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1 of 77 1 EO12866_GHG+Fuel Eff Stds for Med
- Heavy
- Duty Engines+Vehicles 2060
- AP61 FRM Preamble_201105 31 .docx **ENVIRONMENTAL PROTECTION AGENCY**  40 CFR Parts 85, 86, 1036, 1037, 1065, 1066, and 1068 **DEPARTMENT OF TRANSP ORTATION**  National Highway

Traffic Safet y Administration 49 CFR Parts 523, 534, and 535 [EPA

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–2010

– 0162; NHTSA
- 2010
- 0079; FRL
- xxxx - x] RI N 2060
- AP61; RI

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

Engines and Vehicles AGENCIES: Environmental Protection Agency (EPA) and National Highway Traffic 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 Heav y - Dut y National Program that will reduce greenhouse gas emissions and increase fuel efficiency for on
- road heav y - duty

vehicles, respo nding 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 re gulatory

categories of heavy
- 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. Certai n 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 ) emissions standards that will apply to all heav y duty engines, pickup trucks and vans. EPA’s final greenhouse gas emission standards under the Clean Air Act will begin with model y ear 2014. NHTSA’s final fuel consumption standards under the Energy Independence and Security Act of 2007 will be voluntary in model y ears 2014 and 2015, becoming mandatory

with model y ear 2016 for most regulatory categories. Commercial trailers are not regulated in this phase of the Heavy
- Duty National P rogram.2 of 771

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 y ears, providing over $7 billion in net societal benefits, and $49 billion in net societal benefi ts when private fuel savings are considered. DATES: These final rules are effective on **[Insert date 60 days after publication in the Federal Register],**  sixty days after date of publication in the **Federal Register**
. The incorporation b y reference of certai n publications listed in this regulation is approved b y the Director of the Federal Register as of **[Insert date 60 days after publication in the Federal Register]** 
. **ADDRESSES:** EPA and NHTSA have established dockets for this action under Docket ID No. EPA

–HQ

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–2010

– 0162 and NHTSA
- 2010
- 0079, respectively
. All documents in the docket are listed on the www.regulations.gov web site. Although listed in the index, some information is not publicly available, e.g., confidential business information or other information whose disclosure is restricted by 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 ele ctronically

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

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

– 1744, and the telephone number for the Air Docket is (202) 566
- 1742. **NHTSA** : Docket Management Facilit y, M
- 30, U.S. Department of Transportation, W est Building, Ground Floor, Rm. W12
- 140, 1200 New Jersey Avenue, SE, Washington, DC 20590. The Docket Management Facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday , except Federal holiday s. **FOR FURTHER INFORMATION CONTACT:** NH TSA: Rebecca Yoon, Office of Chief Counsel, National Highway Traffic Safet y Administration, 1200 New Jersey Avenue, SE, Washington, DC 20590. Telephone: (202) 366
- 2992. 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 Assessment and Standards Division Hotline; telephone number; (734) 214
- 4636; email asdinfo@epa.gov. SUPPL EMENTARY INFORMATION: 

### A. **Does this Action Apply to Me** This action affects companies that manufacture, sell, or import into the United States new heav y - dut y engines and new Class 2b through 8 trucks, includi ng combination tractors, school and transit buses, vocational vehicles such as utility service trucks, as well as 3⁄4
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3 of 77 1 ton and 1
- ton pickup trucks and vans. 1 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 standards and corporate average fuel econom y standards issued for light
duty model y ear 2012
- 2016 vehicles. Regulated categ ories 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 b y these rules. This table lists the ty pes of entities that the agencies are aware may be regulated by

this action. Other ty

pes of enti ties 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 applica bility of this action to the persons listed in the preceding **FOR FURTHER INFORMATION CONTACT** section. **Table of Contents** I. Overview 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 P rogram E. Program Flexibilities F. EPA and NHTSA Statutory Authorities G. Future HD GHG and Fuel Consumption Rulemakings II. Final G HG and Fuel Consumption Standards for Heav y - duty Engines and Vehicles
1 For purposes of NHTSA’s fuel consumption regulations, non
- commercial recreational vehicles are not covered, even if they otherwise fall under these categories. See 49 U.S.C. 32901(a)(7).4 of 771

