsored b y the Health Effects Institute (HEI), provides evidenc e that biochemical responses are occurring at lower levels of benzene exposure than previously

known. 414 , 415 , 416 , 417 EPA’s IRI S program has not y et evaluated these new data.

405 U.S. EPA. 2000. Integrated Risk Information System File fo r Benzene. This material is available electronically at http://www.epa.gov/iris/subst/0276.htm. Docket EPA
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. 406 International Agency for Research on Cancer. 1982. Monographs on the evaluation of carcinogenic risk of chemicals to humans, Vo lume 29. Some industrial chemicals and dyestuffs, World Health Organization, Lyo n, France, p. 345
- 389. Docket EPA
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- 0 16 2 407 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, V.A. 1992. Synergistic action of the benzene metabolite hydroquin one on myelopoietic stimulating activity of granulocyte/macrophage colony
stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691
- 3695. Docket EPA
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. 408 See IARC , Note 406 , above
. 409 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: http://ntp.niehs.nih.gov/go/16183. Docket EPA
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- 0 16 2 410 Aksoy, M. (1989). Hematotoxicity and carcinogenicity of benzene. Environ. Health Perspect. 82: 193
- 197. Docket EPA
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. 411 Goldstein, B.D. (1988). Benzene toxicity. Occupational medicine. State of the Art Reviews. 3: 541
- 554. Docket EPA
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. 412 Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko
- Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes (1996) Hematotoxicity among Chinese workers heavily exposed to benzene. Am. J. Ind. Med. 29: 236
- 246. Docket EPA
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. 413 U.S. EPA (2002) Toxicological Revie w of Benzene (Noncancer Effects). Environmental Protection Agency, Integrated Risk Information System, Research and Development, National Center for Envi ronmental Assessment, Washington DC. This material is available electronically at http://www.epa.gov/iris/subst/0276.htm. Docket EPA
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. 414 Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.; Melikian, A.; Eastmond, D.; Rappaport, S.; L i, H.; Rupa, D.; Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok, E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003) HEI Report 115, Validation & Evaluation of Biomarkers in Workers Exposed to Benzene in China. Docket EPA
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. 415 Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et al. (2002) Hematological changes among Chinese workers with a broad range of benzene exposures. Am. J. Industr. Med. 42: 275
- 285. Docket EPA
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. 416 Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. (2004) Hematotoxically in Workers Exposed to Low Levels of Benzene. Science 306: 1774
- 1776. Docket EPA
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431 of (c) 1,3
-Butadiene EPA has characterized 1,3
- butadiene as carcinogenic to humans by inhalation
. 418 , 419 The IARC has determined that 1,3
- butadiene is a human carcinogen and the U.S. DHHS has characterized 1,3
- butadiene as a known human carcinogen. 420 , 421 There are numerous studies consistently demonstrating that 1,3
- butadiene is metabolized into genotoxic metabolites by experimental animals and humans. The specific mechanisms of 1,3
- butadiene
- induced carcinogenesis are unknown; however, the scientific ev idence strongly suggests that the carcinogenic effects are mediated b y genotoxic metabolites. Animal data suggest that females may be more sensitive than males for cancer effects associated with 1,3
- butadiene exposure; there are insufficient data in human s from which to draw conclusions about sensitive subpopulations. 1,3
- b utadiene also causes a variet y of reproductive and developmental effects in mice; no human data on these effects are available. The most sensitive effect was ovarian atroph y observed i n a lifetime bioassay of female mice. 422 (d ) Formaldehyde Since 1987, EPA has classified formaldeh yde as a probable human carcinogen based on evidence in humans and in rats, mice, hamsters, and monkey s. 423 EPA is currentl y reviewing recently published epidemiolog ical data. For instance, research conducted b y the National Cancer Institute found an increased risk of nasophary ngeal cancer and l ymphohematopoietic malignancies such as leukemia among workers exposed to formaldeh yde. 424 , 425 In an anal ys is of the ly mphohem atopoietic cancer mortality from

417 Turtletaub, K.W. and Mani, C. (2003) Benzene metabolism in rodents at doses rel evant to human exposure from Urban Air. Research Reports Health Effect Inst. Report No.113. Docket EPA
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. 418 U.S. EPA (2002) Health Assessment of 1,3
- Butadiene. Office of Research and Development, National Center for Environmental Assessment , Washington Office, Washington, DC. Report No. EPA600
- P
- 98
- 001F. This document is available electronically at http://www.epa.gov/iris/supdocs/buta
- sup.pdf. Docket EPA
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. 419 U.S. EPA (2002) Full IRIS Summary for 1,3
- butadiene (CASRN 106
- 99
- 0). Environmental Protection Agency, Integrated Risk Information System (IRIS), Research and Development, National Center for Environmental Assessment, Washington, DC http://www.epa.gov/iri s/subst/0139.htm. Docket EPA
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- evaluation of some organic chemicals, hydrazine and hydrogen peroxide and Volume 97 (in preparation), World Health Organization, Lyon, France. Docket EPA
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- 0162 421 U.S. Department of Health and Human Services (2005) National Toxicology Program 11th Report on Carcinogens available at: ntp.niehs.nih.gov/index.cfm?obj ectid=32BA9724
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- 0162 422 Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996) Subchronic toxicity of 4
- vinylcyclohexene in rats and mice by inhalation. Fundam. Appl. Toxicol. 32:1
- 10. Docket EPA
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. 423 U.S. EPA (1987) Assessment of Health Risks to Garment Workers and Certain Home Residents from Exposure to Formaldehyde, Office of Pesticides and Toxic Substances, April 1987. Docket EPA
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- 0162. 424 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2003. Mortality from lymphohematopoetic malignancies among workers in formaldehyde industries. Journal of the National Cancer Institute 95: 1615
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432 of an extended follow
- up of these workers, the National Cancer Institute confirmed an association between ly

mphohematopoietic cancer risk and peak exposure s. 426 A recent National Institute of Occupational Safety and Health study of garment workers also found increased risk of death due to leukemia among workers exposed to formaldehyde. 427 Extended follow
- up of a cohort of British chemical workers did not find evidence of an increase in na sophary

ngeal or ly

mphohematopoie tic cancer s, but a continuing statisticall y significant excess in lung cancers was reported. 428 Recentl y, the IARC re
- classified formaldeh yde as a human carcinogen (Group 1). 429 Formaldeh yd e exposure also causes a range of noncancer health effects, including irritati on of the eyes (burning and watering of the ey es), nose and throat. Effects from repeated exposure in humans include respiratory tract irritation, chronic bronchitis and nasal epithelial lesions such as metaplasia and loss of cilia
. Animal studies sugges t that formaldeh yde may

also cause airway

inflammation

– including eosinophil infiltration into the airway s. There are several studies that suggest that formaldehyde may increase the risk of asthma

– particularly in the young. 430 , 431 (e) Acetaldehyde Acetaldeh yd e is classified in EPA’s IRI S database as a probable human carcinogen, based on nasal tumors in rats , and is considered toxic by the inhalation, oral, and intravenous routes
. 432 Acetaldeh yd e is reasonably anticipated to be a human carcinogen b y the U.S. DHHS in the 11 th Report on Carcinogens and is classified as

425 H auptmann, M..; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Blair, A. 2004. Mortality from solid cancers among workers in formaldehyde industries. American Journal of Epidemiology 159: 1117
- 1130. Docket EPA
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- 0162. 426 Beane Freeman, L. E.; Blair , A.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. Mortality from lymphohematopoietic malignancies among workers in formaldehyde industries: The National Cancer Institute cohort. J. National Cancer Inst. 101: 751
- 761. Dock et EPA
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- 0162. 427 Pinkerton, L. E. 2004. Mortality among a cohort of garment workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 193
- 200. Docket EPA
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- up of a cohort of British chemical workers exposed to formaldehyde. J National Cancer Inst. 95:1608
- 1615. Docket EPA
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- Butoxyethanol and 1
- tert Butoxypropan
- 2
- ol. Vo lume 88. (in preparation), World Health Organization, Lyon, France. Docket EPA
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- 0162 430 Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for Formaldehyde. Atlanta, GA: U.S. Department of Health and Human Servi ces, Public Health Service. http://www.atsdr.cdc.gov/toxprofiles/tp111.html Docket EPA
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- 0162. 431 WHO (2002) Concise International Chemical Assessment Document 40: Formaldehyde. Published under the joint sponsorship of the United Nations Enviro nment Programme, the International Labour Organization, and the World Health Organization, and produced within the framework of the Inter
Organization Programme for the Sound Management of Chemicals. Geneva. Docket EPA
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. 432 U.S. EPA. 1991. Integrated Risk Information System File of Acetaldehyde. Research and Development, National Center for Environmental Assessment, Washington, DC. Available at http://www.epa.gov/iris/subst/0290.htm. Docket EPA
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433 of possibly carcinogenic to humans (Group 2B) by the IARC. 433 , 434 EPA is currently conducting a reassessment of cancer risk from inhal ation exposure to acetaldehyde. The primary

noncancer effects of exposur e to acetaldeh yde vapors include irritation of the eyes, skin, and respiratory tract. 435 In short
- term (4 week) rat studies, degeneration of olfactory epithelium was observed at various concentration levels of acetaldeh yde exposure
. 436 , 437 Data from these studies were used b y EPA to develop an inhalation reference concentration. Some asthmatics have been shown to be a sensitive subpopulation to decrements in functional expiratory volume (FEV1 test) and bronchoconstriction upon acetaldeh yd e inhalation. 438 The agency is currently conducting a reassessment of the health hazards from inhalation exposure to acetaldehyde. (f ) Acrolein Acrolein is extremely

acrid and irritating to humans when inhaled, with acute exposure resulting in upper respirato ry tract irritation, mucus hy persecretion and congestion. The intense irritancy of this carbonyl has been demonstrated during controlled tests in human subjects, who suffer intolerable ey e and nasal mucosal sensory reactions within minutes of exposure. 439 These data and additional studies regarding acute effects of human exposure to acrolein are summarized in EPA’s 2003 IR IS Human Health Assessment for acrolein. 440 Evidence available from studies in humans indicate that levels as low as 0.09 ppm (0.21 mg/m 3 ) for five minutes may elicit subjective complaints of ey e irritation with increasing concentrations leading to more extensive ey e, nose and respiratory

s ymptoms. 441 Lesions to the lungs and upper respiratory tract of rats, rabbits, and hamsters have been ob served after subchronic exposure to acrolein. 442

433 U.S. Department of Health and Human Services National Toxicology Program 11th Report on Carcinogens available at: ntp.niehs.nih.gov/index.cfm?objectid=32BA9724
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- evaluation of some organic chemicals, hydrazine, and hydrogen peroxide. IARC Monographs on the Evaluation of Carcinogenic Risk of Chemical to Humans, Vol 71. Lyon, France. Docket EPA
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- 0162 435 See Integrated Risk Information Sys tem File of Acetaldehyde , Note 432 , above. 436 Appleman, L. M., R. A. Woutersen, V. J. Feron, R. N. Hooftman, and W. R. F. Notten. 1986. Effects of the variable versus fixed exposure levels on the toxicity of acetaldehyde in rats. J. Appl. Toxicol. 6: 331
- 336. Docket EPA
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- 0162 437 Appleman, L.M., R.A. Woutersen, and V.J. Feron. 1982. Inhalation toxicity of acetaldehyde in rats. I. Ac ute and subacute studies. Toxicology. 23: 293
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- mediated bronchoconstriction in asthmatics. Am. Rev. Respir.Dis. 148 (4 Pt 1): 940
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- 0162 439 U.S. EPA (U.S. Environmental Protection Agency). (2003) Toxicological review of acrolein in support of summary information on Integrated Risk Information System (IRIS) National Center for Environmental Assessm ent, Washington, DC. EPA/635/R
- 03/003. p. 10. Available online at: http://www.epa.gov/ncea/iris/toxreviews/0364tr.pdf
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- 0162 440 See U.S. EPA 2003 Toxicological revie w of acrolein, Note 439 , above. 441 See U.S. EPA 2003 Toxicological revie w of acrolein, Note 439 , at p. 11. 442 Integrated Risk Information System File of Acrolein. Office of Research and Development, National Center for Environmental Assessment, Washingt on, DC. This material is available at http://www.epa.gov/iris/subst/0364.htm Docket EPA
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434 of Acute exposure effects in animal studies report bronchial hy per - responsiveness. 443 In a recent study, the acute respiratory irritant effects of exposure to 1.1 ppm acrolein were more pronounced in mice with al lergic airway disease by

comparison to non
- diseased mice which also showed decreases in respiratory rate. 444 Based on these animal data and demonstration of similar effects in humans (e.g., reduction in respiratory rate), individuals with compromised respir atory function (e.g., emph ys ema, asthma) are expected to be at increased risk of developing adverse responses to strong respiratory irritants such as acrolein. EPA determined in 2003 that the human carcinogenic potential of acrolein could not be determi ned because the available data were inadequate. No information was available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity. 445 The IARC determined in 1995 that acrolein was not classif

iable as to its carcinogenicit y in humans
. 446 (g ) Polycyclic Organic Matter The term pol yc yclic organic matter (POM) defines a broad class of compounds that includes the polycyclic aromatic hydrocarbon compounds (PAHs)
. One of these compounds, naphthalene, is discussed separately below. POM compounds are formed primarily from combustion and are present in the atmosphere in gas and particulate form. Cancer is the major concern from exposure to POM. Epidemiologic studies have reported an increase in lung cancer in humans exposed to diesel exhaust, coke oven emissions, roofing tar emissions, and cigarette smoke; all of these mixtures contain POM compounds
. 447 448 Animal studies have reported respiratory tract tumors from inhal ation exposure to benzo[a]py

rene and alimentary

tract and l iver tumors from oral exposure to benzo[a]py

rene. EPA has classified seven PAHs (benzo[a]py rene, benz[a]anthracene, chry sene, benzo[b]fluoranthene, benzo[k]fluoranthene, dibenz[a,h]anthracene, and indeno[1,2,3
- cd]py

rene) as Group B2, probable human carcinogens. 449 Recent studies have found that maternal exposures to PAHs in a population of pregnant women were

443 See U.S. 2003 Toxicological review of acrolein, Note 439 , at p. 15. 444 Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate sensory nerve
- mediated respiratory responses to irritants in healthy and allergic airway - diseased mice. J Appl Physiol 94(4):1563
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- 0162 447 Agency for Toxic Substances and Disease Registry (ATSDR). 199 5. Toxicological profile for Polycyclic Aromatic Hydrocarbons (PAHs). Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. Available electronically at http://www.atsdr.cdc.gov/ToxProfiles/TP.asp?id=122&tid=25. 448 U.S. EPA (2002). Health Assessment Document for Diesel Engine Exhaust . EPA/600/8
- 90/057F Office of Research and Development, Washington DC. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060
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- 0 16 2 449 U.S. EPA (1997). Integr ated Risk Information System File of indeno(1,2,3
- cd)pyrene. Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/ncea/iris/subst/0457.htm.******* **E.O. 12866 Review**

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435 of associated with several adverse birth outcomes, including low birth weight and reduced length at birth, as well as impaired cognitive development in preschool children (3 years of age). 450 , 451 EPA has not y et evaluated these recent studies. (h ) Naphthalene Naphthalene is found in small quantities in gasoline and diesel fuels. Naphthalene emissions have been measured in larger quantities in both gasoline and diesel exhaust compared with evaporative emissions from mobile sources, indicating it is primarily a product of combustion. EPA released an external review draft of a reassessment of the inhalation carcinogenicity of naphthalene based on a number of recent animal carcinogenicity studies. 452 The draft reassessment completed external peer review. 453 Based on external peer review comments received, additional analyses are being undertaken. This external review draft does not represent official agency opinion and was released solely

for the purposes of external peer review and public comment. The National Toxicology Program listed naphthalene as "reasonabl y anticipated to be a human carcinogen" in 2004 on the basis of bioassay s reporting clear evidence of carcinogenicity

in rats and some evidence of carcinogenicity in mice. 454 California EPA has released a new risk assessment for naphthalene, and the IARC has reevaluated naphthalene and re
- classified it as Group 2B: possibly carcinogenic to humans. 455 Naphthalene also causes a number of chronic non
- cancer effects in animals, including abnormal cell changes and growth in respiratory and nasal tissues. 456 (i ) Other Air Toxics In addition to the compounds described ab ove, other compounds in gaseous hydrocarbon and PM emissions from heav y - dut y vehicles will be affected by this final action. Mobile source air toxic compounds that would potentially be impacted include
450 Perera , F.P.; Rauh, V.; Tsai, W
- Y.; et al. (2002) Effect of transplacental exposure to environmental pollutants on birth outcomes in a multiethnic population. Environ Health Perspect. 111: 201
- 205. 451 Perera , F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Tang, D.; Diaz, D.; H oepner, L.; Barr, D.; Tu, Y.H.; Camann, D.; Kinney, P. (2006) Effect of prenatal exposure to airborne polycyclic aromatic hydrocarbons on neurodevelopment in the first 3 years of life among inner
- city children. Environ Health Perspect 114: 1287
- 1292. 452 U. S. EPA. 2004. Toxicological Revie w of Naphthalene (Reassessment of the Inhalation Cancer Risk), Environmental Protection Agency, Integrated Risk Information System, Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available electronically at http://www.epa.gov/iris/subst/0436.htm. Docket EPA
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- 0162. 454 National Toxicology Program (NTP). (2004). 11th Report on Carcinogens. Public Health Service, U.S. Department of Health and Human Servi ces, Research Triangle Park, NC. Available from: http://ntp
server.niehs.nih.gov
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436 of ethylbenzene, propionaldehyde, toluene, and xylene. Information regarding the health effects of these compounds can be found in EPA’s IRI S database. 457 (j ) Exposure and Health Effects Associated with Traffic Populations who live, work, or attend school near major roads experience elevated exposure concentrations to a wide range of air pollutants, as well as higher risks for a number of adverse health effects. While the previous sections of this preamble have focused on the health effects associated with individual criteria pollutants or air toxics, this section d iscusses the mixture of different exposures near major roadways, rather than the effects of an y single pollutant. As such, this section emphasizes traffic
- related air pollution, in general, as the relevant indicator of exposure rather than any particular pollutant. Concentrations of man y traffic
- generated air pollutants are elevated for up to 300
- 500 meters downwind of roads with high traffic volumes. 458 Numerous sources on roads contribute to elevated roadside concentrations, including exhaust and evaporat ive emissions, and resuspension of road dust and tire and brake wear. Concentrations of several criteria and hazardous air pollutants are elevated near major roads. Furthermore, different semi
- volatile organic compounds and chemical components of particu late matter, including elemental carbon, organic material, and trace metals, have been reported at higher concentrations near major roads. Populations near major roads experience greater risk of certain adverse health effects. The Health Effects Institute published a report on the health effects of traffic
related air pollution. 459 Itconcluded that evidence is “sufficient to infer the presence of a causal association” between traffic exposure and exacerbation of childhood asthma sy mptoms. The HEI report also concludes that the evidence is either “sufficient” or “suggestive but not sufficient” for a causal association between traffic exposure and new childhood asthma cases. A review of asthma studies by Salam et al. (2008) reaches similar conclusions. 460 The HEI report also concludes that there is “suggestive” evidence for pulmonary

function deficits associated with traffic exposure, but concluded that there is “inadequate and insufficient” evidence for causal associations with respiratory health care util ization, adult
- onset asthma, chronic obstructive pulmonary disease sy

mptoms,

457 U.S. EPA Integrated Risk Information System (IRIS) database is available at: www.epa.gov/ iris 458 Zho u, Y.; Levy, J.I. (2007) Factors influencing the spatial extent of mobile source air pollution impacts: a meta - analysis. BMC Public Health 7: 89. doi:10.1186/1471
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- related air pollution: a critical review of the literature on emissions, exposure, and health effects. [Online at www.healtheffects.org ] Docket EPA
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- 0162. 460 Salam, M.T.; Is lam , T.; Gilliland, F.D. (2008) Recent evidence for adverse effects of residential proximity to traffic sources on asthma. Current Opin Pulm Med 14: 3
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437 of and allergy . A review b y Holguin (2008) notes that the effects of traffic on asthma may be modified by

nutrition status, medication use, and genetic factors. 461 The HEI report also concludes that evidence is “suggestive” of a causal association between traffic exposure and all
- cause and cardiovascular mortality . There is also evidence of an association between traffic
- related air pollutants and cardiovascular effects such as change s in heart rhy thm, heart attack, and cardiovascular disease. The HEI report characterizes this evidence as “suggestive” of a causal association, and an independent epidemiological literature review b y Adar and Kaufman (2007) concludes that there is “consi stent evidence” linking traffic
- related pollution and adverse cardiovascular health outcomes. 462 Some studies have reported associations between traffic exposure and other health effects, such as birth outcomes (e.g., low birth weight) and childhood cancer. The HEI report concludes that there is currentl y “inadequate and insufficient” evidence for a causal association between these effects and traffic exposure. A review by Raaschou
Nielsen and Rey

nolds (2006) concluded that evidence of an association betwee n childhood cancer and traffic
- related air pollutants is weak, but noted the inability to draw firm conclusions based on limited evidence. 463 There is a large population in the United States living in close proximity of major roads. According to the Census Bureau’s American Housing Survey for 2007, approximately

20 million residences in the United States, 15.6% of all homes, are located within 300 feet (91 m) of a highway with 4+ lanes, a railroad, or an airport. 464 Therefore, at current population of approximately 309 million, assuming that population and housing are similarl y distributed, there are over 48 million people in the United States living near such sources. The HEI report also notes that in two North Am erican cities, L os Angeles and Toronto, over 40% of each city ’s population live within 500 meters of a highway or 100 meters of a major road. It also notes that about 33% of each cit y’s population resides within 50 meters of major roads. Together, the ev idence suggests that a large U.S. population lives in areas with elevated traffic
- related air pollution. People living near roads are often socioeconomically disadvantaged. According to the 2007 American Housing Survey , a renter - occupied property is over twice as likel y as an owner - occupied property to be located near a highway with 4+ lanes, railroad or airport. In the same survey , the median household income of rental housing occupants was less than half that of owner
- occupants ($28,921/$59,886). Numer ous studies in
461 Holguin, F. (2008) Traffic, outdoor air pollution, and asthma. Immuno l Allergy Clinics North Am 28: 577
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- 0162. 462 Adar, S.D.; Kaufman, J.D. (2007) Cardiovascular disease and air pollutants: evaluating and improving epidemiological data implicating traffic exposure. Inhal Toxicol 19: 135
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-Nielsen, O.; Reynolds, P. (2006) Air pollution and childhood cancer: a review of the epidemiological literature. Int J Cancer 118: 2920
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- 0162 464 U.S. Census Bureau (2008) American Housi ng Survey for the United States in 2007. Series H
- 150 (National Data), Table 1A
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438 of individual urban areas report higher levels of traffic
- related air pollutants in areas with high minority

or poor populations. 465 , 466 , 467 Students may

also be exposed in situations where schools are located near major roads. In a stud y of nine me tropolitan areas across the United States, Appatova et al. (2008) found that on average greater than 33% of schools were located within 400 m of an Interstate, U.S., or state highway , while 12% were located within 100 m. 468 The study also found that among the metropolitan areas studied, schools in the Eastern United States were more often sited near major roadway s than schools in the Western United States. Demographic studies of students in schools near major roadway s suggest that this population is more likely than the general student population to be of non
- white race or Hispanic ethnicity , and more often live in low socioeconomic status locations. 469 , 470 , 471 There is some inconsistency in the evidence, which may be due to different local development pattern s and measures of traffic and geographic scale used in the studies. 468 

### C. **Environmental Effects of Non -**  **GHG Pollutants** In this section we discuss some of the enviro nmental effects of PM and its precursors such as visibility impairment, atmospheric deposition, and materials damage and soiling , as well as environmental effects associated with the presence of ozone in the ambient air , such as impacts on plants, includin g trees, agronomic crops and urban ornamentals , and environmental effects associated with air toxics
. **(1) Visibility**  Visibility can be defined as the degree to which the atmosphere is transparent to visible light. 472 Visibility impairment is caused by light scattering and absorption by suspended
465 Lena, T.S.; Ochieng, V.; Carter, M.; Holguín
- V eras, J.; Kinney, P.L. (2002) Elemental carbon and PM2.5 levels in an urban community heavily impacted by truck traffic. Environ Health Perspect 110: 1009
- 1015. Docket EPA
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- 0162 466 Wier, M.; Sciammas, C.; Seto, E.; Bhatia, R.; Rivard, T. (2009) Health, traffic, and environmental justice: collaborative research and community action in San Francisco, California. Am J Public Health 99: S499
- S504. Docket EPA
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- 0162 467 Forkenbrock, D.J. and L.A. Schweitzer, Environmental Justice and Tran sportation Investment Policy
. Iowa City: University of Iowa, 1997. Docket EPA
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- 0162 468 Appatova, A.S.; Ryan, P.H.; LeMasters, G.K.; Grinshpun, S.A. (2008) Proximal exposure of public schools and students to major roadways: a nationwide U.S. survey . J Environ Plan Mgmt Docket EPA
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- 66. Docket EPA
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- 0162 470 Hous ton, D.; Ong, P.; Wu, J.; Winer, A. (2006) Proximity of licensed child care facilities to near
roadway vehicle pollution. Am J Public Health 96: 1611
- 1617. Docket EPA
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- 0162 471 Wu, Y.; Batterman, S. (2006) Proximity of schools in Detroit, Michigan to automobile and truck traffic. J Exposure Sci Environ Epidemiol 16: 457
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- 0162 472 National Research Council, 1993. Protecting Visibility in National Parks and Wilderness Areas. National Academy of Sciences Committee on Haze in National Parks and Wilderness Areas. National Academy Press, Washington, DC. Docket EPA
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439 of particles and gases. Visibility is important because it has direct significance to people’s enjoy ment of daily

activities in all parts of the country . Individuals value good visibility for the well
- being it provides them directl y, where they live and work, and in places where they

enjoy recreational opportunities. Visibility is also highl y valued in significant natural areas , such as national parks and wilderness areas , and special emphasis is given to protecting visibility

in these areas. For more information on visibility see the final 200 9 PM I SA. 473 EPA is pursuing a two
- part strategy to address visibility

impairment. First, EPA developed the regional haze program (64 FR 35714) which was put in place in July 1999 to protect the visibility

in Mandatory

Class I Federal areas . There are 156 national parks, forests and wilderness areas categorized as Mandatory Class I Federal areas (62 FR 38680
- 38681, July

18, 1997). These areas are defined in CAA section 162 as those national parks exceeding 6,000 acres, wilderness areas and memorial parks exceeding 5,000 acres, and all international parks which were in existence on August 7, 1977. Second, EPA has concluded that PM 2.5 causes adverse effects on visibility in other areas that are not protected b y the Regional Haze Rule, depending on PM 2.5 concentrations and other factors that control their visibility impact effectiveness such as dry chemical composition and relative humidity (i.e., an indicator of the water composition of the particles), and has set secondary PM 2.5 standards to address these areas. The existing annual primary

and secondary

PM 2.5 standards have been remanded and are being addressed in the currently ongoing PM NAAQS review. The secondary PM 2.5 standards serve as a reasonable complement to the Regional Haze Progr am. **(2) Plant and Ecosystem Effects of Ozone**  Elevated o zone levels contribute to environmental effects, with impacts to plants and ecos ys tems being of most concern. Ozone can produce both acute and chronic injury in sensitive species depending on the concentr ation level and the duration of the exposure. Ozone effects also tend to accumulate over the growing season of the plant, so that even low concentrations experienced for a longer duration have the potential to create chronic stress on vegetation. Ozone d amage to plants includes visible injury to leaves and impaired photosy nthesis, both of which can lead to reduced plant growth and reproduction, resulting in reduced crop yi elds, forestry production, and use of sensitive ornamentals in landscaping. In addi tion, the impairment of photosy nthesis, the process by which the plant makes carbohydrates (its source of energy and food), can lead to a subsequent reduction in root growth and carboh ydrate storage below ground , result ing in other, more subtle plant and e cos ys tems impacts. These latter impacts include increased susceptibility of plants to insect attack, disease, harsh weather, interspecies competition and overall decreased plant vigor. The adverse effects of ozone on forest and other natural vegetation can potentially lead to species shifts and loss from the affected ecos ys tems, resulting in a loss or reduction in associated ecos ys tem goods and services. Last ly , visible ozone injury to leaves can result in a loss of aesthetic value in areas of special s cenic significance like national parks and

473 See U.S. EPA 2009 Final PM ISA , No te 374
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440 of wilderness areas. The final 2006 Ozone Air Quality Criteria Document presents more detailed information on ozone effect s on vegetation and ecos ys tems. **(3) Atmospheric Deposition**  Wet and dry

deposition of ambient part iculate matter delivers a complex mixture of metals (e.g., mercury , zinc, lead, nickel, aluminum, cadmium), organic compounds (e.g., pol yc yclic organic matter , dioxins, furans) and inorganic compounds (e.g., nitrate, sulfate) to terrestrial and aquatic eco sy stems. The chemical form of the compounds deposited depends on a variet y of factors including ambient conditions (e.g., temperature, humidity , oxidant levels) and the sources of the material. Chemical and phy sical transformations of the compounds occur in the atmosphere as well as the media onto which they

deposit. These transformations in turn influence the fate, bioavailability and potential toxicity

of these compounds. Atmospheric depositi on has been identified as a key component of the environmental and human health hazard posed by several pollutants including mercury , dioxin and PCBs. 474 Adverse impacts on water quality can occur when atmospheric contaminants deposit to the water surface or when material deposited on the land enters a waterbody through runoff. Potential impacts of atmospheric deposition to waterbodies include those related to both nutrient and toxic inputs. Adverse effects to human health and welfare can occur from the add ition of excess nitrogen via atmospheric deposition. The nitrogen
nutrient enrichment contributes to toxic algae blooms and zones of depleted oxygen, which can lead to fish kills, frequentl y in coastal waters. Deposition of heavy metals or other toxi c s m ay

lead to the human ingestion of contaminated fish, impairment of drinking water, damage to the marine ecology , and limit s to recreational uses. Several studies have been conducted in U.S. coastal waters and in the Great Lakes Region in which the role of ambient PM deposition and runoff is investigated. 475 , 476 , 477 , 478 , 479 Atmospheric deposition of nitrogen and sulfur contributes to acidification, altering biogeochemistry

and affecting animal and plant life in terrestrial and aquatic ecos ys tems across the United S tates. The sensitivity of terrestrial and aquatic ecos ys tems to acidification from nitrogen and sulfur deposition is predominantly governed by
474 U.S. EPA (2000) Deposition of Air Pollutants to the Great Waters: Third Report to Congress. Office of Air Quality Planning and Standards. EPA
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-New Jersey harbor estuary. Atmos. Environ. 36: 1077
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. 477 Kim , G., N. Hussain, J.R. Scudlark, and T.M. Church. 2000. Factors influencing the atmospheric depositional fluxes of stable Pb, 210Pb, and 7Be into Chesapeake Bay. J. Atmos. Chem. 36: 65
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. 478 Lu, R., R.P. Turco, K. Stolz enbach, et al. 2003. Dry deposition of airborne trace metals on the Los Angeles Basin and adjacent coastal waters. J. Geophys. Res. 108(D2, 4074): AAC 11
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. 479 Marvin, C.H., M.N. Charlton, E.J. Reiner, et al. 2002. Surficial sediment contamination in Lakes Erie and Ontario: A comparative analysis. J. Great Lakes Res. 28(3): 437
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441 of geology
. Prolonged exposure to excess nitrogen and sulfur deposition in sensitive areas acidifies lakes, rivers and soils. Increased acidit y in surface waters creates inhospitable conditions for biot a and affects the abundance and nutritional value of preferred prey species, threatening biodiversity and ecos ys tem function. Over time, acidifying deposition also re moves essential nutrients from forest soils, depleting the capacity of soils to neutralize future acid loadings and negatively affecting forest sustainability
. Major effects include a decline in sensitive forest tree species, such as red spruce ( Picea rub ens ) and sugar maple ( Acer saccharum ), and a loss of biodiversity of fishes, zooplankton, and macro invertebrates
. In addition to the role nitrogen deposition play s in acidification, nitrogen deposition also leads to nutrient enrichment and altered biogeoc hemical cycling. In aquatic s ys tems increased nitrogen can alter species assemblages and cause eutrophication. In terrestrial sy stems nitrogen loading can lead to loss of nitrogen sensitive lichen species, decreased biodiversit y of grasslands, meadows an d other sensitive habitats, and increased potential for invasive species. For a broader explanation of the topics treated here, refer to the description in Section 7.1.2 of the RIA. Adverse impacts on soil chemistry and plant life have been observed for areas heavily influenc ed b y atmospheric deposition of nutrients, metals and acid species, resulting in species shifts, loss of biodiversity , forest decline and damage to forest productivity . Potential impacts also include adverse effects to human health through ingestion of contaminated vegetation or livestock (as in the case for dioxin deposition), reduction in crop yi eld, and limited use of land due to contamination. Atmospheric deposition of pollutants can reduce the aesthetic appeal of buildings and c ulturall y important articles through soiling , and can contribute directly (or in conjunction with other pollutants) to structural damage b y means of corrosion or erosion. Atmospheric deposition may affect materials principally by promoting and acceleratin g the corrosion of metals, by degrading paints, and by deteriorating building materials such as concrete and limestone. Particles contribute to these effects because of their electrol yt ic, h ygroscopic, and acidic properties , and their ability to ad sorb co rrosive gases (principall y sulfur dioxide). **(4) Environmental Effects of Air Toxics**  Emissions from producing, transporting and combusting f uel contribute to ambient levels of pollutants that contribute to adverse effects on vegetation. Volatile organic comp ounds, some of which are considered air toxics, have long been suspected to play a role in vegetation damage. 480 Inlaboratory experiments, a wide range of tolerance to VOCs has been observed. 481 Decreases in harvested seed pod weight have been reported for the more sensitive plants, and some studies have reported effects on seed

480 U.S. EPA. 1991. Effects of organic chemicals in the atmosphere on terrestrial plants. EPA/600/3
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- top chamber experiment. Environ. Pollut. 124:341
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442 of germination, flowering and fruit ripening. Effects of individual VOCs or their role in conjunction with other stresso rs (e.g., acidification, drought, temperature extremes) have not been well studied. In a recent study of a mixture of VOCs including ethanol and toluene on herbaceous plants, significant effects on seed production, leaf water content and photosy

nthetic ef ficiency were reported for some plant species. 482 Research suggests an adverse impact of vehicle exhaust on plants, which has in some cases been attributed to aromatic compounds and in other cases to nitrogen oxides. 483 , 484 , 485 The impacts of VOCs on plant rep roduction may have long
- term implications for biodiversity and survival of native species near major roadway s. Most of the studies of the impacts of VOCs on vegetation have focused on short
- term exposure and few studies have focused on long
- term effects o f VOCs on vegetation and the potential for metabolites of these compounds to affect herbivores or insects. 

### D. **Air Quality Impacts of Non -**  **GHG Pollutants** Air quality

modeling was performed to assess the impact of the heavy
- dut y vehicle standards on criteria and air toxic pollutants . In this section, we present information on current modeled levels of pollution as well as projec tions for 2030, with respect to ambient PM 2.5 , ozone , selected air toxics, visibility levels and nitrogen and sulfur deposition. The re sults are discussed in more detail in Section 8.2 of the RIA. We used the Community

Multi
- scale Air Qualit y (CMAQ) photochemical model , version 4.7.1, for our analy sis. This version of CMAQ includes a number of improvements to previous versions of the m odel. These improvements are discussed in Section 8.2.2 of the RIA. **(1) Ozone**  (a ) Current Levels 8
- hour ozone concentrations exceeding the level of the ozone NAAQS occur in many parts of the country
. In 2008, the EPA amended the ozone NAAQS (73 FR 16436, March 2 7, 2008). The final 2008 ozone NAAQS rule set forth revisions to the previous 1997 NAAQS for ozone to provide increased protection of public health and welfare. On January 6, 2010, EPA pr oposed to reconsider the 2008 ozone NAAQS to ensure that they are r equisite to protect public health with an ample margin of safety , and requisite to protect public welfare (75 FR 2938, January 19, 2010)
. EPA intends to complete the
482 Cape JN, ID Leith, J Binnie, J Content, M Donkin, M Skewes, DN Price AR Brown, AD Sharpe. 2003. Effects of VOCs on herbaceous plants in an open
- top chamber experiment. Environ. Pollut. 124:341
- 343. Docket EPA
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. 483 Viskari E
- L. 2000. Epicuticular wax of Norway spruce needles as indicator of traffic pollutant deposition. Water, Air, and Soil Pollut. 121:327
- 337. Docket EPA
- HQ
- OAR
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. 484 Ugrekhelidze D, F Korte, G Kvesitadze. 1997. Uptake and transformation of benzene and toluene by plant leaves. Ecotox. Environ. Safety 37:24
- 29. Docket EPA
- HQ
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- 2010
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. 485 Kammerbauer H, H Selinger, R Rommelt, A Ziegler
- Jons, D Knoppik, B Hock. 1987. Toxic components of motor vehicle emissions for the spruce Picea abies. Environ. Pollut. 48:235
- 243. Docket EPA
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443 of reconsideration by July

31, 2011
. If, as a result of the reconsideration, EPA promulgate s different ozone standards, the new 201 1 ozone standards would replace the 2008 ozone standards and the requirement to designate areas for the replaced 2008 standards would no longer appl y. As of April 21 , 2011 there are 44 areas designated as nonattainment for the 1997 8
- hour ozone NAAQS, comprising 2 42 full or partial counties with a total population of over 118 million people. These numbers do not include the people living in areas where there is a future risk of failing to maintain or attain the 1997 8
- hour ozone NAAQS. The numbers above likel y underestimate the number of counties that are not meeting the ozone NAAQS because the nonattainment areas associated with the more stringent 2008 8
- hour ozone NAAQS have not y et been designated. Table VII
- 7 provides an estimate, based on 2006
- 08 air quality data , of the counties with design values greater than the 2008 8
- hour ozone NAAQ S of 0.075 ppm.

**Table VII**  **- 7**  **Counties with Design Values Greater Than the Ozone NAAQS** NUMBER OF COUNTIES POPULATION A 1997 Ozone Standard: counties within the 54 areas currently

designated as nonattainment (as of 1/6/10) 266 122,343, 799 2008 Ozone Standard: additional counties that would not meet the 2008 NAAQS (based on 2006
- 2008 air qualit y data) b 156 36,678,478 Total 422 159,022,277 Notes: a Population numbers are from 2000 census data. b Area designations for the 2008 ozone NAAQS have not yet been made. Nonattainment for the 2008 Ozone NAAQS w ould be based on three years of air quality data from later years. Also, the county numbers in thi s row

include only the counties with monitors violating the 2008 Ozone NAAQS. The numbers in this table may be an underestimate of the number of counties and populations that will eventually be included in areas with multiple counties designated nonattainment. (b ) Projected Levels without this Final Action States with 8
- hour ozone nonattainment areas are required to take action to bring those areas into compliance in the future. Based on the final rule designating and classifying 8
- hour ozone nonattainment ar eas for the 1997 standard (69 FR 23951, April 30, 2004), most 8
- hour ozone nonattainment areas will be required to attain the ozone NAAQS in the 2007 to 2013 time frame and then maintain the NAAQS thereafter
. As noted, EPA is reconsidering the 2008 ozone NAAQS. I f EPA promulgates different ozone NAAQS in 201 1 as a result of the reconsideration, these standards would replace the 2008 ozone NAAQS and there would no longer be a requirement to designate areas for the 2008 NAAQS. Attainment dates for an y 2011 ozone NAAQS would range from 3 to 20 years from designation, depending on the area’s classification.******* **E.O. 12866 Review**

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444 of EPA has alread y adopted many emission control programs that are expected to reduce ambient ozone levels and assist in reducing the number of areas that fail to achieve the ozone NAAQS. Even so, our air quality modeling projects that in 2030 , with all current controls but excluding the impacts of the heav y - dut y standards, up to 10 countie s with a population of over 3 0 million may not attain the 2008 ozone standard of 0.075 ppm (75 ppb) . These numbers do not account for those areas that are close to (e.g., within 10 percent of) the 2008 ozone standard. These areas, although not violating the standards, will also be impacted b y changes in ozone as they wor k to ensur e long
- term maintenance of the ozone NAAQS. (c) Projected Levels with this Final Action Our modeling indicates ozone design value concentrations will decrease in many areas of the country
. The decreases in ozone design values are likely due to proje cted tailpipe reductions in NO X and projected ups tream emissions decreases in NO X and VOCs from reduced gasoline production
. The majority of the ozone design value decreases are less than 1 ppb. The maximum projected decrease in an 8
- hour ozone design value is 1.57 ppb in Jefferson County , Tennessee. O n a population
- weighted basis, the average modeled 8
- hour ozone design val ues are projected to decrease b y 0.39 ppb in 2030 and the design values for those counties that are projected to be above the 2008 ozone standard in 2030 will see population
- weighted decreases of 0.16 ppb due to the heav y - dut y standards. **(2) Particulate Matte**  **r** (a ) Current Levels PM 2.5 concentrations exceeding the level of the PM 2.5 NAAQS occur in many parts of the country
. In 2005 , EPA designated 39 nonattainment areas for the 1997 PM 2.5 NAAQS (70 FR 943, January 5, 2005). These areas are composed of 208 full or partial counties with a total population exceeding 88 million. The 1997 PM 2.5 NAAQS was revised in 2006 and the 2006 24
- hour PM 2.5 NAAQS became effective on December 18, 2006. On October 8, 2009, the EPA issued final nonattainment area designations for the 2006 24
- hour PM 2.5 NAAQS (74 FR 58688, November 13, 2009). These designations include 32 areas composed of 121 full or partial counties with a population of over 70 million
. Intotal, there are 54 PM 2.5 nonattainment areas composed of 243 counties wi th a population of almost 102 million people. (b ) Projected Levels without this Final Action States with PM 2.5 nonattainment areas are required to take action to bring those areas into compliance in the future. Areas designated as not attaining the 1997 PM 2.5 NAAQS will need to attain the 1997 standards in the 2010 to 2015 time frame, and then maintain them thereafter. The 2006 24
- hour PM 2.5 nonattainment areas will be required to attain the 2006 24
- hour PM 2.5 NAAQS in the 2014 to 2019 time frame and then be required to maintain the 2006 24
- hour PM 2.5 NAAQS thereafter. The heavy
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445 of standards finalized in this action become effective in 2012 and therefore may be useful to states in attaining or maintaining the PM 2.5 NAAQS. EPA has alread y adopted many emis sion control programs that are expected to reduce ambient PM 2.5 levels and which will assist in reducing the number of areas that fail to achieve the PM 2.5 NAAQS. Even so, our air quality modeling projects that in 2030 , with all current controls but excluding the impacts of the heav y - dut y standards adopted here , at least 4 counties with a population of almost 7 million may not attain the 1997 annual PM 2.5 standard of 15 μg/m 3 and 22 counties with a population of over 33 million may

not attain the 2006 24
- hour PM 2.5 standard of 3 5 μg/m 3 . These numbers do not account for those areas that are close to (e.g., within 10 percent of) the PM 2.5 standard s . These areas, although not violating the standards, will also benefit fro m any reductions in PM 2.5 ensuring long
- term maintenance of the PM 2.5 NAAQS. (c) Projected Levels with this Final Action Air quality

modeling performed for this final action shows that in 2030 the majority of the modeled counties will see decreases of less than 0.01 μg/m 3 i n their annual PM 2.5 design values. The decreases in annual PM 2.5 design values that we see in some counties are likel y due to emission reductions related to lower fuel production at existing oil refineries and/or reductions in PM 2.5 precursor emissions (NO X , SO X , and VOCs ) due to improvements in road load
. The maximum projected decrease in an annual PM 2.5 design value is 0.03 μg/m 3 in Allen County , Indiana and Canyon County , Idaho. On a population
- weighted basis, the average modeled 2030 annual PM 2.5 design value is projected to decrease b y 0.01 μg/m 3 due to this final action. In addition to looking at annual PM 2.5 design values , we also modeled the impact of the standards on 24
- hour PM 2.5 design values
. Air quality modeling performed for this final action shows that in 2030 the majority of the modeled counties will see changes of between
- 0.05 μg/m 3 and 0 μg/m 3 i n their 24
- hour PM 2.5 design values. The decreases in annual PM 2.5 des ign values that we see in some counties are likel y due to emission reductions related to lower fuel production at existing oil refineries and/or reductions in PM 2.5 precursor emissions (NO X , SO X , and VOCs ) due to improvements in road load
. The maximum projected decrease in a 24
- hour PM 2.5 design value is 0.27 μg/m 3 in Canyon Count y, ID. There are also some counties that are projected to see increases of less than 0.1 μg/m 3 in their 24
- hour PM 2.5 design values
. These small increases in 24
- hour PM 2.5 design values are likel y related to downstream emission increases from APUs. On a population
- weighted basis, the average modeled 2030 24
- hour PM 2.5 design value is projected to decrease b y 0.03 μg/m 3 due to this final action. Those counties that are projected to be above the 24
- hour PM 2.5 standard in 2030 will see slightly smaller population
- weighted decreases of 0.01 μg/m 3 in their design values due to this final action.******* **E.O. 12866 Review**

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446 of **(3) Air Toxics**  (a ) Current Levels The majority

of Americans continue to be expo sed to ambient concentrations of air toxics at levels which have the potential to cause adverse health effects. 486 The levels of air toxics to which people are exposed vary depending on where people live and work and the kinds of activities in which they en gage, as discussed in detail in U.S. EPA’s most recent Mobile Source Air Toxics Rule. 487 According to the National Air Toxic Assessment (NATA) for 2005 , 488 mobile sources were responsible for 43 percent of outdoor toxic emissions and over 50 percent of the cancer risk and noncancer hazard
. Benzene is the largest contributor to cancer risk of all 124 pollutants quantitatively assessed in the 2002 NATA and mobile sources were responsible for 59 percent of benzene emissions in 2002
. Over the ye ars, EPA has implemented a number of mobile source and fuel controls resulting in VOC reductions, which also reduce benzene and other air toxic emissions. (b ) Projected Levels Our modeling indicates that the heav y - dut y standards have relativel y little impact on national av erage ambient concentrations of the modeled air toxics. Additional detail on the air toxics results can be found in Section 8.2.3.3 of the RIA. **(4) Nitrogen and Sulfur Deposition**  (a ) Current Levels Over the past two decades, the EPA has undertaken numerous efforts to reduce nitrogen and sulfur deposition across the U.S. Analy ses of long
- term monitoring data for the U.S. show that deposition of both nitrogen and sulfur compounds has decreased over the last 17 years although many areas continue to be negativel y impacted by deposition. Deposition of inorganic nitrogen and sulfur species routinely measured in the U.S. between 200 5 and 200 7 were as high as 9.6 kilograms of nitrogen per hectare (kg N/ha) averaged over three ye ars and 20.8 kilograms of sulfur per hectare (kg S/ha ) averaged over three years . 489 The data show that reductions were more substantial for sulfur compounds than for nitrogen compounds. These numbers are generated b y the U.S. national monitoring network and they likel y underestimate nitrogen depo sition because

486 U. S. Environmental Protection Agency (2007). Control of Hazardous Air Pollutants from Mobile Sources; Final Ru le. 72 FR 8434, February 26, 2007. 487 U. S. Environmental Protection Agency (2007). Control of Hazardous Air Pollutants from Mobile Sources; Final Rule. 72 FR 8434, February 26, 2007. 488 U. S. EPA. ( 20 11 ) 200 5 National
- Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata200 5 /. Docket EPA
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- 0162. 489 U.S. EPA. U.S. EPA's Report on the Environment (Final Report). U.S. Environmental Protection Agency, Washington, D.C., EPA/600/R
- 07/045F (NTIS PB2008
- 112484) . Docket EPA
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- 0162. Updated data available online at: http://cfpub.epa.gov/eroe/index.cfm? fuseaction=detail.viewInd&ch=46&subtop=341&lv=list.listByChapter &r=201744******* **E.O. 12866 Review**

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447 of neither ammonia nor organic nitrogen is measured. In the eastern U.S., where data are most abundant, total sulfur d eposition decreased by about 44 % between 1990 and 200 7, while total nitrogen deposition decreased b y 25 % over the same time f rame. 490 (b ) Projected Levels Our air qualit y modeling projects decreases in nitrogen deposition, especially in the Midwest, as a result of the heav y - duty standards required b y this final action. The heav y - dut y standards will result in annual percent decreases of 0.5% to more than 2% in some cities in the Midwest, Phoenix, Albuquerque, and some areas in Texas. The remainder of the country

will see only

minimal changes in nitrogen deposition, ranging from decreases of les s than 0.5% to increases of less than 0.5%. For a map of 2030 nitrogen deposition impacts and additional information on these impacts, see Section 8.2.3.4 of the RIA. The impacts of the heav y - dut y standards on sulfur deposition are minimal, ranging from decreases of up to 0.5% to increases of up to 0.5%. **(5) Visibility**  (a ) Current Levels As mentioned in Section VII.D(1)(a) , million s of people live in nonattainment areas for the PM 2.5 NAAQS. These populations, as well as large numbers of individuals who travel to these areas, are likel y to experience visibility impairment. In addition, while visibility

trends have improved in mandatory class I federal areas, the most recent data show that these areas continue to suffer from visibility impairment. In summary , v isibility impairment is experienced throughout the U.S., in multi
- state regions, urban areas, and remote mandatory class I federal areas. (b ) Projected Levels Air quality

modeling conducted for this final action was used to project visibility conditions in 13 8 mandatory class I federal areas across the U.S. in 2030. The results show that all the modeled areas will continue to have annual average deciview levels above background in 2030. 491 The results also indicate that the majority of the modeled mandatory

cl ass I federal areas will see very little change in their visibility , but some mandatory

class I federal areas will see improvements in visibility due to the heav y - dut y standards and a few mandatory class I federal areas will see visibility decreases. The

490 U.S. EPA. U.S. EPA ’ s 2008 Report on the Environment (Final Report). U.S. Environmental Protection Agency, Washington, D.C., EPA/600/R
- 07/045F (NTIS PB2008
- 112484). Docket EPA
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- 20 10
- 0 16 2 . Updated data available online at: http://cfpub.epa.gov/eroe/index.cfm? fuseaction=detail.viewInd&ch=46&subtop=341&lv=list.listByChapter &r=201744 491 The level of visibility impairment in an area is based on the light
- extinction coefficient and a unitless visibility index, called a “deciview , ” which is used in the valuation of visibility. The deciview metric provides a scale for perceived visual changes over the entire range of conditions, from clear to hazy. Under many scenic conditions, the average pe rson can generally perceive a change of one deciview . The higher the deciview value, the worse the visibility. Thus, an improvement in visibility is a decrease in deciview value.******* **E.O. 12866 Review**

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448 of average visibility

at all modeled mandatory class I federal areas on the 20% worst day s is projected to improve b y 0.01 deciviews, or 0.06%, in 2030. Section 8.2.3.5 of the RIA contains more detail on the visibility portion of the air qualit y modeling. 

## VIII. **W hat ar**  **e the Agencies**  **’ Estim**  **ated Cost, Economic, and Other Impacts of the**  **Final Program?**  In this section, we present the costs and impacts of the final HD National Program. It is important to note that NHTSA’s final fuel consumption standards and EPA’s fin al GHG emissions standards will both be in effect, and each will lead to average fuel efficiency

increases and GHG emission reductions. The two agencies’ final standards comprise the HD National Program. The net benefits of the final HD National Program c onsist of the effects of the program on:
 the vehicle program costs (costs of compl yi ng with the vehicle CO 2 standards)  fuel savings associated with reduced fuel usage resulting from the program  reductions in greenhouse gas emissions,  the reductions in other (non
- GHG) pollutants,  costs associated with increases in noise, congestion, and accidents resulting from increased vehicle use,  improvements in U.S. energy security impacts,  benefits associated with increased vehicle use due to the “rebound” effect. We also present the cost
- effectiveness of the standards, or the cost per ton of emissions reduced. Where possible, we identify the uncertain aspects of these economic impacts and attempt to quantify them when/if possible (e.g., sensitivity ranges associated with quantified and monetized GHG impacts ; probabilistic uncertainty associated with non - GHG health benefits ). For some impacts, however, there is a lack of adequate information to in form a probabilistic assessment of uncertainty . EPA continues to work toward developing a comprehensive strategy for characterizing the aggregate impact of uncertaint y in key elements of its analyses and we will continue to work to refine these uncertaint y analyses in the future as time and resources permi t. The program may

have other effects that are not included here. The agencies sought comment on whether an y costs or benefits were omitted from this analysis, so that they could be explicitly

recognized in the final rules. In particular, as discussed in Section III and in Chapter 2 of the RIA, the technology cost estimates developed here take into account the costs to hold other vehicle attributes, such as size and performance, constant. In addition, the anal ys is assumes that the full technology costs are passed along to vehicle bu yers. With these assumptions, because welfare losses are monetary estimates of how much buy ers would have to be compensated to be made as well off as in******* **E.O. 12866 Review**

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449 of the absence of the ch ange, 492 the price increase measures the loss to the buyer. 493 Assuming that the full technology cost gets passed along to the buy er as an increase in price, the technology

cost thus measures the welfare loss to the buy er. Increasing fuel efficiency would have to lead to other changes in the vehicles that buyers find undesirable for there to be additional losses not included in the technology costs. The agencies sought comments, including supporting data and quantitative anal ys es, of any

additional impacts of the final standards on vehicle attributes and performance, and other potential aspects that could positively or negatively affect the welfare implications of this final rulemaking, not addressed in this anal ys is. The comments received by the agencies did not provide an y clear insights into this question. Some comments noted the diversity of the trucking industry and expressed a request that the program continue the great variety of options for the industry , because of the variation in needs for differ ent customers. Additional comments noted that the separate engine and vehicle programs support the maintenance of variety and current market structure. Though a few commenters raised concerns, no information was offered to indicate that choice will in fa ct be limited by the program, or that other vehicle attributes are adversely

affected. The total monetized benefits (excluding fuel savings) under the program are projected to be $ 4.3 to $ 11.1 billion in 2030 , depending on the value used for the social cost of carbon. These benefits are summarized below in Table VIII
- 30 . The costs of the program in 2030 are estimated to be approximately $ 2. 6 billion for new engine and truck technology , less $ 20. 6 billion in savings realized by trucking operations through fewer fuel expenditures (calculated using pre
- tax fuel prices). These costs are summarized below in Table VIII
- 29
. The present value of the total moneti zed benefits (excluding fuel savings) under the program is expected to range from $ 48.7 billion to $ 180.1 billion with a 3% discount rate; with a 7% discount rate, the total monetized benefits are expected to range from $ 24.3 billion to $ 155.7 billion. These values, summarized in Table VIII
- 30 , depend on the value used for the social cost of carbon. The present value of costs of the program for new engine and truck technology , in Table VIII
- 29 , are expected to be $ 47.4 billion using a 3% discount rate, and $ 24.7 billion with a 7% discount rate, less fuel savings (calculated using pre
- tax fuel prices) of $ 375.3 billion with a 3% discount rate, and $ 166.5 billion with a 7% discount rate. Total net present benefits (in Table VIII
- 31 )

492 This approach describes the economic concept of compensating variation, a payment of money after a change that would make a consumer as well off after the change as before it. A related concept, equivalent variation, estimates the income change that would be an alternative to the change taking place. The difference between th em is whether the consumer’s point of reference is her welfare before the change (compensating variation) or after the change (equivalent variation). In practice, these two measures are ty pically very close together. 493 Indeed, it is likely to be an over estimate of the loss to the buyer , because the buy er has choices other than buying the same vehicle with a higher price; she could choose a different vehicle, or decide not to buy a new vehicle. The buyer wo uld choose one of those options only if the alte rnative involves less loss than paying the higher price. Thus, the increase in price that the buyer faces would be the upper bound of loss of consumer w elfare, unless there are other changes to the vehicle due to the fuel economy improvements that make th e vehicle less desirable to buyers
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450 of are thus expected to range from $ 376.6 billion to $ 508 billion with a 3% discount rate, and $ 166.1 billion to $ 297.5 billion with a 7% discount rate. The estimates developed here are measured against a baseline fuel efficiency associated with MY 2010 vehicles
. The a gencies also considered an alternate baseline associated with AEO 2011 projections, which is further discussed in S ection IX. All calculations presented in S ection V III use the constant 2010 vehicle baseline. The extent to which fuel efficiency

improvements may

have occurred in the absence of the rules affects the net benefits associated with the program. I f trucks were to install technologies to achieve the fuel savings and reduced GHG emissions in the absence of this program, then both the costs and benefits of these fuel savi ngs could be attributed to market forces, not the rules. As a baseline for estimates of the extent of fuel
- saving technologies that might have been adopted in the absence of the program, the proposal used the level of these technologies in MY 2010 vehicle s. We sought comment on whether the agencies should use an alternative baseline based on data provided by commenters to estimate the degree to which the technologies discussed in the proposal would have been adopted in the absence of these rules. No comme nts were received on this issue. One comment cites the EPA draft RIA as noting a historic 1% per ye ar improvement in fuel efficiency , and argues that the rules are therefore not needed; the actual figure in the draft RIA, however, was a 0.09% per ye ar imp rovement. EPA has undertaken an analy sis of the econom y - wide impacts of the final heav y duty truck fuel efficiency and GHG standards as an exploratory exercise that EPA believes could provide additional insights into the potential impacts of the program. 494 These results were not a factor regarding the appropriateness of the final standards. It is important to note that the results of this modeling exercise are dependent on the assumptions associated with how manufacturers would make fuel efficiency improve ments and how trucking operations would respond to increases in higher vehicle costs and improved vehicle fuel efficiency as a result of the final program. Further information on these and other aspects of the economic impacts of our rules are summarize d in the following sections and are presented in more detail in the RIA for this final rulemaking. 

### A. **Conceptual Framework for Evaluating Impacts** This regulation is motivated primarily by the goals of reducing emissions of greenhouse gases and promoting U.S. energy security by reducing consumption and imports of petroleum
- based fuels. These motivations involve classic externalities, meaning that private decisions do not incorporate all of the costs associated with these problems; these costs are not borne completel y b y the households or businesses whose actions are responsible for them. In the absence of some mechanism to “internalize” these costs

– that is, to transfer their burden to individuals or firms whose decisions impose them

– individuals and firms w ill consume more petroleum
- based fuels than is

494 See Memorandum to Docket, “ Economy
- Wide Im pacts of Proposed Heavy
- Duty Truck Greenhouse Gas Emissions and Fuel Efficiency Standards ”, October 8, 2010. Docket EPA
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451 of socially optimal. Externalities are a classic motivation for government intervention in markets. These externalities, as well as effects due to changes in emissions of other pollutants and other impacts, are discussed in Sections VIII.H

– VIII.K. In some cases, these classic externalities are by themselves enough to justify the costs of imposing fuel efficiency standards. F or some discount rates and some projected social costs of carbon, however, the reduc tions in these external costs are less than the costs of new fuel saving technologies needed to meet the standards . (See T able s 9
- 18 and 9
- 1 9 in the RIA .) Nevertheless , th is regulation reduces trucking companies’ fuel costs; according to our estimates, these savings in fuel costs are by themselves sufficient to pay for the technologies over periods of time considerably shorter than vehicles’ expected lifetimes under the assumptions used for this analy sis (e.g., AEO 2011 projected fuel prices). If these estimates are correct, then the entire value of the reductions in external costs represents additional net benefits of the program, beyond those resulting from the fact that the value of fuel savings exceeds the costs of technologies necessary to achieve them. It is often asserted that there are cost - effective fuel
- saving technologies that markets do not take advantage of . This is commonly

known as the “energy gap” or “energy paradox.” S tandard economic theory suggests that in normall y functioning competitive markets, interactions between vehicle buyers and producers would lead producers to incorporate all cost
- effective technology into the vehicles that they offer, without government intervention. Unlike in the light
- dut y v ehicle market, the vast majority of vehicles in the medium
- and heav y - duty truck market are purchased and operated b y businesses with narrow profit margins, and for which fuel costs represent a substantial operating expense. Even in the presence of uncer taint y and imperfect information

– conditions that hold to some degree in every market

– we generally

expect firms to attempt to minimize their costs in an effort to survive in a competitive marketplace, and therefore to make decisions that are in the best interest of the company and its owners and/or shareholders. In this case, the benefits of the rules would be due exclusively to reducing the economic costs of externalities resulting from fuel production and consumption. However, as discussed below in S ection VIII.E, the agencies have estimated that the application of fuel
- saving technologies in response to the final standards would , on average, yi eld private returns to truck owners of 140% to 420% (see Table VIII
- 21 below). T he agencies have also estim ated that the application of these technologies would be significantl y lower in the absence of the final standards ( i.e. , under the “no action” regulatory

alternative), meaning that truck buyers and operators ignore opportunities to make investments in hig her fuel efficiency that appear to offer significant cost savings
. As discussed in the NPRM, there are several possible explanations in the economics literature for why trucking companies do not adopt technologies that would be expected to increase their profits: there could be a classic market failure in the trucking industry

– market power, externalities, or asy mmetric or incomplete (i.e., missing market) information; there could be institutional or behavioral rigidities in the industry (union rules, standard operating procedures, statutory requirements, loss aversion, etc.), whereb y******* **E.O. 12866 Review**

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452 of participants collective ly

do not minimize costs; or the engineering estimates of fuel savings and costs fo r these technologies might overstate their benefits or understate th eir costs in real
- world application s . To try to understand why trucking companies have not adopted these seemingl y cost - effective fuel
- saving technologies, the agencies survey ed published literature about the energy

paradox, and held discussions with numer ous truck market participants. The proposal discussed five categories of possible explanations derived from these sources
. Collectively , these five hy potheses may explain the apparent inconsistency between the engineering anal ys is, which finds a number of cost - effective methods of improving fuel efficiency , and the observation that many of these technologies are not widely adopted. These h ypotheses include imperfect information in the original and resale markets, split incentives, uncertaint y about future fuel prices, and adjustment and transactions costs. As the discussion indicated, some of these explanations suggest failures in the private market for fuel
- saving technology in addition to the externalities caused b y producing and consuming fuel that are the primary motivation for the rules. Other explanations suggest market
- based behaviors that may imply additional costs of regulating truck fuel efficiency that are not accounted for in this anal ys is. As noted above, an additional explanation

– adverse e ffects on other vehicle attributes
-- did not elicit supporting information in the public comments. Anecdotal evidence from various segments of the trucking industry suggests that many

of the hy potheses discussed here may play a role in explaining the puzzle of why truck purchasers appear to under
- invest in fuel efficiency , although different explanations may apply to different segments, or even different companies. The published literature does not appear to include empirical anal ys is or data related to this question. The agencies invite d comment on these explanations, and on an y data or information that could be used to investigate the role of an y or all of these five hy potheses in explaining this energy paradox as it applies specifically to trucks
. Som e comments expressed dissatisfaction about the explanations presented; they argued that these arguments were not sufficient to explain the phenomenon. These comments argued that the truck owners and operators are better judges of the appropriate amount of fuel efficiency than are government agencies; they choose not to invest because of warranted skepticism about these technologies. The agencies also request ed comment and information regarding any other hy potheses that could explain the appearance that cost effective fuel
- saving technologies have not been widely incorporated into trucks
. The following discussion summarizes the fuller discussion provided in the NPRM and includes discussion of the comments received. **(1) Information Issues in the Original Sale**  **Markets** One potential h ypothesis for wh y the trucking industry does not adopt what appear to be inexpensive fuel saving technologies is that there is inadequate or unreliable information available about the effectiveness of many fuel
- saving technologies f or new vehicles. If reliable information on the effectiveness of many new technologies is absent,******* **E.O. 12866 Review**

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453 of truck buy ers will understandabl y be reluctant to spend additional money to purchase vehicles equipped with unproven technologies. This lack of information can manifest itself in multiple way s. For instance, the problem may

arise purely because collecting reliable information on technologies is costly (also see Section VIII.A. 5 on transaction costs). Moreover, information has aspects of a public good , in that no single firm has the incentive to do the costly experimentation to determine whether or not particular technologies are cost - effective, while all firms benefit from the knowledge that would be gained from that experimentation. Similarly , if multiple f irms must conduct the same tests to get the same information, costs could be reduced b y some form of coordination of information gathering. While its effect on information is indirect, we expect the requirement for the use of new technologies included in this program will circumvent these information issues, resulting in their adoption, thus providing more readily available information about their benefits. The agencies appreciate, however, that the diversity of truck uses, driving situations, and driver b ehavior will lead to variation in the fuel savings that individual trucks or fleets experience from using specific technologies. One commenter noted that the SmartWay program targets semi
- truck owners and thus should have the largest impact on that secto r, rather than vocational or medium
- duty trucks . H owever, the gap between actual investment in fuel efficiency and the agencies’ estimates of optimal investment is largest for combination tractor s . Some of the difference in magnitude is lik ely to be due to the higher vehicle miles traveled for semi
trucks compared to medium
- duty and vocational vehicles: more driving means more fuel savings. Additionall y, not even a majorit y of semi
- trucks are owned b y participants in SmartWay ; non - particip ants are unlikel y to get all the benefits of participants. Other explanations, noted below, are also likely to play a role. This observation may also suggest some limitations of improved information provision as a means of addressing the “efficiency

gap. ” **(2) Information Issues in the Resale Market**  In addition to issues in the new vehicle market, a second h ypothesis for why trucking companies may

not adopt what appear to be cost
- effective technologies to save fuel is that the resale market may not adequately reward the addition of fuel
- saving technology

to vehicles to ensure their original purchase by new truck bu ye rs. This inadequate pay

back for users beyond the original owner may contribute to the short pay back period that new purchasers appear to expect. 495 The agencies requested data and information on the extent to which costs of fuel saving equipment can be recovered in the resale truck market. No data were received. One reviewer disputed this theory on the

495 See NAS 2010, Note **213** , at p. 188.******* **E.O. 12866 Review**

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454 of basis that people are willing to pay more for better vehicles, new or used. It is not clear, however, whether bu ye rs of used vehicles can tell which are the better vehicles. 496 Some of this unwillingness to pay for fuel
- saving technology may be due to the extension of the information problems in the n ew vehicle market into resale markets. Bu yers in the resale market have no more reason to trust information on fuel
- saving technologies than bu yers in the original market. Because actual fuel efficiency of trucks on the road depends on many factors, including geography and driving st yles or habits, even objective sources such as logs of truck performance for used vehicles may not provide reliable information about the fuel efficiency that potential purchasers of used trucks will experience. A related poss ibility

is that vehicles will be used for different purposes by their second owners than those for which they were originall y designed, and the fuel
- saving technology

is therefore of less value. It is possible, though, that the fuel savings experienced by the secondary purchasers may

not match those experienced b y their original owners if the optimal secondary new use of the vehicle does not earn as many benefits from the technologies. One commenter asks whether the fuel
- saving technology is unvalued be cause it is unproven or overrated. In that case, the premium for fuel
- saving technology in the secondary market should accuratel y reflect its value to potential buyers participating in that market, even if it is lower than its value in the original market , and the market has not failed. Because the information necessary to optimize use in the secondary market may not be readil y available or reliable, however, buyers in the resale market may have less ability

than purchasers of new vehicles to identify and gain the advantages of new fuel
- saving technologies, and may thus be even less likely

to pay a premium for them. For these reasons, purchasers’ willingness to pay for fuel efficiency

technologies may be even lower in the resale market than in the original equipment market. Even when fuel
- saving technologies will provide benefits in the resale markets, purchasers of used vehicles may

not be willing to compensate their original owners fully for their remaining value. As a result, the purchasers of original equipment may expect the resale market to provide inadequate appropriate compensation for the new technologies, even when those technologies would reduce costs for the new bu ye rs. This information issue may partially explain what appears to be the very s hort pay back periods required for new technologies in the new vehicle market. **(3) Split**  **I ncentives**  **in the M edium**  **- and**  **H eavy**  **- D**  **uty T**  **ruck I**  **ndustry** A third hy

pothesis explaining the energy paradox as applied to trucking involves split incentives. When markets wor k effectivel y, signals provided b y transactions in one market are quickl y transmitted to related markets and influence the decisions of buyers

496 Akerlof, George A. “The Market for ‘Lemons’” Quality Uncertainty and the Market Mechanism,” Quarterly Journal of Economics 84(3) (1970): 488
- 500 points out that asymmetric in formation

– the seller has better information than the buyer

– can potentially lead to complete failure of a market, even when both buyers and sellers would benefit from trade.******* **E.O. 12866 Review**

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455 of and sellers in those related markets. For instance, in a well
- functioning market sy stem, changes in the expected future price of fuel should be transmitted rapidl y to those who purchase trucks, who will then reevaluate the amount of fuel
- saving technology to purchase for new vehicles. If for some reason a truck purchaser will not be directly responsible for future fuel costs, or the individual who will be responsible for fuel costs does not decide which truck characteristics to purchase, then those price signals may not be transmitted effectivel y, and incentives can be described as “split.” One place where such a s plit may occur is between the owners and operators of trucks. Because they

are generall y responsible for purchasing fuel, truck operators have strong incentives to economize on its use, and are thus likely to support the use of fuel
saving technology . Ho wever, the owners of trucks or trailers are often different from operators, and may

be more concerned about their longevit y or maintenance costs than about their fuel efficiency , when purchasing vehicles. As a result, capital investments by truck owners m ay

be channeled into equipment that improves vehicles’ durability or reduces their maintenance costs, rather than into fuel
- saving technology . If operators can choose freel y among the trucks they drive, competition among truck owners to employ operators w ould encourage owners to invest in fuel
- saving technology . However, if truck owners have more ability to choose among operators, then market signals for improved fuel savings that would normally be transmitted to truck owners may be muted. Truck fleets that rent their vehicles may provide an example: renters may observe the cost of renting the truck, but not its fuel efficiency ; if so, then the purchasers will aim for vehicles with lower costs, to lower the cost of the rental. One commenter noted that there are alway s tradeoffs in an investment decision: a purchaser may

prefer to invest in other vehicle attributes than fuel efficiency. In an efficient market, however, a purchaser should invest in fuel
- saving technology as long as the increase in fuel
- saving technology costs less than the expected fuel savings. This result should hold regardless of the level of investment in other attributes, unless there are constraints on a purchaser’s access to investment capital. Anecdotal information about large truck fleets suggests that, even within a compan y, the office or department responsible for truck purchas es is often different from that responsible for purchasing fuel. Therefore, the employees who purchase trucks may have strong incentives to lower the ir initial capital cost, but not equally strong incentives to lower operating costs. In addition, the NAS report notes that split incentives can arise between tractor and trailer operators. 497 Trailers affect the fuel efficiency of shipping, but trailer own ers do not face strong incentives to coordinate with truck owners. EPA and NHTSA are not regulating trailers in this action. By itself, information provision may be inadequate to address the potential underinvestment in fuel efficiency resulting from such split incentives. In this setting, regulation may

contribute to fuel savings that otherwise may be difficult to achieve.

497 See NAS 2010, Note **213** , at p. 182.******* **E.O. 12866 Review**

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456 of **(4) Uncertainty A**  **bout Future Cost Savings** Another h ypothesis for the lack of adoption of seemingl y fuel saving technologies may be uncertainty

about future fuel prices or truck maintenance costs . When purchasers have less than perfect foresight about future operating expenses , they may implicitly discount future savings in those costs due to uncertainty about potential returns from investments that reduce future costs. In contrast, the immediate costs of the fuel
- saving or maintenance
- reducing technologies are certain and immediate, and thus not subject to discounting
. In this situation, both the expected return on capital investments in higher fuel efficiency

and potential variance about its expected rate may play a role in a firm’s calculation of its pay

back period on such investments. In the context of energy efficiency investments for the home, Metcalf and Rosenthal (1995) and Metcalf and Hassett (1995) observe that households weigh known, up - front costs that are essentially irreversible against an unknown stream of future fuel savings. 498 Notably , in this situation, r equiring households to adopt technologies more quickly ma y make them worse off by imposing additional risk on them
. Greene et al (2009) also find s support for this explanation in the context of light
duty fuel econom y decisions: a loss
- averse consumer’s expected net present value of increasing the fuel economy of a passenger car can be very close to zero , even if a risk
neutral expected value calculation shows that its buyer can expect significant net benefits from purchasing a more fuel
- efficient car
. 499 Supporting this hy pothesis is a finding by Dasgupta et. al (2007) that consumers are more likely to lease than buy

a vehicle with higher maintenance costs because it provides them with the option to return it before those costs become too high. 500 However, the agencies know of no studies that have estimated the impact of uncertaint y on perceived future savings for medium
- and heav y duty vehicles
. Purchasers’ uncertainty

about future fuel prices implies that mandating improvements in fuel efficiency can reduce the expected utility associated with truck purchases. T his is because adopting such regulation requires purchasers to assume a greater level of risk than they would in its absence, even if the future fuel savings predicted b y a risk
- neutral calculation actually materialize. One commenter expressed support for this argument. Thus the mere existence of uncertaint y about future savings in fuel costs does not b y itself assure that regulations requiring improved fuel efficiency will necessarily

provide economic benefits for truck purchasers and operators. On the other hand, because risk aversion reduces expected returns for businesses, competitive
498 Metcalf, G., and D. Rosenthal (1995). “ The ‘New’ View of Investment Decisions and Public Policy Analysis: An Application to Green Lights and Cold Refrigerators, ” Journal of Policy Analysi s and Management 14: 517

– 531. Hassett and Metcalf (1995). “ Energy Tax Credits and Residential Conservation Investment: Evidence from Panel Data ” Journal of Public Economics 57 (1995): 201
- 217. Metcalf, G., and K. Hassett (1999). “ Measuring the Energy Savin gs from Home Improvement Investments: Evidence from Monthly Billing Data. ” The Review of Economics and Statistics 81(3): 516
- 528. 499 Greene, D., J. German, and M. Delucchi (2009). “Fuel Economy: The Case for Market Failure” in Reducing Climate Impacts in th e Transportation Sector, Sperling, D., and J. Cannon, eds. Springer Science. 500 Dasgupta, S., S. Siddarth, and J. Silva
- Risso (2007). “To Lease or to Buy? A Structural Model of a Consumer’s Vehicle and Contract Choice Decisions.” Journal of Marketing Resear ch 44: 490

– 502.******* **E.O. 12866 Review**

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457 of pressures can reduce risk aversion: risk
- neutral companies can make higher average profits over time. Thus, significant risk aversion is unlikely to survive competitiv e pressures. **(5) Adjustment and Transactions Costs**  Another h ypothesis is that transactions costs of changing to new technologies (how easil y drivers will adapt to the changes, e.g.) may slow or prevent their adoption. Because of the diversit y in the trucking industry , truck owners and fleets may like to see how a new technology

works in the field, when applied to their specific operations, before they

adopt it. One commenter expressed support for this argument. If a conservative approach to new technologies leads truck buyers to adopt new technologies slowly , then successful new technologies are likely to be adopted over time without market intervention, but with potentially significant delay s in achieving fuel saving, environment, and energy

securit y benefit s. In addition, there may

be costs associated with training drivers to realize the potential fuel savings enabled by new technologies, or with accelerating fleet operators’ scheduled fleet turnover and replacement to hasten their acquisition of vehicles eq uipped with new fuel
- saving technologies. Here, again, there may be no market failure; requiring the widespread use of these technologies may impose adjustment and transactions costs not included in this analy sis. As in the discussion of the role of risk , these adjustment and transactions costs are typically immediate and undiscounted, while their benefits are future and uncertain; risk or loss aversion may further discourage companies from adopting new technologies. To the extent that there may be transa ctions costs associated with the new technologies, then regulation gives all new truck purchasers a level playing field, because it will require all of them to adjust on approximately the same time schedule. If experience with the new technologies serves to reduce uncertaint y and risk, the industry as a whole may

become more accepting of new technologies. This could increase demand for future new technologies and induce additional benefits in the legacy fleet through complementary

efforts such as SmartWay
. **(6) Additional Hypotheses**  In the public comments, two additional ideas were raised for the lack of adoption of what appears to be cost
- effective fuel
- saving technology . The first suggestion is that tighter diesel emissions standards caused fuel efficiency f or diesel trucks to decline in the past decade. Because engine manufacturers would have to invest heavil y (both financiall y and with personnel) in emissions reduction technologies, they would not invest in fuel efficiency . The costs associated with the d ecline in fuel efficiency due to the emissions regulations were accounted for in that rulemaking. A second suggestion is that a truck may be a “positional good”

– that is, a good whose value depends on how it compares to the goods owned by others. If tr

ucks confer status on their owners or operators, and if that status depends on easil y observable******* **E.O. 12866 Review**

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458 of characteristics, then owners may invest disproportionately in status
- granting characteristics rather than less visible characteristics, such as fuel efficiency . Because status depends on comparisons to others, an “arms race” may develop in which all parties spend additional money

on visible characteristics but may not manage to make themselves better off. In this case, regulation may improve welfare: by

incre asing the requirements for non
- positional fuel efficiency , regulation could reduce expenditures made purel y for competition rather than actual increase in welfare. In a competitive business, cost reduction provides a major opportunity cost to investing in status rather than in fuel
- saving technology ; thus, this argument may play less of a role in the heavy
duty market than in the consumer market for vehicles. Both these h ypotheses leave open the question, though, wh y additional investments were not made in fuel efficiency if they would provide rapid pay back. Truck purchasers should, in principle, be willing to buy additional fuel
- saving technology as long as it is cost
- effective, regardless of other vehicle attributes. L imited access to capital, if it is a problem in this sector, might provide some reason for the “crowding out” of the purchase of fuel
- saving technology
. **(7) Summary**  On the one hand, commercial vehicle operators are under competitive pressure to reduce operating costs, and thus their purchasers would be expected to pursue and rapidl y adopt cost
- effective fuel
- saving technologies. On the other hand, the short pay back period required b y bu yers of new trucks is a s ymptom that suggests some combination of uncertaint y about future cost savings, trans actions costs, and imperfectly functioning markets. In addition, widespread use of tractor
- trailer combinations introduces the possibility

that owners of trailers may have weaker incentives than truck owners or operators to adopt fuel
- saving technology f o r their trailers. The market for medium
- and heav y - dut y trucks may face these problems, both in the new vehicle market and in the resale market. Provision of information about fuel
- saving technologies through voluntary programs such as SmartWay will assis t in the adoption of new cost
- saving technologies, but diffusion of new technologies can still be obstructed. Those who are willing to experiment with new technologies expect to find cost savings, but those may be difficult to prove. As noted above, beca use individual results of new technologies vary , new truck purchasers may

find it difficult to identify or verify the effects of fuel
- saving technologies. Those who are risk
- averse are likel y to avoid new technologies out of concerns over the possibility of inadequate returns on the investment, or with other adverse impacts. Competitive pressures in the freight transport industry can provide a strong incentive to reduce fuel consumption and improve environmental performance. However, not every

driver or trucking fleet operating today has the requisite ability

or interest to access the technical information, some of which is already provided by SmartWay , nor the resources necessary to evaluate this information within the context of his or her own freight o peration.******* **E.O. 12866 Review**

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459 of It is unclear, as discussed above, whether some or many of the technologies would be adopted in the absence of the program. To the extent that they would have been adopted, the costs and the benefits attributed to those technologies may not in f act be due to the program and may

therefore be overstated. Both baselines used project substantially less adoption than the agencies consider to be cost
- effective. The agencies will continue to explore reasons for this slow adoption of cost
- effective tec hnologies. 

### B. **Costs Associated With the Final Program** In this section, the agencies present the estimated costs associated with the final program. The presentation here summarizes the costs associated with new technology expected to be added to meet the new GHG and fuel consumption standards. The anal ys is summarized here provides the estimate of incremental costs on a per truck basis and on an annual total basis. The presentation here summarizes the best estimate by EPA and NHTSA staff as to the technolog y mix expected to be employed for compliance. For details behind the cost estimates associated with individual technologies, the reader is directed to Section III of this preamble and to Chapter 2 of the RIA
. With respect to the cost estimates presented here, the agencies note that, because these estimates relate to technologies which are in most cases already available, these cost estimates are technically robust. **(1) Costs per Truck**  For the heavy
- dut y pickup trucks and vans, the agencies hav e used a methodology consistent with that used for our recent light
- dut y joint rulemaking since most of the technologies expected for heav y - dut y pickup trucks and vans is consistent with that expected for the larger light
- dut y trucks. The co st estimates presented in the recent light
duty joint rulemaking were then scaled upward to account for the larger weight, towing capacity , and work demands of the trucks in these heavier classes. For details on that scaling process and the resultant cost s for individual technologies, the reader is directed to Section III of this preamble and to Chapter 2 of the RIA . Note also that all cost estimates have been updated to 2009 dollars for this analysis while the heavy
- dut y GHG emissions and fuel efficiency proposal was presented in 2008 dollars and the light
- dut y rule was presented in 2007 dollars. For the loose heav y - dut y gasoline engines, we have generally used engine
- related costs from the heav y - duty pi ckup truck and van estimates since the loose heavy
- dut y gasoline engines are essentially the same engines as those sold into the heavy
- dut y pickup truck and van market. For heav y - dut y diesel engines, the agencies have estimated costs using a different methodology

than that employed in the recent light
- duty joint rulemaking. In the light
duty 2012
- 2016 MY vehicle rule , the fixed costs were included in the hardware costs via an indirect cost multiplier. As such, the hardware costs presented in that analy sis, and in******* **E.O. 12866 Review**

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460 of the cost estimates for Class 2b and 3 trucks, included both the actual hardware and the associated fixed costs. For this analy sis, some of the fixed costs are estimated separatel y for HD diesel engines and ar e presented separately from the hardware costs. For details, the reader is directed to Chapter 2 of the RIA . Importantly , both methodologies after the figures are totaled account for all the costs associated with the program. As noted above, all costs are presented in 2009 dollars. The estimates of vehicle compliance costs cover the y ears leading up to

– 2012 and 2013

– and including implementation of the program

– 2014 through 2018. Also presented are costs for the years following implementation to she d light on the long term (2022 and later) cost impacts of the program. The year 2022 was chosen here consistent with the light
- duty 2012
- 2016 MY vehicle rule . That year was considered long term in that anal ys is because the short
- term and long
- term markup factors described shortly below are applied in five year increments with the 2012 through 2016 implementation span and the 2017 through 2021 span both repres enting the short
- term. Since many of the costs used in this analysis are based on costs in the light
- dut y rule anal ysis, consistency

with that analy sis seems appropriate. Some of the individual technology cost estimates are presented in brief in Section III , and account for both the direct and indirect costs incurred in the manufacturing and dealer industries (for a complete presentation of technology costs, please refer to Chapter 2 of the RIA). To account for the indirect costs on Class 2b and 3 pickup trucks and vans, the agencies have applied an I CM factor to all of the direct costs to arrive at the estimated technology

cost. The I CM factor used was 1.24 in the short
- t erm (2014 through 2021) to account for differences in the levels of R&D, tooling, and other indirect costs that will be incurred. Once the program has been full y implemented, some of the indirect costs will no longer be attributable to these standards and, as such, a lower ICM factor is applied to direct costs in 2022 and later. The agencies have also applied I CM factors to Class 4 through 8 trucks and to heav y - duty diesel engine technologies. Markup factors in these categories range from 1.15 to 1.30 in the short term (2014 through 2021) depending on the complexity of the given technology . We have modified the manner in which I CMs are applied in that they are no longer applied as a simple multiplicative factor on top of the direct manufacturing costs. Instead, we have broken out the warranty cost portion of the I CM and apply it in a multiplicative manner then add the non
- warrant y cost portion of the I CM to that. The latter portion, that for non
- warranty costs, is determined for a given year and held con stant rather than decreasing ye ar - over - ye ar. This new approach, which responds to criticisms from some that the multiplicative approach used in the past essentially double counts learning effects, is discussed in Section VIII.C and is detailed in Chapter 2 of the RIA. Note that, for the HD diesel engines, the agencies have applied the ICMs to ensure that our estimates are conservative since we have estimated fixed costs separatel y for technologies applied to these categories
-- effectively

making the use of markups a double counting of indirect costs. For the details on the background and the concept behind our use of ICMs to calculate******* **E.O. 12866 Review**

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461 of indirect costs, please refer to the report that has been placed in the docket for this final action. 501 The agencies have a lso considered the impacts of manufacturer learning on the technology

cost estimates by reflect ing the phenomenon of volume
- based learning curve cost reductions in our modeling using two algorithms depending on where in the learning cycle ( i.e., on what po rtion of the learning curve) we consider a technology to be

– “ steep ” portion of the curve for newer technologies and “ flat ” portion of the curve for mature technologies. The observed phenomenon in the economic literature which supports manufacture r learni ng cost reductions are based on reductions in costs as production volumes increase, and the economic literature suggests these cost reductions occur indefinitely , though the absolute magnitude of the cost reductions decrease as production volumes increase (with the highest absolute cost reduction occurring with the first doubling of production). The agencies use the terminology “ steep ” and “ flat ” portion of the curve to distinguish among newer technologies and more mature technologies, respectively , and ho w learning cost reductions are applied in cost anal ys es . The steep learning algorithm applies for the earl y, steep portion of the learning curve and is estimated to result in 20 percent lower costs after two full y ears of implementation (i.e., a 201 6 MY c ost would be 20 percent lower than the 201 4 and 201 5 model year costs for a new technology

being implemented in 201 4 ). The flat learning algorithm applies for the flatter portion of the learning curve and is estimated to result in 3 percent lower costs in each of the five ye ars following first introduction of a mature technology added in response to this final action . Once two st eep learning steps have occurred (for technologies having steep learning applied), flat learning would begin. For technologies to which flat learning is applied, learning would begin in year 2 at 3 percent per year for 5 years. Beyond 5 years of flat learning at 3 percent per year, 5 years of flat learning at 2 percent per ye ar, then 5 at 1 percent per y ear become effective. Learning impacts have been considered on most but not all of the technologies expected to be used because some of the expected tec hnologies are already used rather widely in the industry

and, presumabl y, learning impacts have already occurred. The agencies have applied the steep learning algorithm for only a handful of technologies considered to be new or emerging technologies such as energy recovery s ystems and thermal storage units which might one day be used on big trucks. For most technologies, the agencies have considered them to be more established and, hence, the agencies have applied the lower flat learning algorithm. For m ore discussion of the learning approach and the technologies to which each t yp e of learning has been applied the reader is directed to Chapter 2 of the RIA
. The technology

cost estimates discussed in Section III and detailed in Chapter 2 of the RIA are use d to build up technology package cost estimates. For each engine and truck class, a single package for each was developed capable of compl yi ng with the final standards and the costs for each package was generated. The technology packages and package cost s are discussed in more detail in Chapter 2 of the RIA. The compliance cost estimates take into account all credits and trading programs and include costs associated

501 RTI International. Heavy
- duty Truck Retail Price Equivalent and Indirect Cost Multipliers. July 2010.******* **E.O. 12866 Review**

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462 of with air conditioning controls. Table VIII
- 1 presents the average incremental costs per truck for this final action. For HD pickup trucks and vans (Class 2b and 3), costs increase as the standards become more stringent in 2014 through 2018. Follo wing 2018, costs then decrease going forward as learning effects result in decreased costs for individual technologies. By 2022, the long term ICMs take effect and costs decrease yet again. For vocational vehicles, cost trends are more difficult to disce rn as diesel engines begin adding technology

in 2014, gasoline engines begin adding technology in 2016, and the trucks themselves begin adding technology in 2014. With learning effects the costs, in general, decrease each year except for the heavy
- dut y ga soline engine changes in 2016. Long term I CMs take effect in 2022 to provide more cost reductions. For combination tractors, costs generall y decrease each ye ar due to learning effects with the exception of 2017 when the engines placed in sleeper cab trac tors add turbo compounding. Following that, learning impacts result in cost reductions and the long term IC Ms take effect in 2022 for further cost reductions. By 2030 and later, cost

– per - truck estimates remain constant for all classes. Regarding the lon g term IC Ms taking effect in 2022, the agencies consider this the point at which some indirect costs decrease or are no longer considered attributable to the program (e.g., warrant y costs go down). Costs per truck remain essentially

constant thereafter.