A. What Vehicles Would Be Affected? B. Class 7 and 8 Combination Tractors C. Heav y - Dut y Picku

p 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. Cla ss 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 Cons umption 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 Will 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’ Es timated Cost, Economic, and Other Impacts of the Final Program? A. Conceptual Framework for Evaluating Impacts B. Costs Associated With the Final Program C. Indire ct Cost Multipliers D. Cost per Ton of Emissions Reductions E. Impacts of Reduction in Fuel Consumption F. Class Shifting and Fleet Turnover Impacts G. Benefits of Reducing CO 2 Emissions H. Non
- GHG Health and Environmental Impacts I. Energy Security Impacts***** E.O. 12866 Review**

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5 of 77 1 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 Agenci es 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 . Statutory

and Executive Order Reviews XII. Statutory

Provisions and Legal Authorit y A. EPA B. NHTSA 

## I. **Overview A.**  **Introduction** EPA and NHTSA (“the agencies”) are announcing a first
- ever program to reduce greenhouse gas (GHG) emissions and improve fuel efficiency in the heavy
- duty

highway vehicle sector. This broad sector

– ranging from large pickups to sleeper
- cab tractors

– together represent the second largest contributor to oil consumption and GHG emissions 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, 2 010 standards to sharply reduce GHG emissions and fuel consumption from MY 20120
- 2016 passenger cars and light trucks (published at 75 FR 25324 (May 7, 2010)). In a May 21, 2010 memorandum to the Administrators of EPA and NHTSA (and the Secretaries of T ransportation 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 domestic jobs, enhance our energy security , and improve our environment.” 2 , 3 In the May 2010 memorandum, the President specifically requested

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 MY 2012
- 2016 National Program for light
- duty vehicles by developing and proposing coordinated light
- duty vehicle standards for MY 2017
- 2 025. 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 FR 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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6 of 771 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 commercia l medium
- and heav y - dut y vehicles beginning with the 2014 model y ear (MY).” In this final rulemaking each agency is addressing this Memorandum by adopting rules under its respective authority that together comprise a coordinated and comprehensive HD Nation al Program designed to address the urgent and closely intertwined challenges of dependence on oil, achievement of energy security , and amelioration of global climate change. At the same time, the final program will enhance American competitiveness and j ob 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 , an d 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 oth er stakeholders toward 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 works 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 leadin g to the earl y introduction of advanced technologies. The final rules adopted today reflect these principles. The final HD National Program builds on many y ears of heavy
- dut y engine and vehicle technology

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

feasible, and cost
- effective for model y ears 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 y ears, the agencies and industry

will also continue learning about emerging opportunities for this complex sector to further reduce GHG emissions and fuel consumption thro ugh future regulatory

steps. Similarly , the agencies will participate 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 a s 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 developments and***** E.O. 12866 Review**

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7 of 77 1 maximize the achieved reductions in GHG emissions and fuel 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, Me xico, 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. The regulatory

program we are finalizing today is largel y unchanged from the proposal the agencies made in October 2010. The structure of the program and the stringency

of the standards is essentially the same as proposed. We have made a number of changes to the testing requirements and reporting requirements to 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 technologies and to provide a more straightforward mechanism to certify engines and vehicles using i nnovative technologies. We have also made slight changes to the vocational vehicle standards to reflect new tire rolling resistance data, along with adjustments to the N 2 O and CH 4 emissions caps reflecting additional data. Finally in response to comments , we have made some technical changes to our emissions compliance model that results in different numeric standards for vehicles to more accurately characterize emissions while maintaining the same overall stringency and therefore expected costs and benefi ts 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 en gines, although about 37 percent of these vehicles are powered b y gasoline engines. 4 Heav y - duty trucks have alway s been an important part of the goods movement infrastructure in this country and have experienced significant growth over the last decade rel ated to increased imports and exports of finished goods and increased shipping of finished goods to homes through internet purchases. 5 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.