**Table VIII**  **- 1**  **: Estimated Cost per Truck (200**  **9 dollars)**  HD Pickups & Vans Vocational Combination 2014 $165 $329 $6,019 2015 $215 $320 $5,871 2016 $422 $397 $5,677 2017 $631 $387 $6,413 2018 $1,048 $378 $6,215 2020 $985 $366 $6,004 2030 $977 $311 $5,075 2040 $977 $305 $5,075 2050 $977 $304 $5,075 These costs would, presumably , have some impact on new truck prices, although the agencies make no attempt at determining what the impact of increased costs would be on new truck prices. Nonetheless, on a percentage basis, the costs shown in Table VIII
- 1 for 2018 MY trucks (when all final requirements are full y implemented) would be roughl y three percent for a ty pical HD pickup truck or van, less than one percent for a ty pical vocational vehicle, and roughl y six percent for a t ypical combination truck/tractor using new truck prices of $40,000, $100,000 and $100,000, respectivel y. The costs would represent lower or higher percentages of new truck prices for new trucks with higher or lower prices, respectively . Given the wide range of new truck prices in these categories

— a Class 4 Vocational work truck might be $40,000 when new while a Class 8 refuse truck (i.e., a large vocational vehicle) might be as much as $200,000 when new

—it is very difficult to reflect incremental costs as percentages of new truck prices for all trucks. What is presented here is the average cost ( Table VIII
- 1 ) compared with ty pical new truck prices.******* **E.O. 12866 Review**

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463 of As noted above, the fixed costs were estimated separatel y from the hardware costs for HD diesel engines that are placed in vocational vehicles and combination tractors. Those fixed costs are not included in Table VIII
- 1 . The agencies have estimated the R&D costs at $6.8 million per manufacturer per ye ar for five years and the new test cell costs (to ac commodate measurement of N 2 O emissions) at $63,087 per manufacturer. The test cell costs of N 2 O emissions measurement has been adjusted for the final rulemaking to reflect comments which stated approximately 75 percent of manufacturers would be required t o update existing equipment while the other 25 percent would require new equipment. These costs appl y individually for LHD, MHD and HHD engines. Given the 14 manufacturers impacted b y the final standards, 11 of which are estimated to sell both MHD and HH D engines and 3 of which are estimated to sell LHD engines, we have estimated a five ye ar annual R&D cost of $170.3 million dollars (2 x 11 x $6.8 million plus 3 x $7.75 million for each ye ar 2012
- 2016) and a one
- time test cell cost of $1.6 million dollars (2 x 11 x $63,087 plus 3 x $63,087 in 2013). Estimating annual sales of HD diesel engines at roughl y 600,000 units results in roughly $284 per engine per ye ar for five years beginning in 2012 and ending in 2016. Again, these costs are not reflected in Table VIII
- 1 , but are included in Table VIII
- 2 as “Other Engineeri ng Costs.” The certification and compliance program costs, for all engine and truck types, are estimated at $6.5 million in the first y ear dropping to $2.3 million in each year thereafter and continuing indefinitely . These costs are detailed in the “Draf t Supporting Statement for Information Collection Request” which is contained in the docket for this final action. 502 The costs are higher in the first y ear due to capital expenses required to comply with new reporting burdens (facility upgrade costs are included in engineering costs as described above). Estimating annual sales of heavy
- dut y trucks at roughl y 1.5 million units would result in just over $4 per engine/truck in the first y ear and less than $2 per engine/truck per year thereafter. These costs are not reflected in Table VIII
- 1, but are included in Table VIII
- 2 below as “Compliance Program” costs. **(2) Annual Cost**  **s of the HD National Program** The costs presented here represent the incremental costs for newl y added technology

to comply

with the program . Together with the projected increases in truck sales, the increases in per
- truck average costs shown in Table VIII
- 1 , above result in the total annual costs presented in Table VIII
- 2 below. Note that the costs presented in Table VIII
- 2 do not include the savings that will occur as a result of the improvements to fuel consumption. Thos e impacts are presented in Section VIII. E. Note also that the costs presented here represent costs estimated to occur presuming that the final standards will continue in perpetuit y. Any changes to the final standards would be considered as part of a future rulemaking. In other words, the final standards do not appl y only to 2014
- 2018 model year trucks
- they

do, in fact, appl y to all 2014 and later model ye ar trucks. We

502 “Draft Supporting Statement for Information Collection Request,” Control of Greenhouse Gas Emissions from New Motor Vehicles: Prop osed Heavy
- Duty Engine and Vehicle Standards, EPA ICR Tracking Number 2394.01.******* **E.O. 12866 Review**

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464 of present more detail regarding the 2014
- 2018 model year trucks in Sections VIII.L and M, where we summarize all monetized costs and benefits. **Table VIII**  **- 2**  **: Annual Costs Associated with the Pro**  **gram ($Millions of 200**  **9 dollars)**  Year HD Pickup

and Van s Vocational

Vehicles Combination

Tractors Other

Engineering Costs Compliance

Program Costs Annual

Costs 2012 $0 $0 $0 $170 $0 $170 2013 $0 $0 $0 $172 $0 $172 2014 $130 $185 $1,078 $170 $6.5 $1,569 2015 $157 $170 $922 $170 $2.3 $1,422 2016 $300 $202 $820 $170 $2.3 $1,495 2017 $447 $198 $951 $0 $2.3 $1,598 2018 $751 $201 $1,000 $0 $2.3 $1,955 2020 $754 $202 $1,001 $0 $2.3 $1,959 2030 $918 $216 $1,076 $0 $2.3 $2,212 2040 $1,024 $281 $1,372 $0 $2.3 $2,679 2050 $1,156 $354 $1,777 $0 $2.3 $3,290 NPV, 3% $17,070 $4 ,950 $24,487 $793 $52 $47,352 NPV, 7% $8,467 $2 ,588 $12,855 $724 $30 $24,665 

### C. **I ndirect Cost**  **Multipliers (1)**  **Markup Factors to Estimate Indirect Costs** For all segments in this analy sis, indirect costs are estimated by applying indirect cost multipliers (I CM) to direct cost estimates. ICMs were calculated by EPA as a basis for estimating the impact on indirect costs of individual vehicle technology changes that would result from regulatory actions. Separate ICMs were derived for low, medium, and high complexity

technologies, thus enabling estimates of indirect costs that reflect the variation in research, overhead, and other indirect costs that can occur among different technologies. I CMs were also applied in the light
- duty rule
. Prior to developing the ICM methodology , EPA and NHTSA both applied a retail price equival ent (RPE) factor to estimate indirect costs. RPEs are estimated by dividing the total revenue of a manufacturer b y the direct manufacturing costs. As such, it includes all forms of indirect costs for a manufacturer and assumes that the ratio applies equa lly for all technologies. I CMs are based on RPE estimates that are then modified to reflect only

those elements of indirect costs that would be expected to change in response to a regulatory
- induced technology change. For example, warrant y costs would be reflected in both RPE and I CM estimates, while marketing costs might only be reflected in an RPE estimate but not an I CM estimate for a particular technology , if the new regulatory
- induced technology change is not one expected to be marketed to consumers. Because ICMs calculated by EPA are for individual technologies, many of which are small in scale, they

often reflect a subset of RPE costs; as a result, the RPE is ty picall y higher than an ICM. This is not alway s the case, as I CM estimates for complex******* **E.O. 12866 Review**

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465 of t echnologies may

reflect higher than average indirect costs, with the resulting ICM larger than the averaged RPE for the industry
. There is some level of uncertaint y surrounding both the I CM and RPE markup factors. The ICM estimates used in this final action group all technologies into three broad categories and treat them as if individual technologies within each of the three categories (low, medium, and high complexity ) will have the same ratio of indirect costs to direct costs. This simplification m eans it is likely that the direct cost for some technologies within a category will be higher and some lower than the estimate for the category in general. More importantly , the IC M estimates have not been validated through a direct accounting of actual i ndirect costs for individual technologies. Rather, the I CM estimates were developed using adjustment factors developed in two separate occasions: the first, a consensus process, was reported in the RTI report; the second, a modified Delphi method, was co nducted separately and reported in an EPA memo. 503 Both these panels were composed of EPA staff members with previous background in the automobile industry ; the memberships of the two panels overlapped but were not the same. 504 The panels evaluated each elem ent of the industry ’s RPE estimates and estimated the degree to which those elements would be expected to change in proportion to changes in direct manufacturing costs. The method and estimates in the RTIreport were peer reviewed b y three industry expert s and subsequently by reviewers for the International Journal of Production Economics. 505 RPEs themselves are inherently difficult to estimate because the accounting statements of manufacturers do not neatly categorize all cost elements as either direct or indirect costs. Hence, each researcher developing an RPE estimate must apply a certain amount of judgment to the allocation of the costs. Moreover, RPEs for heav y - and medium
- duty trucks and for engine manufacturers are not as well studied as they are fo r the light
- dut y automobile industry
. Since empirical estimates of I CMs are ultimatel y derived from the same data used to measure RPEs, this affects both measures. However, the value of RPE has not been measured for specific technologies, or for groups o f specific technologies. Thus applying a single average RPE to any given technology

by definition overstates costs for very simple technologies, or understates them for advanced technologies. In the proposal, we requested comment on our ICM factors and wh ether it was most appropriate to use ICMs or RPEs. We received no comment on the issue specificall y, other than basic comments that perhaps our I CM factors were low. In response, for this final action, we have adjusted our I CM factors such that they are slightly higher and, importantly , we have changed the way in which the factors are

503 Helfand, Gloria, and Sherwood, Todd. “Documentation of the Development of Indirect Cost Multipliers for Three Automotive Technologies.” Memorandum, Assessment and Standards Division, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, August 2009. 504 NHTSA staff participated in the development of the process for the second, modified Delphi panel, and reviewed the results as they were developed, but did not serve on the panel. 505 The results of the RTI report were published in Alex Rogozhin, Michael Gallaher, Glo ria Helfand, and Walter McManus, “Using Indirect Cost Multipliers to Estimate the Total Cost of Adding New Technology in the Automobile Industry.” International Journal of Production Economics 124 (2010): 360
- 368.******* **E.O. 12866 Review**

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466 of applied. The first change

—increased ICM factors

— has been done as a result of further thought among the EPA and NHTSA team that the I CM factors presented in the original RTI report 506 for low and medium complexity technologies should no longer be used and that we should rel y solely on the modified
- Delphi values for these complexity levels. 507 For that reason, we have eliminated the averaging of original RTI values with modified
Delphi values and instead are rel yi ng solel y on the modified
- Delphi values for low and medium complexity

technologies. The second change

—the way the factors are applied

— results in the warranty

portion of the indirect costs being applied as a multiplicativ e factor (thereb y decreasing going forward as direct manufacturing costs decrease due to learning), and the remainder of the indirect costs being applied as an additive factor (thereb y remaining constant y ear - over - year and not being reduced due to learning ). This second change has a comparativel y large impact on the resultant technology costs and, we believe, more appropriately estimates costs over time. Inaddition to these changes, a secondary
- level change was also made as part of this I CM recalculation to the light
- dut y ICMs and, therefore, to the I CMs used in this analy sis for heavy
- dut y pickups and vans. That change was to revise upward the RPE level reported in the original RTIreport from an original value of 1.46 to 1.5 to reflect the long term average RPE. The original RTI study was based on 2008 data. However, an anal ysis of historical RPE data indicates that, although there is year to year variation, the average RPE has remained constant at roughl y 1.5. ICMs will be applied to future ye ar’s data and therefore NHTSA and EPA staff believe that it would be appropriate to base ICMs on the historical average rather than a single ye ar’s result. Therefore, ICMs were adjusted to reflect this average level since the original value exclude d net income. As a result, even the High 1 and High 2 ICMs used for heavy
- duty pickups and vans have also changed. These changes to our ICMs and the methodology are described in greater detail in Chapter 2 of the final RIA. 

### D. **Cost per Ton of Emissi ons Reductions**  The agencies have calculated the cost per ton of GHG reductions associated with this program on a CO 2 eq basis using the above costs and the emissions reductions described in Section s VIand VII
. These values are presented in Table VI II
- 3 through Table VIII
- 5 for HD pickups & vans, vocational vehicles and combination trucks/tractors, respectively
. The cost per metric ton of GHG emissions reductions has been calculated in the ye ars 2020, 2030, 2040, and 2050 using the annual vehicle compliance costs and emission reductions for each of those y ears. The value in 2050 represents the lon g - term cost per ton of the emissions reduced. The agencies have also calculated the cost per metric ton of GHG emission reductions including the savings associated with reduced fuel consumption (presented below in Section VIII. E. ). This latter calculation does not include the other benefits associated with this program such as those associated with energy securit y benefits as discussed later in S ection VIII .I
. B y including the fuel savings in the cost estimates, the cost per ton is generally less than $0
506 Rogozhin, Alex, Michael Gallaher, and Walter McManus. “Automobile Industry Retail Price Equivalent and Indirect Cost Multipliers.” Report prepared for EPA by RTI International. EPA Report EPA
- 420
- R
- 09
- 003, February 2009. 507 Helfand, Gloria, and Sherwoo d, Todd. “Documentation of the Development of Indirect Cost Multipliers for Three Automotive Technologies.” Memorandum, Assessment and Standards Division, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, August 2009.******* **E.O. 12866 Review**

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467 of since the estimated value of fuel savings outweighs the program costs. The results for CO 2 eq costs per ton under the HD National Program across all regulated cat egories are shown in Table VIII
- 6
. **Table VIII**  **- 3**  **: Annual Cost**  **per Metric Ton of CO 2**  **e q**  **Reduced**
**– HD**  **Pickup Trucks & Vans (200 9**  **dollars)** Year Program Cost Fuel

Savings (post
- tax) CO 2 eq

Reduced Cost per Ton

(without Fuel Savings) Cost per Ton

(with Fuel Savings) 2020 $800 $1,000 3 $240
- $60 2030 $900 $3,300 10 $90
- $230 2040 $1,000 $4,700 14 $70
- $270 2050 $1,200 $5,900 16 $80
- $300

**Table VIII**  **- 4**  **: Annual**  **Cost per Metric Ton of CO 2**  **e q**  **Reduced**
**– Vocational**  **Vehicle s (200**  **9 dollars)**  **508** Year Program Cost Fuel

Savings (post
- tax) CO 2 eq

Reduced Cost per Ton

(without Fuel Savings) Cost per Ton

(with Fuel Savings) 2020 $200 $1,200 4 $50
- $240 2030 $200 $2,600 9 $20
- $270 2040 $300 $3,800 12 $30
- $300 2050 $400 $5,000 14 $30
- $330

**Table VIII**  **- 5**  **: Annual Cost**  **per Metric Ton of CO 2**  **e q**  **Reduced**
**– Combination**  **Tractors (200**  **9 dollars)**  **509** Year Program Cost Fuel

Savings (post
- tax) CO 2 eq

Reduced Cost per Ton

(without Fuel Savings) Cost per Ton

(with Fuel Savings) 2020 $1,000 $8,700 32 $30
- $240 2030 $1,100 $17,000 57 $20
- $280 2040 $1,400 $22,100 68 $20
- $300 2050 $1,800 $28,500 78 $20
- $340

508 The program costs, fuel savings, and CO 2 eq reductions of the engines installed in vocational vehicles are em bedded in the vehicle standards and analysis. 509 The program costs, fuel savings, and CO 2 eq reductions of the engines installed in tractors are embedded in the tractor standards and analysis.******* **E.O. 12866 Review**

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468 of **Table VIII**  **- 6**  **: Annual Cost**  **p er Metric Ton of CO**  **2 eq**  **Reduced**
**– Final**  **(200 9**  **dollars)** Year Program

Cost Fuel

Savings (post
- tax) CO 2 eq

Reduced Cost per Ton

(without Fuel Savings) Cost per Ton

(with Fuel Savings) 2020 $2,000 $10,900 39 $50
- $230 2030 $2,200 $23,000 76 $30
- $270 2040 $2,700 $30,600 94 $30
- $300 2050 $3,300 $39,500 108 $30
- $340 

### E. **Impacts of Reduction in Fuel Consumption (1)**  **What are the Projected Changes in Fuel Consumption** The new CO 2 standards will result in significant improvements in the fuel efficiency of affected trucks. Drivers of those trucks will see corresponding savings associated with reduced fuel expenditures. The agencies have estimated the impacts on fuel consumption fo r the tailpipe CO 2 standards. To do this, fuel consumption is calculated using both current CO 2 emission levels and the new CO 2 standards. The difference between these estimates represents the net savings from the CO 2 standards. Note that the total numbe r of miles that vehicles are driven each ye ar is different under the control case scenario than in the reference case due to the “rebound effect,” which is discussed in Section VIII. E. (5) . EPA also notes that drivers who drive more than our average estimates for vehicle miles traveled (VMT) will experience more fuel savings; drivers who drive less than our average VMT estimates will experience less fuel savings. The expected impacts on fuel consumption are shown in Table VIII
- 7 . The gallons shown in the tables reflect impacts from the new fuel consumption and CO 2 standards and include increased consumption resulting from the rebound effect.

**Table VIII**  **- 7**  **: Fuel Consumption**  **Reduction s of the Pro**  **gram (Million gallons)** 

Year Gasoline Diesel 2014 1 473 2015 3 846 2016 14 1,171 2017 31 1,643 2018 58 2,123 2020 114 2,986 2030 348 5,670 2040 453 7,046 2050 522 8,158 **(2) Potential Impacts on Global Fuel Use and Emissions**  EPA’s quantified reductions in fuel consumption focus on the gains from reducing fuel used b y heavy
- duty vehicles within the United States. However, as******* **E.O. 12866 Review**

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469 of discussed in Section VIII.I , EPA also recognizes that this regulation will lower the world price of oil (the “monopsony” effect). Lowering oil prices could lead to an uptick in oil consumption globally , leading to a corresponding increase in GHG emissions in other countries. This global increase in emissions could slightly offset some of the emission reduc tions achieved domestically as a result of the regulation. **(3) What are the Monetized Fuel Savings?**  Using the fuel consumption estimates presented in Table VIII
- 7 , the agencies can calculate the monetized fuel savings associated with the final standards. To do this, reduced fuel consumption is multiplied in each ye ar b y the corresponding estimated ave rage fuel price in that year, using the reference case taken from the AEO 201 1
. These estimates do not account for the significant uncertainty in future fuel prices; the monetized fuel savings will be understated if actual fuel prices are higher ( or overs tated if fuel prices are lower) than estimated. AEO is a standard reference used b y NHTSA and EPA and man y other government agencies to estimate the projected price of fuel. This has been done using both the pre
- tax and post
- tax fuel prices. Since the po st - tax fuel prices are the prices paid at fuel pumps , the fuel savings calculated using these prices represent the savings consumers would see. The pre
- tax fuel savings are those savings that society would see. These results are shown in Table VIII
- 8 . Note that in Section s V III. L and M , the overall benefit s and cost s of the rule s are presented and, for that reason, onl y the pre
- tax fuel savings are presented there
.

**Table VIII**  **- 8**  **: Estimated Monetized Fuel Savings ($Millions of 200**  **9 dollars)** 

Year Fuel Savings

(pre
- tax) Fuel Savings

(post
- tax) 2014 $1,200 $1,400 2015 $2,200 $2,600 2016 $3,300 $3,800 2017 $4,800 $5,500 2018 $6,400 $7,400 2020 $9,600 $10,900 2030 $20,600 $23,000 2040 $28,000 $30,600 2050 $36,500 $39,500 NPV, 3% $375,300 $415,300 NPV, 7% $166,500 $185,400 As shown in Table VIII
- 8 , the agencies are projecting that truck consumers would realize very

large fuel savings as a result of the final standards
. As discussed further in the introductory

paragraphs of Section V II I , it is a conundrum from an economic perspective that these large fuel savings have not been provided b y manufacturers and purchased b y consumers of these products
. Unlike in the light
- dut y vehicle market, the vast majority

of vehicles in the medium
- and heavy
- dut y truck market are purchased and operated b y businesses; for them, fuel costs may represent substantial operating expenses.******* **E.O. 12866 Review**

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470 of Even in the presence of uncertainty and imperfect information

– conditions that hold to some degree in every

market

– we generally

expect firms to be cost
- minimizing to survive in a competitive marketplace and to make decisions that are therefore in the best interest of the compan y and its owners and/or shareholders. A number of behavioral and market phenomena may lead to a disconnect between how businesses account for fuel savings in their decisions and the way in which we account for the full stream of fuel savings for these rules, including imperfect information in the original and resale markets, split incentives, uncertaint y in future fuel prices, and adjustment or transactions costs (see Section VIII. A for a more detailed discussion). As discussed below in the context of rebound in Section VIII.E.5, the nature of the explanation for this gap may influence the actual magnitude of the fuel savings. **(4) Payback Period and Lifetime Savings on New Truck Purchases**  Another factor of interest is the pay back period on the purchase of a new truck that complies with the new standards. In other words, how long would it take for the e xpected fuel savings to outweigh the increased cost of a new vehicle? For example, a new 2018 MY HD pickup truck and van is estimated to cost $1,473 more, a vocational vehicle $419 more, and a combination tractor $6,215 more (all values are on average, an d relative to the reference case vehicle) due to the addition of new GHG reducing technology . This new technology will result in lower fuel consumption and, therefore, savings in fuel expenditures. But how many months or years would pass before the fuel savings exceed the upfront costs? Table VIII
- 9 shows the pay back period analy sis for HD pickup trucks and vans. The table shows fuel consumed under the reference case and fuel consumed b y a 2018 model year truck under the program, inclusive of fuel consumed due to rebound miles. The decrease in fuel consumed under the program is then monetized by

multiplying by

the fuel price reported b y AEO (re ference case) for 2018 and later. This value represents the fuel savings expected under the program for a HD pickup or van. These savings are then discounted each ye ar since future savings are considered to be of less value than current savings. Shown n ext are estimated increased costs (costs do not necessarily reflect increased prices which may be higher or lower than costs) for the new truck (refer to Table VI II
- 1 ). The next columns of Table VIII
- 9 show the period required for the fuel savings to exceed the new truck costs. As seen in the table, in the second ye ar of ownership, the discounted fuel savings (at both 3% and 7% discount rates) have begun to outweigh the increased cost of the truck. As shown in the table, the full life savings using 3% discounting would be $ 6,138 and at 7% discounting would be $4, 459
. Costs in this section, and summarized in Section VIII. L, are shown from the greenhouse gas perspective where fuel savings are treated as negative costs , since the primary motivations of this program are U.S. energy securit y and reductions in GHG emissions. From that perspective, the benefits of the program are the external effects, and the net effects on truck owners and operators are the costs. EPA prefers to account for all costs (positive and negative) di rectly realized by

the end user to accuratel y present the total cost and to differentiate those costs and cost savings from more generall y realized societal benefits. In Section VIII.M, the agencies also present summary tables******* **E.O. 12866 Review**

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471 of that show the cost and benef it anal ys is from the fuel efficiency perspective, where the purpose of a program to regulate fuel efficiency is primarily

to save fuel. From this perspective, fuel savings are counted as benefits that occur over the lifetime of the vehicle as it consumes less fuel, rather than as negative costs that would be experienced either at the time of purchase or over the lifetime of the vehicle. OMB’s Circular A
- 4, which provides guidance to Federal agencies on the development of regulatory anal ys is, makes clear that either approach is acceptable.

**Table VIII**  **- 9**  **: Payback Period for a 2018 Model Year HD Pickup or Van (2009$) Year of**  **Ownership Reduced**  **Fuel Use**

**(gallons) b**  **Fuel Savings a**  **Increased Cost**  **Cumulative Savings Gasoline**  **Diesel 3%** 

**Discount 7%** 

**Discount 3%** 

**Discount 7%** 

**Discount 1**  67 122 $627 $616
- $1, 048
- $421
- $433 **2** 67 122 $617 $583 $196 $151 **3** 66 120 $600 $546 $796 $696 **4** 64 117 $570 $499 $1,366 $1,196 **5** 62 113 $544 $458 $1,910 $1,654 **6** 59 108 $507 $411 $2,417 $2,065 **7** 56 102 $474 $370 $2,890 $2,435 **Full Life** 894 1,617 $7,187 $5,507
- $1, 048 $ 6,138 $4, 459 Note s : a Fuel savings calculated using the AEO 201 1 reference case fuel prices through 2035. Fuel prices beyond 2035 were extrapolated from an average growth rate for the years 2017 to 2035 . Gasoline and diesel fuel prices have been weighted by gasoline and die sel fuel reductions estimated for all 2018 MY heavy
- duty trucks during their lifetimes. b Gallons under the control case include gallons consumed during rebound driving. The story is somewhat different for vocational vehicle s and combination tractor s. The se cases are shown in Table VIII
- 10 and Table VIII
- 11 , respectivel y. Since these trucks travel more miles in a given year, their payback periods are shorter and are expected to occur within the second ye ar of ownership under both the 3% and 7% discounting cases. As can be seen in Table VIII
- 10 and Table VI II
- 11 , the lifetime fuel savings are estimated to be considerable with savings of $ 5,494 (3%) and $ 4,268 (7%) for the vocational vehicles and $72,875 (3%) and $58,162 (7%) for the combination tractors.******* **E.O. 12866 Review**

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472 of **Table VIII**  **- 10**  **: Payback Period for a 2018 Model Year Vocational Vehicle (2009$) Year of**  **Ownership Reduced**  **Fuel Use**

**(gallons) b**  **Fuel Savings a**  **Increased Cost**  **Cumulative Savings Gasoline**  **Diesel 3%**  **Discount 7%** 

**Discount 3%** 

**Discount 7%** 

**Discount 1**  51 161 $702 $690
- $ 378 $325 $312 **2** 47 146 $637 $602 $962 $914 **3** 44 134 $576 $524 $1,538 $1,438 **4** 41 122 $516 $452 $2,054 $1,889 **5** 38 110 $463 $390 $2,516 $2,279 **6** 34 98 $404 $328 $2,921 $2,607 **7** 31 87 $359 $280 $3,279 $2,887 **Full Life** 550 1,458 $5,872 $4,646
- $ 378 $5,494 $4,268 Notes: a Fuel savings calculated using the AEO 201 1 reference case fuel prices through 2035. Fuel prices beyond 2035 were extrapolated from an average growth rate for the years 2017 to 2035 . Gasoline and diesel fuel prices have been weighted by gasoline and diesel fuel reductions estimated for all 2018 MY heavy
- duty trucks during their lifetimes. b Gallons under the control case include gallons consumed during rebound driving. **Table VIII**  **- 11**  **: Payback Period for a 2018 Model Year Com bination Tractor (2009$)**  **Year of Ownershi**  **p Reduced Fuel Use** 

**(gallons) b**  **Fuel Savings a**  **Increase d Cost**  **Cumulative**

**Savings Gasoline**  **Diesel 3%**  **Discoun t**  **7% Discoun**  **t 3%** 

**Discount 7%** 

**Discoun t**  **1** 0 3,223 $10,736 $10,539
- $6,215 $4,522 $4,324 **2** 0 2,897 $9,619 $9,089 $14,141 $13,413 **3** 0 2,619 $8,564 $7,790 $22,705 $21,203 **4** 0 2,359 $7,532 $6,595 $30,237 $27,797 **5** 0 2,096 $6,626 $5,585 $36,863 $33,382 **6** 0 1,842 $5,684 $4,611 $42,546 $37,993 **7** 0 1,617 $4,951 $3,867 $47,497 $41,860 **Full Life** 0 26,148 $79,089 $64,376
- $6,215 $72,875 $58,162 Notes: a Fuel savings calculated using the AEO 201 1 reference case fuel prices through 2035. Fuel prices beyond 2035 were extrapolated from an average growth rate for the years 2017 to 2035 . Gasoline and diesel fuel prices have been weighted by gasoline and diesel fuel reductions estimated for all 2018 MY heavy
- duty trucks during their lifetimes. b Gallons under the control case include gallons consumed during rebound driving. All of these pay

back analy ses include fuel consumed during rebound VMT in the control case but not in the reference case, consistent with other parts of the anal ys is. Further, this analy sis does not include other societal impacts such as reduced time spent refueling or noise, congestion and accidents since the focus is meant to be on those factors bu ye rs think about most while considering a new truck purchase . Note also that operators that drive more miles per year than the average would realize greater fuel savings than estimated here, and those that drive fewer miles per year would realize******* **E.O. 12866 Review**

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473 of lesser savings. The same holds true for operators that keep their v ehicles longer (i.e., more years) than average in that they would realize greater lifetime fuel savings than operators that keep their vehicles for fewer ye ars than average. Likewise, should fuel prices be higher than the AEO 2011 reference case, operator s will realize greater fuel savings than estimated here while they would realize lesser fuel savings were fuel prices to be lower than the AEO 2011 reference case. **(5) Rebound Effect**  The VMT rebound effect refers to the fraction of fuel savings expected to result from an increase in fuel efficiency that is offset by additional vehicle use. If truck shipping costs decrease as a result of lower fuel costs, an increase in truck VMT may occur. Unlike the light
- duty rebound effect, the heav y - dut y (HD) rebound e ffect has not been extensively

studied. Because the factors influencing the HD rebound effect are generall y different from those affecting the light
- duty rebound effect, much of the research on the light
- duty rebound effect is not likely to appl y to the H D sectors. O ne of the major differences between the HD rebound effect and the light
- dut y rebound effect is that HD vehicles are used primarily for business purposes. Since these businesses are profit driven, decision makers are highl y likely to be aware of the costs and benefits of different shipping decisions, both in the near term and long term. Therefore, shippers are much more likely

to take into account changes in the overall operating costs per mile when making shipping decisions that affect VMT. Another difference from the light
- dut y case is that, as discussed in the recent NAS Report 510 , when calculating the percentage change in trucking costs to determine the rebound effect, all changes in the operating costs should be considered. The cost of la bor and fuel generall y constitute the top two shares of truck operating costs, depending on the price of petroleum, 511 , distance traveled, t ype of truck, and commodity. 512 Finally , the equipment costs associated with the purchase or lease of the truck is also a significant component of total operating costs. Even though vehicle costs are lump
- sum purchases, they can be considered operating costs for trucking firms, and these costs are, in many cases, expected to be passed onto the final consumers of shipping services on a variable basis. This shipping cost increase could help temper the rebound effect relative to the case of light
- dut y vehicles, in which vehicle costs are not considered an operating cost by vehicle owners. When calculating the net change in o perating costs, both the increase in new vehicle costs and the decrease in fuel costs per mile should be taken into consideration. The higher the net cost savings, the higher the expected rebound effect. Conversel y, if the upfront vehicle costs outweighe d future cost savings and total costs increased, shipping costs would rise, which would likely result in a decrease in truck VMT. In

510 S e e NAS Report, Note **213** 511 American Transportation Research Institute, An Analysis of the Operational Cost s of Trucking , December 2008 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0007). 512 Transport Canada, Operating Cost of Trucks, 2005. See http://www.tc.gc.ca/eng/policy/report
- a cg operatingcost2005
- 2005
- e - 2
- 1727.htm , accessed on July 16, 2010 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0006 ). See also ATRI, 2008.******* **E.O. 12866 Review**

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474 of theory , other changes such as maintenance costs and insurance rates would also be taken into account, although information on these potential cost changes is extremely limited. In the proposal, we invited comments on the most appropriate methodology for factoring new vehicle purchase or leasing costs into the per
- mile operating costs. We also invited comment or data on how these regulations could affect maintenance, insurance, or other operating costs. We did not receive an y comments on these assumptions. The following sections describe the factors affecting the rebound effect, different methodologies for estimating the reb ound effect, and examples of different estimates of the rebound effect to date. According to the NAS study , it is “ not possible to provide a confident measure of the rebound effect , ” yet NAS concluded that a rebound effect likely exists and that “estimate s of fuel savings from regulatory standards will be somewhat misestimated if the rebound effect is not considered.” While we believe the HD rebound effect needs to be studied in more detail, we have attempted to capture the potential impact of the rebound effect in our anal ys is. In the proposal, we solicited data on the rebound effect and input on the most appropriate estimates to use for the rebound effect. However, we did not receive an y new data or substantive comments. Therefore, for this final acti on, we continue to use a rebound effect for vocational vehicles of 15%, a rebound effect for HD pickup trucks and vans of 10%, and a rebound effect for combination tractors of 5%. These VMT impacts are reflected in the estimates of total GHG and other air pollution reductions presented in Chapter 5 of the RIA. (a ) Factors Affecting the Magnitude of the Rebound Effect The HD vehicle rebound effect is driven b y the interaction of several different factors. In the short
- run, decreasing the fuel cost per mil e of driving could lead to a decrease in end product prices. Lower prices could stimulate additional demand for those products, which would then result in an increase in VMT. In the long run, shippers could reorganize their logistics and distribution networks to take advantage of lower truck shipping costs. For example, shippers may shift away

from other modes of shipping such as rail, barge, or air. In addition, shippers may also choose to reduce the number of warehouses, reduce load rates, and make sm aller, more frequent shipments, all of which could also lead to an increase in HD VMT. Finally , the benefits of the fuel savings could ripple through the economy , which could in turn increase overall demand for goods and services shipped b y trucks, and th erefore increase HD VMT. Conversel y, if a fuel efficiency regulation leads to net increases in the cost of trucking because fuel savings do not fully offset the increase in upfront vehicle costs, then the price of trucking services could rise, spurring a decrease in HD VMT and a shift to alternative shipping modes. These effects would also ripple through the econom y. (b ) Options for Quantifying the Rebound Effect As described in the previous section, the fuel efficiency rebound effect for HD vehicles has not been studied as extensively as the rebound effect for light
- duty vehicles, and virtually

no research has been conducted on the HD pickup truck and van rebound effect. In the proposal, we discussed four options for quantifying the rebound effect and******* **E.O. 12866 Review**

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475 of r equested comments. We did not receive an y substantive comments on the described methodologies. (i ) Aggregate Estimates The aggregate approximation approach quantifies the overall change in truck VMT as a result of a percentage change in freight rates. It i s important to note that most of the aggregate estimates measure the change in freight demanded (tons or ton
- miles), rather than a change in fuel consumption or VMT. The change in tons or ton
- miles is more accurately

characterized as a freight elasticity
. Therefore, it may not be entirel y appropriate to interpret these freight elasticities as measures of the rebound effect, although these terms are sometimes used interchangeabl y in the literature. 513 Given these caveats, freight elasticit y estimates rel y o n estimates of aggregate price elasticity of demand for trucking services, given a percentage change in trucking prices, which is generall y referred to as an “own
- price elasticit y.” Estimates of trucking own
- price elasticities vary

widel y from positive 1. 72 to negative 7.92), and there is no general consensus on the most appropriate values to use, though a 2004 literature survey found aggregate elasticit y estimates generall y fall in the range of
- 0.5 to
- 1.5. 514 Inother words, given an own
- price elasticity of
- 1.5, a 10% decrease in trucking prices leads to a 15% increase in truck shipping demand. Another challenge of estimating the rebound effect using freight elasticities is that these values appear to vary substantiall y based on the demand elasticit y m easure (e.g., ton or ton - mile), the model specification (e.g., linear functional form or log linear), the length of the trip, and the ty pe of cargo. In general, elasticity estimates of longer trips tend to be larger than elasticity estimates for shorter trips. In addition, elasticities tend to be larger for lower
- value commodities compared to higher
- value commodities. Although these factors explain some of the differences in estimates, much of the observed variation cannot be explained quantitatively . F or example, a recent study that controlled for these variables onl y accounted for about half of the observed variation. 515 Another important variable influencing freight elasticity estimates is whether potential mode shifting is taken into account. Alth ough the total demand for freight transport is generally

determined by

economic activity , there is often the choice of shipping freight on modes other than truck. This is because the United States has extensive rail, waterway

and air transport networks in addition to an extensive highway network; these networks closely parallel each other and are often both viable choices for freight transport for long
- distance routes within the continent. If rates go down for one mode, there will be an increase in demand for that mode and some demand will be shifted from other modes. This “cross
- price elasticity” is a measure of the percentage change in demand for shipping b y another mode (e.g., rail) given a percentage change in the price

513 Memo from Energy and Environmental Research Associates , LLC Regarding HDV Rebound Effect, dated June 8 , 2011. 514 Graham and Glaister, “Road Traffic Demand Elasticity Estimates: A Review,” Transport Revie ws Volume 24, 3, pp. 261
- 274, 2004 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 000 5). 515 Li, Z., D.A. Hensher, and J.M. Rose, Identifying sources of systematic variation in direct price elasticities from revealed preference studies of inter
- city freight demand. Transport Policy, 2011
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476 of of trucking. Aggregate estimat es of cross
- price elasticities also vary widely , and there is no general consensus on the most appropriate value to use for anal yt ical purposes. The NAS report cites values ranging from 0.35 to 0.59. 516 Other reports provide significantly different cross
- price elasticities, ranging from 0.1 517 to 2.0. 518 When considering intermodal shift, the most relevant kinds of shipments are those that are competitive between rail and truck modes. These trips generall y include long
haul shipments greater than 500 miles, which weigh between 50,000 and 80,000 pounds (the legal road limit in many states). Special kinds of cargo like coal and short
- haul deliveries are of less interest because they are generall y not econom ically transferable between truck and rail modes, and they would not be expected to shift modes except under an extreme price change. However, the total amount of freight that could potentially

be subject to mode shifting has also not been studied extensi vely. (ii) Sector
- Specific Estimates Given the limited data available regarding the HD rebound effect, the aggregate approach greatly

simplifies many

of the assumptions associated with calculations of the rebound effect. In reality, however, responses to changes in fuel efficiency and new vehicle costs will vary

significantly

based on the commodities affected. A detailed, sector - specific approach would be expected to more accuratel y reflect changes in the trucking market in response to the standards in this program . For example, input
- output tables could be used to determine the trucking cost share of the total delivered price of a commodity . Using the change in trucking prices described in the aggregate approach, the product
- specific demand elasticitie s could be used to calculate the change in sales and shipments for each product. The change in shipment increases could then be weighted b y the share of the trucking industry total, and then summed to get the total increase in trucking output. A simplifying assumption could then be made that the increase in output results in an increase in VMT. To the best of our knowledge, this ty pe of data has not y et been collected. We did not receive an y new information in response to our request for comments in the proposal, therefore we were unable to use this methodology for estimating the rebound effect for this final action. (iii) Econometric Estimates Similar to the methodology used to estimate the light
- dut y rebound effect, the HD rebound effect could be modeled econometricall y by estimating truck demand as a function of economic activity (e.g., GDP) and different input prices (e.g., vehicle prices, driver wages, and fuel costs per mile). This ty pe of econometric model could be

516 See 2010 NAS Report, Note **213** . See also 2009 Cambridge Systematics, Inc., Draft Final Paper commissioned by the NAS in support of the medium
- duty and heavy
- duty report. Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles: Commissioned Paper on Indirect Cos ts and Alternative Approaches Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0009). 517 Friedlaender, A. and Spady, R. (1980) A derived demand function for freight transportation, Revie w of Economics and Statistics, 62, pp. 432

–441 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0004). 518 Christidis and Leduc, “Longer and Heavier Vehicles for freight transport,” European Commission Joint Research Center’s Institute for Prospective Technology Studies, 2009 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0010).******* **E.O. 12866 Review**

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477 of estimated for either truck VMT or ton - miles as a measure of demand. The resulting elasticity estimates could then be used to determine the change in trucking demand, given the change in fuel cost and truck prices per mile from these standards. One of the challenges associated with an eco nometric anal ys is is the potential for omitted variable bias, which could either overstate or understate the potential rebound effect if the omitted variable is correlated with the controlled variables. (iv) Other Modeling Approaches Regulation of the heav y - duty industry has been studied in more detail in Europe, as the European Commission (EC) has considered allowing longer and heavier trucks for freight transport. Part of the anal ys is considered by the EC relies on country
- specific modeling of changes in the freight sector that would result from changes in regulations. 519 This approach attempts to explicitly calculate modal shift decisions and impacts on GHG emissions. Although similar ty pes of anal ys is have not been conducted extensively in the United States, research is currentl y underway that explores the potential for intermodal shifting in the United States. For example, Winebrake and Corbett have developed the Geospatial Intermodal Freight Transportation model, which evaluates the potential for GHG emiss ions reductions based on mode shifting, given existing limitations of infrastructure and other route characteristics in the United States. 520 This model connects multiple road, rail, and waterway transportation networks and embeds activity
based calculatio ns in the model. Within this intermodal network, the model assigns various economic, time
- of
- delivery , energy , and environmental attributes to real
- world goods movement routes. The model can then calculate different network optimization scenarios, based on changes in prices and policies. 521 However, more work is needed in this area to determine whether this ty pe of methodology

is appropriate for the purposes of capturing the rebound effect. Therefore, we have not been able to use this methodology for esti mating the rebound effect for this final action. (c) Estimates of the Rebound Effect The aggregate methodology was used by

Cambridge S ys tematics, Inc. (CSI) to show several examples of the magnitude of the rebound effect. 522 In their paper commissioned by the NAS in support of the recent HD report, CSI calculated an effective rebound effect for two different technology cost and fuel savings scenarios associated with an example Class 8 truck. Scenario 1 increased average fuel economy from 5.59 mpg to 6.8 mp g, with an additional cost of $22,930. Scenario 2 increased the average

519 Christidis and Leduc, “Longer and Heavier Vehicles for freight transport,” European Commission Joint Research Center’s Institute for Prospective Technology Studies, 2009. 520 Winebrake, James and Corbett, James J. (2010). “Improving the Energy Efficiency and Environmental Performance of Goods Movement,” in Sperling, Daniel and James S. Cannon (2010) Climate and Transportation Solutions: Findings from the 2009 Asilomar Conference on Transportation and Energy Policy. See http://www.its.ucdavis.edu/events/2009book/Chapter13.pdf (Docket ID: EPA
- HQ
- OAR
2010
- 0162
- 0011) 521 Winebrake, J. J.; Corbett, J. J.; Falzarano, A.; Ha wker, J. S.; Korfmacher, K.; Ketha, S.; Zilora, S., Assessing Energy, Environmental, and Economic Tradeoffs in Intermodal Freight Transportation, Journal of the Air &W

aste Management Association , 58(8), 2008 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0008)
. 522 C am bridge Systematics, Inc., 2009
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478 of fuel econom y to 9.1 mpg, at an incremental cost of $71,630 per vehicle. The CSI examples provided estimates using a range of own
- price elasticities (
- 0.5 to
- 1.5) and cross - price ela sticities (0.35 to 0.59) from the literature. Based on these two scenarios and a number of simplifying assumptions to aid the calculations, CSI found a rebound effect of 11
- 31% for Scenario 1 and 5
- 16% for Scenario 2 when the fuel savings from reduced rai l usage were not taken into account (“First rebound effect”). When the fuel savings from reduced rail usage were included in the calculations, the overall rebound effect was between 9
- 13% for Scenario 1 and 3
- 15% for Scenario 2 (“Second Rebound Effect”). See Table VI II
- 12
. CSIincluded a number of caveats associated with these calculations. Namely , the elasticity estimates derived from the literature are “heavil y reliant on factors including the ty pe of demand measures anal yz ed (vehicle
- miles of travel, ton
- miles, or tons), anal ys is geograph y, trip lengths, markets served, and commodities transported .” Furthermore, the CSIexample only

focused on Class 8 combination tractors and did not attempt to quantify the potential rebound effect for any other truck classes. Finall y, these scenarios were characterized as “sketches” and were not included in the final NAS report. In fact, the NAS report asserted that it is “not possible to provide a confident measure of the rebound effect , ” yet concluded that a rebound effect likely exi sts and that “estimates of fuel savings from regulatory standards will be somewhat misestimated if the rebound effect is not considered.” **Table VIII**  **- 12**  **: Range of Rebound Effect Estim**  **ates from Cambridge Systematics Aggregate Assessment**  Scenario 1 (6.8 mpg, $22,930) Scenario 2

(9.1 mpg, $71,630) “First Rebound Effect” (increase in truck VMT resulting from decrease in operating costs) 11
- 31% 5
- 16% “Second Rebound Effect” (net fuel savings when decreases from rail are taken into account) 9
- 13 % 3
- 15% As an alternative, using the econometric approach, NHTSA has estimated the rebound effect in the short run and long run for single unit (Class 4
- 7) and (Class 8) combination tractors. As shown in Table VIII
- 13 : , the estimates for the long
- run rebound effect are larger than the estimates in the short run, whic h is consistent with the theory that shippers have more flexibility to change their behavior (e.g., restructure contracts or logistics) when they

are given more time. In addition, the estimates derived from the national data also showed larger rebound eff ects compared to the state data. 523 One

523 NHTSA’s estimates of the rebound effect are derived from econometric analysis of national and state VMT data reported in Federal Highway Administration, Highway Statistics , various editions, Tables VM
- 1 and VM
- 4. Speci fically, the estimates of the rebound effect reported in Table VIII
- 10 are ranges of the estimated short
- run and long
- run elasticities of annual VMT by single
- unit and combination trucks with respect to fuel cost per mile driven. (Fuel cost per mile drive n during each year is equal to average fuel price per gallon during that year divided by average fuel economy of the truck fleet during that same year.)******* **E.O. 12866 Review**

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479 of possible explanation for the difference in the estimates is that the national rebound estimates are capturing some of the impacts of changes in economic activity. Historically , large increases in fuel prices are high ly correlated with economic downturns, and there may not be enough variation in the national data to differentiate the impact of fuel price changes from changes in economic activity . In contrast, some states may see an increase in output when energy price s increase (e.g., large oil producing states such as Texas and Alaska); therefore, the state data may be more accurately

isolating the individual impact of fuel price changes. **Table VIII**  **- 13**  **: Range of Rebound Effect Estim ates from NHTSA Econometric Analysis**  Truck T ype National Data State Data

Short Run Long Run Short Run Long Run Single Unit 13
- 22% 28
- 45% 3
- 8% 12
- 21% Combination N/A 12
- 14% N/A 4
- 5% As discussed throughout this section, there are multiple methodologies for quantifying the rebound effect, and these different methodologies produce a large range of potential values of the rebound effect. However, for the purposes of quantifying the rebound effect for this program, we have used a rebound effect with respect to changes in fuel costs per mile on the lower range of the long
- run estimates. Given the fact that the long
- run state estimates are generall y more consistent with the aggregate estimate s, for this program we have chosen a rebound effect for vocational vehicles (single unit trucks) of 15% that is within the range of estimates from both methodologies. Similarly , we have chosen a rebound effect for combination tractors of 5%. To date, no estimates of the HD pickup truck and van rebound effect have been cited in the literature. Since these vehicles are used for very different purposes than heav y - dut y vehicles, it does not necessarily seem appropriate to apply one of the heav y duty estimat es to the HD pickup trucks and vans. These vehicles are more similar in use to large light
- dut y vehicles, so for the purposes of our anal ys is, we have chosen to apply the light
- dut y rebound effect of 10% to this class of vehicles. For the purposes of th is program, we have not taken into account any potential fuel savings or GHG emission reductions from the rail sector due to mode shifting. We requested comments on this assumption in the proposal, but we did not receive any new data or input. Furtherm ore, we have made a number of simplifying assumptions in our calculations, which are discussed in more detail in the RIA. Specificall y, we have not attempted to capture how current market failures might impact the rebound effect. The
These estimates are derived from time
- series regression of annual national aggregate VMT for the period 1970
- 2008 on measures of nationwide economic activity, including aggregate GDP, the value of durable and nondurabl e goods production, and the volume of U.S. exports and imports of goods, and variables affecting the price of trucking services (driver wage rates, truck purchase prices, and fuel costs), and from regression of VMT for each individual state over the period 1994
- 2008 on similar variables measured at the state level.******* **E.O. 12866 Review**

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480 of direction and magnit

ude of the rebound effect in the HD market are expected to vary depending on the existence and t ypes of market failures affecting the fuel efficiency of the trucking fleet. If firms are already accuratel y accounting for the costs and benefits of these tec hnologies and fuel savings, then these regulations would increase their net costs, because trucks would already include all the cost
- effective technologies. As a result, the rebound effect would actually be negative and truck VMT would decrease as a resul t of these final regulations. However, if firms are not optimizing their behavior today due to factors such as lack of reliable information (see Section VIII.A. for further discussion), it is more likely

that truck VMT would increase. If firms recognize their lower net costs as a result of these regulations and pass those costs along to their customers, then the rebound effect would increase truck VMT. This response assumes that trucking rates include both truck purchase costs and fuel costs, and that th e truck purchase costs included in the rates spread those costs over the full expected lifetime of the trucks. If those costs are spread over a shorter period, as the expected short pay back period implies, then those purchase costs will inhibit reduction of freight rates, and the rebound effect will be smaller. As discussed in more detail in Section VIII.A, if there are market failures such as split incentives, estimating the rebound effect may depend on the nature of the failures. For example, if the orig inal purchaser cannot fully recoup the higher upfront costs through fuel savings before selling the vehicle nor pass those costs onto the resale buye r, the firm would be expected to raise shipping rates. A firm purchasing the truck second
hand might low er shipping rates if the firm recognizes the cost savings after operating the vehicle, leading to an increase in VMT. Similarl y, if there are split incentives and the vehicle bu yer isn’t the same entity that purchases the fuel, than there would theoretica lly be a positive rebound effect. In this scenario, fuel savings would lower the net costs to the fuel purchaser, which would result in a larger increase in truck VMT. If all of these scenarios occur in the marketplace, the net effect will depend on the extent and magnitude of their relative effects, which are also likel y to vary across truck classes (for instance, split incentives may be a much larger problem for Class 7 and 8 tractors than they

are for HD pickup trucks). Additional details on the rebo und effect are included in the RIA. 

### F. **Class Shifting and Fleet Turnover Impacts** The agencies considered two additional potential indirect costs, benefits, effects, and externalities which may lead to unintended consequences of the pro gram to improve the fuel efficiency

and reduce GHG emissions from HD trucks. The next sections cover the agencies’ qualitative discussions on potential class shifting and fleet turnover effects. **(1) Class**  **S hifting**  Heav y - dut y vehicles are ty picall y configured and purchased to perform a function. For example, a concrete mixer truck is purchased to transport concrete, a combination tractor is purchased to move freight with the use of a trailer, and a Class 3 pickup truck could be purchased b y a landscape company to pull a tra iler carrying lawnmowers. The purchaser makes decisions based on man y attributes of the vehicle,******* **E.O. 12866 Review**

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481 of including the gross vehicle weight rating of the vehicle which in part determines the amount of freight or equipment that can be carried. If the final HD Nati onal Program impacts either the performance of the vehicle or the marginal cost of the vehicle relative to the other vehicle classes, then consumers may choose to purchase a different vehicle, resulting in the unintended consequence of increased fuel consumption and GHG emissions in
- use. The agencies, along with the NAS panel, found that there is little or no literature which evaluates class shifting between trucks. 524 NHTSA and EPA qualitatively evaluated the final rules in light of potential class shifting . The agencies looked at four potential cases of shifting:
- from light
- dut y pickup trucks to heav y - dut y pickup trucks; from sleeper cabs to day

cabs; from combination tractors to vocational vehicles; and within vocational vehicles. Li ght
- dut y pickup truc ks, those with a GVWR of less than 8,500 pounds, are currentl y regulated under the existing CAFE program and will meet GHG emissions standards beginning in 2012. The increased stringency of the light
- dut y 2012
- 2016 MY vehicle rule h as led some to speculate that vehicle consumers may choose to purchase heav y - dut y pickup trucks that are currentl y unregulated if the cost of the light
- duty regulation is high relative to the cost to buy the larger heavy
- dut y pickup trucks. Since fuel con sumption and GHG emissions rise significantly with vehicle mass, a shift from light
- duty trucks to heavy
- dut y trucks would likely lead to higher fuel consumption and GHG emissions, an untended consequence of the regulations. Given the significant price pr emium of a heav y - dut y truck (often five to ten thousand dollars more than a light
- dut y pickup), we believe that such a class shift would be unlikely even absent this program. With these final regulations, any incentive for such a class shift is significantly diminished. The final regulations for the HD pickup trucks, and similarly for vans, are based on similar technologies and therefore reflect a similar expected increase in cost when compared to the light
- duty GHG regulation. Hence, the combination of the two regulations provides little incentive for a shift from light
- duty trucks to HD trucks. To the extent that our final regulation of heav y - duty pickups and vans could conceivabl y encourage a class shift towards lighter pickups, this unintended consequ ence would in fact be expected to lead to lower fuel consumption and GHG emissions as the smaller light
- duty pickups are significantly more efficient than heavy
- dut y pickup trucks. The projected cost increases for this final action differ significantly between Class 8 day cabs and Class 8 sleeper cabs, reflecting our expectation that compliance with the final standards will lead truck consumers to specify sleeper cabs equipped with APUs while day cab consumers will not. Since Class 8 day cab and sleeper ca

b trucks perform essentially

the same function when hauling a trailer, this raises the possibility that the higher cost for an APU equipped sleeper cab could lead to a shift from sleeper cab to day cab trucks. We do not believe that such an intended conse quence will occur for the following reasons. The addition of a sleeper berth to a tractor cab is not a consumer
selectable attribute in quite the same way as other vehicle features. The sleeper cab provides a utility

that long
- distance trucking fleets ne ed to conduct their operations
-- an
524 See 2010 NAS Report, Note **213** , page 152.******* **E.O. 12866 Review**

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482 of on - board sleeping berth that lets a driver comply with federally
- mandated rest periods, as required b y the Department of Transportation Federal Motor Carrier Safety Administration's hours
- of
- service regulations. The co st of sleeper trucks is already higher than the cost of day cabs, y et the fleets that need this utility purchase them. 525 A day cab simply

cannot provide this utility . The need for this utility would not be changed even if the marginal costs to reduce gree nhouse gas emissions from sleeper cabs exceed the marginal costs to reduce greenhouse gas emissions from day cabs. 526 A trucking fleet could decide to put its drivers in hotels in lieu of using sleeper berths, and switch to day cabs. However, this is unlik ely to occur in any

great number, since the added cost for the hotel stay s would far overwhelm differences in the marginal cost between day and sleeper cabs. Even if some fleets do opt to buy hotel rooms and switch to day cabs, they would be highl y unlike ly to purchase a day

cab that was aerody

namically worse than the sleeper cab they

replaced, since the need for features optimized for long
- distance hauling would not have changed. So in practice, there would likely be little difference to the environment for an y s witching that might occur. Further, while our projected costs assume the purchase of an APU for compliance, in fact our regulatory structure would allow compliance using a near zero cost software utility that eliminates tractor idling after five minutes. Using this compliance approach, the cost difference between a Class 8 sleeper cab and day

cab due to our final regulations is small. We are providing this alternative compliance approach reflecting that some sleeper cabs are used in team driving situations where one driver sleeps while the other drives. In that situation, an APU is unnecessary

since the tractor is continually being driven when occupied. When it is parked, it will automatically eliminate any

additional idling through the shutdown software. If trucking companies choose this option, then costs based on purchase of APUs may

overestimate the costs of this program to this sector. Class shifting from combination tractors to vocational vehicles may occur if a customer deems the additio nal marginal cost of tractors due to the regulation to be greater than the utility

provided by

the tractor. The agencies initially considered this issue when deciding whether to include Class 7 tractors with the Class 8 tractors or regulate them as vocati onal vehicles. The agencies’ evaluation of the combined vehicle weight rating of the Class 7 shows that if these vehicles were treated significantly differently

from the Class 8 tractors, then they could be easil y substituted for Class 8 tractors. Theref ore, the agencies are finalizing to include both classes in the tractor category . The agencies believe that a shift from tractors to vocational vehicles would be limited because of the ability of tractors to pick up and drop off trailers at locations whic h cannot be done b y vocational vehicles. The agencies do not envision that the final regulatory program will cause class shifting within the vocational class. The marginal cost difference due to the regulation of vocational vehicles is minimal. The cost of LRR tires on a per tire basis is the same for
525 A baseline tractor price of a new day cab is $89,500 versus $113,000 for a new sleeper cab based on information gathered by ICF in the “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy
- Duty On
- Road Vehicles”, July 2010. Page 3. Docket Identification Number EPA
HQ
- OAR
- 2010
- 0162
- 0044. 526 The average marginal cost difference between sleeper cabs and day cabs in the proposal is nearly $6,000.******* **E.O. 12866 Review**

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483 of all vocational vehicles so the only difference in marginal cost of the vehicles is due to the number of axles. The agencies believe that the utility gained from the additional load carryi ng capabilit y of th e additional axle will outweigh the additional cost for heavier vehicles. 527 In conclusion, NHTSA and EPA believe that the final regulatory structure for HD trucks does not significantly change the current competitive and market factors that determine purcha ser preferences among truck t yp es. Furthermore, even if a small amount of shifting does occur, any resulting GHG impacts are likel y to be negligible because an y vehicle class that sees an uptick in sales is also being regulated for fuel efficiency
. There fore, the agencies did not include an impact of class shifting on the vehicle populations used to assess the benefits of the program. **(2) Fleet Turnover Effect**  A regulation that increases the cost to purchase and/or operate trucks could impact whether a cons umer decides to purchase a new truck and the timing of that purchase. The term pre
- buy

refers to the idea that truck purchases may occur earlier than otherwise planned to avoid the additional costs associated with a new regulatory requirement. Slower fle et turnover, or low
- buy s, may occur when owners opt to keep their existing truck rather than purchase a new truck due to the incremental cost of the regulation. The NAS panel discusses the topics associated with HD truck fleet turnover. NAS noted that there is some empirical evidence of pre
- buy behavior in response to the 2004 and 2007 heav y - duty engine emission standards, with larger impacts occurring in response to higher costs. 528 However, those regulations increased upfront costs to firms without any offsetting future cost savings from reduced fuel purchases. In summary , NAS stated that ...during periods of stable or growing demand in the freight sector, pre
buy behavior may

have significant impact on purchase patterns, especially for larger fleets with better access to capital and financing. Under these same conditions, smaller operators may simpl y elect to keep their current equipment on the road longer, all the more likel y given continued improvements in diesel engine durability over time. On the oth er hand, to the extent that fuel economy improvements can offset incremental purchase costs, these impacts will be lessened. Nevertheless, when it comes to efficiency

investments, most heavy
- dut y fleet operators require relativel y quick payback periods, o n the order of two to three ye ars. 529 The final regulations are projected to return fuel savings to the truck owners that offset the cost of the regulation within a few years for vocational vehicles and Class 7 and 8 tractors, the categories where the potential for prebuy and delayed fleet tur nover are

527 The final rule projects the difference in costs between the HHD and MHD vocational vehicle technologies is approximately $30
. 528 See NAS Report, Note **213** , pp. 150
- 151 529 See NAS Report, Note **213** , page 151.******* **E.O. 12866 Review**

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484 of concerns. In the case of vocational vehicles, the added cost is small enough that it is unlikely to have a substantial effect on purchasing behavior. In the case of Class 7 and 8 trucks, the effects of the regulation on purchasing behavior will depend on the nature of the market failures and the extent to which firms consider the projected future fuel savings in their purchasing decisions. If trucking firms account for the rapid pay back, they

are unlikel y to strategically accelerate or delay

their purchase plans at additional cost in capital to avoid a regulation that will lower their overall operating costs. As discussed in Section VIII.A, this scenario may occur if this final program reduces uncertainty about fuel
- saving technologies. More reliable information about way s to reduce fuel consumption allows truck purchasers to evaluate better the benefits and costs of additional fuel savings, primaril y in the original vehicle market, but possibly in the resale market as well. Other market fai lures may leave open the possibility of some pre
- buy

or delayed purchasing behavior. Firms may not consider the full value of the future fuel savings for several reasons. For instance, truck purchasers may not want to invest in fuel efficiency because of uncertaint y about fuel prices. Another explanation is that the resale market may not full y recognize the value of fuel savings, due to lack of trust of new technologies or changes in the uses of the vehicles. Lack of coordination (also called split ince ntives

— see Section VIII.A) between truck purchasers (who emphasize the up
- front costs of the trucks) and truck operators, who would like the fuel savings, can also lead to pre - buy or delayed purchasing behavior. If these market failures prevent firms from fully internalizing fuel savings when deciding on vehicle purchases, then pre
- buy and delayed purchase could occur and could result in a slight decrease in the GHG benefits of the regulation. Thus, whether pre
- buy

or delayed purchase is likely to play a significant role in the truck market depends on the specific behaviors of purchasers in that market. Without additional information about which scenario is more likely to be prevalent, the Agencies are not projecting a change in fleet turnover characteri stics due to this regulation. 

### G. **Benefits of Reducing CO 2**  

### Emissions **(1) Social Cost of Carbon**  EPA has assigned a dollar value to reductions in CO 2 emissions using recent estimates of the social cost of carbon (SCC). The SCC is an estimate of the monetized dama ges associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity , human health, property

damages from increased flood risk, and the value of ecos ys t em services due to climate change. The SCC estimates used in this analy sis were developed through an interagency

process that included EPA, DOT/NHTSA, and other executive branch entities, and concluded in February 2010. We first used these SCC estimates in the benefits analy sis for the l ight
- d ut y 2012
- 2016 MYv ehicle rule ; see th at rule’s preamble for a discussion of application of the SCC
. 530 The SCC Technical Support

530 See 2010 Light
- DutyFinal Rule, Note **7** , docket ID EPA
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485 of Document (SCC TSD) provides a complete discussion of the methods used to develop these SCC estimates. 531 The interagency

group selected four SCC values for use in regulatory anal yses, which we have applied in this analy sis: $5, $ 22, $36, and $6 7 per metric ton of CO 2 emissions in 2010, in 200 9 dollars. 532 , 533 The first three values are based on the average SCC from three integrated assessment models, at discount rates of 5 , 3, and 2. 5 percent, respectivel y. SCCs at several discount rates are included because the literature shows that the SCC is quite sensitive to assumptions about the discount rate, and because no consensus exists on the appropriate rate to use in an intergenerational context. The fourth value is the 95th percentile of the SCC from all three models at a 3 percent discount rate. It is included to represent higher
- than
- expected impacts from temperature change further out in the tails of the SCC distribution. L ow probability , high impact events are incorporated into all of the SCC values through explicit consideration of their effects in two of the three models as well as the use of a probability density function for equilibrium climate sensitivity . Treating climate sensitivity probabilistically

results in more high temperature outcomes, which in turn lead to higher projections of damages. The SCC increases over time because future emissions are expected to produce larger incremental damages as ph ys ical and economic sy stems become more stressed in response to greater cli matic change. Note that the interagency group estimated the growth rate of the SCC directly using the three integrated assessment models rather than assuming a constant annual growth rate. This helps to ensure that the estimates are internally consistent with other modeling assumptions. Table VIII
- 14 presents the SCC estimates used in this analy sis. When attempting to assess the incremental economic impacts of carbon dioxide emissions, the analy st faces a number of serious challenges. A recent report from the National Academies of Science points out that an y assessment will suffer from uncertaint y, speculation, and lack of information about (1) future emission s of greenhouse gases, (2) the effects of past and future emissions on the climate sy stem, (3) the impact of changes in climate on the phy sical and biological environment, and (4) the

531 Docket ID EPA
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- 114577, Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, I nteragency Working Group on Social Cost of Carbon , with participation by Council of Economic Advisers, Council on Environmental Quality, Department of Agriculture, Department of Commerce, Department of Energy, Department of Transportation, Environmental Pr otection Agency, National Economic Council, Office of Energy and Climate Change, Office of Management and Budget, Office of Science and Technology Policy, and Department of Treasury (February 2010). Also available at http://epa.gov/otaq/climate/regulations.htm 532 The interagency group decided that these estimates apply only to CO 2 emissions. Given that warming profiles and impacts other than temperature change ( e.g., ocean acidification) vary across GHGs, the group concluded “transforming gases into CO 2 - equivalents using GWP, and then multiplying the carbon
equivalents by the SCC, would not result in accurate estimates of the social costs of non
- CO 2 gases” (SCC TSD, pg 13). 533 The SCC estimates were c onverted from 2007 dollars to 2008 dollars using a GDP price deflator (1.021) and again to 2009 dollars using a GDP price deflator (1.009) obtained from the Bureau of Economic Analysis, National Income and Product Accounts Table 1.1.4, Prices Indexes for Gross Domestic Product
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486 of translation of these environmental impacts into economic damages. 534 As a result, any effort to quantify

and monetize the harms associated with climate change will raise serious questions of science, economics, and ethics and should be viewed as provisional. The interagency

group noted a number of limitations to the SCC analy sis, including the incomplete way in which the integrated assessment models capture catastrophic and non
- catastrophic impacts, their incomplete treatment of adaptation and technological change, uncertaint y in the extrapolation of damages to high temperatur es, and assumptions regarding risk aversion. The limited amount of research linking climate impacts to economic damages makes the interagency modeling exercise even more difficult. The interagency group hopes that over time researchers and modelers will work to fill these gaps and that the SCC estimates used for regulatory anal ys is by

the Federal government will continue to evolve with improvements in modeling. Additional details on these limitations are discussed in the SCC TSD. We received several comme nts regarding the SCC estimates used to anal yz e the proposed standards. In particular, these commenters discussed the incomplete treatment of impacts as well as discount rate selection. EPA has reviewed these comments in detail and responded to them in the EPA Response to Comments Document for the Joint Rulemaking. As noted in that document , the U.S. government intends to revise these estimates, taking into account new research findings that were not included in the first round , and has set a preliminary goal of revisiting the SCC values in the next few years or at such time as substantially updated models become available, and to continue to support research in this area. The EPA Response to Comments Document for the Joint Rulemaking di scusses ongoing research in greater detail. Applying the global SCC estimates, shown in Table VIII
- 14 , to the estimated domestic reductions in CO 2 emissions under this final program , we estimate the dollar value of the climate related benefits for each analysis year. For internal consistency , the annual benefits are discounted back to net present value terms using the same discount rate as each SCC estimate ( i.e., 5%, 3%, and 2.5%) rather than 3% and 7%. 535 These estimates are provided in Table VIII
- 15
.

**Table VIII**  **- 14**  **: Social Cost of CO 2**  **, 201 2** 

**– 2050**  **a (in 200**  **9 dollars**  **per Metric Ton )**  Year Discount Rate and Statistic

5% Average 3% Average 2.5% Average 3% 95th Percentile **2012** $5.28 $23.06 $37.53 $70.14 **2015** $5.93 $24.58 $39.57 $75.03 **2020** $7.01 $27.10 $42.98 $83.17 **2025** $8.53 $30.43 $47.28 $93.11 **2030** $10.05 $33.75 $51.58 $103.06

534 National Research Council (2009). Hidden Costs of Energy: Unpriced Co nsequences of Energy Production and Use . National Academies Press. See docket ID EPA
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- 11486. 535 It is possible that other benefits or costs of final regulations unrelated to CO 2 emissions will be discounted at rates that differ from those used to develop the SCC estimates.******* **E.O. 12866 Review**

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487 of **2035** $11.57 $37.08 $55.88 $113.00 **2040** $13.09 $40.40 $60.19 $122.95 **2045** $14.63 $43.34 $63.59 $131.66 **2050** $16.18 $46.27 $66.99 $140.37 Note: a The SCC values are dollar
- year and emissions
- year specific. **Table VIII**  **- 15**  **: Monetized CO**  **2 Benefits of**  **Vehicle Program**  **, CO 2**  **Em issions**  **a (Million 200**  **9 $)**  YEAR CO 2

EMISSIONS REDUCTION (MMT) BENEFITS

Avg SCC at 5% ($5
- $16) a Avg SCC at 3%

($23
- $46) a Avg SCC at

2.5% ($38
- $67) a 95 th percentile

SCC at 3% ($70
- $140) a 2020 37.7 $264 $1,021 $1,619 $3,133 2030 73.1 $734 $2,467 $3,770 $7,532 2040 90.3 $1,182 $3,650 $5,437 $11,108 2050 103.9 $1,682 $4,810 $6,963 $14,590 Net Present Value b $9,045 $46,070 $78,037 $140,432 Notes : a Except for the last row (net present value), the SCC values are dollar
- year and emissions
- year specific
. b Net present value of reduced CO 2 emissions is calculated differently from other benefits. The same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail. 

### H. **Non -**  **GHG Health a nd Environmental Impacts**  This section presents EPA’s anal ys is of the non
- GHG health and environmental impacts that can be expected to occur as a result of the HD National Program . GHG emissions are predominantly the b yproduct of fossil fuel combustion pro cesses that also produce criteria and hazardous air pollutants. The vehicles that are subject to the standards are also significant sources of mobile source air pollution such as direct PM, NO X , VOCs and air toxics. The standards will affect exhaust emis sions of these pollutants from vehicles. They will also affect emissions from upstream sources related to changes in fuel consumption. Changes in ambient ozone, PM 2.5 , and air toxics that will result from the standards are expected to affect human health in the form of premature deaths and other serious human health effects, as well as other important public health and welfare effects. As many commenters noted, it is important to quantify the health and environmental impacts associated with the final ru les because a failure to adequatel y consider these ancillary co - pollutant impacts could lead to an incorrect assessment of their net costs and benefits. Moreover, co
- pollutant impacts tend to accrue in the near term, while an y effects from reduced climate change mostl y accrue over a time frame of several decades or longer.******* **E.O. 12866 Review**

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488 of This section is organized as follows : the first presents the PM
- and ozone
- related health and environmental impacts associated with final program in calendar year (CY) 2030 ; the second discusses the related co - benefits associated with the model year (MY) anal ys is of the program
. 536 **(1) Quantified**  **and Monetized Non -**  **GHG Human Health Benefits of the 2030**  **Calendar Year Analysis** This analy sis reflects the impact of the HD National Program in 2 030 compared to a future
- ye ar reference scenario without the program in place. 537 Overall, we estimate that the final rule s will lead to a net decrease in PM 2.5 - related health impacts . S ee Section VII. D of this preamble for more information about the air quality modeling results. While the PM
- related air quality impacts are relatively

small, the decrease in population
weighted national average PM 2.5 exposure results in a net decrease in adverse PM
- relat ed human health impacts (the decrease in national population
- weighted annual average PM 2.5 is 0.00 5 μg/m 3 ). The air qualit y modeling also projects decreases in ozone concentrations in many areas. While the ozone
- related impacts are relatively small, the de crease in population
weighted national average ozone exposure results in a net decrease in ozone
- related health impacts (population
- weighted maximum 8
- hour average ozone de creases b y 0. 16 4 ppb). We base our analy sis of the program’s impact on human health in 2030 on peer reviewed studies of air quality and human health effects. 538 , 539 These methods are described in more detail in the RIA that accompanies this action
. Our benefits methods are also consistent with recent rulemaking anal ys es such as the f inal Transport Rule, 540

536 EPA typically analyzes rule impacts (emissions, air quality, costs and benefits) in the year in which they occur; for this analysis, we selected 2030 as a representative future year. We refer to this analysis as the “Calendar Year” (CY) analysis. EPA also conducted a separate analysis of the impacts over the model year lifetimes of the 2012 through 2016 model year vehicles. We refer to this analysis as the “Model Year” (MY) analysis. In contrast to the CY analysis, the MY lifetime analysis shows the lifetime impacts of the program on each of these MY fleets over the course of its lifetime. 537 The future
- year reference scenar io to which the program impacts are compared in this section assumes no future gains in mpg (a “flat” scenario). For the final rulemaking, the agencies have also conducted a sensitivity analysis relative to the baseline assumptions. Th e alt ernative baseline assumes annual mp g projections , in the absence of the program , which were developed by the U.S. Energy Information Ad ministration (EIA) for the Annual Energy Outlook (AEO). A description of the alternative baseline can be found in RIA Chapter 6. Due to time and resource constraints, EPA was unable to conduct full
- scale photochemical air quality modeling to reflect the final rule impacts relative to this alternative baseline. 538 U.S. Environmental Protection Agency. (2006). Final Regulatory Impact Analysis (RIA) for the Proposed National Ambient Air Quality Standards for Particulate Matter . Prepared by: Office of Air and Radiation. Retrieved March, 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html 539 U.S. Environmental Protection Agency. (2008). Final Ozone NAAQS Regulatory Impact Analysis
. Prepared by: Office of Air and Radiation, Office of Air Quality Planning and Standards. Retrieved March, 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html 540 Final Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone. Signed July 6 , 2011. Available at http://epa.gov/airtransport/******* **E.O. 12866 Review**

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489 of the light
- dut y 2012
- 2016 MY v ehicle r ule, 541 and the final Portland Cement National Emissions Standards for Hazardou s Air Pollutants (NESHAP) RIA. 542 To model the ozone and PM air quality impacts of this final action , we used the Community Multiscale Air Qu ality

(CMAQ) model (see Chapter 8.2.2 of the RIA that accompanies this preamble ). The modeled ambient air quality data serves as an input to the Environmental Benefits Mapping and Analy sis Program version 4.0 (BenMAP ). 543 BenMAP is a computer program developed by the U.S. EPA that integrates a number of the modeling elements used in previous analy ses (e.g., interpolation functions, population projections, health impact functions, valuation functions, analy sis and pooli ng methods) to translate modeled air concentration estimates into health effects incidence estimates and monetized benefits estimates. The range of total monetized ozone - and PM
- related health impacts is presented in Table VIII
- 16 . We present total benefits based on the PM
- and ozone
- related premature mortality

function used. The benefits ranges therefore reflect the addition of each estimate of ozone
- related premature mortality ( each with its own row in Table VIII
- 16 ) to estimates of PM
- related premature mortality . These estimates represent EPA’s preferred approac h to characterizing a best estimate of benefits. As is the nature of Regulatory

Impact Analy ses (RIAs), the assumptions and methods used to estimate air quality benefits evolve to reflect the a gency ’s most current interpretation of the scientific and econ omic literature.

541 U.S. Environmental Protection Age ncy. (2010). Regulatory Impact Analysis : Final Rulemaking to Establish Light
- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards , EPA
- 420
- R
- 10
- 009, April 2010. Available on the internet : http://www.epa.gov/otaq/climate/regulations/420r10009.pdf 542 U.S. Environmental Protec tion Agency (U.S. EPA). 2010 . Regulatory Impact Analysis: National Emission Standards for Hazardous Air Pollutants from the Portland Cement Manufacturing Industry. Office of Air Quality Planning and Standards, Research Triangle Park, NC. Augues . Available on the Internet at < http://www.epa.gov/ttn/ecas/regdata/RIAs/portlandcement finalria.pdf >. EPA
- HQ
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- 0241 543 Information on BenMAP, including downloads of the software, can be found at http://www.epa.gov/ttn/ecas/ benmodels.html.******* **E.O. 12866 Review**

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490 of **Table VIII**  **- 16**  **: Estimated 2030 Monetized PM**  **- and Ozone**  **- Related Health Benefits**  **a** 2030 Total Ozone and PM Benefits

– PM Mortality Derived from American Cancer Society Analysis and Six
- Cities Analysis a Premature Ozone Mortality Function Reference Total Benefits ( B illions , 200 9 $, 3% Discount Rate) b, c Total Benefits ( B illions , 200 9 $, 7% Discount Rate) b, c Multi
- city analyses Bell et al., 2004 Total: $ 1.3
- $ 2.4 PM: $ 0.74
- $1.8 Ozone: $ 0.55 Total: $ 1.2
- $ 2.2 PM: $ 0.67
- $ 1.6 Ozone: $ 0.55 Huang et al., 2005 Total: $ 1.6
- $ 2.7 PM: $ 0.74
- $1.8 Ozone: $ 0.91 Total: $ 1.6
- $ 2.5 PM: $ 0.67
- $1.6 Ozone: $ 0.91 Schwartz, 2005 Total: $ 1.6
- $ 2.6 PM: $ 0.74
- $1.8 Ozone: $ 0.83 Total: $ 1.5
- $ 2.5 PM: $ 0.67
- $1.6 Ozone: $ 0.83 Meta
- analyses Bell et al., 2005 Total: $ 2.4
- $ 3.5 PM: $ 0.74
- $1.8 Ozone: $ 1.7 Total: $ 2.4
- $ 3.3 PM: $ 0.67
- $1.6 Ozone: $ 1.7 Ito et al., 2005 Total: $ 3.1
- $ 4.2 PM: $ 0.74
- $1.8 Ozone: $ 2.4 Total: $ 3.0
- $ 4.0 PM: $ 0.67
- $1.6 Ozone: $ 2.4 Levy et al., 2005 Total: $ 3.1
- $ 4.2 PM: $ 0.74
- $1.8 Ozone: $ 2.4 Total: $ 3.1
- $ 4.0 PM: $ 0.67
- $1.6 Ozone: $ 2.4 Notes: a Total includes premature mortality
- related and morbidity
- related ozone and PM 2.5 benefits. Range was developed by adding the estimate from the ozone premature mortality function to the estimate of PM 2.5 - related premature mortality derived from either the ACS study (Pope et al., 2002) or the Six
- Cities study (Laden et al., 2006). b Note that total benefits presented here do not include a number of unquantified benefits categories. A detailed listing of unquantified health and welfar e effects is provided in Table VIII
- 17
. c Results reflect the use of both a 3 and 7 percent discount rate, as recommended by E PA ’s Guidelines for Preparing Economic Analyses and OMB Circular A
- 4. Results are rounded to two significant digits for ease of presentation and computation. The benefits in Table VIII
- 16 include all of the human health impacts we are able to quantify

and monetize at this time. However, the full complement of human health and welfare effects associated with PM and ozone remai n unquantified because of current limitations in methods or available data. We have not quantified a number of known or suspected health effects linked with ozone and PM for which appropriate health impact functions are not available or which do not provi de easil y interpretable outcomes ( e.g., changes in heart rate variability). Additionally , we are unable to quantify a number of known welfare effects, including reduced acid and particulate deposition damage to cultural monuments and other materials, and environmental benefits due to reductions of impacts of eutrophication in coastal areas. The se are listed in Table VIII
- 17 . As a result, the health benefits qu antified in this section are likely underestimates of the total benefits attributable to th is final action
.

**Table VIII**  **- 17**  **: Unquantified and Non**  **- Monetized**  **Potential Effects** Pollutant/Effects Effects Not Included in Analysis
- Changes in:******* **E.O. 12866 Review**

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491 of Pollutant/Effects Effects Not Included in Analysis
- Changes in: Ozone Health a Chronic respiratory damage b

Premature aging of the lungs b Non
- asthma respiratory emergency room visits Exposure to UVb (+/
- ) e Ozone Welfare Yields for

- commercial forests

- som e fruits and vegetables

- non - commercial crops Damage to urban ornamental plants Impacts on recreational demand from damaged forest aesthetics Ecosystem functions Exposure to UVb (+/
- ) e PM Health c Premature mortality
- short term exposures d

Low birth weight Pulmonary function Chronic respiratory diseases other than chronic bronchitis Non
- asthma respiratory emergency room visits Exposure to UVb (+/
- ) e PM Welfare Residential and recreational visibility in non
- Class I areas

Soiling and materials damage Damage to ecosystem functions Exposure to UVb (+/
- ) e Nitrogen and Sulfate Deposition Welfare Commercial forests due to acidic sulfate and nitrate deposition

Commercial freshwater fishing due to acidic deposition Recreation in terrestrial ecosystems due to acidic deposition Existence values for currently healthy ecosystems Commercial fishing, agriculture, and forests due to nitrogen deposition Recreation in estuarine ecosystems due to nitrogen deposition Ecosystem functions Passive fertilization CO Health Behavioral effects HC/Toxics Health f Cancer (benzene, 1,3
-butadiene, formaldehyde, acetaldehyde)

Anemia (benzene) Disruption of production of blood components (benzene) Reduction in the number of blood platelets (benzene) Excessive bone marrow formation (benzene) Depression of lymphocyte counts (benzene) Reproductive and developmental effects (1,3
-butadiene) Irritation of eyes and mucus membranes (formaldehyde) Respiratory irritation (formaldehyde) Asthma attacks in asthmatics (formaldehyde) Asthma
- like symptoms in non
- asthmatics (formaldehyde) Irritation of the eyes, skin, and respiratory tract (acetaldehyde) Upper respiratory tract irritation and congestion (acrolein)******* **E.O. 12866 Review**

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492 of Pollutant/Effects Effects Not Included in Analysis
- Changes in: HC/Toxics Welfare Direct toxi c effects to animals

Bioaccumulation in the food chain Damage to ecosystem function Odor Notes: a The public health impact of biological responses such as increased airw ay responsiveness to stimuli, inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to respiratory infection are likely partially repre sented by our quantified endpoints. b The public health impact of effects such as chronic respiratory damage and premature aging of the lungs may be partially represented by quantified endpoints such as hospital admissions or premature mortality, but a number of other related health impacts, such as doctor visits and decreased athletic performance, remain unquantified. c In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including morphological changes and alte red host defense mechanisms. The public health impact of these biological responses may be partly represented by our quantified endpoints. d While some of the effects of short
- term exposures are likely to be captured in the estimates, there may be premature mortality due to short
- term exposure to PM not captured in the cohort studies used in this analysis. However, the PM mortality results derived from the expert elicitation do take into account premature mortality effects of short term exposures. e May r esult in benefits or disbenefits. f Many of the key hydrocarbons related to this action are also hazardous air pollutants listed in the CAA. While there will be impacts associated with air toxic pollutant emission changes that result from th is final actio n , we do not attempt to monetize those impacts. This is primarily because currently

available tools and methods to assess air toxics risk from mobile sources at the national scale are not adequate for extrapolation to incidence estimations or benefits ass essment. The best suite of tools and methods currently available for assessment at the national scale are those used in the National
- Scale Air Toxics Assessment (NATA). The EPA Science Advisory Board specifically

commented in their review of the 1996 NAT A that these tools were not yet ready for use in a national
- scale benefits analy sis, because they did not consider the full distribution of exposure and risk, or address sub
- chronic health effects. 544 While EPA has since improved the se tools, there remain c ritical limitations for estimating incidence and assessing benefits of reducing mobile source air toxics. As part of the second prospective anal ys is of the benefits and costs of the Clean Air Act , 545 EPA conducted a case study anal ys is of the health effect s associated with reducing exposure to benzene in Houston from implementation of the Clean Air Act
. While reviewing the draft report, EPA’s Advisory Council on Clean Air Compliance Analy sis concluded that “the challenges for assessing progress in health improvement as a result of reductions in emissions of hazardous air pollutants (HAPs) are daunting...due

544 Science Advisory Board. 2001. NATA

– Evaluating the National
- Scale Air Toxics Assessment for 1996

– an SAB Advisory. http://www.epa.gov/ttn/atw/sab/sabrev.html. 545 U.S. Environmental Pro tection Agency (U.S. EPA). 2011
. The Benefits and Costs of the Clean Air Act from 1990 to 2020
. Office of Air and Radiation, Washington, DC. March. Available on the Internet at <http://www.epa.gov/air/sect812/feb11/fullreport.pdf>.******* **E.O. 12866 Review**

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493 of to a lack of exposure
- response functions, uncertainties in emissions inventories and background levels, the difficulty of extrapolating risk estimates to low doses and the challenges of tracking health progress for diseases, such as cancer, that have long latency periods .” 546 EPA continues to work to address these limitations; however, we did not have the methods and tools available for national
- scale applic ation in time for the anal ys is of the final action
. 547 EPA is also unaware of specific information identifying an y effects on listed endangered species from the small fluctuations in pollutant concentrations associated with this program (see Section VII.D ) . Furthermore, our current modeling tools are not designed to trace fluctuations in ambient concentration levels to potential impacts on particular endangered species. (a ) Quantified Human Health Impacts Table VIII
- 18 and Table VIII
- 19 present the annual PM 2.5 and ozone health impacts , respectivel y, in the 48 co ntiguous U.S. states associated with the HD National Program for 2030. For each endpoint presented in Table VIII
- 18 and Table VIII
- 19 , we provide both the mean estimate and the 90% confidence interval. Using EPA’s preferred estimates, based on the A merican Cancer Societ y (ACS) and Six
- Cities studies and no threshold assumption in the model of mortality , we estimate that the final rules will result in between 7 8 and 200 cases of avoided PM 2.5 - related premature mortalities annually in 2030. As a sensitivity analy sis, when the range of expert opinion is used, we estimate between 2 6 and 2 60 fewer premature mortalities in 2030 (see Table 8
- 14 in the RIA that accompanies this action). For ozone
- related premature mortality in 2030 , we estimate a range of between 5 4 to 24 0 fewe r premature mortalities
. **Table VIII**  **- 18**  **: Estimated PM**  **2.5 -**  **Related Health Impacts a**  Health Effect 2030 Annual Reduction in Incidence (5 th %
- 95 th %ile)

546 U.S. Environmental Protection Agency

— Science Advisory Board (U.S. EPA
- SAB). 2008. Benefits of Reducing Benzene Emissions in Houston, 1990

–2020 . EPA
- COUNCIL
- 08
- 001. July. Available at <http://yosemite.epa.gov/sab/sabproduct.nsf/D4D7EC9DAEDA8A548525748600728A83/$File/EPA
COUNCIL
- 08
- 001
- unsigned.pdf>. 547 In April, 2009, EPA hosted a workshop on estimating the benefits or reducing hazardous air pollutants. This workshop built upon the work accomplished in the June 2000 Science Advisory Board/EPA Workshop on the Benefits of Reductions in Exposure to Hazardous Air Pollutants, which generated thoughtful discussion on approaches to estimating human health benefits from reductions i n air toxics exposure, but no consensus was reached on methods that could be implemented in the near term for a broad selection of air toxics. Please visit http://epa.gov/air/toxicair/2009workshop.html for more information about the workshop and its assoc iated materials.******* **E.O. 12866 Review**

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494 of Health Effect 2030 Annual Reduction in Incidence (5 th %
- 95 th %ile) Premature Mortality

– Derived from epidemiology literature b Adult, age 30+, ACS Cohort Study (Pope et al., 2002) Adult, age 25+, Six
- Cities Study (Laden et al., 2006) Infant, age <1 year (Woodruff et al., 1997) 7 8 ( 30

– 1 30 ) 200 ( 110

– 290 ) 0 (0

– 1 ) Chronic bronchitis (adult, age 26 and over) 53 ( 1 0

– 97 ) Non
- fatal myocardial infarction (adult, age 18 and over) 1 50 ( 54

– 240 ) Hospital admissions
- respiratory (all ages) c 2 0 (1 0

– 3 0 ) Hospital admissions
- cardiovascular (adults, age >18) d 4 5 ( 3 2

– 52 ) Emergency room visits for asthma (age 18 years and younger) 8 1 ( 48

– 1 20 ) Acute bronchitis, (children, age 8
- 12) 130 (0

– 270 ) Lower respiratory symptoms (children, age 7
- 14) 1,600 ( 750

– 2,400 ) Upper respiratory symptoms (asthmatic children, age 9
- 18) 1,200 ( 370

– 2,000 ) Asthma exacerbation (asthmatic children, age 6
- 18) 1,400 (1 60

– 4,0 00) Work loss days 9,7 00 ( 8,5 00

– 11,0 00) Minor restricted activity days (adults age 18
- 65) 57 ,000 ( 48,0 00

– 66 ,000) Notes: a Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous United States. b PM
- related adult mortality based upon the American Cancer Society (ACS) Cohort Study (Pope e t al., 2002) and the Six
- Cities Study (Laden et al., 2006). Note that these are two alternative estimates of adult mortality and should not be summed. PM
- related infant mortality based upon a study by Woodruff, Grillo, and Schoendorf, (1997). 548 c Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD), pneumonia and asthma. d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and heart failure.