4 References in this preamble to “gasoline” engines (and the vehicles pow ered by them) generally include other Otto
- cycle engines as well, such as those fu eled 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 highway vehicles (including buses). As such, the term is generally interchangeable with “heavy
- duty vehicle.”***** E.O. 12866 Review**

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8 of 771 For purposes of this preamble, the term “heav y - duty” or “HD” is used to apply to all highway

vehicles and engines that are not within 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. 6 Italso does not include motorcycles. Thus, in this rulemaking, unless specified otherwise, the 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. 7 We note that the Energy Independence and Security Act of 2007 requires NHTSA to set standards for “commercial medium
- and heav y - dut y on - highway vehicles and work trucks.” 8 The NPRM proposed to include all segments of the heav y - dut y category above, except NHTSA propo sed not to include recreational vehicles (RVs), based on an interpretation of “commercial” vehicles. NHTSA proposed that recreational vehicles were non - commercial, and therefore outside of the scope of its rule. Oshkosh Corporation commented that this interpretation did not match the statutory definition in EI SA, which defines “commercial medium
- and heav y - dut y on - highway vehicle” b y weight onl y, 9 and that therefore it should be explicitly broadened to include all vehicles that are not engaged in interstate commerce as defined by the Federal Motor Carrier Safety Administration in 49 CFR § 202. Alternatively , Oshkosh suggested that if NHTSA stuck to the definition provided in EI SA, there would be no logical reason to exclude RVs on that definition. NHTSA has reviewed the proposed interpretation and believes that, given the very wide variet y of vehicles contained in the HD fleet, trying to exclude certain ty pes of vehicles based on the proposed interpretation could create illogical results. Therefore, NHT SA will adhere to the statutory definition contained in EI SA for this rulemaking. As RVs were not included by NHSTA for the proposed regulation in the NPRM, they are not within scope and are also excluded in NHTSA’s portion of the final program. NHTSA wi ll revisit this issue in the next rulemaking and may include RVs at that time. Setting GHG emissions standards for the heav y - duty sector will help to ameliorate climate change. The EPA Administrator found that human
- induced climate change resulting from GHG emissions endangers the public health and welfare of current and future generations (74 FR 66496, December 15, 2009), based on the scientific assessment reports of the Intergovernmental Panel on Climate Change (IPCC), the U.S. Climate Change Science P rogram (CCSP), the U.S. Global Change Research Program (USGCRP), and the National Research Council (NRC). As summarized in the Technical Support Document for EPA’s Endangerment and Cause or Contribute Findings under
6 Light
- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule 75 FR 25323,(May 7, 2010. 7 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. 8 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). 9 See above note.***** E.O. 12866 Review**

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9 of 77 1 Section 202(a) of the Clean Air Act, anthropogenic emissions of GHGs are very likely (a 90 to 99 percent probability) the cause of most of the observed global warming over the last 50 y ears. 10 Primary

GHGs of concern are carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), hydrofluorocarbo ns (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
- grow ing source of U.S. GHGs since 1990. 11 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. 12 Heav y - dut y vehicles emit CO 2 , CH 4 , N 2 O, and HFCs and are responsible for nearl y 19 percent of all mobile source GHGs (nearl y 6% of all U.S. GHGs) and about 25 percent of section 202(a) mobile source GHGs. For heav y - duty

vehicles in 2007, CO 2 emissions represented more than 99 percent of all GHG emissions (including HFCs). 13 Setting fuel consumption standards for the heav y - duty sector, pursuant to NHTSA’s EISA authority , will also improve our energy securit y b y reducing our dependence on foreign oil, which has been a national objective since the first oil price shocks in the 1970s. Net petroleum imports now account for approximately 60 percent of U.S. petroleum consumption. World crude oil production is highly concentrated, exacerbating the risks of supply disruptions and price shocks as the recent unrest in North Africa and the Persian Gulf highlights. Current oil prices are over $100 per barrel, with 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 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 duty vehicles account for about 17 percent of transportation oil use, which means that they alone account for about 12 percent of all U.S. oil consumption. 14 In developing this HD National program, the agencies 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. 15 Further, it is our expectation based on our ongoing work with the State of California that the Californi a ARB will be able to adopt regulations equivalent in practice to those of this