548 Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997. “The Relationship Between Selected Causes of Postneonatal Infant Mortality and Particulate Air Pollution in the United States.” Environmental Health Perspectives 105(6):608
- 612.******* **E.O. 12866 Review**

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495 of **Table VIII**  **- 19**  **: Estimated**  **Ozone -**  **Related Health Im pacts**  **a** Health Effect 2030 Annual Reduction in Incidence (5th%
- 95th%ile) Premature Mortality, All ages b Multi
- City Analyses Bell et al. (2004)

– Non
- accidental Huang et al. (2005)

– Cardiopulmonary Schwartz (2005)

– Non
- accidental Meta
- analyses: Bell et al. (2005)

– All cause It o et al. (2005)

– Non
- accidental Levy et al. (2005)

– All cause 5 4 (2 3

– 84 ) 90 ( 43

– 140 ) 82 ( 34

– 130 ) 1 70 ( 96

– 250 ) 240 (1 60

– 320 ) 240 (1 80

– 310 ) Hospital admissions
- respiratory causes (adult, 65 and older)c 510 ( 69

– 870 ) Hospital admissions
- respiratory causes (children, under 2) 3 20 (1 60

– 470 ) Emergency room visit for asthma (all ages) 230 (0

– 630 ) Minor restricted activity days (adults, age 18
- 65) 300 ,000 ( 150 ,000

– 450 ,000) School absence days 1 20,000 ( 52,0 00

– 170 ,000 Notes: a Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous U.S
. b Estimates of ozone
- related premature mortality are based upon incidence estimates derived from several alternative studies: Bell et al. (2004); Huang et al. (2005); Schwartz (2005) ; Bell et al. (2005); Ito et al. (2005); Levy et al. (2005). The estimate s of ozone
- related premature mortality should therefore not be summed. c Respiratory hospital admissions for ozone include admissions for all respiratory causes and subcategories for COPD and pneumonia. (b ) Monetized Benefits Tabl e VIII
- 20 presents the estimated monetary value of changes in the incidence of ozone and PM 2.5 - related health effects. All monetized estimates are stated in 2009 $
. These estimates account for growth in real gross domestic product (GDP) per capita between the present and 2030. Our estimate of total monetized benefits in 203 0 for the program , using the ACS and Six
- Cities PM mortality studies and the range of ozone mortality assumptions, is between $1 .3 and $ 4.2 b illion, assuming a 3 percent discount rate, or between $ 1.2 and $ 4.0 b illion , assuming a 7 percent discount rate.******* **E.O. 12866 Review**

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496 of **Tabl e**  **VIII -**  **20 :**  **Estimated Monetary Value of Changes in Incidence of Health and Welfare Effects in**  **2030 (**  **M illions of 2009$)**  **a,b PM**  **2.5 -**  **Related Health Effect (5**  **th and 95**  **th %ile)**  Premature Mortality

– Derived from Epidemiology Studies c,d, Adult, age 30+
- ACS study (Pope et al., 2002) 3% discount rate 7% discount rate $ 680 ($ 87
- $ 1,800 ) $ 620 ($ 79
- $ 1,600 ) Adult, age 25+
- Six
- Cities study (Laden et al., 2006) 3% discount rate 7% discount rate $ 1,800 ($2 5 0
- $ 4,300 ) $ 1,600 ($ 220
- $ 3,900 ) Infant Mortality, <1 year

– (Woodruff et al. 1997) $ 2.5 ($0
- $ 9.4 ) Chronic bronchitis (adults, 26 and over) $ 29 ($ 2.4
- $ 9 6) Non
- fatal acute myocardial infarctions 3% discount rate 7% discount rate $1 6 ($ 3.7
- $ 38 ) $ 16 ($ 3.4
- $ 38 ) Hospital admissions for respiratory causes $0. 3 1 ($0. 15
- $0. 4 5) Hospital admissions for cardiovascular causes $ 1.3 ($0. 83
- $ 1.8 ) Emergency room visits for asthma $0.0 3 ($0.0 2
- $0.0 5 ) Acute bronchitis (children, age 8

– 12) $0.01 ($0
- $0.03) Lower respiratory symptoms (children, 7

– 14) $0.0 3 ($0.0 1
- $0.0 6 ) Upper respiratory symptoms (asthma, 9

– 11) $0.0 4 ($0.0 1
- $0.0 8 ) Asthma exacerbations $0.0 8 ($0 .009
- $0. 23 ) Work loss days $ 1.6 ($ 1.4
- $ 1.8 ) Minor restricted
- activity days (MRADs) $ 3.6 ($ 2.1
- $ 5.2 ) **Ozone -**  **related Health Effect** Premature Mortality, All ages

– Derived from Multi
- city analyses Bell et al., 2004 $ 520 ($ 69
- $ 1,300 )******* **E.O. 12866 Review**

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497 of Huang et al., 2005 $ 880 ($ 120
- $ 2,200 ) Schwartz, 2005 $ 800 ($ 100
- $ 2,000 ) Premature Mortality, All ag es – Derived from Meta
- analyses Bell et al., 2005 $ 1,700 ($ 240
- $ 4,100 ) It o et al., 2005 $ 2,300 ($ 350
- $ 5,500 ) Levy et al., 2005 $ 2,400 ($ 350
- $ 5,500 ) Hospital admissions
- respiratory causes (adult, 65 and older) $ 13 ($ 1.7
- $ 22 ) Hospital admissions
- respiratory causes (children, under 2) $ 3.4 ($ 1.8
- $ 5.0 ) Emergency room visit for asthma (all ages) $ 0.09 ($0
- $0. 2 3) Minor restricted activity days (adults, age 18
- 65) $ 19 ($ 8.6
- $ 32 ) School absence days $ 11 ($ 5.0
- $ 16 ) Notes: a Monetary benefits are rounded to two significant digits for ease of presentation and computation. PM and ozone benefits are nationwide. b Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2030)
. c Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. Results reflect the use of 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic analyses. (c) What Are the Limitations of the Benefits Analysis? Every benefit
- cost analy sis examining the potential effects of a change in environmental protection requirements is limited to some extent by data gaps, limitations in model capabilities (such as geographic coverage), and uncertainties in the underl yi ng sc ientific and economic studies used to configure the benefit and cost models. Limitations of the scientific literature often result in the inability to estimate quantitative changes in health and environmental effects, such as potential decreases in premature mortality associated with decreased exposure to carbon monoxide. Deficiencies in the economics literature often result in the inability to assign economic values even to those health and environmental outcomes which can be quantified. These general un certainties in the underlying scientific and economics literature, which can lead to valuations that are higher or lower, are discussed in detail in the RIA and its supporting references. Key uncertainties that have a bearing on the results of the benefit
- cost anal ys is of the final rules include the following:

 The exclusion of potentially significant and unquantified benefit categories (such as health, odor, and ecological benefits of reduction in air toxics, ozone, and PM);******* **E.O. 12866 Review**

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498 of  Errors in measurement and proje ction for variables such as population growth;  Uncertainties in the estimation of future ye ar emissions inventories and air quality ;  Uncertaint y in the estimated relationships of health and welfare effects to changes in pollutant concentrations including the shape of the C
- R function, the size of the effect estimates, and the relative toxicity of the many

components of the PM mixture;  Uncertainties in exposure estimation; and  Uncertainties associated with the effect of potential future actions to limit emissions. As Table V III
- 20 indicates, total benefits are driven primaril y b y the reduction in premature mortalities each year. Some key assumptions underlying the premature mortality estimates include the following, which may also contribute to uncertaint y:
 Inhalation of fine particles is causally associated with premature death at concentrations near those experienced b y most Americans on a daily basis. Although biological mechanisms for this effect have not yetbeen completel y established, the weight of the available epidemiological, toxicological, and experimental evidence supports an assumption of causalit y. The impacts of including a probabilistic representation of causality were explored in the expert elicitation
- based results of the PM NAAQS R IA
.  All fine particles, regardless of their chemical composition, are equall y potent in causing premature mortality . This is an important assumption, because PM produced via transported precursors emitted from heav y - duty engines may differ significantly from PM precursors released from electric generating units and other industrial sources. However, no clear scientific grounds exist for supporting differential effects estimates by

particle t ype.  The C
- R function for fine particles is approximately linear within the range of ambient concentrations under consideration. Thus, the estimates include health benefits from reducing fine particles in areas with varied concentrations of PM, including both regions that may be in attainment with PM 2.5 standards and those that are at risk of not meeting the standards.  There is uncertaint y in the magnitude of the association between ozone and premature mortality . The range of ozone benefits associated with the coordinated strategy is estimated based on the risk of se veral sources of ozone
- related mortalit y effect estimates. In a report on the estimation of ozone
- related premature mortality published by

the National Research Council, a panel of experts and reviewers concluded that short
- term exposure to ambient ozone is likely to contribute to premature deaths and that ozone
- related mortalit y should be included in estimates of the health benefits of reducing ozone exposure. 549 EPA has requested advice from the National Academ y of Sciences on how best to quantify uncerta int y in the relationship between ozone exposure and premature mortality in the context of quantifying benefits.

549 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits from Controlling Ozone Air Pollution. The National Academies Press: Washington, D.C.******* **E.O. 12866 Review**

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499 of Despite the uncertainties described above, we believe this anal ys is provides a conservative estimate of the estimated non - GHG health and environmental benefits of the standards in future ye ars because of the exclusion of potentially significant benefit categories that are not quantifiable at this time. Acknowledging benefits omissions and uncertainties, we present a best estimate of the total ben efits based on our interpretation of the best available scientific literature and methods supported by EPA’s technical peer review panel, the Science Advisory Board’s Health Effects Subcommittee (SAB
- HES). The National Academies of Science (NRC, 2002) has also reviewed EPA’s methodology for anal yz ing the health benefits of measures taken to reduce air pollution. EPA addressed man y of these comments in the anal ys is of the final PM NAAQS. 550 , 551 This anal ys is incorporates this work to the extent possible. **(2) No**  **n -**  **GHG Human Health Benefits of the Model Year (MY) Analysis**  As described in Section VII , the final standards will reduce emissions of several criteria and toxic pollutants and precursors. EPA ty picall y anal yz es rule impacts (emissions, air quality , costs and benefits) in the year in which they occur; for the anal ys is of non
- GHG ambient air quality and health impacts, we selected 2030 as a representative future year since resource and time constraints precluded EPA from considering multiple calendar years. We refer to this analy sis as the “Calendar Year” (CY) anal ys is because the benefits of the program reflect impacts across all regulated vehicles in a calendar ye ar. EPA also conducted a separate anal ys is of the impacts over the model year lifetimes of the 2014 through 2018 model year vehicles. We refer to this analy sis as the “Model Year” (MY) analy sis (see Chapter 6 of the RIA that accompanies this preamble). In contrast to the CY analy sis, the MY analy sis estimates the impacts of the program on each MY fleet over the course of its lifetime. Due to analy tical and resource limitations, however, MY non
- GHG emissions (direct PM, VOCs , NO 2 and SO 2 ) were not estimated for this anal ys is. Because MY impacts are measured in relation to onl y the lifetime of a particular vehicle model year (2014, 2015, 2016, 2017, and 2018), and assumes no additional controls to model y ear vehicles beyond 2018, the impacts are smaller than if the impacts of all regulated vehicles were considered. We therefore expect that the non GHG health
- related benefits associated with the MY anal ys is will be smaller than those estimated for the CY analy sis, both in a given y ear (such as 2030) and in present value terms across a given time period (such as 2014

– 2050). 

### I. **Energy Security**  **Im pacts**  Th e HD National Program is designed to reduce fuel consumption and GHG emissions in medium and heav y - dut y (HD) vehicles, which will result i n improved fuel efficiency and , in turn, help to reduce U.S. petroleum imports. A reduction of U.S.
550 National Research Council (NRC). 2002. Estimating the Public Health Be nefits of Proposed Air Pollution Regulations. The National Academies Press: Washington, D.C. 551 U.S. Environmental Protection Agency. October 2006. Final Regulatory Impact Analysis (RIA) for the Proposed National Ambient Air Quality Standards for Particulate Matter . Prepared by: Office of Air and Radiation. Available at http ://www.epa.gov/ttn/ecas/ria.html.******* **E.O. 12866 Review**

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500 of petroleum imports reduces both financial and strategic risks caused b y potential sudden disruptions in the supply

of imported petroleum to the U.S. This reduction in risk is a measure of improved U.S. energy security . This section summarizes the agencies’ estimates of U.S. oil import reductions and energy securit y benefits of the final HD National Program
. Additional discussion of this issue can be found in Chapter 9. 5 of the RIA. **(1) Implications of Reduced Petroleum Use on U.S. Imports**  In 2008, U.S. petroleum import expenditures represented 21 percent of total U.S. imports of all goods and services. 552 In2008, the United States imported 66 percent of the petroleum it consumed, and the transportation sector accounted for 70 percent of total U.S. petroleum consumption. This compares to approximately 37 percent of petroleum from imports and 55 percent of consumption from petroleum in the transportation sector in 1975. 553 Itis clear that petroleum imports have a significant impact on the U.S. econom y. Requiring low er GHG vehicle technology and fuel efficient technology in HD vehicles in the U.S. is expected to lower U.S. oil imports. EPA used the MOVES model to estimate the fuel savings due to this program. A detailed explanation of the MOVES model can be found in Chapter 5 of the RIA. Based on a detailed anal ysis of differences in fuel consumption, petroleum imports, and imports of refined petroleum products and crude oil using the Reference Case presented in the Energy Information Administration’s Annual Energy O utlook (AEO) 2011 Earl y Release , EPA and NHTSA estimate that approximately 50 percent of the reduction in fuel consumption resulting from adopting improved GHG emissions standards and fuel efficiency standards is likel y to be reflected in reduced U.S. impo rts of refined fuel, while the remaining 50 percent is expected to be reflected in reduced domestic fuel refining
. Of this latter figure, 90 percent is anticipated to reduce U.S. imports of crude petroleum for use as a refinery feedstock, while the remain ing 10 percent is expected to reduce U.S. domestic production of crude petroleum. Thus , on balance, each gallon of fuel saved as a consequence of the HD GHG and fuel efficiency standards is anticipated to reduce total U.S. imports of petroleum by 0.95 gal lons. 554 The agencies’ estimates of the reduction in U.S. oil imports from this program for selected ye ars, in millions of barrels per day , are presented in Table VIII
- 21 below. These estimates assume that the fuel efficiency of HD vehicles remains constant in the baseline.

552 Source: U.S. Bureau of Economic Analysis, U.S. International Transactions Accounts Data, as shown on June 24, 2009. 553 Source: U.S. Department of En ergy, Annual Energy Revie w 2008, Report No. DOE/EIA
- 0384(2008), Tables 5.1 and 5.13c, June 26, 2009. 554 This figure is calculated as 0.50 + 0.50*0.9 = 0.50 + 0.45 = 0.95.******* **E.O. 12866 Review**

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501 of **Table VIII**  **- 21**  **: U.S. Oil Import Reductions from th**  **e HD National Program for Selected Years**  **(M illions**  **of Barrels per Day, mmbd)**  Year mmbd 2020 0. 202 2030 0. 393 2040 0. 489 2050 0. 566 **(2) Energy Security Implications**  In order to understand the energy securit y implications of reducing U.S. petroleum imports, EPA worked with Oak Ridge National Laboratory (ORNL), which has developed approaches for evaluating the economic costs and energy security implications of oil use. The energy security estimates provide d below are based upon a methodology

developed in a peer
- reviewed study entitled ” The Energy Security Benefits of Reduced Oil Use, 2006
- 2015 , ” completed in March 2008. This study is included as part of the docket for this final action
. 555 , 556 When conducting this analy sis, ORNL considered the full economic cost of importing petroleum into the United States. The economic cost of importing petroleum into the U.S. is defined to include two components in addition to the purchase price of petroleum itself. These are: (1) the higher costs for oil imports resulting from the effect of increasing U.S. import demand on the world oil price and on the market power of the O rganization of the Petroleum Exporting Countries (i.e., the “ demand ” or “ monopsony” costs); and (2) the risk of reductions in U.S. economic output and disruption of the U.S. econom y caused b y sudden disruptions in the supply of imported petroleum to the U. S. (i.e., macroeconomic disruption/adjustment costs). Maintaining a U.S. military presence to help secure stable oil supply from potentiall y vulnerable regions of the world was not included in this analy sis because its attribution to particular missions or activities is hard to quantify
. For this action , ORNL estimated energy securit y premium s by

incorpor ating the most recent available AEO 2011 Earl y Release oil price forecasts and market trends. Energy security premiums fo r the years 2020, 2030, 2040, and 2050 are presented in Table VIII
- 22 , as well as a breakdown of the components of the energy security premium s for each of these years. 557 The components of the energy security premium s and their values are discussed in detail in Chapter 9.4 of the RIA.

555 Leiby, Paul N. , " Estimating the Energy Security Benefits of Reduced U.S. Oil Import s " Oak Ridge National Laboratory, ORNL/TM
- 2007/028, Final Report, 2008. (Docket EPA
- HQ
- OAR
- 2010
- 0162) 556 The ORNL study “ The Energy Security Benefits of Reduced Oil Use, 2006
- 2015 ," completed in March 2008 , is an update version of the approach used for estim ating the energy security benefits of U.S. oil im port reductions developed in an ORNL 1997 Report by Leiby, Paul N., Donald W. Jones, T. Randall Curlee, and Russell Lee, entitled “ Oil Imports: An Assessment of Benefits and Costs. " (Docket EPA
- HQ
OAR
- 20 10
- 0 162 ) 557 AEO 2011 forecasts energy market trends and values only to 2035. The energy security premium estimates post
- 2035 were assumed to be the 2035 estimate.******* **E.O. 12866 Review**

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502 of **Table VIII**  **- 22**  **: Energy Security Prem** **ium s in Selected**  **Years (2009$/Barrel)** Year (range) Monopsony Macroeconomic Disruption/Adjustment Costs Total Mid
- Point 2020 $11.29

($3.86
- $21.32) $7.11 ($3.50
- $11.40) $18.41 ($9.70
- $28.94) 2030 $11.17

($3.92
- $20.58) $8.32 ($4.04
- $13.33) $19.49 ($10.49
- $29.63) 20 35 $10.56

($3.69
- $19.62) $8.71 ($3.86
- $14.35) $19.27 ($10.32
- $29.13) The literature on the energy securit y for the last two decades has routinel y combined the monopsony and the macroeconomic disruption components when calculating the total value of the energy securit y premium. However, in the context of using a global SCC value, the question arises: how should the energy security premium be determined when a global perspective is taken? Monopsony benefits represent avoided pay

ments by the United States to oil producers in foreign countries that result from a decrease in th e world oil price as the U.S. decreases its consumption of imported oil. Several commenters commented on the agencies’ energy securit y anal ys is of this program. The Conservative Law Foundation, Interfaith Care for Creation, Environmental Defense Fund and American Lung Association (EDF/ALA) and R. Desjardin noted that the standards in this program will increase our national securit y b y decreasing U.S. dependence on foreign oil imports. The Competitive Enterprise Institute (CEI) felt that there is no relationship between reduced U.S. oil imports and U.S. energy securit y; the commenter sees no relationship between reduced oil imports and, for example, the number of hijackings, bombings, and other terrorist
- related activities that have occurred through time. CBD commented that the benefit of the reduction of military costs associated with maintaining a secure oil supply should be fully

accounted for, and EDF recommended a more extensive anal ys i s of the external security costs of oil dependence. The agencies recognize that potential national and energy securit y risks exist due to the possibility

of tension over oil supplies. Much of the world’s oil and gas supplies are located in countri es facing social, economic, and demographic challenges making them even more vulnerable to the potential local instability associated with the impacts of climate change. For example, in 2010 just over 40% of world oil supply came from OPEC nations, and th is share is not expected to decline in the AEO 2011 projections through 2030. Approximately 28% of global supply

is from Persian Gulf countries alone. Measured in terms of the share of world oil resources or the share of global oil export supply , rather than oil production, the concentration in OPEC nations is even larger. As another measure of concentration, of the 137 countries/principalities that export either crude or product, the top 12 have recentl y accounted for over 55% of exports. 558 Eight of

558 Based on data from the CIA, combining various recent years, https://www.cia.gov/library/publications/the
- wo rld
- factbook/rankorder/2176rank.html
.******* **E.O. 12866 Review**

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503 of thes e countries are members of OPEC, and a 9th is Russia. 559 Ina market where even a 1
- 2% supply

loss raises prices noticeably , and where a 10% suppl y loss could lead to an unprecedented price shock, this regional concentration is of concern. This year, political instability has been reflected in large street protests, beginning in Iran, and spreading to other countries in North African and the Middle East, including regime change in Egy pt and insurrection in the oil exporting country of Libya . Historicall y, the countries of the Middl e East have been the source of eight of the ten major world oil disruptions 560 , with the 9 th originating in Venezuela, an OPEC country , and the 10th being Hurricanes Katrina and Rita. Because of U.S. dependence on o il, the military could be called on to protect energy resources through such measures as securing shipping lanes from foreign oil fields. To maintain such military effectiveness and flexibility , the Department of Defense identified in the Quadrennial Defe nse Review that it is “increasing its use of renewable energy supplies and reducing energy demand to improve operational effectiveness, reduce greenhouse gas emissions in support of U.S. climate change initiatives, and protect the Department from energy price fluctuations.” (DOD 2010) The Department of the Nav y has also stated that the Nav y and Marine Corps rely far too much on petroleum, which “degrades the strategic position of our country and the tactical performance of our forces. The global supply o f oil is finite, it is becoming increasingly difficult to find and exploit, and over time cost continues to rise.” 561 In remarks given to the White House Energy Security Summit on April 26, 2011, Deputy Securit y of Defense William J. Lynn, III noted the direct impact of energy securit y on military readiness and flexibility . According to Deputy Security L ynn, “ Today , energy

technology

remains a critical element of our military superiority
. Addressing energy

needs must be a fundamental part of our military planning.” 562 Thus, to the degree to which the final rule s reduce reliance upon imported energy supplies or promotes the development of technologies that can be deployed by either consumers or the nation’s defense forces, the United States could expect benefits related to national securit y, reduced energy costs, and inc reased energy suppl y. This benefit is why President Obama has identified this program as a key component for improving energy efficiency

and putting America on a path to reducing oil imports in the Blueprint for a Secure Energy

Future. 563 Although the a gencies recognize that there clearl y is a benefit to the United States from reducing dependence on foreign oil, the agencies have been unable to calculate the
559 The other three are Norway, Canada, and the EU, an exporter of product. 560 IEA 2011 “IEA Response System for Oil Supply Emergencies.” 561 The Department of the Navy’s Energy Goals ( http://www.navy.mil/features/Navy_EnergySecurity.pdf ) (Last accessed May 31, 2011). 562 U.S. Department of Defense, Speech: Remarks at the White House Energy Security Summit. Tuesday , April 26, 2011. ( http://www.defense.gov/speeches/speech.aspx?speechid=1556 ) (Last accessed May 31, 2011). 563 The White House, Blueprint for a Secure Energy Future (March 30, 2011) ( http://www.whitehouse.gov/sites/default/files/blueprint_secure_energy_future.pdf ) (Last accessed May 27, 2011).******* **E.O. 12866 Review**

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504 of monetary benefit that the United States will receive from the improvements in national securit y e xpected to result from this program . In contrast, the other portion of the energy securit y premium, the U.S. macroeconomic disruption and adjustment cost that arises from U.S. petroleum imports , is included in the energy security benefits estimated fo r this program. To summarize, the agencies have included only the macroeconomic disruption portion of the energy

security benefits to estimate the monetary value of the total energy securit y benefits of this program. The agencies have calculated energy s ecurity in very specific terms, as the reduction of both financial and strategic risks caused by potential sudden disruptions in the supply of imported petroleum to the U.S. Reducing the amount of oil imported reduces those risks, and thus increases the n ation’s energy securit y. Another commenter, citing Administration guidelines (OMB Circular A
- 4) for conducting economic analy ses, felt that the agency should include the monopsony benefit as part of its overall costs and benefits anal ys is. After reviewing the guidelines cited by the commenter, the agencies have concluded that excluding the monopsony benefit from i ts overall costs and benefits analy sis continues to be appropriate when a global perspective is taken. However, the agencies recognize that the monopsony benefit has distributional impacts for the U.S., and continue to describe and discuss the monopsony b enefit in this section of the Preamble. The t otal annual energy

securit y benefits for the final HD National Program are reported in Table VIII
- 23 for the ye ars 2020, 2030, 2040 and 2050. **Table VIII**  **- 23**  **: Total Annual Energy Security Benefits from** **the HD National Program**

**in 2020, 2030, 2040 and 2050 (Millions, 2009$)** Year Benefits 2020 $ 499 2030 $ 1,132 2040 $ 1,477 2050 $ 1,710 

### J. **Other Impacts (1)**  **Noise, Congestion and Accidents** Increased vehicle use associated with a positive rebound effect also contributes to increased traffic congestion, motor vehicle accidents, and highway noise. Depending on how the additional travel is distributed throughout the day and on where it takes place, additional vehicle use can contribute to traffic congestion and delay s by increasing traffic volumes on facilities that are already heavil y traveled during peak periods. These added delay s impose higher costs on drivers and other vehicle occupants in the form of increased travel time and o perating expenses, increased costs associated with traffic accidents, and increased traffic noise. Because drivers do not take these added costs into account in deciding when and where to travel, they must be accounted for separately as a cost of the adde d driving associated with the rebound effect.******* **E.O. 12866 Review**

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505 of EPA and NHTSA rel y on estimates of congestion, accident, and noise costs caused b y pickup trucks and vans, single unit trucks, buses, and combination tractors developed b y the Federal Highway Administration to estimate the increased external costs caused b y added driving due to the rebound effect. 564 The Federal Highway Administration (FHWA) estimates are intended to measure the increases in costs from added congestion, property damages and injuries in traffic accidents, and noise levels caused b y various ty

pes of trucks that are borne by persons other than their drivers (or “marginal” external costs). EPA and NHTSA employ ed estimates from this source previously

in the anal ys is accompan yi ng the l ight
- Duty 2012
- 16 MY vehicle rule. The agencies continue to find them appropriate for this anal ys is after reviewing the procedures used b y FHWA to develop them and considering other available estimates of these values. FHWA’s congestion cost estimates for trucks, which are weighted averages based on the estimated fractions of peak and off
- peak freeway

travel for each class of trucks, already account for the fact that trucks make up a smaller fraction of peak period traffic on congested roads because they try to avoid peak periods when possible. FHWA’s congestion cost estimates focus on freeway s because non
- freeway effects are less serious d ue to lower traffic volumes and opportunities to re
- route around the congestion. The agencies, however, applied the congestion cost to the overall VMT increase, though the fraction of VMT on each road ty pe used in MOVES range from 27 to 29 percent of the vehicle miles on freeways for vocational vehicles and 53 percent for combination tractors. The results of this analy sis potentiall y overestimate the costs and provide a conservative estimate. The agencies are using FHWA’s “Middle” estimates for marginal congestion, accident, and noise costs caused b y increased travel from trucks
. This approach is consistent with the current methodology used in the L ight
- Duty

GHG rulemaking anal ys is. These costs are multiplied by the annual increases in vehicle miles tr avelled from the positive rebound effect to yield the estimated cost increases resulting from in creased congestion, accident s , and noise during each future ye ar. The values the agencies used to calculate these increased costs are included in Table VI II
- 24 : .

**Table VIII**  **- 24**  **: Noise, Accident, and Congestion Costs per Mile (2009$)**  External Costs Pickup T ruck s and

V ans ($/VMT) V ocational V ehicles

($/VMT) C ombination

T r a c tor s ($/VMT) Congestion $0.0 49 $0. 111 $0. 108 Accidents $0.0 27 $0. 019 $0. 022 Noise $0.001 $0.0 09 $0.0 20 In aggregate, the increased costs due to noise, accidents, and congestion from the additional truck driving are presented in Table VIII
- 25
.

564 These estimates were developed by FHWA for use in its 1997 Federal Highway Cost Allocation Study ; see http://www.fhwa.dot.gov/policy/hcas/fina l/index.htm (last accessed July 21, 2010 ).******* **E.O. 12866 Review**

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506 of **Table VIII**  **- 25**  **: Accident, Noise, and Congestion Costs (Millions, 2009$)**  Year Pickup Trucks

and Vans Vocational

Vehicles Combination

Tractors Total Costs 2012 $0 $0 $0 $0 2013 $0 $0 $0 $0 2014 $8 $21 $18 $46 2015 $15 $38 $31 $84 2016 $22 $55 $43 $120 2017 $29 $71 $54 $153 2018 $36 $85 $64 $186 2020 $51 $112 $83 $246 2030 $105 $195 $138 $437 2040 $130 $256 $166 $551 2050 $148 $298 $191 $638 NPV, 3% $1,818 $3,620 $2,492 $7,929 NPV, 7% $832 $1,680 $1,184 $3,695 **(2) Savings Due to Reduced Refueling Time**  Reducing the fuel consumption of heavy
- dut y trucks may either increase their driving range before they require refueling , or motivate truck purchasers to buy , and manufacturers to offer, smaller fuel tanks
. Keeping the fuel tank the same size allows truck operators to reduc e the frequency with which drivers ty

picall y refuel their vehicles; it thus extend s the upper limit of the range they can travel before requirin g refueling. Alternativel y, if purchasers and manufacturers respond to improved fuel efficiency by reducing the size of fuel tanks to maintain a constant driving range, the smaller tank will require less time in actual refueling
. Because refueling time represents a time cost of truck operation, these time savings should be incorporated into truck purchasers’ decisions over how much fuel
saving technology

they want in their vehicles. The savings calculated here thus raise the same questions discussed in Preamble VIII.A and RIA Section 9.1 does the apparent existence of these savings reflect failures in the market for fuel efficiency , or does it reflect costs not addressed in this analy sis? The response to these questions could vary across truck segment . See those sections for further anal ys is of this question. This analy sis estimates the reduction in the annual time spent filling the fuel tank; this reduced time could come either from fewer refueling events, if the fuel tank stay s the same size, or les s time spent during each refueling event, if the fuel tank is made proportionatel y smaller. The refueling savings are calculated as the savings in the amount of time that would have been necessary to pump the fuel. The calculation does not include time s pent searching for a fuel station or other time spent at the station; it is assumed that the time savings occur onl y during refueling. The value of the time saved is******* **E.O. 12866 Review**

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507 of estimated at the hourl y rate recommended for truck operators ($22.36 in 2009 dollars) in DOT guidance for valuing time savings. 565 The refueling savings include the increased fuel consumption resulting from additional mileage associated with the rebound effect. However, the estimate of the rebound effect does not account for an y reduction in ne t operating costs from lower refueling time. As discussed earlier, the rebound effect should be a measure of the change in VMT with respect to the net change in overall operating costs . Ideally , changes in refueling time would factor into this calculation , al though the effect is expected to be minor because refueling time savings are small relative to the value of reduce d fuel expenditures. The details of this calculation are discussed in the RIA Chapter 9.3.2. The savings associated with reduced refuelin g time for a truck of each t yp e throughout its lifetime are shown in Table VIII
- 26 . The aggregate savings associated with reduced refueling time are shown in Table VIII
- 27 for vehicles sold in 2014 through 2050. **Table VIII**  **- 26**  **: Lifetime Refueling Savings for a 2018 MY Truck of Each Type (2009$)** 

Pickup Trucks and Vans Vocational Vehicles Combination Tractor 3% Discount Rate $31 $ 34 $341 7% Discount Rate $19 $ 22 $223

**Table VIII**  **- 27**  **: Annual Refueling Savings (Millions, 2009$)** Year Pickup Trucks

and Vans Vocational

Vehicles Combination

Tractor Total 2012 $0.0 $0.0 $0.0 $0.0 2013 $0.0 $0.0 $0.0 $0.0 2014 $0.2 $1.4 $8.0 $9.6 2015 $0.5 $2.6 $14.3 $17.3 2016 $1.3 $3.8 $19.6 $24.6 2017 $2.7 $6.2 $26.7 $35.6 2018 $5.2 $8.5 $33.8 $47.5 2020 $10.5 $12.7 $46.2 $69.3 2030 $32.6 $25.8 $82.9 $141 2040 $43.4 $35.1 $100.5 $179 2050 $50.1 $41.3 $116.1 $207 NPV, 3% $541 $468 $1,467 $2,476 NPV, 7% $231 $2 10 $685 $1,126

565 U.S. Department of Transportation, “Revised Departmental Guidance for Valuation of Travel Time in Economic Analysis,” February 11, 2003, Table 4 (which show s a value of $18.10 in 2000 dollars) ; available at http://ostpxweb.dot.gov/policy/Data/VOTrevision1_2
- 11
- 03.pdf (last accessed September 9, 2010).******* **E.O. 12866 Review**

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508 of 

### K. **The Effect of Safety Standards**  **and Voluntary Safety Improvements**  **on Vehicle Weight** Safety standards developed by NHTSA in previous rulemakings may make compliance with the fuel efficiency and CO 2 emissions standards more difficult or may reduce the projected benefits of the program. The primary way that safet y regulations can impact fuel efficiency and CO 2 emissions is through increa sed vehicle weight, which reduces the fuel efficiency (and thus increases the CO 2 emissions) of the vehicle. Using MY 2010 as a baseline, this section discusses the effects of other government regulations on MY s 2014
- 2016 medium and heav y - dut y vehicle fue l efficiency and CO 2 emissions
. At this time, no known safet y standards will affect new models in MY 2017 or 2018. NHTSA’s estimates are based on cost and weight tear
- down studies of a few vehicles and cannot possibly

cover all the variations in the manuf acturers’ fleets. NHTSA also requested, and various manufacturers provided, confidential estimates of increases in weight resulting from safety improvements. Those increases are shown in subsequent tables. We have broken down our anal ys is of the impact of safet y standards that might affect the MY s 2014
- 20 16 fleets into three parts: 1) those NHTSA final rules with known effective dates, 2) proposed rules or soon
- to - be proposed rules b y NHTSA with or without final effective dates, and 3) currentl y volunt ary safet y improvements planned by the manufacturers. **(1) Weight Impacts of Required Safety Standards**  NHTSA has undertaken several rulemakings in which several standards would become effective for medium
- and heav y - dut y (MD/HD) vehicles between MY 2014 and MY 2016. We will examine the potential impact on MD/HD vehicle weights for MY s 2014
- 2016 using MY 2010 as a baseline.

 FMVSS 119, Heav y Truck Tires Endurance and High Speed Tests  FMVSS 121, Air Brake Sy stems Stopping Distance  FMVSS 214, Motor Coach Lap/ Shoulder Belts  MD/HD Vehicle Electronic Stability Control Sy stems (a ) FMVSS 119, Heavy Truck Tires Endurance and High Speed Tests NHTSA tentatively

determined that the FMVSS No. 119 performance tests developed in 1973 should be updated to reflect the increased operational speeds and duration of truck tires in commercial service. A Notice of Proposed Rulemaking (NPRM) was issued December 7, 2010 (75 FR 60036). It proposed to increase significantly the stringency

of the endurance test and to add a new high speed test. The data in the large truck crash causation study (LTCCS) that preceded that NPRM found that J and Lload range tires were having proportionatel y more problems than the other sizes and the agency ’s test results indicate that H, J , and L load range tires are more likely to fail the******* **E.O. 12866 Review**

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509 of proposed requirements among the targeted F, G, H, J and Lload range tires. 566 To address these problems, the H and J load range tires could potentially use improved rubber compounds, which would add no weight to the tires, to reduce heat retention and improve the durability

of the tires. The L load range tires, in contrast, appear to need to use high tensile strength steel chords in the tire bead, carcass and belt areas, which would enable a weight reduction with no strength penalties. Thus , if the update to FMVSS No. 119 was finalized, we anticipate no change in weight for H and J load range tires and a small reduction in weight for L load range tires. This proposal could become a final rule with an effective date of MY 2016. (b ) FMVSS No. 121, Airbrake Systems Stopping Distance FMVSS No. 121 contains performance and equipment requirements for braking sy stems on vehicles with air brake sy stems. The most recent major final rule affecting FMVSS No. 121 was published on July 27, 2009 , and became effective on November 24, 2009 (MY 2009). The final rule requires the vast majority of new heavy

truck tractors (approximately

99 percent of the fleet) to achieve a 30 percent reduction in stopping distance compared to currently requi red levels. Three
- ax l e tractors with a gross vehicle weight rating (GVWR) of 59,600 pounds or less must meet the reduced stopping distance requirements b y August 1, 2011 (MY 2011) , while two - axle tractors and tractors with a GVWR above 59,600 pounds must meet the reduced stopping distance requirements by the later date of August 1, 2013 (MY 2013). NHTSA determined that there are several brake s ys tems that can meet the requirements established in the final rule , includ ing installation of larger S
- cam drum brakes or disc brake s ys tems at all positions, or hy brid disc and larger rear S
- cam drum brake s ys tems. According to data provided by a manufacturer (Bendix) in response to the NPRM , the heaviest drum brakes weigh more than the lightest disc brakes , whil e the heaviest disc brakes weigh more than the lightest drum brakes. For a three
- axle tractor equipped with all disc brakes, then, the total weight could increase by 212 pounds or could decrease by 134 pounds compared to an all
- drum
- braked tractor , depend ing on which disc or drum brakes are used for comparison. The improved brakes may add a small amount of weight to the affected vehicle s for MY s 2014
- 2016 , resulting in a slight increase in fuel consumption. (c) FMVSS No. 208, Motor coach Lap/Shoulder Belts NHTSA is proposing lap/shoulder belts for all motorcoach seats. About 2,000 motorcoaches are sold per year in the United States. Based on preliminary results from the agency ’s cost/weight teardown studies of motor coach seats, 567 NHTSA estimate s that the w eight added b y 3
- point lap/shoulder belts ranges from 5.96 to 9.95 pounds per 2
- person seat. This is the weight onl y of the seat belt assembly itself , and does not include changing the design of the seat, reinforcing the floor, walls or other areas of the motor
566 “Preliminary Regulatory Impact Analysis, FMVSS No. 119, New Pneumatic Tires for Motor Vehicles with a GVWR of More Than 4,536 kg (10,000 pounds), June 2010. 567 Cost and Weight Analysis of Two Motorcoach Seating Systems: One With and One Without Three
Point Lap/Shoulder Belt Restraints, Ludtke and Associates, July 2010.******* **E.O. 12866 Review**

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510 of coach. Few current production motor coaches have been installed with lap/shoulder belts on their seats, and the number of vehicles with these belts already installed could be negligible. Assuming a 54 passenger motor coach, the added weight for th e 3
- point lap/shoulder belt assembly would be in the range of 161 to 269 pounds (27 * (5.96 to 9.95)) per vehicle. This proposal could become a final rule with an effective date of MY 2016. (d ) Electronic Stability Control Systems (ESC) for Medium
- and Heav y -Duty (MD/HD) Vehicles The purpose of an ESC system for MD/HD vehicles is to reduce crashes caused by rollover or by

directional loss
- of

- control. ESC monitors a vehicle’s rollover threshold and lateral stability

using vehicle speed, wheel speed, steering wheel angle, lateral acceleration, side slip and yaw rate data and upon sensing an impending rollover or loss of directional control situation automatically reduces engine throttle and applies braking forces to individual wheels or sets of wheel to slow the vehicle down and regain directional control. ESC is not currently required in MD/HD vehicles , but could be proposed to be required in the se vehicles b y NHTSA. FMVSS No. 105, Hydraulic and electric brake s ys tems, requires multipurpose passenger vehicles, trucks and buses with a GVWR greater than 4,536 kg (10,000 pounds) to be equipped with an antilock brake sy stem (ABS). All MD/HD vehicles h av ing a GVWR of more than 10,000 pounds, are required to have ABS installed by that standard. In addition to the existing ABS functionalit y, ESC requires sensors including a yaw rate sensor, lateral acceleration sensor, steering angle sensor and brake pre ssure sensor along with a brake solenoid valve. According to data provided by Meritor WABCO, the weight of an ESC sy stem for the model 4S4M tractor is estimated to be around 55. 5 pounds, and the weight of the ABS only is estimated to be 45.5 pounds. Thus , we estimate the added weight for the ESC for the vehicle to be 10 (55. 5

– 45.5) pounds. **(2) Summary** 

**– Overview**  **of Anticipated Weight Increases** Table VIII
- 28 s ummarizes estimates made by NHTSA regarding the weight added by the a bove discussed standards or likel y rulemakings. NHTSA estimates that weight additions required b y final rules and likel y NHTSA regulations effective in MY 2016 compared to the MY 2010 fleet will increase motor coach vehicle weight by 171 to 279 pounds and will increase other heav y - duty truck weights by

10 pounds.******* **E.O. 12866 Review**

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511 of **Table VIII**  **- 28**  **: Weight Additions Due to Final Rules or Likely NHTSA Regulations: Com paring MY**  **2016 to the MY 2010 Baseline Fleet** Standard Number Added Weight in pounds MD/HD Vehicle Added Weight in kilograms MD/HD Vehicle 119 0 0 121 0 (?) 0 (?) 208 Motor coaches only 161
- 269 73
- 122 MD/HD Vehicle Electronic Stability Control Sy stems 10 4.5 Total Motor coaches 171
- 279 77.5
- 126.5 Total All other MD/HD vehicles 10 4.5 **(3) Effects of Vehicle Mass Reduction on**  **Safety** NHTSA and EPA have been considering the effect of vehicle weight on vehicle safet y for the past several years in the context of our joint rulemaking for light
- dut y vehicle CAFE and GHG standards, consistent with NHTSA’s long
- standing consideration of safet y effects in setting CAFE standards. Combining all modes of impact, the latest anal ys is by NHTSA for the light - duty 2012
- 2016 MY vehicle rule 568 found that reducing the weight of the heavier light trucks (LT > 3,870) had a positive overall effect on safet y, reducing societal fatalities. In the context of the current rulemaking for HD fuel consumption and GHG standards, one w ould expect that reducing the weight of medium
- dut y trucks similarly would, if an ything, have a positive impact on safety . However, given the large difference in weight between light
- duty vehicles and medium
- duty trucks, and even larger difference between light
- duty vehicles and heavy
- duty

vehicles with loads, the agencies believe that the impact of weight reductions of medium
- and heav y - dut y trucks would not have a noticeable impact on safet y for an y of these classes of vehicles. However, the agencies rec ognize that it is important to conduct further study and research into the interaction of mass, size and safety to assist future rulemakings, and we expect that the collaborative interagency work currently

on - going to address this issue for the light
- dut y vehicle context may also be able to inform our evaluation of safet y effects for the final HD program . We intend to continue monitoring this issue going forward, and may take steps in a future rulemaking if it appears that the MD/HD fuel effici ency and GHG standards have unforeseen safety consequences. The American Chemistry Council stated in comments to the agencies that plastics and plastic composite materials provide a new way

to lighten vehicles while maintaining passenger safety. They add ed that properties of plastics including strength to weight ratio, energy absorption, and
568 “Final Regulatory Impact Analysis, Corporate Average Fuel Economy for MY 2012
- MY 2016 Pa ssenger Cars and Light Trucks”, NHTSA, March 2010, (Docket No. NHTSA
- 2009
- 0059
- 0344.1).******* **E.O. 12866 Review**

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512 of flexible design make these materials well suited for the manufacture of medium
- and heav y - dut y vehicles. They submitted supporting anal ys es with their comments. The National School Transportation Association stated that added structural integrity requirements increase weight of school buses, and thus decrease fuel economy . They asked that if there are safety and fuel econom y trade
- offs, manufacturers should be able to receive a waiver from the regulation’s requirements. Since no weight reduction is required for school buses

– or an y other vocational vehicle

– the agencies do not believe this is an issue with the current regulation. 

### L. **Summary of Costs and Benefits from the Greenhouse Gas Emissions**  **Perspective** As noted in Section VIII.A, the primary motivations of the HD National Program are improved energy

security and GHG emissions reductions in the United States. From that perspective, the benefits of the program are the external effects, and the net effects on truck owners and operators are the costs. In this section, the agencies present a summary of costs, benefits, and net benefits of the program. Section VIII. M presents the benefits and costs from the perspecti ve that the motivation of the program is to improve fuel efficiency
. Table VIII
- 29 shows the estimated annual monetized costs of the final program for the indicated calendar years. The table also shows the net present values of those costs for the calendar ye ars 2012
- 2050 using both 3 percent and 7 percent discount rates. 569 Inthis table, the aggregate value of fuel savings is calculated using pre
- tax fuel prices since savings in fuel taxes do not represent a reduction in the value of economic resources utilized in producing and consuming fuel. Note that fuel savings shown h ere result from reductions in fleet
- wide fuel use. Thus, they grow over time as an increasing fraction of the fleet meets the 2018 standards. **Table VIII**  **- 29**  **: Estimated**  **Monetized Costs of the**  **Final Program** **(Millions ,**  **200 9$**  **) a**  2020 2030 2040 2050 NPV, Y ears 2012
- 2050, 3% D iscount R ate NPV, Y ears

2012
- 2050, 7% D iscount R ate Technology Costs $2,000 $2,200 $2,700 $3,300 $47,400 $24,700 Fuel Savings (pre
- tax) - $9,600
- $20,600
- $28,000
- $36,500
- $375,300
- $166,500 Monetized Annual Costs - $7,600
- $18,400
- $25,300
- $33,200
- $327,900
- $141,800
Note : a Technology costs and fuel savings for separate truck segments can be found in Section VIII.B.1.

569 For the estimation of the stream of costs and benefits, we assume that after implementation of the final MY 2014
- 2017 standards, the 2017 standards apply to each year out to 2050
.******* **E.O. 12866 Review**

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513 of Table VIII
- 30 presents estimated annual monetized benefits for the indicated calendar years. The table also shows the net present values of those benefits for the calendar years 2012
- 2050 using both 3 percent and 7 percent discount rates. The table shows the benefits of reduced CO 2 emissi ons — and consequentl y the annual quantified benefits (i.e., total benefits)

— for each of four SCC values estimated by the interagency working group. As discussed in the RIA Section 9.3 , there are some limitations to the SCC analy sis, including the incomplet e way in which the integrated assessment models capture catastrophic and non
- catastrophic impacts, their incomplete treatment of adaptation and technological change, uncertainty in the extrapolation of damages to high temperatures, and assumptions regardin g risk aversion. In addition, these monetized GHG benefits exclude the value of net reductions in non - CO 2 GHG emissions (CH 4 , N 2 O, HFC) expected under this action. Although EPA has not monetized the benefits of reductions in non
- CO 2 GHGs, the value of these reductions should not be interpreted as zero. Rather, the net reductions in non
- CO 2 GHGs will contribute to this program’s climate benefits, as explained in Section VI .C
. **Table VIII**  **- 30**  **: Monetized Benefits Associated with the**  **Final Program** **(Million s,**  **200 9$)** 

2020 2030 2040 2050 NPV, Years 2012
- 2050, 3% Discount Rate a NPV, Years

2012
- 2050, 7% Discount Rate a Reduced CO 2 Emissions at each assumed SCC value b 5% (avg SCC) $300 $700 $1,200 $1,700 $9,000 $9,000 3% (avg SCC) $1,000 $2,500 $3,600 $4,800 $46,100 $46,100 2.5% (avg SCC) $1,600 $3,800 $5,400 $7,000 $78,000 $78,000 3% (95th percentile) $3,100 $7,500 $11,100 $14,600 $140,400 $140,400 Energy Securit y Impacts (price shock) $500 $1,100 $1,500 $1,700 $19,800 $8,800 Accidents, Congestion, Noise - $200
- $400
- $600
- $600
- $7,900
- $3,700 Refueling Savings $100 $100 $200 $200 $2,500 $1,100 Non
- GHG Impacts c ,d B $2,800 $2,800 $2,800 $25,300 $9,100 Non
- CO 2 GHG Impacts e n/a n/a n/a n/a n/a n/a******* **E.O. 12866 Review**

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514 of Total Annual Benefits at each assumed SCC value b 5% (avg SCC) $700 $4,300 $5,100 $5,800 $48,700 $24,300 3% (avg SCC) $1,400 $6,100 $7,500 $8,900 $85,800 $61,400 2.5% (avg SCC) $2,000 $7,400 $9,300 $11,100 $117,700 $93,300 3% (95 th percentile) $3,500 $11,100 $15,000 $18,700 $180,100 $155,700 Notes: a Net present value of reduced CO 2 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, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail. b Section VIII.G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46 ; f or Average SCC at 2.5%: $36
- $66 ; and for 95 th percentile SCC at 3%: $66
- $139
. See Section VIII.F
. c Note that “ B ” indicates unquantified criteria pollutant benefits in the year 2020. For the analysis of the final program , we only modeled the rule ’ s PM 2.5 - and ozone
- related impacts in the calendar year 2030. For the purpose s of estimating a stream of future
- year criteria pollutant benefits, w e assume that the benefits out to 2050 are equal to, and no less than, those modeled in 2030 as reflected by the stream of estimated future emission reductions. The NPV of criteria pollutant - related benefits should therefore be considered a conservative estimate of the potential benefits associated with the final program . d Non
- GHG
- related health and welfare impacts (related to PM 2.5 and ozone exposure) range between $1 ,300 and $ 4,200 million in 2030, 2040, and 2050
. $2 ,8 00 was chosen as the mid
- point of this range for the purposes of estimating total benefits across all monetized categories. e The monetized GHG benefits presented in this analysis exclude the value of changes in n on - CO 2 GHG emissions expected under this program (S ee RIA Chapter 5). Although EPA has not monetized changes in non - CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. Table VIII
- 31 presents estimated annual net benefits for the indicated calendar ye ars. The table also shows the net present values of those net benefits for the calendar ye ars 2012
- 2050 using both 3 percent and 7 percent discount rate s . The table includes the benefits of reduced CO 2 emissions (and consequently the annual net benefits) for each of four SCC values considered b y EPA.******* **E.O. 12866 Review**

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515 of **Table VIII**  **- 31**  **: Monetized Net Benefits Associated with the**  **Final Program** **(Million s,**  **200 9$**  **)**

2020 2030 2040 2050 NPV, 3% a NPV, 7% a Total Annual Costs b Total Annual Costs - $7,600
- $18,400
- $25,300
- $33,200
- $327,900
- $141,800 Total Annual Benefits at each assumed SCC value c 5% (avg SCC) $700 $4,300 $5,100 $5,800 $48,700 $24,300 3% (avg SCC) $1,400 $6,100 $7,500 $8,900 $85,800 $61,400 2.5% (avg SCC) $2,000 $7,400 $9,300 $11,100 $117,700 $93,300 3% (95th percentile) $3,500 $11,100 $15,000 $18,700 $180,100 $155,700 Monetized Net Benefits at each a ssumed SCC value c 5% (avg SCC) $8,300 $22,700 $30,400 $39,000 $376,600 $166,100 3% (avg SCC) $9,000 $24,500 $32,800 $42,100 $413,700 $203,200 2.5% (avg SCC) $9,600 $25,800 $34,600 $44,300 $445,600 $235,100 3% (95th percentile) $11,100 $29,500 $40,300 $51,900 $508,000 $297,500 Notes: a N et present value of reduced CO 2 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, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Ref er to the SCC TSD for more detail. b Negative costs represent savings. c Section VIII. G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3 %: $22
- $46; for Average SCC at 2.5%: $36
- $66; and for 95th percentile SCC at 3%: $66
- $139. Section VIII. G also presents these SCC estimates. EPA also conducted a separate anal ys is of the total benefits over the model year lifetimes of the 201 4 through 201 8 model year trucks . In contrast to the calendar ye ar anal ys is presented above in Table VIII
- 29 through Table VIII
- 31 , the model year lifetime anal ys is below shows the impacts of the final pr ogram on vehicles produced during each of the model years 2014 through 2018 over the course of their expected lifetime s . The net societal benefits over the full life times of vehicles produced during each of the five model years from 201 4 through 201 8 are shown in Table V III
- 32 and Table VIII
- 33 at both 3 percent and 7 percent discount rate s , respectively
.******* **E.O. 12866 Review**

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516 of **Table V**  **III -**  **32 : Monetized**  **C osts, Benefits, and Net Benefits Associated with the Lifetimes of 2014**  **-**

**2018 Model Year Trucks (Millions ,**  **200 9$**  **; 3% Discount Rate)** 2014 MY 2015

MY 2016

MY 2017

MY 2018

MY Sum Technology
- $1,600
- $1,400
- $1,500
- $1,600
- $2,000
- $8,100 Fuel Savings (pre
- tax) $9,300 $8,300 $8,100 $11,500 $12,900 $50,100 Energy Securit y Impacts (price shock) $500 $400 $400 $600 $700 $2,700 Accidents, Congestion, Noise - $300
- $300
- $300
- $300
- $300
- $1,500 Refueling Savings $60 $60 $60 $80 $100 $400 Non
- CO 2 GHG Impacts and Non
GHG Impacts c,d n/a n/a n/a n/a n/a n/a Reduced CO 2 Emissions at each assumed SCC value a, b 5% (avg SCC) $200 $200 $200 $300 $300 $1,200 3% (avg SCC) $1,100 $900 $900 $1,300 $1,500 $5,700 2.5% (avg SCC) $1,800 $1,600 $1,500 $2,100 $2,400 $9,400 3% (95th percentile) $3,300 $2,900 $2,800 $4,000 $4,500 $17,000 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $8,200 $7,300 $7,000 $10,600 $11,700 $44,800 3% (avg SCC) $9,100 $8,000 $7,700 $11,600 $12,900 $49,300 2.5% (avg SCC) $9,800 $8,700 $8,300 $12,400 $13,800 $53,000 3% (95th percentile) $11,300 $10,000 $9,600 $14,300 $15,900 $60,600 Notes: a N et present value of reduced CO 2 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, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the S CC TSD for more detail. b Section VIII. G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46; for Average SCC at 2.5%: $36
- $6 6; and for 95th percentile SCC at 3%: $66
- $139. Section VIII. G also presents these SCC estimates. c The monetized GHG benefits presented in this analysis exclude the value of changes in non
- CO 2 GHG emissions expected under this action (see RIA Chapter 5) . Although EPA has not monetized changes in non - CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. d Due to analytical and resource limitations, MY non
- GHG emissions (direct PM, VOCs, NO 2 and SO 2 ) were not es timated for this analysis.******* **E.O. 12866 Review**

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517 of **Table VIII**  **- 33**  **: Monetized Costs, Benefits, and Net Benefits Associated with the Lifetimes of 2014**  **-**

**2018 Model Year Trucks (Milli ons**  **, 200**  **9$ ; 7% Discount Rate)** 

2014 MY 2015

MY 2016 MY 2017

MY 2018

MY Sum Technology
- $1,600
- $1,400
- $1,500
- $1,600
- $2,000
- $8,100 Fuel Savings (pre
- tax) $6,900 $5,900 $5,600 $7,600 $8,300 $34,400 Energy Securit y Impacts (price shock) $400 $300 $300 $400 $400 $1,800 Accidents, Congestion, Noise - $200
- $200
- $200
- $200
- $200
- $1,000 Refueling Savings $50 $40 $40 $60 $60 $200 Non
- CO 2 GHG Impacts and Non
- GHG Impacts c,d n/a n/a n/a n/a n/a n/a Reduced CO 2 Emissions at each assumed SCC value a, b 5% (avg SCC) $200 $200 $200 $300 $300 $1,200 3% (avg SCC) $1,100 $900 $900 $1,300 $1,500 $5,700 2.5% (avg SCC) $1,800 $1,600 $1,500 $2,100 $2,400 $9,400 3% (95th percentile) $3,300 $2,900 $2,800 $4,000 $4,500 $17,000 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $5,800 $4,800 $4,400 $6,600 $6,900 $28,500 3% (avg SCC) $6,700 $5,500 $5,100 $7,600 $8,100 $33,000 2.5% (avg SCC) $7,400 $6,200 $5,700 $8,400 $9,000 $36,700 3% (95th percentile) $8,900 $7,500 $7,000 $10,300 $11,100 $44,300 Notes: a N et present value of reduced CO 2 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, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the S CC TSD for more detail. b Section VIII.G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46 ; f or Average SCC at 2.5%: $36
- $6 6 ; and for 95 th percentile SCC at 3%: $66
- $139 . Section VIII.G also presents these SCC estimates. c The monetized GHG benefits presented in this analysis exclude the value of changes in non
- CO 2 GHG emissions expected under this action (see RIA Chapter 5). Although EPA has not monetized changes in non - CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. d Due to analytical and resource limitations, MY non
- GHG emissions (direct PM, VOCs, NO 2 and SO 2 ) were not es timated for this analysis. 

### M. **Summary of Costs and**  **Benefits f**  **rom the Fuel Efficiency Perspective**  The purpose of a program to regulate fuel efficiency is primarily

to save fuel, as compared to the purpose of a program to regulate GHG emissions, which is primarily to reduce the impact of climate change. Considering costs and benefits from a fuel efficiency perspective, technology

costs occur when the vehicle is purchased, just as they do from a GHG emissions perspective, but fuel savings w ill be counted as ben efits that occur over the lifetime of the vehicle as it consumes less fuel, rather than as negative costs experienced either at the time of purchase or over the lifetime of the vehicle. Table******* **E.O. 12866 Review**

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518 of VIII
- 35 Table VI II
- 34 and Table VIII
- 35 show similar model year estimates to those provided above in Table V III
- 32 and Table VIII
- 33 above in Section VIII. L , but with the categories relabeled to illustrate the fuel efficiency perspective . In addition, these figures reflect only the impacts of the mandatory portions (three model ye ars) of the NHTSA HD program . **Table VIII**  **- 34**  **: Monetized**  **Costs, Benefits, and Net Benefits Associated with the Lifetimes of 201 6**  **-**

**2018 Model Year Trucks (Millions ,**  **200 9$**  **; 3**  **% Discount Rate)**

2016 MY 2017 MY 2018 MY Sum Technology Costs
- $1,500
- $1,600
- $1,700
- $5,200 Benefits Fuel Savings (pre
- tax) $5,500 $10,900 $11,500 $27,900 Energy Securit y Impacts (price shock) $300 $600 $600 $1,500 Accidents, Congestion, Noise
- $300
- $300
- $300
- $900 Refueling Savings $40 $80 $80 $200 Non
- CO 2 GHG Impacts and Non
GHG Impacts c,d n/a n/a n/a n/a Reduced CO 2 Emissions at each assumed SCC value a, b 5% (avg SCC) $100 $300 $300 $700 3% (avg SCC) $600 $1,200 $1,300 $3,100 2.5% (avg SCC) $1,000 $2,000 $2,200 $5,200 3% (95th percentile) $1,900 $3,800 $4,000 $9,700 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $4,100 $10,000 $10,500 $24,200 3% (avg SCC) $4,600 $10,900 $11,500 $26,600 2.5% (avg SCC) $5,000 $11,700 $12,400 $28,700 3% (95th percentile) $5,900 $13,500 $14,200 $33,200 Notes: a N et present value of reduced CO 2 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, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail. b Section VIII. G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46; for Average SCC at 2.5%: $36
- $66; and for 95th percentile SCC at 3%: $66
- $139. Section VIII. G also presents these SCC estimates. c The monetized GHG benefits presented in this analysis exclude the value of changes in non
- CO 2 GHG emissions expected under this proposal (see RIA Chapter 5) . Although EPA has not monetized change s in non - CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. d Due to analytical and resource limitations, MY non
- GHG emissions (direct PM, VOCs, NO 2 and SO 2 ) were not estimated for this analysis.******* **E.O. 12866 Review**

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519 of **Table VIII**  **- 35**  **: Monetized**  **Costs, Benefits, and Net Benefits Associated with the Lifetimes of 201 6**  **-**

**2018 Model Year Trucks (Millions ,**  **200 9$**  **; 7% Discount Rate)**

2016 MY 2017 MY 2018 MY Sum Technology

Costs
- $1,500
- $1,600
- $1,700
- $5,200 Benefits Fuel Savings (pre
- tax) $3,800 $7,200 $7,300 $18,300 Energy Securit y Impacts (price shock) $200 $400 $400 $1,000 Accidents, Congestion, Noise
- $200
- $200
- $200
- $600 Refueling Savings $30 $50 $50 $130 Non
- CO 2 GHG Impacts and Non
GHG Impacts c,d n/a n/a n/a n/a Reduced CO 2 Emissions at each assumed SCC value a, b 5% (avg SCC) $100 $300 $300 $700 3% (avg SCC) $600 $1,200 $1,300 $3,100 2.5% (avg SCC) $1,000 $2,000 $2,200 $5,200 3% (95th percentile) $1,900 $3,800 $4,000 $9,700 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $2,400 $6,200 $6,200 $14,300 3% (avg SCC) $2,900 $7,100 $7,200 $16,700 2.5% (avg SCC) $3,300 $7,900 $8,100 $18,800 3% (95th percentile) $4,200 $9,700 $9,900 $23,300 Notes: a N et present value of reduced CO 2 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, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail. b Section VIII.G notes that SCC increases over time. Corresponding to the years in this table, the SCC es timates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46 ; f or Average SCC at 2.5%: $36
- $66 ; and for 95 th percentile SCC at 3%: $66
- $139 . Section VIII.G also presents these SCC estimates. c The monetized GHG benefits pre sented in this analysis exclude the value of changes in non
- CO 2 GHG emissions expected under this proposal (see RIA Chapter 5) . Although EPA has not monetized changes in non - CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. d Due to analytical and resource limitations, MY non
- GHG emissions (direct PM, VOCs, NO 2 and SO 2 ) were not estimated for this analysis. 

### N. **Employment Impacts**  **(1) Introduction**  Although analy sis of employ ment impacts is not part of a cost
- benefit analy sis (except to the extent that labor costs contribute to costs), employ ment impacts of federal rules are of particular concern in the current economic climate of sizeable unemploy ment. The recentl y issued Executive Order 1 3563, “Improving Regulation and Regulatory Review” (January

18, 2011), states, “ Our regulatory s ys tem must protect public health, welfare, safet y, and our environment while promoting economic growth, innovation,******* **E.O. 12866 Review**

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520 of competitiveness, and job creation ” (emphasis added). Although EPA and NHTSA did not undertake an employment anal ys is of the proposed rules, several commenters suggested that we undertake an employ ment analy sis for the final rulemaking. Therefore, we have provided a robust qualitative discussion of the potential employ ment impacts of the Heav y - Dut y National Program
. When the econom y is at full employment, an environmental regulation is unlikely to have much impact on net overall U.S. employment ; instead, labor would primarily be shifted from one s ector to another. These shifts in employ ment impose an opportunity cost on society , approximated by the wages of the employ ees, as regulation diverts workers from other activities in the economy
. 570 In this situation, any effects on net employ ment are like ly

to be transitory

as workers change jobs (e.g., some workers may need to be retrained or require time to search for new jobs, while shortages in some sectors or regions could bid up wages to attract workers). On the other hand, if a regulation comes into effect during a period of high unemploy ment, a change in labor demand due to regulation may affect net overall U.S. employ ment because the labor market is not in equilibrium. Schmalansee and Stavins 571 point out that net positive employ ment effects are po ssible in the near term when the econom y is at less than full employ ment due to the potential hiring of idle labor resources by the regulated sector to meet new requirements (e.g., to install new equipment) and new economic activity

in sectors related to the regulated sector. In the longer run, the net effect on emplo ym ent is more difficult to predict and will depend on the way in which the related industries respond to the regulatory requirements. As Schmalansee and Stavins note, it is possible that the ma gnitude of the effect on employ ment could vary

over time, region, and sector, and positive effects on employment in some regions or sectors could be offset b y negative effects in other regions or sectors. For this reason, they urge caution in reporting partial employ ment effects since it can “paint an inaccurate picture of net employ

ment impacts if not placed in the broader economic context.” This rulemaking is expected to have a relativel y s mall effect on net employment in the United States through the regulated sector

– the truck and engine manufacturer industry

– and several related sectors, specifically , industries that supply the truck and engine manufacturing industry (e.g., truck parts), the trucking industry itself, other industries involved in transporting goods (e.g., rail and shipping) , the petroleum refining sector, and the retail sector. According to the U.S. Bureau of Labor Statistics, about 1.25 million people were employed in the truck transportation industry and about 675,000 people were emplo yed in the motor vehicle parts industry between 2010 and 2011. 572 Although heavy - dut y vehicles (HD) account for approximately 4% of the vehicles on the road, these vehicles consume more than 20% of on
- road gasoline and diesel fuel use. As discussed in Chapter 5 of this RIA, this rulemaking is predicted to reduce the amount of fuel these vehicles use, and thus affect the petroleum refinery industry . The petroleum
570 Schmalensee, Richard, and Robert N. Stavins. “A Guide to Economic and Policy Analysis of EPA’s Transport Rule.” White paper commissioned by Excelon Corporation, March 2011. 571 Ibid. 572 U.S. Bureau of Labor Statistics seasonally
- adjusted Current Employment Statistics Survey for the Truck Transportation Industry (NAICS 484) and the Motor Vehicle Parts Manufacturing Industry (NAICS 3363).******* **E.O. 12866 Review**

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521 of refinery industry employed about 65,000 people in the U.S. in 2009, the most recent year that employ

ment estimates are available for this sector. 573 As discussed in Chapter 5 of this RIA, this rulemaking is predicted to reduce the amount of fuel these vehicl es use, and thus affect the petroleum refinery industry . The petroleum refinery industry employed about 65,000 people in the U.S. in 2009, the most recent ye ar that employ ment estimates are available for this sector. 574 Finall y, since the net reduction in cost associated with th e s e rule s is expected to lead to lower transportation and shipping costs, in a competitive market a substantial portion of those cost saving s will be passed along to consumers, who then will have additional discretionary income (how much of the cost is passed along to consumers depends on market structure and the relative price elasticities). Several commenters suggested that the HD vehicle rules would lead to an increase in employ ment in affected sectors b y offering the potential f or new employment opportunities in the design and production of new vehicle technologies. Also, these commenters suggested that since the U.S. manufacturers and suppliers are leaders in certain advanced truck technologies, this program has the potential t o help them consolidate their leadership and thrive in a global market. In this context, several commenters referred to an assessment by the Union of Concerned Scientists (UCS) and CalStart of the economic and employ ment benefits of the improved efficienc y in HD vehicles. 575 The study

predicts an increase in 63,000 jobs in 2020 and 124,000 in 2030, as result of higher fuel efficiency for HD vehicles. These quantitative estimates were derived using a standard input
- output model, though the estimates themsel ves have not ye t been peer reviewed. Input
- output (I/O) models do not account for opportunity costs of labor

– that is, all employ ment needs due to the regulatory change will be met by unemployed workers. In addition, I/O models assume no changes in the average use of labor per dollar of output in the affected sectors. For these and other reasons, these may at best be considered an imprecise upper bound on actual emplo ym ent impacts. 576 Determining the direction of employ ment effects even in the regulated industry may be difficult due to the presence of competing effects that lead to an ambiguous adjustment in employ

ment as a result of environmental regulation. Morgenstern, Pizer and Shih 577 identify

three separate way s employ ment levels may

change in the regulated industry in response to a new (or more stringent) regulation. First, higher production costs due to the regulation will lead to higher market prices; higher prices in turn reduce demand for the good, reducing the demand for labor to make that good (“demand effect”). Second, costs rise because of increased use of inputs, including labor, in order to comply

with the new regulatory

requirements (“cost effect”). Third, post
- regulation production technologies may be more or less labor
- intensive (i.e., m ore/less labor is required per dollar of output) (“factor
- shift effect”). The “demand effect” is expected to

574 U.S. Census Bureau, 2009 Annual Survey of Manufactures, Published December 3, 2010. 574 U.S. Census Bureau, 2009 Annual Survey of Manufactures, Published December 3, 2010. 575 Union of Concerned Scientists and CalStart, Delivering Jobs: The Econ omic Costs and Benefits of Im proving Fuel Economy of Heavy Duty Vehicles, July, 2010. http://www.ucsusa.org/deliveringjobs
. 576 Berck, Peter, and Sandra Hoffman. “Assessing the Employment Impacts of Environmental and Natural Resource Policy.” Environmental and Resource Economics 22 (2002): 133
- 156. 577 Morgenstern, Richard D., William A. Pizer, and Jhih
- Shy ang Shih. “Jobs Versus the Environment: An Industry
- Level Perspective.” Journal of Environmental Economics and Management 43 (2002): 412
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522 of have a negative effect on employ ment, the “cost effect” to have a positive effect on employ ment, and the “factor
- shift effect” has an ambiguous ef fect on employ

ment. Without more information as to the magnitudes of these competing effects, it is not possible to predict the total effect environmental regulation will have on employ ment levels in a regulated sector Morgenstern et al. estimated the eff ects on emplo yment of spending on pollution abatement for four highly polluting/regulated industries (pulp and paper, plastics, steel, and petroleum refining). They conclude that increased abatement expenditures generall y have not caused a significant change in employ ment in those sectors. More specifically , their results show that, on average across the industries studied, each additional $1 million spent on pollution abatement results in a (statistically insignificant) net increase of 1.5 jobs. While the specific sectors Morgenstern et al. examined are different that the sectors considered here, the methodology that Morgenstern et al. developed is still useful in this context. **(2) Overview of Affected Sectors**  The above discussion focuses on employ ment changes in the regulated sector, but the regulated sector is not the only source of changes in emplo ym ent. In these rules, the regulated sectors are truck and engine manufacturers; they are responsible for meetin g the standards set in these rules. The effects of these rules are also likely to have impacts beyond the directl y regulated sector. The related sectors which these rules are also likel y to impact include: motor vehicle parts producers, to the extent th at the truck and engine industries purchase components rather than manufacture them in
- house; shipping and transport, because man y companies in this sector purchase trucks and their operating costs will be affected b y both higher truck prices and fuel savi ngs; oil refineries due to reduced demand for petroleum
- based fuels; and the final retail market, which is where any net cost reductions due to fuel savings are ultimately expected to be experienced. The following discussion describes the direction of imp acts on employ ment in these industries. The effects of the HD National Program on net U.S. employ ment depend, not only on their relative magnitudes, but also on employ ment levels in the overall econom y. As previously

discussed, in a full
- employ ment e conomy

these sector
- specific impacts will be mostly

offset by employ ment changes elsewhere in the econom y and would not be expected to result in a net change in jobs. However, in an econom y with significant unemploy ment these changes may

affect net employ

ment in the U.S. (a ) Truck and Engine Manufacturers The regulated sector consists of truck and engine manufacturers. Emplo yment associated with manufacturing trucks and engines may be affected by

the demand, cost, and factor
- shift effects. The demand effect depends on the effects of this rulemaking on HD vehicle sales. If vehicle sales increase, then more people will be required to assemble trucks and their components. If vehicle sales decrease, employ ment associated with these activities will decrease. T he effects of this rulemaking on HD vehicle sales depend on the perceived******* **E.O. 12866 Review**

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523 of desirability

of the new vehicles. On one hand, this rulemaking will increase vehicle costs; by itself, this effect would reduce vehicle sales. On the other hand, this rulemaking wi ll reduce the fuel costs of operating the vehicle; by itself, this effect would increase vehicle sales, especiall y i f potential buyers have an expectation of higher fuel prices. The agencies have not made an estimate of the potential change in vehicle sa les. However as discussed in Preamble Section VIII.E.5 the agencies have estimated an increase in vehicle miles traveled (i.e., VMT rebound) due to the reduced operating costs of trucks meeting these new standards. Since increased VMT is most likely to b e met with more drivers and more trucks, our projection of VMT rebound is suggestive of an increase in vehicle sales and truck driver employment (recognizing that these increases may be partiall y offset by a decrease in manufacturing and sales for equipment of other modes of transportation such as rail cars or barges). As discussed above in Section VIII.A, the agencies find that the reduction in fuel costs associated with this rulemaking outweigh the increase in vehicle cost. This finding is puzzling: market forces should lead truck manufacturers and bu ye rs to install all cost
effective fuel
- saving technology , but the agencies find that they have not. Section VIII.A discusses various h ypotheses that have been suggested to explain this phenomenon. Some o f the explanations suggest that vehicle manufacturers and buye rs will benefit from the rulemaking, and vehicle sales will increase; others suggest that the opposite might occur. The agencies do not have strong evidence supporting one specific explanation over another. However, some in the heav y - dut y i ndustry indicate the potential for an increase in jobs. As stated by Tom Linebarger (President and Chief Operatin g Officer of Cummins ) and Fred Krupp (President of the Environmental Defense Fund), “ Finall y, strong environmental standards play a crucial role in getting innovations to market that will create economic opportunity for American companies and jobs for American workers. . . . It helps that Cummins and other forward
- thinking businesses view this as an opportunity

to innovate and increase international market share. ” 578 One commenter raised the issue of whether there could be a loss of recreation vehicle (RV) industry

jobs due to a reduction in the sales of motor homes and towable RVs. As mentioned ab ove, the effects of this rulemaking on HD vehicle sales depend on the desirability

of the new vehicles. The truck and engine manufacturing sector has great flexibility in how to respond to the requirement for reduced greenhouse gases and increasing fuel efficiency , with a broad suite of technologies being available to achieve the standards. These technologies are described in detail in Chapter 2 of this RIA. Among these technologies, a distinction can be made between technologies that can be “added on” to conventional trucks versus those that replace features of a conventional truck. “Added on” features require additional labor to install the technologies on trucks, thus clearl y increasing labor demand (the “cost effect”). For “replacement” technologie s, the predicted impact on labor demand from regulation depends on the change in the amount of labor used to install one
578 Tom Linebarger (President and Chief Operatin g Officer of Cummins ) and Fred Krupp (President of the Environmental Defense Fund), "Clear rules can create better engines, clean air," Indianapolis Star, October 28, 2010, p. 19; included as part of Cummins' comments on the rule, Docket Number EP A
- HQ
- OAR
- 2010
- 0162
- 1765.1[1]******* **E.O. 12866 Review**

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524 of ty pe of technology

compared to another. In man y cases, the new technologies are predicted to be more complex than the existing technol ogies and are therefore likely to require additional labor installation inputs. However, most of the technologies that are expected to be used to meet these standards are replacement technologies, therefore overall changes in the labor intensity are expect ed to be relativel y small. For example, almost all of the engine improvements involve replacement technologies that are not expected to significantly

change the labor requirements. Similarly , regulations of the chassis on vocational vehicles will only re quire the installation of a different ty pe of tire, which is also not expected to have large labor intensity impacts. Therefore, the potential magnitude of the factor shift effect is expected to be relativel y small, though slightly positive due to the add itional labor needed to install more complex technologies. For the truck and engine manufacturing sector, the demand effect may result in either increased or decreased emplo y ment ; the cost effect is expected to increase employ ment; and the factor
- shift e ffect may have a slightly

positive effect on employ ment in this sector. (b ) Motor Vehicle Parts Manufacturing Sector Some vehicle parts are made in
- house and would be included directly in the regulated sector; alternatively , some are made by independent supp liers and are not directly regulated, but they

will be affected by

the rules as well. The parts manufacturing sector will be involved primarily in providing “add
- on” parts, or components for replacement parts built internally . Because demand for these parts is expected to increase, emplo ym ent effects in this sector are expected to be positive. (c) Transport and Shipping Sectors Although not directl y regulated by these rules, employ ment effects in the transport and shipping sector are likely to result from the se regulations. If the overall cost of shipping a ton of freight decreases because of increased fuel efficiency (taking into account the increase in upfront purchasing costs), in a perfectl y competitive industry these costs savings will be passed along to customers. With lower prices, demand for shipping would lead to an increase in demand for truck shipping services (consistent with the VMT rebound effect anal ys is) and therefore an increase in employ ment. In addition, if the relative cost of shipping fr eight via trucks becomes cheaper than shipping b y other modes (e.g., rail or barge), then employ ment in the truck transport industry is likely to increase. To the extent that the trucking industry is more labor intensive than other modes, we would expect this effect to lead to an overall increase in emplo yment in the transport and shipping sectors. 579 , 580

579 American Transportation Research Institute , “ An Analysis of the Ope rational Costs of Trucking: 2011 Update .” See http://www.atri
online.org/research/results/Op_Costs_2011_Update_one_page_summary.pdf
. 580 Association of Am erican Railroads, “ All Inclusive Index and Rail Adjustment Factor.” June 3, 2011. See http://www.aar.org/~/media/aar/RailCostIndexes/AAR
- RCAF
- 2011
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525 of (d ) Fuel Suppliers In addition to the effects on the trucking industry and related truck parts sector, these rules will result in reductions in fuel use that lower GHG emissions. Fuel saving, principally

reductions in liquid fuels such as diesel and gasoline, will affect employ ment in the fuel suppliers industry sectors, principall y the Petroleum Refinery sector. 581 Expected fuel consumption reductions b y fuel ty pe, and by

heavy
- dut y vehicle ty pe, can be found in Table VIII
- 7. These reductions reflect impacts from the new fuel efficiency and GHG standards and include increased consumption from the rebound effect. These fuel savings are monetized in Table VIII
- 8 by multiplying the reduced fuel consumption in each year by the corresponding estimated average fuel price in that year, using the Reference Case from the AEO 2011. In 2014, the pre
- tax fuel savings is $1.2 billion (2009$). While these figures represe nt a level of fuel savings for purchasers of fuel, it also represents a loss in value of output for the petroleum refinery industry . Since 50 percent of the fuel would have been refined in the U.S., the loss in output to the U.S. Petroleum Refinery

sector is $600 million (2009$), which will result in reduced sectoral employ ment. 582 Because this sector is very capital
- intensive, the employ ment effect is not expected to be large. (e) Fuel Savings As a result of this rulemaking, it is anticipated that trucking fir ms will experience fuel savings. Fuel savings lower the costs of transportation goods and services and, as a result, could increase the profitability of trucking firms operating in the U.S. In a competitive market, the fuel saving that initially accrue t o trucking firms are likely to be passed along as lower transportation costs that, in turn, could result in lower prices for final goods and services. In either case, the savings will accrue to some segment of consumers: either owners of trucking firms or the general public. In both cases, the effect will be increased spending b y consumers in other sectors of the econom y, creating jobs in a diverse set of sectors, including retail and service industries. As mentioned above, the value of fuel savings fro m this rulemaking is projected to be $1.2 billion (2009$) in 2014, according to Table VIII
- 8. If all those savings are spent by consumers or trucking firm owners, the fuel savings will stimulate increased employ ment in the economy

through those expenditur es. If the fuel savings accrue primarily to firm owners, they

may either reinvest the money or take it as profit. Reinvesting the money

in firm operations would increase employ ment directly . If they
581 North American Industry Classification System (NAICS) Code 32411. 582 EPA and NHTSA estimate that approximately 50 percent of the reduction in fuel consumption resulting from adopting improved fuel GHG standards and fuel efficiency standards is likely to be reflected in reduced U.S. imports of refined fuel, while the remain ing 50 percent is expected to be reflected in reduced domestic fuel refining. Of this latter figure, 90 percent is anticipated to reduce U.S. imports of crude petroleum for use as a refinery feedstock, while the remaining 10 percent is expected to reduce U.S. domestic production of crude petroleum. Because we do not expect to see a significant reduction in crude oil production in the U.S., we do not expect this rule to have a significant impact on the Oil and Gas Extraction industry sector in the U.S. (NA ICS 211000). For more information, refer to Section VIII
- I on the energy security impacts from the program.******* **E.O. 12866 Review**

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526 of take the money

as profit, to the extent that these own ers are wealthier than the general public, they

may spend less of the savings, and the resulting employ ment impacts would be smaller than if the savings went to the public. **(3) Summary**  The net emplo ym ent effects of this rulemaking are expected to be found thro ugh out several key

sectors: truck and engine manufacturers, the trucking industry , truck parts manufacturing, fuel production, and consumers. For the regulated sector, the demand effect may

result in either increased or decreased employ ment, depending on the net effect on HD vehicle sales. The cost effect is expected to increase employ ment in the regulated sector; and the factor
- shift effect may have a slightl y positive effect on employ ment, though we cannot definitivel y sa y this is the case without quant ification. In creased expenditures by truck and engine manufacturers are expected to require increased labor to build parts, though this effect also depends on an y changes in the labor intensity of production; increased complexity of technologies may

imply increased labor inputs. L ower prices for shipping are expected to lead to an increase in demand for truck shipping services and, therefore, an increase in employ ment, though this effect may be offset somewhat b y changes in emplo ym ent in other shipping se ctors. Reduced fuel production implies less employ ment in the fuel provision sectors. Finall y, any net cost savings would be expected to be passed along to some segment of consumers: either the general public or the owners of trucking firms, who are expe cted then to increase employ ment through their expenditures
. Given the job creation as a result of the $1.2B (2009$) in fuel savings in 2014 and the possible employ ment increases in the manufacturing and parts sectors, we find it highl y unlikely that ther e would be significant net job losses related to this policy
. 