10 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
- 0171
- 11645, and at http://epa.gov/climatechange/endangerment.html. 11 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/do wnloads09/GHG2007entire_report
- 508.pdf 12 See Endangerment TSD, Note 10 , above, at pp. 180
- 194. 13 U.S. Environmental Protection Agency. 2009. Inve ntory of U.S. Greenhouse Gas Emissions and Sinks: See Note 11 , above. 14 In 2009 Source: EIA Annual Energy Outlook 2010 released May 11, 2010 15 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.***** E.O. 12866 Review**

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10 of 771 HD National Program, just as it has done for past EPA regulation of heav y - duty trucks and engines. NHTSA and EPA have been working with California 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 heavy
- duty vehicles 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 thes e 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 vehicle rule establishing CAFE and GHG standards for MYs 2012
- 2016 light
- dut y vehicles, EPA’s and NHTSA’ s final standards for the heav y - dut y sector are largel y 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 c arbon
- based fuels, the amount of CO 2 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 fuel consumed to move cargo a given distance, the less CO 2 emitted 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. 16 Because of this close techni cal relationship, NHTSA and EPA have been able to rely on jointly
- developed assumptions, analy ses, and analy tical conclusions to support the standards and other provisions that NHTSA and EPA are adopting under our separate legal authorities. 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 y ear 2014. In order to provide for the four full model y ears of regulatory lead time required by EISA, as di scussed in Section I. B. (5) below, NHTSA’s final fuel consumption standards will be voluntary in model y ears 2014 and 2015, becoming mandatory in model ye ar 2016 , except for diesel engine standards which will be voluntary in model y ears 2014, 2015 and 2016, becoming mandatory in model y ear 2017. Both agencies are also allowing for early

compliance in model y ear 2013. A detailed discussion of how the final standards are consistent with each agency ’s respective statutory requirements and authorities is found later in this preamble.

16 How ever, 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 condit ioning refrigerant emissions).), as required by the Endangerment Finding under the CAA. See Section II.***** E.O. 12866 Review**

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11 of 77 1 NHTSA received several comments related to the timing of the fuel consumption standards. The Engine Manufacturers Association (EMA), 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 - duty program shall have “not less than 4 full model years of regulatory lead
- time.” The commenters seemed to interpret the voluntary program as the imposition of regulation upon industry . NADA described NHTSA’s standards during the vol untary 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 s tandards will be “mandates.” As described in later sections, the voluntary standards would only

appl y to a manufacturer if it makes the affirmative choice to opt
- in to the program. The voluntary

period of 2014 and 2015 will provide manufacturers with the flexibility to prepare for the imposition of standards in 2016, in accordance with their varied business practices and timelines. NHTSA believes the 2014 and 2015 voluntary period will enhance the usefulness of the four ye ars of lead time until regulatio n by allowing manufacturers greater flexibility in the timeframes and speed in which they must meet the 2016 standards. Mandatory NHTSA standards will first come into effect in 2016, giving industry

four full y ears of lead time. NHTSA further believes that this is consistent with Executive Order 13563, which directs each agency

to “seek to identify , as appropriate, means to achieve regulatory goals that are designed to promote innovation,” as well as to “identify and consider regulatory approaches that r educe burdens and maintain flexibility and freedom of choice for the public.” Allison Transmission stated that sufficient time must be taken before issuing the final rule in order to ensure that the standards are supportable. NHTSA agrees with this comm ent, and, consistent with longstanding agency policy , is committed to ensuring that regulatory