## IX. **Analysis of the Alternatives**  The heav y - duty

truck segment is very

complex. The sector consists of a diverse group of impacted parties, including engine manufacturers, chassis manufacturers, truck manufacturers, trailer manufacturers, truck fleet owners and the public. The final standards that the agencies have adopted today maximize the environmental and fuel savings benefits of the program while taking into consideration the unique and varied nature of the regulated industries. In developing this final rulemaking, we considered a number of alternatives that could have resulted in potentially fewer or greater GHG and fuel consumption reductions than the program we are finalizing. This section summarizes the alternatives we considered and presents assessments of technology costs, CO 2 reductions, and fuel savings associated with each alternative. The agencies reduced the number of alternatives analyzed in this final rulemaking compared to the proposal because we did not receive an y comments supporting standard setting for a smaller su bset than HD pickup trucks, combination tractors, and vocational vehicles (as well as engines used in vocational vehicles and combination tractors). As discussed below, the agencies have also refined some of the alternatives anal yz ed in response to the co mments received.******* **E.O. 12866 Review**

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527 of 

### A. **What Are the Alternatives that the Agencies Considered?** In developing alternatives, NHTSA must consider EI SA's requirement for the MD/HD fuel efficiency

program noted above. 49 U.S.C. 32902(k)(2) and (3) contain the following three require ments specific to the MD/HD vehicle fuel efficiency improvement program: (1) The program must be “designed to achieve the maximum feasible improvement”; (2) the various required aspects of the program must be appropriate, cost
effective, and technologicall y feasible for MD/HD vehicles; and (3) the standards adopted under the program must provide not less than four model ye ars of lead time and three model ye ars of regulatory stabilit y. In considering these various requirements, NHTSA will also account for re levant environmental and safet y considerations. The alternatives below represent a broad range of approaches for a HD vehicle fuel efficiency

and GHG emissions program. Details regarding the modeling of each alternative are included in RIA Chapter 6. Th e alternatives in order of increasing fuel efficiency and GHG emissions reductions are: **(1) Alternative 1: No Action**  A “no action” alternative assumes that the agencies would not issue rules regarding a MD/HD fuel efficiency improvement program. This alternat ive is presented in order for NHTSA to comply with the National Environmental Policy Act (NEPA) and to provide an anal yt ical baseline against which to compare environmental impacts of the other regulatory

alternatives. 583 The agencies refer to this as the “No Action Alternative” or as a “no increase” or “baseline” alternative. As described in RIA Chapter 5, this no
action alternative is considered the reference case. The no action alternative first presented in this final action is based on the assumption that the new vehicle fleet continues to perform at the same level as new 2010 vehicles. In this way , it provides a comparison between today ’s new trucks and the increased cost and reduced fuel consumption of future compliant ve hicles. The agencies recognize that there is substantial uncertainty in determining an appropriate baseline against which to compare the effects of the proposed action. The lack of prior regulation of HD fuel efficiency means that there is a lack of his toric data regarding trends in this sector. Therefore, in this final action , the agencies have also included an analy sis using a baseline derived from annual projections developed by the U.S. Energy

Information Administration (EIA) for the Annual Ener gy Outlook (AEO). For this alternative baseline, the agencies analyzed the new truck fuel economy
583 NEPA re quires agencies to consider a “ no action ” alternative in their NEPA analyses and to compare the e ffects of not taking action with the effe cts of the reasonable action alternatives to demonstrate the different environmental effects of the action alternatives. See 40 CFR 1502.2(e), 1502.14(d). CEQ has explained that “ [T]he regulations require the analysis of the no action alternative even if the agency is under a court order or legislative command to act. This analysis provides a benchmark, enabling decision makers to compare the magnitude of environmental effects of the action alternatives. [See 40 CFR 1502.14(c).] * * * Inclusion of such an analysis in the EIS is necessary to inform Congress, the public, and the President as intended by NEPA. [See 40 CFR 1500.1(a).]'' Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations, 46 FR 18026 (1981) (emphasis added).******* **E.O. 12866 Review**

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528 of projections for the Light Commercial Trucks, along with the Medium
- and Heav y - Duty Freight Vehicles developed in AEO 2011. 584 The agencies converted the fuel econom y improvements into CO 2 emissions reductions relative to a 2010 model year (see RIA Chapter 6). The baseline derived from the AEO forecast provides a comparison between the impacts of the proposed standards and EIA’s projection of future new truck pe rformance absent regulation. This alternative baseline is informative in showing one possible projection of future vehicle performance based on other factors beyond the regulation the agencies are finalizing today . The AEO forecast makes a number of assumptions that should be noted. AEO 2011 assumes improved fuel efficiency for 8,500
- 10,000 lb. GVWR heavy
- duty

pickups due to the light
- dut y 2012
- 2016 MY regulations. We project a similar capability

for fuel econom y improvement as AEO does for this class o f vehicles; however, the agencies recognize that absent regulation manufacturers may decline to add the necessary technologies to reach the level of our proposed standards
. For medium and heav y - duty vocational vehicles, AEO 2011 projects a small reduction in fuel efficiency

over time (an increase in fuel consumption), similar to that achieved under the MY 2010 baseline. For Class 8 combination tractors, the AEO 2011 baseline projections an annual improvement of approximately 0.3 percent. We are not able t o make an estimate of the cost of the AEO 2011 alternative baseline because we are not able to accuratel y determine the technology mix used in the AEO 2011 anal ys is to achieve the projected improvements in fuel efficiency . We do know they

differ significantly

from our own analysis as the EIA projections do not include the full range of technologies considered by the agencies (e.g. EIA’s analy sis does not consider the use of idle reduction technologies and diesel auxiliary power units to reduce fuel consump tion associated with vehicle hotel ing). If one were to assume that the cost of the AEO2011 baseline was proportional to projected improvement relative to our preferred alternative, the total AEO2011 baseline cost estimate would be approximately

equal to the total cost of the preferred case, but vary by category . **(2) Alternative 2: 12 Percent Less Stringent than the Preferred Alternative**  Alternative 2 represents an alternative stringency level to the agencies’ preferred approach. Alternative 2 represents a stringency level which is approximately 12 percent less stringent than the preferred approach. The agencies calculated the Alternative 2 stringency

level in order to meet two goals. First, we sought to create an alternative that regulated the same engine and vehicle categories as the preferred alternative, but at lower stringency

(10
- 20 percent lower) than the preferred alternative. Second we wanted an alternative that reflected removal of the least cost effective technology that we believed manufacturers would add last in order to meet the preferred alternative. In other words, we wanted an alternative that as closel y as possible reflected the last increment in stringency

prior to reaching our preferred alternative. Please see Table 2
- 3 6 in RIA Chapter 2 for a list of all of the technologies, as well as their cost and relative

584 U.S. Energy Information Administration. Annual Energy Outlook 2011 Early Release. Last viewed on March 29, 2011 at http://www.eia.doe.gov/forecasts/aeo/ . See Supplemental Tables 7, 63, and 68.******* **E.O. 12866 Review**

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529 of effectiveness. The resulting Alternative 2 is based on the same technologies used in Alternative 3 except as follows for each of the three categories. The combinatio n tractor standard would be based on the removal of the Advanced SmartWay

aerod ynamic package and weight reduction technologies , which decreases the average combination tractor GHG emissions and fuel consumption reduction by approximately

1 percent. The HD pickup truck and van standard would be based on removal of the 5 percent mass reduction technology , which decreases the average truck reduction of fuel consumption and GHG emissions by approximately

1.6 percent. The vocational vehicle standard would b e based on removal of low rolling resistance tires

– in essence meaning that there would be no expected improvement in performance from vocational vehicles, onl y from engines used to power them
. This alternative would also reduce the amount of technologie s applied to diesel engines used in vocational vehicles such that the engines achieve a 3 percent reduction in 2014 model ye ar and a 5 percent reduction in 2017 model year, both compared to a 2010 model year baseline , The agencies have decided not to finalize Alternative 2 , because as shown below , Alternative 3 is more stringent, is technicall y feasible , and results in a greater net benefit to society
. **(3) Alternative 3: Preferred Alternative and Final Standards**  Alternative 3 represents the agencies’ preferred approach. This alternative consists of the finalized fuel efficiency and GHG standards for HD engi nes, HD pickup trucks and vans, Class 2b through Class 8 vocational vehicles, and Class 7 and 8 combination tractors. Details regarding modeling of this alternative are included in RIA Chapter 5 as the control case. The agencies selected Alternative 3 over Alternatives 4 and 5 described below because the agencies concluded that alternatives 4 and 5 were not technically feasible to achieve given the leadtime provided in th e s e final rule s . Hence, we have concluded that Alternative 3 represents the maximum feasible improvement. Section 2 of this preamble provides an explanation of the consideration that agencies gave to setting more stringent standards based on the application of additional technologies and our reasons for concluding that the identified technologies for each of the vehicle and engine standards that constitute Alternative 3 represented the maximum feasible improvement based on technological feasibility . In general, we reached this conclusion for one of two reasons. For some technologies such as Rankine Waste Heat Recovery engine technologies, the agencies have concluded that the technology is still in the research phase and will not be developed full y for new engine production in the time frame of this first regulatory action. In other c ases, the agencies concluded that the manufacturing capacity for technologies such as advanced battery s ys tems for heav y - dut y h ybrid drivetrains could******* **E.O. 12866 Review**

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530 of not be expanded quickly

enough to allow for significant vehicle production volume in the time frame of th is program . **(4) Alternative 4: 20 Percent More Stringent than the Preferred Alternative**  Alternative 4 represents a modeled alternative which is 20 percent more stringent than the preferred approach. The agencies derived the stringency level based on sim ilar goals as for Alternative 2. Specificall y, we wanted an alternative that would reflect an incremental improvement over the preferred alternative based on adding the next most cost effective technology in each of the categories. We believed these were the technologies most likely

to be attempted by

manufacturers if a more stringent standard were established. A s discussed above and in the feasibility discussion in Section III, we are not finalizing Alternative 4 because we do not believe that the technologies used in this alternative can be developed and introduced in the time frametime frame of this rulemaking. We note that the estimated costs for this alternative are denoted as ‘+c.’ The +c is intended to make clear that the cost estimates we are showing do not include additional costs related to pulling ahead the development and expanding manufacturing base for the additional technologies (for example, building new factories in the next few ye ars). The resulting Alternative 4 is based on the same technologies used in Alternative 3 except as follows for each of the three categories. The combination tractor standard would be based on the addition of Rankine waste heat recovery

s ys tems and 100 percent appli cation of advanced aerodynamic technologies, such as underbod y airflow treatment, advanced gap reduction, rearview cameras to replace mirrors, and wheel sy stem streamlining, to high roof sleeper cab combination tractors. The agencies do not believe that e ither advanced aerody namic technologies or Rankine waste heat recovery s ys tems should be used to set the standard for HD engines in 2017 MY because this technology is still in the research phase. The agencies assumed 59 percent of all combination tractors are sleeper cabs and of those, 80 percent are high roof sleeper cabs. The agencies assumed a 12 kWh waste heat recovery sy stem would reduce CO 2 emissions by 6 percent at a cost of $8,400 per truck. 585 The estimated reduction in CO 2 emissions from the engine for this alternative is included in RIA Chapter 6. The impact of 100 percent application of the advanced aerody namic technology

package would lead to a total 20.7 percent reduction in Cd values for high roof sleeper cabs over a 2 010 MY baseline tractor. The incremental cost of this technology

over the preferred case is $1,027 per vehicle. The HD pickup truck and van standard would be based on the addition of the turbocharged, downsized technology to gasoline engines which would bring the total reduction for gasoline HD pickup trucks and vans to 15 percent and match the level of reduction for the diesel pickup trucks. The agencies do not consider this to be a technology

from which the 2017MY gasoline HD pickup truck standards sh ould be premised on because we are not yet convinced that turbocharged downsized gasoline engines can be applied to heav y - dut y truck applications in a durable manner. We are aware that manufacturers are testing such engines and that in pickup trucks with a duty

585 TIAX. 2009. Page 4
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531 of cycle representing a mix of passenger vehicle and work applications the engines can be durable. However, we are unable to conclude today that such engines will be durable and hence technicall y feasible when applied in heav y - duty truck applications with an expected higher average load factor. The estimated incremental cost increase to HD pickup trucks and vans to replace a stoichiometric gasoline direct injected V8 engine with coupled cam phasing used in Alternative 3 with a V6 stoichiometric gasoli ne direct injection DOHC with dual cam phasing, discrete valve lift, and twin turbochargers is estimated to be $1,743. 586 The vocational vehicle standard would be based on the addition hy brid powertrains to 6 percent of the vehicles. The agencies assumed a 32 percent per vehicle reduction in GHG emissions and fuel consumption due to the hy brid with a cost of $26,667 per vehicle based on the average effectiveness and costs developed in the NAS report for box trucks, bucket trucks, and refuse haulers. 587 **(5) Alter**  **native 5: Trailers**  **Plus Accelerated Hybrid** Alternative 5 builds on Alternative 4 through additional hy brid powertrain application rates in the HD sector and b y adding a performance standard for fuel efficiency and GHG e missions to commercial trailers. This alternative includes all elements of Alternative 4 (some of which we already regard as infeasible in the model ye ars covered b y the final rule s ), plus the application of additional hy brid powertrains to the pickup truc ks, vans, vocational vehicles, and tractors. In addition, the agencies applied aerodyn amic technologies to commercial box trailers, along with tire technologies for all commercial trailers. The agencies set the h ybrid penetration for each category such that it represents 50 percent of the HD pickup truck and van segment, 50 percent of vocational vehicles, and 5 percent of tractors in 2017 model year. The agencies have concluded that it is not feasible to achieve h ybrid technology penetration rates at or even near these levels in the time frametime frame of this rulemaking. As with Alternative 4, we include a +c in our cost estimates for this alternative to reflect additional costs not estimated by the agencies. The agencies assumed that a h ybrid powertrain would provide a 32 percent reduction in CO 2 emissions and f

uel consumption of a vocational vehicle at a projected cost of $26,667 per vehicle, based on the average of the NAS report findings for box trucks, bucket trucks, and refuse vehicles. 588 The agencies are projecting a cost of $9,000 per vehicle for the HD pi ckup trucks and vans with an effectiveness of 18 percent, again based on the NAS report. 589 Lastl y, the effectiveness of hybrid powertrains installed in tractors was assumed to be 10 percent at a cost of $25,000 based on the NAS report. 590 The combination tra ctor technology package for Alternative 5 includes the preferred alternative technologies, waste heat recovery and Advanced SmartWay

586 See RIA Chapter 2, Table 2.35. 587 NAS Report. Page 146. 588 NAS Report. Page 146. 589 NAS Report. Page 146. 590 NAS Report. Page 146.******* **E.O. 12866 Review**

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532 of aerod ynamic package used in Alternative 4, and application of hy brid powertrains discussed above, in addition to a regulation for commercial trailers pulled by combination tractors. The agencies assumed a box trailer program would mirror the SmartWay program and include tire and aerodyn amic requirements. The agencies added low rolling resistance tires to all commercial trailers, which are assumed to have 15 percent lower rolling resistance than the baseline trailer tire which is equivalent to the target value required b y SmartWay . The aerody namics of the box trailers were assumed to improve the coefficient of drag for the combination tractor
- trailer b y 10 percent through the application of technologies such as trailer skirts and gap reducers. 591 These technologies would result in further reductions in drag coefficient and rolling resistance coefficient from the MY 2010 baseline. As stated above for hybrids, the agencies do not believe that it is possible to achieve technology penetration rates at or even near these levels in the time framet ime frame of this rulemaking. The combination tractor costs for this alternative are equal to the costs in Alternative 4, plus $25,000 for h ybrid powertrains in ten percent of tractors, plus the costs of trailers. The costs for the trailer program of A lternative 5 were derived based on the assumption that trailer aerodyn amic improvements would cost $2,150 per trailer. This cost assumes side fairings and gap reducers and is based on the ICF cost estimate. 592 The agencies applied the aerodynamic improveme nt to only box trailers, which represent approximately

60 percent of the trailer sales. The agencies used $528 per trailer (2014 MY cost) for low rolling resistance based on the agencies’ estimate of $66 per tire in the tractor program. Lastl y, the agenc ies assumed the trailer volume is equal to three times the tractor volume based on the 3:1 ratio of trailers to tractors in the market today
. 

### B. **How Do These Alternatives Compare in Overall GHG Emissions Reductions and Fuel Efficiency and Cost?**  The agencies analyzed all five alternatives through the MOVES model to evaluate the impact of each alternative, as shown in **Table** IX
- 1 . The table contains the annual CO 2 and fuel savings in 2030 and 2050 for each alternative (relative to the reference scenario of Alternative 1), presenting both the total savings across all regulatory categories, and for each regulatory

category . Table IX
- 2 presents the annual technology costs associated with each alternative (relative to the reference scenario of Alternative 1) in 2030 and 2050 for each regulatory category . In addition, the total annual downstream impacts of NO X , CO, PM, and VOC emissions in 2030 for each of the alternatives are included in **Table** IX
- 3
. Lastl y, the agencies project the monetized net benefits associated with each alternative in 2030 and 2050 as shown in **Table** IX
- 4 and **Table** IX
- 5
.

591 The Cd improvement of 10 percent for trailer improvements w as derived from the TIAX report, Table 4
- 26 on page 4
- 50. 592 Assumed retail prices of $1,300 for side skirts and $850 for gap reducers based on the ICF Cost Report, page 90.******* **E.O. 12866 Review**

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533 of **Table IX**  **- 1**  **: Annual CO 2**  **and Oil Reductions Relative to Alternative 1 in 2030 and 2050** DOWNSTREAM CO 2 REDUCTIONS (MMT) OIL REDUCTIONS (BILLION GALLONS) 2030 2050 2030 2050 Alt. 1 Baseline 0 0 0 0 Alt. 1a AEO 2011 Baseline
- Total 39 90 3.9 9.0 Tractors 29 73 2.9 7.1 HD Pickup Trucks 9 16 0.9 1.7 Vocational Vehicles 1 2 0.1 0.2 Alt. 2 L ess Stringent
- Total 54 78 5.4 7.7 Tractors 42 59 4.2 5.8 HD Pickup Trucks 7 11 0.8 1.2 Vocational Vehicles 5 7 0.4 0.7 Alt. 3 Preferred

– Total 61 88 6.0 8.7 Tractors 45 63 4.4 6.2 HD Pickup Trucks 8 13 0.9 1.3 Vocational Vehicles 7 11 0.7 1.1 Alt. 4 More Stringent

– Total 74 107 7.4 10.7 Tractors 53 74 5.2 7.3 HD Pickup Trucks 10 15 1.0 1.6 Vocational Vehicles 11 18 1.1 1.8 Alt. 5 Max Technology

– Total 99 146 9.8 14.5 Tractors 61 85 6.0 8.3 HD Pickup Trucks 15 24 1.6 2.5 Vocational Vehicles 23 37 2.2 3.6

**Table IX**  **- 2**  **: Technology Cost Projections Relative to Alternative 1 for Each Alternative**  **a** TECHNOLOGY COSTS (20 09$ MILLIONS) 2030 2050 Alt. 1 Baseline $0 $0 Alt. 1a AEO 2011 Baseline

– Total b -- -- Tractors
-- -- HD Pickup Trucks
-- -- Vocational Vehicles
-- -- Alt. 2 L ess Stringent

– Total $1,676 $2,440 Tractors $743 $1,227 HD Pickup Trucks $817 $1,029 Vocational Vehicles $117 $185 Alt. 3 Preferred

– Total $2,210 $3,287******* **E.O. 12866 Review**

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534 of TECHNOLOGY COSTS (20 09$ MILLIONS) Tractors $1,076 $1,777 HD Pickup Trucks $918 $1,156 Vocational Vehicles $216 $354 Alt. 4 More Stringent

– Total $5,211+c $6,996+c Tractors $1,953+c $3,225+c HD Pickup Trucks $1,442+c $1,816+c Vocational Vehicles $1,816+c $1,954+c

$17,909+c $27,306+c Alt. 5 Max Technology

– Total $2,747+c $4,292+c Tractors $5,669+c $7,142+c HD Pickup Trucks $9,493+c $15,873+c Vocational Vehicles $5,211+c $6,996+c Notes: a The +c is intended to make clear that the cost estimates we are showing do not include additional costs related to pulling ahead the development and expanding manufacturing base for these technologies. b The agencies did not conduct a cost analysis for th e AEO2011 baseline. **Table IX**  **- 3**  **: Downstream Impacts Relative to Alternative 1 of Key Non**  **- GHGs for Each Alternative**  **in 2030** NO X CO PM 2.5 VOC Alt. 1 Baseline 0% 0% 0% 0% Alt. 1a AEO 2011 Baseline 8.8% 1.0%
- 3.8% 7.2% Alt. 2 L ess Stringent
- 21.9%
- 2.0% 8.4%
- 19.0% Alt. 3 Preferred
- 22.0%
- 2.0% 8.5%
- 19.1% Alt. 4 More Stringent
- 22.5%
- 2.0% 8.7%
- 19.5% Alt. 5 Max Technology
- 22.9%
- 2.1% 8.4%
- 20.0% **Table IX**  **- 4**  **: Monetized Net Benefits Associated with Each Alternative Relative to Alternative 1 for Lifetime of 2014 through 2018 Model Year Vehicles(3% discount**  **rate, Million 2009 dollars)** Alt.1 Baseline Alt.2 Less

Stringent Alt.3

Preferred Alt.4 More

Stringent Alt.5 Max

Technology Truck Program Costs d $0
- $5,900
- $8,100
- $20,700+c
- $37,200+c Fuel Savings (pre
- tax) $0 $45,000 $50,100 $63,900 $79,100 Reduced CO 2 Emissions at Each Assumed SCC Value a,b 5% (avg SCC) $0 $1,100 $1,200 $1,600 $1,900 3% (avg SCC) $0 $5,100 $5,700 $7,200 $9,000 2.5% (avg SCC) $0 $8,400 $9,400 $12,000 $15,000 3% (95th percentile) $0 $16,000 $17,000 $22,000 $27,000 Energy Security Impacts (price shock) $0 $2,400 $2,700 $3,400 $4,200 Accidents, Congestion, Noise $0
- $1,300
- $1,500
- $1,600
- $1,600 Refueling Savings $0 $300 $400 $500 $600******* **E.O. 12866 Review**

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535 of Non
- CO 2 GHG Impacts and Non
- GHG Impacts c N/A N/A N/A N/A N/A Monetized Net Benefits at Each Assumed SCC Value a,b 5% (avg SCC) $0 $41,600 $44,800 $47,100+c $47,000+c 3% (avg SCC) $0 $45,600 $49,300 $52,700+c $54,100+c 2.5% (avg SCC) $0 $48,900 $53,000 $57,500+c $60,100+c 3% (95th percentile) $0 $56,500 $60,600 $67,500+c $72,100+c Notes: a Net present value of reduced CO 2 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 the SCC TSD for more detail. b Section VIII.G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46; for Average SCC at 2.5%: $3 6
- $66; and for 95th percentile SCC at 3%: $66
- $139. Section VIII.G also presents these SCC estimates. c The monetized GHG benefits presented in this analysis exclude the value of changes in non
- CO 2 GHG emissions expected under this rulemaking (see RIA Ch apter 5). Although EPA has not monetized changes in non
- CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. d “+c” indicates additional costs not estimated in this rulemaking. **Table IX**  **- 5**  **Monetized Net Benefits Associated with Each Alternative Relative to Alternative 1 for Lifetime of 2014 through 2018 Model Year Vehicles(7% discount rate, Million 2009 dollars)**  Alt.1 Baseline Alt.2 Less

Stringent Alt.3

Preferred Alt.4 More

Stringent Alt. 5 Max

Technology Truck Program Costs d $0
- $5,900
- $8,100
- $20,700+c - $37,200+c Fuel Savings (pre
- tax) $0 $30,900 $34,400 $43,800 $53,900 Reduced CO 2 Emissions at Each Assumed SCC Value a,b 5% (avg SCC) $0 $1,100 $1,200 $1,600 $1,900 3% (avg SCC) $0 $5,100 $5,700 $7,200 $9,000 2.5% (avg SCC) $0 $8,400 $9,400 $12,000 $15,000 3% (95th percentile) $0 $16,000 $17,000 $22,000 $27,000 Energy Security Impacts (price shock) $0 $1,600 $1,800 $2,300 $2,900 Accidents, Congestion, Noise $0
- $900
- $1,000
- $1,100
- $1,100 Refueling Savings $0 $200 $200 $300 $400 Non
- CO 2 GHG Impacts and Non
- GHG Impacts c N/A N/A N/A N/A N/A Monetized Net Benefits at Each Assumed SCC Value a,b 5% (avg SCC) $0 $27,000 $28,500 $26,200+c $20,800+c 3% (avg SCC) $0 $31,000 $33,000 $31,800+c $27,900+c 2.5% (avg SCC) $0 $34,300 $36,700 $36,600+c $33,900+c 3% (95th percentile) $0 $41,900 $44,300 $46,600+c $45,900+c Notes: a Net present value of reduced CO 2 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 the SCC TSD for more detail.******* **E.O. 12866 Review**

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536 of b Section VIII.G notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates range as follows: for Average SCC at 5%: $5
- $16; for Average SCC at 3%: $22
- $46; for Average SCC at 2.5%: $3 6
- $66; and for 95th percentile SCC at 3%: $66
- $139. Section VIII.G also presents these SCC estimates. c The monetized GHG benefits presented in this analysis exclude the value of changes in non
- CO 2 GHG emissions expected under this rulemaking (see RIA Chapter 5). Although EPA has not monetized changes in non
- CO 2 GHGs, the value of any increases or reductions should not be interpreted as zero. d “+c” indicates additional costs not estimated in thi s rulemaking. 

### C. **What Is the Agencies’ Decision Regarding Trailer Standards?** A central theme throughout our HD Program is the recognition of the diversity and complexity

of the heavy
- duty

vehicle segment. Trailers are an important part of this segment and are no less diverse in the range of functions and applications they serve. They are the primary

vehicle for moving freight in the United States. The ty pe of freight varies from retail products to be sold in stores, to bulk goods such as stones, to industrial liquids such as chemicals, to equipment such as bulldozers. Semi
- trailers come in a large variet y of st yl es – box, refrigerated box, flatbed, tankers, bulk, dump, grain, and many others. The most common ty pe of trailer is the box trailer, but even b ox trailers come in many different lengths ranging from 28 feet to 53 feet or greater, and in different widths, heights, depths, materials (wood, composites, and/or aluminum), construction (curtain side or hard side), axle configuration (sliding tandem or fixed tandem), and multiple other distinct features. NHTSA and EPA believe trailers impact the fuel consumption and CO 2 emissions from combination tractors and the agencies see opportunities for reductions. Unlike our experience with trucks and engines, the agencies have very limited experience related to regulating trailers for fuel efficiency or emissions. L ikewise, the trailer manufacturing industry

has only the most limited experience compl yi ng with regulations related to emissions and none with regard to EPA or NHTSA certification and compliance procedures. The agencies broadl y solicited comments on controlling fuel efficiency and GHG emissions through eventual trailer regulations as we described in the notice of proposed rulemaking which could set the foundation of a future rulemaking for trailers. 75 FR at 74345
- 351 (although this was a solicitation for comment regarding future action outside the present rulemaking). The general theme of the comments received was that technologies exist today that can improve trailer efficiency . We received several comments from stakeholders which encouraged the agencies to set fuel efficiency and GHG emissions standards for trailers in this rulemaking. The agencies also received comments supporting a delay in tr ailer regulations. Specifically , IPIcommented that the agencies should regulate trailers at least to some degree, arguing that the agencies’ reasoning for not doing so was insufficient and requesting a plan and schedule in the final rule for the future r egulation of trailers. One commenter recognized that there are well over 100 trailer manufacturers in the U.S., with almost all being small businesses. They stressed the need for the agencies to reach out to the trailer industry and associations prior to developing a regulatory

program for this industry . In addition, they stated that time is needed to develop sufficient research into the area. None of the commenters that supported trailer******* **E.O. 12866 Review**

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537 of regulation in this action addressed the complexities of the trail er industry , nor a method to measure trailer aerodynamic improvements In the NPRM, the agencies discussed relatively conceptual approaches to how a future trailer regulation could be developed ; however, we did not provide a proposed test procedure or proposed standard
. The agencies proposed to delay the regulation of trailers, as the inclusion would not be feasible at this time due to the diversity and complexity

of the trailer industry , as well as a lack of critical information from the SmartWay

program, industry

and other key

stakeholders. Additionally , since a number of trailer manufacturing entities are small businesses, EPA and NHTSA need to allow sufficient time to convene a SBREFA panel to conduct the proper outreach to the potent ially

impacted stakeholders. NHTSA and EPA agree that the regulation of trailers, when appropriate, is likely to provide fuel efficiency benefits. W e continue to believe that both agencies must perform a more comprehensive assessment of the trailer indus try , and therefore that their inclusion at this time is not feasible. Until that time, the SmartWay

Transport Partnership Program will continue to encourage the development and use of technologies to reduce fuel consumption and CO 2 emissions from trailers. 

## X. **Public Participation**  The agencies proposed their respective rules on November 30, 201 0 (75 FR 74152). Two public hearings were held to provide interested parties the opportunity to present data, views, or arguments concerning the proposal; the first hearing was held in Chicago, IL on November 15, 2010, and the second in Cambridge, MA on November 18, 2010. The public was invited to submit written comments on the proposal during the formal comment period, which end ed on January 31, 2011. The agencies received ov er 41,000 comments
- over 3,000 of them unique
- from industry , environmental organizations, states, and individuals. The vast majority

of commenters supported the central tenets of the proposed HD National Program. That is, there was broad support for a national program which would reduce fuel consumption and GHG emissions from the three heavy
- dut y regulatory categories

– heavy
- dut y pickup trucks and vans, vocational vehicles, and combination tractors. The agencies received specific comments on many aspects of the propos al. 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 action and located in the docket (Docket ID EPA

–HQ

– OAR

–2010

– 0162, or NHTSA
- 2010
- 0079). 

## XI **. NHTSA** **’s Record**  **of Decision** On May 21, 2010, President Obama issued a memorandum entitled “Improving Energy Securit y, American Competitiveness and Job Creation, and Environmental Protection through a Transformation of our Nation’s Fleet of Cars and Trucks” to the Secretary of Transpo rtation, the Administrator of NHTSA, the Administrator of EPA, and******* **E.O. 12866 Review**

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538 of the Secretary

of Energy
. 593 The memorandum requested that the Administrators of EPA and NHTSA begin work on a Joint Rulemaking under EISA and the Clean Air Act and establish fuel efficiency and GHG emission standards for commercial medium
- and heav y - dut y vehicles beginning with MY 2014. The President requested that NHTSA implement fuel efficiency standards and EPA implement GHG emission standards that take into account the market structure o f the trucking industry and the unique demands of heav y - dut y vehicle applications; seek harmonization with applicable S tate standards; consider the findings and recommendations published in the National Academy of Sciences (NAS) report on medium
- and heav y - duty truck regulation; strengthen the industry and enhance job creation in the United States; and seek input from all stakeholders, while recognizing the continued leadership role of California and other S tates. In accordance with this policy , this Final Rule promulgates fuel efficiency standards for HD vehicles built in MYs 2014
- 2018. This Final Rule constitutes the Record of Decision (ROD) for NHTSA’s HD vehicle Fuel Efficiency Improvement Program , pursuant to the National Environmental Policy Act (NEP A) and the Council on Environmental Quality ’s (CEQ) implementing regulations. 594 See 40 CFR § 1505.2. As required b y CEQ regulations, this Final Rule and ROD sets forth the following: (1) the agency’s decision; (2) alternatives considered by NHTSA in reach ing its decision, including the environmentall y preferable alternative; (3) the factors balanced by NHTSA in making its decision, including considerations of national policy ; (4) how these factors and considerations entered into its decision; and (5) the a gency ’s preferences among alternatives based on relevant factors, including economic and technical considerations and agency statutory missions. This Final Rule also briefly addresses mitigation
. 

### A. **The Agency’s Decision** In the D raft Environmental Impact Statement (D EI S ) and the F inal Environmental Impact Statement (F EI S ) , the agency identified a Preferred Alternative which would set overall fuel consumption standards for HD vehicles and engines
. The Preferred Alternative, identified as Alternative 3 in the FEI S, would include standards for engines used in Classes 2b
- 8 vocational vehicles (except engines in HD pickups and vans, which are regulated as complete vehicles), fuel consumption standards f or HD pickups and vans by work factor, overall vehicle fuel consumption standards for Classes 2b
- 8 vocational vehicles (in gal/1,000 ton
- miles), and overall fuel consumption standards for Classes 7 and 8 tractors.

593 The White House, Offi ce of the Press Secretary, Presidential Memorandum Regarding Fuel Efficiency Standards (May 21, 2010) ; Th e White House, Office of the Press Secretary, President Obama Directs Administration to Create First
-Ever National Efficiency and Emissions Standards for Medium
- and Heavy
Duty Trucks (May

21, 2010)
. 594 NEPA is codified at 42 U.S.C. §§ 4321
- 47. CEQ NEPA implementing regulations are codified at 40 Co de of Federal Regulations (CFR) Parts 1500
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539 of The Preferred Alternative identified in the NPRM, DEI S, and FEI S assumed that the vocational vehicle standards would lead to a 10 percent reduction in the tire rolling resistance level s of the tires installed in vocational veh icles. After carefull y reviewing and anal yz ing all of the information in the public record including technical support documents, the FEIS, and public and agency comments submitted on the DEI S, the FEIS, and the NPRM, NHTSA has decided to finalize a standard that includes slightl y more stringent requirements for vocational vehicles than those included in the Preferred Alternative analyzed in the FEIS
. Subsequent to issuing the proposed rule, NHTSA and EPA conducted a tire testing program to evaluate the tire rolling resistance of 156 different tires across a wide range of truck applications. The results of the study indicate that the baseline tire rolling resistance of this segment of vehicles was better than the level assumed during the proposal. In the final action, therefore, the agencies made the vocational truck stand ards slightly more stringent than those included as part of the Preferred Alternative for the FEIS, reflecting the better overall performance of tires in this segment. In addition, the agencies have reduced the projected improvement in average tire perfor

mance from 10 percent to 5 percent, reflecting the better than expected baseline performance. NHTSA’s anal ys is indicates that the Agency ’s Decision will result in slightly less fuel savings and CO 2 emissions reductions than those noted in the EI S. 595 For e nvironmental impacts associated with the final rule , see Section s V I
. C and VII of this Final Rule. 596 

### B. **Alternatives Considered by NHTSA in Reaching its Decision, Including the Environmentally Preferable Alternative**  When preparing an EI S, NEPA requires an agen cy to compare the potential environmental impacts of its proposed action and a reasonable range of alternatives. In the FEIS, NHTSA identified alternative s that represent the spectrum of potential actions the agency

could take. The environmental impacts of these alternatives, in turn, represent the spectrum of potential environmental impacts that could result from NHTSA’s chosen action in setting fuel efficiency standards for HD vehicles
. T he FEIS anal yz ed the impacts of four “action” alternatives , each of which would separately regulate segments of the HD vehicle fleet. 597 Three of the action alternatives

595 The agencies’ analysis indicates that the change results in a decrease in total 2014
- 2050 fuel savings of about 1. 05% percent com pared to the Preferred Alternative modeled in the EIS and a corresponding in crease in CO 2 emission s . 596 The environmental impacts of this decision fall within the spectrum of impacts analyzed in the DEIS and the FEIS. There are no “substantial changes to the proposed action” and there are no “significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its im pacts.” Therefore, consistent with 40 CFR § 1502.9(c), no supplement to the EIS is required. 597 In the DEIS, NHTSA analyzed several alternatives that applied only to spe cific components and/or segments of the HD vehicle fleet. Many commenters urged the agency to consider alternatives that applied to the entire HD vehicle fleet, reasoning that such an approach would be more consistent with EISA requirements. After carefu l consideration, NHTSA decided that those alternatives that would set standards for the whole fleet

—that is, the engine as well as the entire vehicle for pickup trucks and vans, vocational vehicles, and tractors

—

best met the purpose and need for this actio n. It also allows for the achievement of the “maximum feasible improvement” in HD fuel efficiency. Therefore, the FEIS examined impacts associated with four of the action alternatives analyzed in the DEIS.******* **E.O. 12866 Review**

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540 of (Alternatives 2, 3 and 4) would regulate the same vehicle categories, but at increasing levels of stringency , with Alternative 2 being the least string ent alternative and Alternative 4 being the most stringent. Alternatives 2 and 4 were constructed by starting with the Preferred Alternative (Alternative 3) and either removing the least cost effective technology

in each of the vehicle categories or addin g the next most cost effective technology

in each of the vehicle categories. 598 Alternative 5 built on the Preferred Alternative b y adding a performance standard for the commercial trailers pulled by tractors and by

specifying more stringent standards based on accelerated adoption of hy brid powertrains for HD vehicles. The DEI S and FEIS also analyzed the impacts that would be expected if NHTSA adopted no HD vehicle standards (the No Action Alternative). For a discussion of the environmental impacts ass ociated with each of the alternatives, see C hapters 3 and 4 of the FEI S. Along with the FEIS, the agency c onducted a national
- scale photochemical air quality modeling and health risk assessment for a subset of the DEIS alternatives to support and confirm the health effects and health
- related economic estimates of the EIS. The photochemical air quality study is included as Appendix F to the F EI S. The study used air qualit y modeling and health benefits anal ysis tools to quantify the air quality

and health
- r elated benefits associated with the alternative HD standards. NHTSA’s environmental anal ys is indicates that Alternative 5 ( Trailers and Accelerated Hy

brid) is the overall Environmentally Preferable Alternative because it would result in the largest reduc tions in fuel use and GHG emissions among the alternatives considered. Under each action alternative the agency considered, the reduction in fuel consumption resulting from higher fuel e fficienc y causes emissions that occur during fuel refining and distribution to decline. For most pollutants, this decline is more than sufficient to offset the increase in tailpipe emissions that results from increased driving due to the fuel efficiency rebound effect, leading to a net reduction in total emissions from fue l production, distribution, and use. Because it leads to the largest reductions in fuel refining, distribution, and consumption among the alternatives considered, Alternative 5 would also lead to the lowest total emissions of CO 2 and other GHGs, as well a s most criteria air pollutants and mobile source air toxics (MSATs)
. 599

598 For example, as noted in the FEIS, the combination tractor standard for Alternative 2 was based on the removal of the Advanced SmartWay aerodynamic package and w eight reduction technologies assumed under the Preferred Alternative. The vocational vehicle standard for Alternative 2 wa s based on the removal of low rolling resistance tires and some diesel engine technologies assumed under the Preferred Alternative. The pickup truck and van standard for Alternative 2 standard wa s based on removal of the 5 percent mass reduction technology, The com bination tractor standard for Alternative 4 wa s based on the addition of Rankine waste heat recovery systems and 100 percent application of advanced aerodynamic technologies not assumed under the Preferred Alternative
. The pickup truck and van standard for Alternative 4 was based on the addition of turbocharged, downsized technology to gasoline engines
. The vocational vehicle standard for Alternative 4 was based on the addition of hybrid powertrains to 6 percent of the vehicles. 599 E missions of d iesel particulate matter (DPM) and fine particulate matter (PM 2.5 ) for Alternative 5 are forecast to be lower than under other action alternatives under all analysis years, but slightly high er than under the No Action Alternative in analysis years 2030 and 2050. See FEIS Table 3.5.2
- 5. This anomaly******* **E.O. 12866 Review**

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541 of NHTSA’s environmental anal ys is indicates that emissions of c arbon monoxide (CO) , acrolein, acetaldehyde, and f ormaldehyde are slightly

( less than one percent ) higher under Alternative 5 than under some other action alternatives and analy sis ye ars. This occurs when increased tailpipe emissions are forecast to exceed the reductions in emissions due to reduced fuel refining and distribution. Thus , while Alternative 5 is the environmentally

preferable alternative on the basis of CO 2 and other GHGs , and on the basis of most criteria air pollutants and MSATs, other alternatives are environmentally preferable from the standpoint of some criteria air pollutants and MSATs in s ome years. Overall, NHTSA considers Alternative 5 to be the Environme ntally Preferable Alternative. For additional discussion regarding the alternatives considered b y the agency in reaching its decision, including the Environmentally Preferable Alternativ e, see Section IX of this Final Rule. For a discussion of the environmental impacts associated with each alternative, see Ch apters 3 and 4 of the FEIS. 

### C. **Factors Balanced b**  **y NHTSA i**  **n Mak ing**  **it s Decision**  For discussion of the factors balanced b y NHTSA in making its decision, see Section s III, VIII and IX of this Final Rule. 

### D. **How the Factors and Considerations Balanced by NHTSA Entered into its Decision**  For discussion of how the factors and considerations balanced b y the agency entered into NHTSA’s Decision, see S ections III, VIII and IX of this Final Rule. 

### E. **The Agency’s Preferences a**  **mong Alternatives Based on Relevant Factors, Including Economic and Technical Considerations and**  **Agency Statutory Missions** For discussion of the agency ’s preferences among altern atives based on relevant factors, including economic and technical considerations, see Section VIII and IX of this Final Rule. 

### F. **Mitigation** The CEQ regulations specify that a ROD must “state whether all practicable means to avoid or minimize environmental harm from the alternative selected have been adopted, and if not, wh y they were not.” 49 CFR § 1505.2(c). The majority of the environmental effects of NHTSA’s action are positive, i.e., beneficial environmental impacts, and would not raise issues of mitigation. E missions of criteria and toxic air results from the agencies’ assumptions regarding the percent of all long
- haul tractors that use an APU rather than the truck’s engine as a pow er source during extended idling (discuss ed further in FEIS Section 3.2.4.1).******* **E.O. 12866 Review**

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542 of pollutants are generall y projected to decrease under the final standards under all anal ys is ye ars as compared to their levels under the No Action Alternative. Anal ys is of the environmental trends reported in the FEIS indicates that the only exceptions to this decline are emissions of PM 2.5 , DPM , and 1,3
- butadiene in some analysis years. See Chapter 5 of the FEIS. The agency forecasts these emissions increases because, under all the alternatives anal yz ed in the E IS , increase in vehicle use due to improved fuel e fficiency is projected to result in growth in total miles traveled by HD vehicles
. The growth in travel outpaces emissions reductions for some pollutants, resulting in projected i ncreases for these pollutants. In addition, NHTSA’s NEPA anal ys is predicted increases in emissions of air toxic and criteria pollutants to occur under certain alternatives based on assumptions about the use of Auxiliary Power Units (APUs). For example, NHTSA’s NEPA anal ys is assume s that some manufacturers will install anti
- idling technologies (including APUs) on some vehicle classes to meet the requirements of the rule and that drivers’ subsequent use of those APUs will result in an increase in emissions of some criteria and toxic air pollutants. NHTSA’s authorit y to promulgate new fuel e fficienc y standards for HD vehicles is limited and does not allow regulation of vehicle emissions or of factors affecting vehicle emissions, including driving habits and APU usage
. Consequentl y, un der the HD Fuel Efficiency

Improvement P rogram, NHTSA must set standards but is unable to take steps to mitigate the impacts of these standards. Chapter 5 of the FEIS outlines a number of other initiatives across government that could ameliorate the environmental impacts of motor vehicle use, including the use of HD vehicles. 