standards are only

issued when and if they

can be supported by

sound, reliable data. For those areas of potential regulation in this rule for which NHTSA has de termined that insufficient time is available to analyze the requisite data, such as trailers, NHTSA is postponing regulation until sufficient support exists. EMA, NADA, and Navistar also argued that the proposed standards would violate the stability

requir ement of 49 U.S.C. 32902(k)(3)(B), which states that they shall have “not less than 3 full model y ears of regulatory stability .” EMA stated that since there are HD emission standards taking effect in 2013, the 2014 implementation date for this rule would violate the stability requirements. NADA argued that the MY 2014
- 2017/2018 phase
- in period was inadequate to fulfi ll the stability requirement. As described in the sections below, the fuel consumption standards are structured to phase in greater stringenc y over the years that the rule is in effect. Consistent with NHTSA’s statutory

obligation to implement a program designed to achieve the maximum***** E.O. 12866 Review**

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12 of 771 feasible fuel efficiency

improvement, the standards increase based upon increasing fleet penetration rates for the available technologies. NHTSA believes that the “regulatory stability” requirement exists to ensure that manufacturers will not be subject to new standards too rapidl y, given that Congress did not include a minimum duration period for the MD/HD stand ards. 17 NHTSA believes that the underlying intent of this requirement is to ensure that standards which are set with increasing stringency , in order to be the maximum feasible during the regulatory period, will increase in a gradual and predictable manner. Therefore, NHTSA interprets the phrase “regulatory stability” in § 32902(k)(3)(B) as requiring that the standards remain in effect for three years before they may be amended. It does not prohibit standards which contain pre
- determined stringency

increas es. NHTSA recognizes both the practical need and statutory requirement for regulatory

stability and has structured the standards to ensure that they comply with § 32902(k)(3)(B). Each standard, associated phase
- in schedule, and alternative standard impl emented by

this final rule was noticed in the NPRM, and no standards that were not noticed at the time of this rulemaking will take effect before 2019. This ensures that the standards in this rule will remain in effect for at least three ye ars, providing the statutorily
- mandated three full y ears of regulatory stability , and ensuring that manufacturers will not be subject to new or amended standards too rapidly. Therefore, NHTSA believes the commenters’ concern about regulatory stability is addressed in th e structure of the rule. Neither 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 businesses. The agencies recognize that aerodynamic and tire rolling resistance improvements to trailers represent a significant opportunity to reduce fuel consumption and GHGs as evidenced by the work of the EPA SmartWay program. While we are deferring action today on setting trailer standards, the agencies are co mmitted to moving forward in a timely manner to create a complementary regulatory

program for trailers. See Section IX for more details on the agencies’ decisions regarding trailers, and Sections II and XI for more details on the agencies’ decisions regar ding small businesses. 

### B. **Building Block s of the Heavy**  **- duty National Program**  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 for fuel consumption and GHG emissions, respecti vel 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 thes e precursors and foundations for this HD National Program.

17 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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13 of 77 1 **(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 engin es. During the last 18 y ears, 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
- ef fective 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 required by the CAA, the emission standards imple mented 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 emission standards will emit 98% less NO X and 9 9% 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 pro jected 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 goal 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 s uccess has been the development over many y ears 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 proce dures 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, EPA has been able to accuratel y address the contribution of the engine alone to overall emissions. The agencies discuss below how the final program incorporates the existing engine
- based approach used for criteria pollutant regulations, as well as new vehicle
- ba sed 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 econom y 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 develop the regulatio ns themselves. 18

18 The NAS study is descri bed below , and the NHTSA study accompanies this FRM.***** E.O. 12866 Review**

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14 of 771 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 d evelop 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 requirements 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 ad opt and implement:

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

standards; 19 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) 20 that have long governed NHTSA’s setting of fuel econom y standards for passenger cars and light trucks, although man y of the same factors are considered 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 stability
. **(3) N**  **ational Academy of Sciences Report on Heavy -**  **Duty Technology** In April 2010 as 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 i mprovement opportunities, titled “Technologies and
19 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 instead more broadly to account as accurately as possible for MD/HD fuel efficienc y . 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 work that MD/HD vehicles are manufactured to do. NHTSA is thus finalizing al ternative metrics as discussed further below
. 20 49 U.S.C. 32902(f) states that “When deciding maximum feasible average fuel economy under this section, [NHTSA] shall consider technological feasibility, economic practicability, the effect of other motor veh icle 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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15 of 77 1 Approaches to Reducing the Fuel Consumption of Medium
- and Heav y - duty Vehicles.” 21 This study

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

– all highway vehic les that are not light
- duty , MDPVs, or motorcycles. The agencies have carefully evaluated the research supporting this report and its recommendations and 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 an invaluable list of off the shelf technologies the agencies could draw from in developing this near term 2014 program consistent w ith 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 developing future regulations for this sector. A review of the technologies in the NAS report makes clear that there are not o nly man y technologies readily available today to achieve important reductions in fuel consumption, like the ones we used in developing the 2014 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 extensive use of this report when we move forward to develop the next phase of regulations for medium and heavy
- dut y vehicles. **(4) The NHTSA and EPA Light**  **- duty National GHG Program**  On April 1, 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 y ears 2012
- 2016. The agencie s have used the light
- dut y National Program as a model for this final HD National Program in many 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
- duty Natio nal Program both technologicall y 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
- duty program in how the agencies have develo ped our respective final standards and compliance structures, although, as discussed below, the technologies applied to light
- duty trucks are not invariably

applicable to heavy
- dut y pickups and vans at the same penetration rates in the lead time afforded i n 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 parallels with the structure of the light
- duty program. However, the agencies have maintained the same
21 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. Available 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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16 of 771 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 v ehicles to meet a closel y coordinated, harmonized national program, and avoid unnecessaril y duplicative testing and compliance burdens. **(5) EPA’s SmartWay Program**  EPA’s voluntary

SmartWay

Transport Partnership program encourages shipping and trucking compani es to take actions that reduce fuel consumption and CO 2 by working with the shipping community and the freight sector to identify low carbon strategies and technologies, and b y providing technical information, financial incentives, 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 reducing fuel consumption and has co nducted 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 improvements in tire and vehicl e aerod ynamic 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 pinnacle 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 evaluate trucks and truck component s) 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 consumption standards in this ru lemaking 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 drivers and their freight customer s 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 one of the three alternative app roaches that the NAS recommended be considered. The three approaches were raising fuel taxes, relaxing truck size and weight restrictions, and encouraging incentives to disseminate information to inform truck drivers about the 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 authority to implement. However, complementary operational measures like driver training, which SmartWay d oes 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.***** E.O. 12866 Review**

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17 of 77 1 **(6) Environment Canada**  Environment Canada)assisted EPA’s developme nt of this final rulemaking, by conducting emissions testing of heav y - dut y engines and vehicles at Environment Canada test facilities. As EPA does today for criteria pollutant emissions, we expect to continue our collaboration with Environment Canada on c ompliance issues going forward with this program. 

### 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 (gr ams of pollutant per unit of work, expressed as grams per brake horsepower
- hour or g/bhp
- hr). 22 This approach recognized the fact that engine characteristics are the dominant determinant of the t ypes of emissions generated, and engine
- based technologies (i ncluding exhaust aftertreatment sy stems) need to be the focus for addressing those emissions. Vehicle
- based technologies, in contrast, have less influence on overall truck emissions 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 achi eved 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

– smaller 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 a s 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 required. 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 a

pproach 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 Daimler argued that EI SA limited NHTSA’s authority to the regulation of complete d vehicles and did not give the agency authorit y to regulate engines. 49 U.S.C. 329002(k)(2) grants NHTSA broad authorit y to regulate this sector,