## XII. **Statutory and Executive Order Reviews (1)**  **Executive Order 12866: Regulatory Planning and Revie w**  Under section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is an “economically significant regulatory

action” because it is likely to have an annual effect on the economy of $100 million or more. Accordingl y, the agencies s ubmitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action. N HTSA is also subject to Executive Order 13 563 (76 FR 3821, January 21, 2011) and the Department of Transportation’s Regulatory Policies and Procedures
. T h e s e final rule s are also significant within the meaning of the DOT Regulatory Policies and Procedures. Executive Order 12866 additionall y requ ire s NHTSA to submit this action to OMB for review and document an y changes made in response to OMB recommendations
. In addition, the agencies prepared an anal ys is of the potential costs and benefits associated with this action. This analy sis is contained in the Regulatory Impact Anal ys is, which is available in the docket for these rules and at the docket internet address listed under **ADDRESSES** above.******* **E.O. 12866 Review**

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543 of **(2) National Environmental Policy Act**  Under NEPA, a Federal agency must prepare an Environmental Impact Statement (EI S) on proposed actions that could significantl y impact the quality of the human environment. The requirement is designed to serve three major functions: (1) to provide the decisionmaker(s) with a detailed description of the potential environmental impacts of a proposed action prior to its adoption, (2) to rigorously explore and evaluate all reasonable alternatives, and (3) to inform the p ublic of, and allow comment on, such efforts. In addition, the CEQ regulations emphasize agency cooperation earl y in the NEPA process and allow a lead agency (in this case, NHTSA) to request the assistance of other agencies that either have jurisdiction by law or have special expertise regarding issues considered in an EIS. 600 At NHTSA’s request, both EPA and the Federal Motor Carrier Safet y Administration (FMCSA) agreed to act as cooperating agencies in the preparation of the EIS. EPA has special experti se in climate change and air quality , and FMCSA has special expertise regarding HD vehicles
. NHTSA, in cooperation with EPA and FMCSA , prepared a DE IS , solicited public comments in writing and in public hearing s , and prepared an FEIS responding to those c omments. Specificall y, in June 2010 , NHTSA published a Notice of Intent to prepare an EI S for proposed HD fuel efficiency standards. 601 See 40 CFR § 1501.7. On October 29, 2010 , EPA issued its Notice of Availabilit y of the DEI S, 602 triggering a public comment period. See 40 CFR § 1506.10. T he public was invited to submit written comments on the DEI S until January

3, 2011 . NHTSA mailed (both electronicall y and through regular U.S. mail) copies of the DEI S to interested parties, including feder al, state, and local officials and agencies; elected officials ; environmental and public interest groups; Native American tribes; and other interested individuals. NHTSA and EPA held two hearings on the proposed rule s and the EI S, the first on November 15 , 2010 in Chicago, I llinois, and the second on November 18, 2010 in Cambridge, Massachusetts. NHTSA received 3,048 written comments to the DEI S and the NPRM
. The transcript from the public hearing and written comments submitted to NHTSA are part of the administrative record and are available on the Federal Docket, which can be found online at http://www.regulations.gov , Reference Docket No. NHTSA
- 2010
- 00 79
. NHTSA reviewed and analyzed all comments received during the public comment period and revised the FEIS in response to comments on the EI S where appropriate. 603

600 40 CFR § 1501.6. 601 See Notice of Intent to Prepare an Environmental Impact Statement for New Medium
- and Heavy
- Duty Fuel Efficiency Improvement Program, 75 FR 33565 (June 14, 2010). 602 Environmental Impact Statements ; Notice of Availability, 75 FR 66756 (Oct. 29, 2010); NHTSA also published a separate Notice of Availability describing the program in greater detail, 75 FR 68312 (Nov. 5, 2010). 603 The agency also changed the FEIS as a result of updated information that became available after issuance of the DEIS.******* **E.O. 12866 Review**

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544 of On June 20, 2011 , NHTSA submitted the FEIS to EPA. NHTSA also mailed (both electronically

and through regular U.S. mail) the FEIS to interested partie s and posted the FEIS on its website, http://www.nhtsa.gov/ f uel
- econom y. On June 24, 201 1 , EPA published a Notice of Availability of the FEIS in the Federal Register
. 604 The FEIS anal yz e s and disclose s the potential environmental impacts of the proposed HD fuel efficiency standards pursuant to the National Environmental Policy Act (NEPA), the Council on Environmental Quality (CEQ) regulations implementing NEPA, DOT Order 5610.1C, and NHTSA regulations. 605 The F EI S compare s the potential environmental impac ts of alternative standards considered b y NHTSA for the final rule. It also anal yz e s direct, indirect, and cumulative impacts and analy ze s impacts in proportion to their significance. See the FEIS and the FEI S Summary for a discussion of the environmenta l impacts anal yz ed. Docket No. NHTSA
- 2011
- 0079. The standards adopted in this Final Rule have been informed by anal ys es contained in the Medium
- and Heavy
-Duty Fuel Efficiency Improvement Program, Final Environmental Impact Statement, Docket No. NHTSA
- 20 10
- 00 7 9 (FEIS). For purposes of this rulemaking, the agency referred to an extensive compilation of technical and policy documents available in NHTSA’s EIS/Rulemaking docket and EPA’s docket. NHTSA’s EIS and rulemaking docket and EPA’s rulemaking docket ca n be found online at http://www.regulations.gov , Reference Docket Nos.: NHTSA
- 20 10
- 00 7 9 (EI S and Rulemaking) and EPA
- HQ
- OAR
- 20 10
- 0 162 (EPA Rulemaking). Based on the foregoing, the agency concludes that the environmental analysis and public involvement process complies with NEPA implementing regulations issued by CEQ, DOT Order 5610.1C, and NHTSA regulations. (a ) Clean Air Act (CAA) The CAA (42 U.S.C. § 7401) is the primary Federal legislation that addresses air quality . Under the authority of the CAA and subsequent amendments, the EPA has established National Ambient Air Quality Standards (NAAQS) for six criteria pollutants, which are relativel y commonplace pollutants that can accumulate in the atmosphere as a r esult of normal levels of human activity . The EPA is required to review the NAAQS every five years and to change the levels of the standards if warranted b y new scientific information. The air qualit y of a geographic region is usuall y assessed b y comparing the levels of criteria air pollutants found in the atmosphere to the levels established by the NAAQS. Concentrations of criteria pollutants within the air mass of a region are measured in parts of a pollutant per million parts of air (ppm) or in microgram s of a pollutant per cubic meter (μg/m3) of air present in repeated air samples taken at designated monitoring locations. These ambient concentrations of each criteria pollutant are compared to the

604 7 6 FR 37111 (June 24, 2011)
. 605 NEPA is codified at 42 U.S.C. 4321
- 4347. CEQ NEPA implementing regulations are codified at 40 Code of Federal Regulations (CFR) Parts 1500
- 1508. NHTSA NEPA implementing regulations are codified at 49 CFR Part 520.******* **E.O. 12866 Review**

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545 of permissible levels specified by the NAAQS in order to asse ss whether the region’s air quality is potentially

unhealthful. When the measured concentrations of a criteria pollutant within a geographic region are below those permitted by the NAAQS, the region is designated by the EPA as an attainment area for that p ollutant, while regions where concentrations of criteria pollutants exceed Federal standards are called nonattainment areas (NAAs). Former NAAs that have attained the NAAQS are designated as maintenance areas. Each NAA is required to develop and implement a State Implementation Plan (SIP), which documents how the region will reach attainment levels within time periods specified in the CAA. In maintenance areas, the SIP documents how the State intends to maintain compliance with the NAAQS. When EPA changes a NAAQS, States must revise their SIPs to address how they will attain the new standard. Section 176(c) of the CAA prohibits Federal agencies from taking actions in nonattainment or maintenance areas that do not “conform” to the State Implementation Plan (SIP). The purpose of this conformity requirement is to ensure that Federal activities do not interfere with meeting the emissions targets in the SIPs, do not cause or contribute to new violations of the NAAQS, and do not impede the ability to attain or maintain the NAAQS. The EPA has issued two sets of regulations to implement CAA Section 176(c):

 The Transportation Conformity Rules (40 CFR Part 93, Subpart A), which apply to transportation plans, programs, and projects funded or approved under U.S.C. Title 23 or the Federal Transit Laws (49 U.S.C. Chapter 53). Projects funded b y the Federal Highway Administration (FHWA) or the Federal Transit Administration (FTA) usuall y are subject to transportation conformity
. See 40 CFR § 93.102.

 The General Conform ity Rules (40 CFR Part 93, Subpart B) appl y to all other federal actions not covered under transportation conformity . The General Conformity

Rule established emissions thresholds, or de minimis levels, for use in evaluating the conformity of a project. I f the net emissions increases attributable to the project are less than these thresholds, then the project is presumed to conform and no further conformity evaluation is required. If the emissions increases exceed an y of these thresholds, then a conformity determination is required. The conformity determination can entail air quality modeling studies, consultation with EPA and state air quality agencies, and commitments to revise the SIP or to implement measures to mitigate air quality impacts. The final fuel consumption standards and associated program activities are not funded or approved under U.S.C. Title 23 or the Federal Transit Act. Further, NHTSA’s HD Fuel Efficiency

Improvement Program is not a highway or transit project funded or approved b y FHWA or FTA. Accordingl y, the standards and associated rulemakings are not subject to transportation conformity
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546 of Under the General Conformity Rule, a conformity

determination is required where a Federal action would result in total direct and indirect emissi ons of a criteria pollutant or precursor equaling or exceeding the rates specified in 40 CFR § 93.153(b)(1) and (2) for nonattainment and maintenance areas. As explained below, NHTSA’s action results in neither direct nor indirect emissions as defined in 40 CFR § 93.152. The General Conformit y Rule defines direct emissions as those of “a criteria pollutant or its precursors that are caused or initiated by the Federal action and originate in a nonattainment or maintenance area and occur at the same time a nd place as the action and are reasonabl y foreseeable.” 40 CFR § 93.152. Because NHTSA’s action only sets fuel consumption standards for HD vehicles, it causes no direct emissions within the meaning of the General Conformity Rule. Indirect emissions under the General Conformity Rule include emissions or precursors: (1) that are caused or initiated b y the Federal action and originate in the same nonattainment or maintenance area but occur at a different time or place than the action ; (2) that are reasonabl y foreseeable; (3) that the agency can practicall y control; and (4) for which the agency

has continuing program responsibility . 40 CFR § 93.152. Each element of the definition must be met to qualify as an indirect emission. NHTSA has determined that, for the purposes of general conformity , emissions that occur as a result of the fuel consumption standards are not caused by NHTSA’s action, but rather occur due to subsequent activities that the agency cannot practicall y control. “[ E]ven if a Federal licensing, rulemaking, or other approving action is a required initial step for a subsequent activity

that causes emissions, such initial steps do not mean that a Federal agency can practicall y control any resulting emissions” (75 FR 172 54, 17260; 40 CFR § 93.152). NHTSA cannot control vehicle manufacturers’ production of HD vehicles and consumer purchasing and driving behavior. For the purposes of anal yz ing the environmental impacts of this action under NEPA, NHTSA has made assumptions regarding the technologies manufacturers will install and how companies will react to increased fuel efficiency standards. Specifically , NHTSA’s NEPA analy sis predicted increases in air toxic and criteria pollutants to occur in some nonattainment areas u nder certain alternatives based on assumptions about the use of APUs and the rebound effect. For example, NHTSA’s NEPA anal ys is assumes that some manufacturers will install anti
- idling technologies (including APUs) on some vehicle classes to meet the requ irements of the program and that drivers’ subsequent use of those APUs will result in an increase in some criteria pollutants. However, neither NHTSA’s nor EPA’s rule s mandate this specific manufacturer decision or driver behavior

– the program does not require that manufacturers install APUs to meet the requirements of the rule, and it does not require drivers to use anti
- idling technologies instead of, for example, shutting off all power when parked. Similarly , NHTSA’s NEPA anal ys is assumes a rebound effect, wherein the standards could create an incentive for additional vehicle use by reducing the cost of fuel consumed per mile driven. This rebound effect is an estimate of how NHTSA assumes some drivers will react to the rule and is useful for estimating the costs and benefits of the rule, but the agency does not have the statutory authorit y, or the program responsibility , to control, among other items discussed above, the actual vehicle miles traveled b y drivers. Accordingl y, change s in any emissions that result from NHTSA’s HD vehicle Fuel Efficiency Improvement Program are not changes that the******* **E.O. 12866 Review**

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547 of agency can practicall y control; therefore, this action causes no indirect emissions and a general conformit y determination is not required. (b ) National Historic Preservation Act (NHPA) The NHPA (16 U.S.C. § 470) sets forth government policy and procedures regarding “historic properties”

—that is, districts, sites, buildings, structures, and objects included in or eligible for the National Regist er of Historic Places (NRHP). See also 36 CFR Part 800. Section 106 of the NHPA requires federal agencies to “take into account” the effects of their actions on historic properties. The agency concludes that the NHPA is not applicable to NHTSA’s Decisio n because it does not directl y involve historic properties. The agency

has, however, conducted a qualitative review of the related direct, indirect, and cumulative impacts, positive or negative, of the alternatives on potentially affected resources, inclu ding historic and cultural resources. See Section 4.5 of the FE IS
. (c) Executive Order 12898 (Environmental Justice) Under Executive Order 12898, Federal agencies are required to identify and address an y disproportionately high and adverse human health or env ironmental effects of its programs, policies, and activities on minority populations and low
- income populations. NHTSA complied with this order by identifying and addressing the potential effects of the alternatives on minority and low
- income populations in Section s 3. 6 and 4.6 of the FEIS, where the agency set forth a qualitative anal ys is of the cumulative effects of the alternatives on these populations. (d ) Fish and W

ildlife Conservation Act (FWCA) The FWCA (16 U.S.C. § 2900) provides financial and technic al assistance to States for the development, revision, and implementation of conservation plans and programs for nongame fish and wildlife. In addition, the Act encourages all Federal agencies and departments to utilize their authority to conserve and to promote conservation of nongame fish and wildlife and their habitats. The agency concludes that the FWCA is not applicable to NHTSA’s Decision because it does not directly involve fish and wildlife. (e) Coastal Zone Management Act (CZMA) The Coastal Zone Management Act (16 U.S.C. § 1450) provides for the preservation, protection, development, and (where possible) restoration and enhancement of the nation’s coastal zone resources. Under the statute, States are provided with funds and techn ical assistance in developing coastal zone management programs. Each participating State must submit its program to the Secretary of Commerce for approval. Once the program has been approved, an y activity of a Federal agency , either within or outside of the coastal zone, that affects an y land or water use or natural resource of the coastal zone must be carried out in a manner that is consistent, to the maximum extent practicable, with the enforceable policies of the State’s program.******* **E.O. 12866 Review**

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548 of The agency

concludes that the CZMA is not applicable to NHTSA’s Decision because it does not involve an activity within, or outside of, the nation’s coastal zones. The agency

has, however, conducted a qualitative review of the related direct, indirect, and cumulative impacts , positive or negative, of the alternatives on potentially affected resources, including coastal zones. See Section 4.5 of the FE IS
. (f ) Endangered Species Act (ESA) Under Section 7(a)(2) of the Endangered Species Act (ESA) federal agencies must ensure that actions they authorize, fund, or carry

out are “not likely

to jeopardize” federally listed threatened or endangered species or result in the destruction or adverse modification of the designated critical habitat of these species. 16 U.S.C. § 1536(a)(2). If a federal agency

determines that an agency action may

affect a listed species or designated critical habitat, it must initiate consultation with the appropriate Service

– the U.S. Fish and Wildlife Service (FWS) of the Department of the Interior and/ o r National Oceanic and Atmospheric Administration’s National Marine Fisheries Service (NOAA Fisheries Service) of the Department of Commerce, depending on the species involved

— in order to ensure that the action is not likely to jeopardize the species or de stroy or adversel y modify

designated critical habitat. See 50 CFR § 402.14. Under this standard, the federal agency

taking action evaluates the possible effects of its action and determines whether to initiate consultation. See 51 FR 19926, 19949 (Jun. 3, 1986). NHTSA received one comment to the Scoping notice for the HD program indicating that the agency should engage in consultation under Section 7 of the ESA when anal yz ing the overall impact of GHG emissions and other air pollutants. NHTSA has re viewed applicable ESA regulations, case law, guidance, and rulings in assessing the potential for impacts to threatened and endangered species from the HD fuel efficiency standards. Consistent with NHTSA’s determination under the agency ’s most recent light
duty fuel econom y rule, NHTSA believes that the agency ’s action, which will result in nationwide fuel savings and, consequentl y, emissions reductions from what would otherwise occur in the absence of the agency ’s action , does not require consul tation with NOAA Fisheries Service or the FWS under S ection 7(a)(2) of the ESA. For discussion of the agency ’s rationale in the context of the CAFE program , see Appendix G of the FE IS for MYs 2012
- 2016, available at: http://www.nhtsa.gov/fuel
- econom y . Accordingl y, NHTSA has concluded its review of this action under Section 7 of the ESA. (g ) Floodplain Management (Executive Order 11988 & DOT Order 5650.2) These Orders require Federal agencies to avoid the long
- and short
- term adverse impacts associated with the occupancy and modification of floodplains, and to restore and preserve the natural and beneficial values served by floodplains. Executive Order 11988 also directs agencies to minimize the impact of floods on human safety , health and welfare, and to restore and preserve the natural and beneficial values served by floodplains through evaluating the potential effects of any actions the agency

may take in a floodplain and ensuring that its program planning and budget requests reflect consideration of flood hazards and floodplain management. DOT Order 5650.2 sets forth DOT policies and procedures for implementing Executive Order 11988. The DOT Order******* **E.O. 12866 Review**

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549 of requires that the agency

determine if a proposed action is within the limits of a base floodplain, mean ing it is encroaching on the floodplain, and whether this encroachment is significant. If significant, the agency is required to conduct further anal ys is of the proposed action and an y practicable alternatives. If a practicable alternative avoids floodpl ain encroachment, then the agency is required to implement it. In this rulemaking, the agency is not occup yi ng, modifying and/or encroaching on floodplains. The agency , therefore, concludes that the Orders are not applicable to NHTSA’s Decision. The ag ency has, however, conducted a review of the alternatives on potentially

affected resources, including floodplains. See Section 4.5 of the FEIS. (h ) Preservation of the Nation’s Wetlands (Executive Order 11990 & DOT Order 5660.1a) These Orders require Federal agencies to avoid, to the extent possible, undertaking or providing assistance for new construction located in wetlands unless the agency head finds that there is no practicable alternative to such construction and that the proposed action includes all pr acticable measures to minimize harms to wetlands that may result from such use. Executive Order 11990 also directs agencies to take action to minimize the destruction, loss or degradation of wetlands in “conducting Federal activities and programs affectin g land use, including but not limited to water and related land resources planning, regulating, and licensing activities.” DOT Order 5660.1a sets forth DOT policy

for interpreting Executive Order 11990 and requires that transportation projects “located in or having an impact on wetlands” should be conducted to assure protection of the Nation’s wetlands. If a project does have a significant impact on wetlands, an EIS must be prepared. The agency

is not undertaking or providing assistance for new constructi on located in wetlands. The agency , therefore, concludes that these Orders do not apply to NHTSA’s Decision. The agency has, however, conducted a review of the alternatives on potentially

affected resources, including wetlands. See Section 4.5 of the FE IS
. (i ) Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle Protection Act (B GEPA), Executive Order 13186 The MBTA provides for the protection of migratory birds that are native to the United States by

making it illegal for anyone to pursue, hunt, take, attempt to take, kill, capture, collect, possess, buy , sell, trade, ship, import, or export any migratory

bird covered under the statute. The statute prohibits both intentional and unintentional acts. Therefore, the statute is violated if an agency acts in a manner that harms a migratory bird, whether it was intended or not. See, e.g., United States v. FMC Corp. , 572 F.2d 902 (2nd Cir. 1978). The BGEPA (16 U.S.C. § 668) prohibits any form of possession or taking of both bald and golden eagles. Under the B GEPA, violators are subject to criminal and civil sanctions as well as an enhanced penalt y provision for subsequent offenses.******* **E.O. 12866 Review**

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550 of Executive Order 13186, “Responsibilities of Federal Agencies to Protect Migratory

Birds,” helps to further the purposes of the M BTA b y requiring a Federal agency to develop a Memorandum of Understanding (MOU) with the Fish and Wildlife Service when it is taking an action that has (or is likely to have) a measurable negative impact on migratory

bird populations. The agency

concludes that the MBTA, BGEPA, and Executive Order 13186 do not apply to NHTSA’s Decision because there is no disturbance and/or take involved in NHTSA’s Decision. (j ) Department of Transportation Act (Section 4(f)) Section 4(f) of the Department of Transportation Act of 1966 (49 U.S.C. § 303), as amended b y Pub. Law § 109
- 59, is designed to preserve publicly owned parklands, waterfowl and wildlife refuges, and significant historic sites. Specificall y, Section 4(f) o f the Department of Transportation Act provides that DOT agencies cannot approve a transportation program or project that requires the use of an y publicl y owned land from a significant public park, recreation area, or wildlife and waterfowl refuge, or any land from a significant historic site, unless a determination is made that:

 There is no feasible and prudent alternative to the use of land, and
 The program or project includes all possible planning to minimize harm to the propert y resulting from use, or
 A transportation use of Section 4(f) propert y results in a de minimis impact. The agency

concludes that the Section 4(f) is not applicable to NHTSA’s Decision because this rulemaking does not require the use of an y publicl y owned land. For a more detailed discussion, please see Section 3. 1 of the FE IS
. **(3) Paperwork**  **Reduction Act** The information collection requirements in these rules have been submitted for approval to OMB under the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . The in formation collection requirements are not enforceable until OMB approves them
. The a genc ies propose to collect information to ensure compliance with the provisions in these rules . This includes a variet y of testing, reporting and recordkeeping requirement s for vehicle manufacturers. Section 208(a) of the CAA requires that vehicle manufacturers provide information the Administrator may reasonably

require to determine compliance with the regulations; submission of the information is therefore mandatory . We will consider confidential all information meeting the requirements of section 208(c) of the CAA
. It is estimated that this collection affects approximately 35 engine and vehicle manufacturers. The information that is subject to this collection is coll ected whenever a manufacturer applies for a certificate of conformity . Under section 206 of the CAA (42******* **E.O. 12866 Review**

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551 of U.S.C. 7521), a manufacturer must have a certificate of conformity before a vehicle or engine can be introduced into commerce. The burden to the manu facturers affected b y these rules has a range based on the number of engines and vehicles a manufacturer produces. The total estimated burden associated with these rules is 25,052 hours annually (see Table XII
- 1 : ). T h is estimated burden for engine and vehicle manufacturers is a total estimate for new reporting requirements. Burden is defined at 5 CFR 1320.3(b).

**Table XII**  **- 1**  **: Burden for Reporting and Recordkeeping Requirements**  Number of Affected Vehicle Manufacturers 34 Annual Labor Hours for Each Manufacturer to Prepare and Submit Required Information Varies Total Annual Information Collection Burden 35.804 Hours An agency

may not conduct or sponsor, and a person is not required to respond to a collection of information unless it display s a currently valid OMB control number. The OMB control numbe rs for EPA ’ s regulations are listed in 40 CFR part 9. When this I CR is approved b y OMB, the agency will publish a technical amendment to 40 CFR part 9 in the Federal Register to display the OMB control number for the approved information collection require ments contained in this final action. **(4) Regulatory Flexibility Act**  (a ) Overview The Regulatory

Flexibility

Act generally

requires an agency

to prepare a regulatory

flexibility

analy sis of any

rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or an y other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small gove rnmental jurisdictions. For purposes of assessing the impacts of these rules on small entities, small entity is defined as: (1) a small business as defined b y S BA regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a cit y, count y, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any

not - for
- profit enterprise which is independently owned and operated and is not dominant in its field. (b ) Summary of Poten tially Affected Small Entities The agencies have not conducted an Initial Regulatory Flexibility

Anal ys is for th is action because we are certifying that the se rule s would not have a significant economic impact on a substantial number of small entities. Th e agencies are defer ring standards for manufacturers meeting SBA’s definition of small business as described in 13 CFR 121.201 due to the extremely small fuel savings and emissions contribution of******* **E.O. 12866 Review**

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552 of these entities , and the short lead time to develop these ru les , especiall y with our expectation that the program would need to be structured differentl y for them (which would require more time). The agencies are instead envisioning fuel consumption and GHG emissions standards for these entities as part of a future regulatory action. This includes small entities in several distinct categories of businesses for heavy - duty engines and vehicles: chassis manufacturers, combination tractor manufacturers, and alternative fuel engine converters. Based on a prelimi nary

assessment, the agencies have identified a total of about 17 engine manufacturers, 3 complete pickup truck and van manufacturers, 11 combination tractor manufacturers and 43 heavy
- duty chassis manufacturers. Notably , several of these manufacturers produce vehicles in more than just one regulatory category ( HD pickup truck s/vans, combination tractors, or vocational vehicles (i.e. heav y - dut y chassi s manufacturers)). Based on the ty pes of vehicles they

manufacture, these companies, however, w ould be sub ject to slightly

different testing and reporting requirements. Taking this feature of the heavy
- duty trucking sector into account, the agencies estimate that although there are fewer than 30 manufacturers covered by the pro gram , there close to 60 division s with these companies that w ill be subject to the final regulations. Of these, about 15 entities fit the SBA criteri a of a small business. There are approximately three engine converters, two tractor manufacturers, and ten heavy
- dut y chassis manufacture rs in the heavy
- dut y engine and vehicle market that are small businesses. (No major heavy
- duty engine manufacturer s, heav y - dut y chassis manufacturers, or tractor manufacturers meet the small
- entity criteria as defined by SBA). The agencies estimate that these small entities comprise less than 0.35 percent of the total heav y - dut y vehicle sales in the United States , and therefore the deferment will have a negligible impact on the fuel consumption and GHG emissions reductions from the final standards. To en sure that the agencies are aware of which companies are be ing deferred, the agencies are requiring that such entities submit a declaration to the agencies containing a detailed written description of how that manufacturer qualifies as a small entity under the provisions of 13 CFR 121.201. Some small entities, such as heav y - dut y tractor and chassis manufacturers, are not currently covered under criteria pol lutant motor vehicle emissions regulations. Small engine entities are currentl y covered b y a number of EPA motor vehicle emission regulations, and they routinely submit information and data on an annual basis as part of their compliance responsibilities. Because such entities are not automatically

exempted from other EPA regulations for heav y - duty engines and vehicles, absent such a declaration, EPA would assume that the entity was subject to the greenhouse gas control requirements in this program . The d eclaration to the agencies w ill need to be submitted at the time of either engine or vehicle emissions certification under the HD highway

engine program for criteria pollutants
. The agencies expect that the additional paperwork burden associated with compl eting and submitting a small entity declaration to gain deferral from the final GHG and fuel consumption standards w ill be negligible and easily done in the context of other routine submittals to the agencies . However, the agencies have accounted for this cost with a nominal estimate included in the Information Collection Request completed under the Paperwork Reduction Act. Additional information can be found in the Paperwork Reduction Act******* **E.O. 12866 Review**

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553 of discussion in Section XI I. (3) Paperwork Reduction Act . B ased on this, the agencies are certifying that the rule s w il l not have a significant economic impact on a substantial number of small entities. **(5) Unfunded Mandates Reform Act**  Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P ub
. L. 104
- 4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the agencies generally must prepare a written statement, including a cost
benefit anal ys is, for proposed and fi nal rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $ 1 34 million or more in any one ye ar. Before promulgating a rule for which a written statement is needed, section 205 of the UMRA generall y requires the agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly , most cost - effective or least burdensome alternative that achieves the objectives of the rul e. The provisions of section 205 do not apply when they

are inconsistent with applicable law. Moreover, section 205 allows the agencies to adopt an alternative other than the least costl y, most cost - effective or least burdensome alternative if the Administrator (of either agency) publishes with the final rule an explanation why that alternative was not adopted. Before the agencies establish any regulatory

requirements that may

significantly or uniquely

affect small governments, including tribal governments, they must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying pot entiall y affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA and NHTSA regulat ions with significant Federal intergovernmental mandates, and informing, educating, and adv ising small governments on compliance with the regulatory requirements. These rules contain no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, or tribal governments. The rule s impose no enforceable duty on an y State, local or tribal governments. T he agencies have determined that these rules contain no regulatory requirements that might significantl y or uniquely affect small governments. T he agencies have determined that these rules contain a Federal mandate that may result in expenditures of $ 100 or more for the private sector in an y one year. T he agencies believe that the pro gram represents the least costl y, most cost - effective approach to achieve the statutory requirements of the rule s . Section VIII. L, above, explains why

the agencies believe that the fuel savings that will result from these rules will lead to lower prices econom y - wide, improving U.S. international competitiveness. The costs and benefits associated with the pro gram are discussed in more detail above in Section VIII and in the Regulatory Impact Anal ys is, as required b y the UMRA. Table XI
- 3 presents the rule
- related benefits, costs and net benefits in both present value terms and in annualized terms. In both cases, the discounted values ar e based on an underlying time varying stream of cost and benefit values that extend into the future******* **E.O. 12866 Review**

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554 of (2012 through 2050). The distribution of each monetized economic impact over time can be viewed in the RIA that accompanies these rules
. Present values r epresent the total amount that a stream of monetized costs/ benefits /net benefits that occur over time are worth now (in year 200 9 dollar terms for this anal ys is ), accounting for the time value of money by discounting future values using either a 3 or 7 per cent discount rate, per OMB Circular A
- 4 guidance
. An annualized value takes the present value and converts it into a constant stream of annual values through a given time period (2012 through 2050 in this analy sis) and thus averages (in present value ter

ms) the annual values. The present value of the constant stream of annualized values equals the present value of the underlying time varying stream of values
. The ratio of benefits to costs is identical whether it is measured with present values or annual ized values. It is important to note that annualized values cannot simply be summed over time to reflect total costs/benefits/net benefits; they must be discounted and summed. Additionally , the annualized value can vary substantially

from the time varyin g stream of cost/benefit/net benefit values that occur in an y gi ven year . **Table XI -**  **3: Esti**  **ma ted**  **Lifetime and Annualized**  **Discounted Costs, Benefits, and Net Benefits**  **for 2014**  **- 2018 Model Year**  **HD Vehicles assuming the $22/ton SCC Value**  **a,b (**  **billions 200**  **9 dollars)**  Costs Benefits Net Benefits Lifetime Present Value c,d

– 3% Discount Rate $8. 1 $5 7 $49 Annualized V alue c,e

– 3% Discount Rate $0.4 $2.6 $2.2 Lifetime Present Value c,d

– 7% Discount Rate $8. 1 $ 41 $ 33 Annualized V alue c,e

– 7 % Discount Rate $0. 6 $3.1 $2. 5 Note s: a Although the agencies estimated the benefits associated with four different values of a one ton CO 2 reduction (SCC: $5, $22, $36, $66), for the purposes of this overview presentation of estimated costs and benefits we are showing the benefits associated with the marginal value deemed to be central by the interagency working group on this topic: $22 per ton of CO 2 , in 2008 dollars and 2010 emissions and fuel consumption. As noted in Section VIII.G , SCC increases over time. 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 consi stency. Refer to Section VII I.G for more detail. c Discounted values presented in this table are based on an underlying series of cost and benefit values that extend into the future (2012 through 2050). The distribution of each monetized economic impact over time can be viewed in th e RIA that accompanies this preamble. d Present value is the total, aggregated amount that a series of monetized costs or benefits that occur over time is worth now (in year 2008 dollar terms), discounting future values to the present. e The annualized va lue is the constant annual value through a given time period (2012 through 2050 in this analysis) whose summed present value equals the present value from which it was derived
. **(6) Executive**  **Order 13132 (Federalism)**  This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of******* **E.O. 12866 Review**

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555 of governm ent, as specified in Executive Order 13132. These rules will appl y to manufacturers of motor vehicles and not to state or local governments. Thus, Executive Order 13132 does not apply to this action
. Although section 6 of Executive Order 13132 does not a

pply to this action, the agencies did consult with representatives of state governments in developing this action
. NHTSA notes that EPCA contains a provision (49 U.S.C. 32919(a)) that expressly preempts any

State or local government from adopting or enforc ing a law or regulation related to fuel econom y standards or average fuel econom y standards for automobiles covered b y an average fuel economy standard under 49 U.S.C. Chapter 329. However, commercial medium
- and heav y - dut y on - highway vehicles and work tr

ucks are not “automobiles,” as defined in 49 U.S.C. 32901(a)(3). Accordingl y, NHTSA has tentatively

concluded that EPCA’s express preemption provision would not reach the fuel efficiency standards to be established in this rulemaking. NHTSA also consid ered the issue of implied or conflict preemption. The possibility

of such preemption is dependent upon there being an actual conflict between a standard established b y NHTSA in this rulemaking and a State or local law or regulation. See Spriestma v. Merc ury Marine, 537 U.S. 51, 64
- 65 (2002). At present, NHTSA has no knowledge of an y State or local law or regulation that would actuall y conflict with one of the fuel efficiency

standards be ing established in this rulemaking. **(7) Executive Order**  **13175 (Consult**  **ation and Coordination with Indian Tribal Governments)**  Th e s e final rule s do not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). These rules will be implemented at the Federal level and impose compliance cos ts onl y on vehicle manufacturers. Tribal governments would be affected onl y to the extent they purchase and use regulated vehicles. Thus, Executive Order 13175 does not apply to these rules
. **(8) Executive Order 13045: “Protection of Children from**  **Environmental Health Risks and Safety Risks”**  This action is subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is an economically significant regulatory

action as defined by Executive Order 12866, and the agencies believe that the environmental health or safet y risk addressed b y this action may

have a disproportionate effect on children. A s ynthesis of the science and research regarding how climate change may affect children and other vulnerable subpopulations is contained in the Technical Support Document for Endangerment or Cause or Contribute Find ings for Greenhouse Gases under s ection 202(a) of the Clean Air Act, which can be found in the public docket for these rules
. 606 A summary of the anal ys is is presented below. With respect to GHG emissions, the effects of climate change observed to date and projected to occur in the future include the increased likelihood of more frequent and

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556 of intense heat waves. Specifically , EPA’s anal ys is of the scientific assessment literature has determined that severe heat waves are projected to intensify in magnitude, frequency , and duration over the portions of the United States where these events already occur, with potential increases in mortality and morbidit y, especiall y among the young, elderl y, and frail. EPA has estimated reductions in projected global mean sur face temperatures as a result of reductions in GHG emissions associated with the final standards in this action (Section II). Children may receive benefits from reductions in GHG emissions because they are included in the segment of the population that i s most vulnerable to extreme temperatures. For non
- GHG pollutants , EPA has determined that c limate change is expected to increase regional ozone pollution, with associated risks in respiratory infection, aggravation of asthma, and premature death. The dire ctional effect of climate change on ambient PM levels remains uncertain. However, d isturbances such as wildfires are increasing in the United States and are likel y to intensify in a warmer future with drier soils and longer growing seasons. PM emissions f rom forest fires can contribute to acute and chronic illnesses of the respiratory s ys tem, particularl y in children, including pneumonia, upper respiratory diseases, asthma and chronic obstructive pulmonary diseases. **(9) Executive**  **Order 13211 (Energy Effects)** This rulemaking is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy

Supply , Distribution, or Use” (66 FR 28355 , May 22, 2001) because it is not likely to have a signifi cant adverse effect on the supply , distribution, or use of energy . In fact, these rules have a positive effect on energy suppl y and use. Because the final GHG emission and fuel consumption standards will result in significant fuel savings, these rules en courage more efficient use of fuels. Therefore, we have concluded that these rules are not likely to have an y adverse energy effects. Our energy effects analysis is described above in Section VIII.H
. **(10) National Technology Transfer Advancement Act**  Section 1 2(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104
- 113, 12(d) (15 U.S.C. 272 note) directs the agencies to use voluntary

consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials, specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary

consensus standards bodies. NTTAA directs the agencies to provide Congress, through OMB, explanations when the agencies deci de not to use available and applicable voluntary consensus standards. For CO 2 , N 2 O, and CH 4 emissions and fuel consumption from heav y - dut y engines , the agencies will collect data over the same tests that are used for the heav y - dut y highway engine program f

or criteria pollutants . This will minimize the amount of testing done by manufacturers, since manufacturers are already required to run these tests.******* **E.O. 12866 Review**

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557 of For CO 2 , N 2 O, and CH 4 emissions and fuel consumption from complete pickup trucks and vans , the agencies will collect data over the same tests that are used for EPA’s heav y - dut y highway engine program for criteria pollutants and for the California Air Resources Board . This will minimize the amount of testing done by manufacturers, since manufacturers are alr eady required to run these tests. For CO 2 emissions and fuel consumption from heavy
- duty combination tractors and vocational vehicles , the agencies will collect data through the use of a simulation model instead of a full
- vehicle chassis dy namometer testin g . This will minimize the amount of testing done by manufacturers
. EPA ’ s compliance assessment tool is based upon well
- established engineering and ph ys ics principals that are the basis of general academic understanding in this area, and the foundation of an y d ynamic vehicle simulation model, including the models cited b y ICCT in its study
. 607 Therefore, the EPA’s compliance assessment tool satisfies the description of a consensus
. For the evaluation of tire rolling resistance input to the model, EPA is fi nalizing to use the I SO 28580 test, a voluntary

consensus methodology . EPA is adopting several alternatives for the evaluation of aerodyn amics which allows the industry to continue to use their own evaluation tools because EPA does not know of a single co nsensus standard available for heav y - dut y truck aerodynamic evaluation. For air conditioning standard s, EPA is finalizing a consensus methodology developed b y the Societ y of Automotive Engineers (SAE). **(11) Executive Order 12898: Federal Actions to Address**  **Environmental Justice in Minority Populations and Low**  **- Income Populations**  Executive Order 12898 (59 FR 7629 , Feb ruary 16, 1994) establishes federal executive policy

on environmental justice. Its main provision directs federal agencies, to the greatest exte nt practicable and permitted b y law, to make environmental justice part of their mission by

identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority

populations and low
- income populations in the United States. With respect to GHG emissions, EPA has determined that th ese final rule s will not have disproportionately high and adverse human health or environmental effects on minority or low
- inc ome populations because they increase the level of environmental protection for all affected populations without having an y disproportionately high and adverse human health or environmental effects on any population, including any minorit y or low
- income po pulation. The reductions in CO 2 and other GHGs associated with the standards will affect climate change projections, and EPA has estimated reductions in projected global mean surface temperatures (Section VI ). Within communities experiencing climate chan ge, certain parts of the population may be especially vulnerable; these include the poor, the elderly , those already in poor health, the disabled, those living alone, and/or indigenous populations dependent on one or a few resources. 608 In addition, the U.S . Climate Change Science Program stated as one of its conclusions:

607 ICCT. ICCT Evaluation of Vehicle Simulation Tools. 2009. 608 See Endangerment TSD, Note 10, above
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558 of “The United States is certainly capable of adapting to the collective impacts of climate change. However, there will still be certain individuals and locations where the adaptive capacity is less and these individuals and their communities will be disproportionally impacted b y climate change.” 609 Therefore, these specific sub
- populations may receive benefits from reductions in GHGs. For non
- GHG co
- pollutants such as ozone, PM 2.5 , and toxi cs, EPA has concluded that it is not practicable to determine whether there would be disproportionately high and adverse human health or environmental effects on minority and/or low income populations from these rules
. **(12) Congressional**  **Review Act** The Congre ssional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory

Enforcement Fairness Act of 1996, generall y provides that before a rule may take effect, the agency

promulgating the rule must submit a rule report, which includes a cop y o f the rule, to each House of the Congress and to the Comptroller General of the United States. The agencies will submit a report containing th e s e rule s and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule s in the Federal Register. A Major rule cannot take effect until 60 day s after it is pu blished in the Federal Register. This action is a “major rule” as defined by 5 U.S.C. 804( 2). Th e s e rule s will be effective **[Insert date 60 days after publication in the Federal Register],** sixty day s after date of publication in the **Federal Register**
. **(13) Privacy**  **Act** Anyone is able to search the electronic form of all comments received into any of our dockets b y the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an organization, business, labor union, etc.). You may rev iew DOT’s complete Privacy Act statement in the Federal Register (65 FR 19477

– 78, April 11, 2000) or you may visit http://www.dot.gov/privacy .html
. 

## XIII. **Statutory Provisions**  **and Legal Authority**  **A. EPA**  Statutory auth orit y for the vehicle controls in these rules is found in CAA section 202(a) (which authorizes standards for emissions of pollutants from new motor vehicles which emissions cause or contribute to air pollution which may reasonabl y be anticipated to endang er public health or welfare), sections 202(d), 203
- 209, 216, and 301 of the CAA , 42 U.S.C. 7521 (a), 7521 (d), 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7550, and 7601.

609 CCSP (2008 ) Analyses of the effects of global change on human health and welfare and human systems
. A Report by the U.S. Climate Change Science Program and the Subcommittee on Global Change Research. [Gam ble, J.L. (ed.), K.L. Ebi, F.G. Sussman, T.J. W ilbanks, (Authors)]. U.S. Environmental Protection Agency, Washington, DC, USA.******* **E.O. 12866 Review**

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559 of 

### B. **NHTSA** Statutory authorit y for the fuel consumption standards in these rules is found in EI SA section 103 (which authorizes a fuel efficiency improvement program, designed to achieve the maximum feasible improvement to be created for commercial medium
- and heav y - dut y on - highway

vehicles and work trucks, to include appropriate test methods, me asurement metrics, standards, and compliance and enforcement protocols that are appropriate, cost
- effective and technologically feasible) of the Energy

Independence and Security Act of 2007, 49 U.S.C. 32902(k). 

### List of Subjects 40 CFR Part 85 Confidential business information, Imports, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Research, Warranties. 40 CFR Part 86 Administrative practice and procedure, Confidential business information, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements. 40 CFR Part 600 Administrative practice and procedure, Electric power, Fuel economy , Incorporation by reference, Labeling, Reporting and recordkeeping requirements. 40 CFR Parts 1036 and 1037 Administrative pract ice and procedure, Air pollution control, Confidential business information, Environmental protection, Incorporation by reference, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Warranties. 40 CFR Part 1039 Environmental prot ection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Incorporation by reference, Labeling, Penalties, Reporting and recordkeeping requirements, Warranties. 40 CFR Parts 1065 and 1066 Administrat ive practice and procedure, Air pollution control, Reporting and recordkeeping requirements, Research. 40 CFR Part 1068 Environmental protection, Administrative practice and procedure, Confidential business information, Imports, Incorporation by reference , Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements, Warranties. 49 CFR Parts 523, 534, and 535 Fuel Efficiency