22 The term “brake power” refers to engine torque and pow er as m easured at the interface between the engine’s output shaft and the dynamometer. This contrasts with “indicated pow er”, 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 measurement procedure inherently measures brake torque and pow er, the final regulatio ns 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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18 of 771 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 program 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 regulatory

approach to the agency ’s expertise and discretion. Considering the factors described in the NPRM and in Sections III and IV below, NHTSA continues to believe that the separate regulation of engines and vehicles is consistent with the agency ’s statutory mandate to determine how to implement a regulatory

program designed to achieve the maximum feasible improvement. As described elsewhere in this preamble, the fina l standards that make up the HD National Program address the complete vehicle, to the extent practicable and appropriate under the agencies’ respective statutory authorities, through complementary engine and vehicle standards. The agencies continue to be lieve that this complementary engine and vehicle approach is the best way to achieve near term reductions from these vehicles. 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 classif

ications, as defined b y the vehicle’s gross vehicle weight rating (GVWR), which is a measure of the combined curb (empty) weight and cargo carrying capacity of the truck. 23 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.

23 GVWR describes the maximum load that can 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 vehicle itself.***** E.O. 12866 Review**

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19 of 77 1 **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. 24 Unlike light
- duty vehicles, which are primarily used for transporting passengers for personal travel, heav y - dut y vehicles fill much more diverse operator needs. Heav y - 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 transportati on, with an average annual mileage in the range of 15,000 miles. The rest of the heavy
- 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 trucks, 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 ca bs 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 significant 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 stand ards in careful consideration of the diversity

and complexity

of the heav y - 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 chara cteristics of each general ty pe of truck. We are therefore dividing the industry into three discrete regulatory categories for purposes of setting our respective standards

– combination tractors, heavy
duty pickups and vans, and vocational vehicles
-- bas ed 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 NHTSA’s final fuel consumption standards for the three regulatory

categories of heav y - dut y vehicles and their engines.
24 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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20 of 771 The agencies are adopting test metrics that express fuel consumption and GHG emissions relative to the most important measures of heav y - dut y 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. T his approach differs from NHTSA’s light
- dut y program that uses fuel economy as the basis. The NAS 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 potential 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 sh ould 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 NH TSA standards are in terms of gallons of fuel consumed 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 criteria 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 pe rcent, due to their large payloads, their high annual miles traveled, and their major role in national freight transport. 25 These vehicles consist of a cab and engine (tractor or combination tractor) and a detachable trailer. In general, reducing GHG emi ssions and fuel consumption for these vehicles will involve improvements in aerod ynamics and tires and reduction in idle operation, as well as engine
- based efficiency improvements. In general, the heav y - duty combination tractor industry consists of tractor manufacturers (which manufacture the tractor 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. The owners of trucks

25 The on
- highway Class 7/8 combination tractors constitute 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**

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 s because trucking 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 a 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 whi volume. Setting standards for the products involved recognition of the large differences between these manufacturing industries, which can then warrant consideration of di 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 dis 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 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 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 (aerodyn amics), tire rolling resistance, and parasitic losses (including accessory loads and friction in the drivetrain). The importance of the engine design is that it det basic GHG emissions and fuel consumption performance of the engine for the variet y 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 improved technologies for lower GHG emissions and fuel consumption for both the cab and the engine. ***** E.O. 12866 Review**

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21 of 77 1 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 s hippers. This occurs in part because trucking 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 a nd 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 whi ch are relatively

small in size and production volume. Setting standards for the products involved
-- tractors and trailers recognition of the large differences between these manufacturing industries, which can then warrant consideration of di fferent 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 dis cussed 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 an 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 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

, the loads that require additional power from the engine include air resistance (aerodyn amics), tire rolling resistance, and parasitic losses (including accessory loads and friction in the drivetrain). The importance of the engine design is that it det basic GHG emissions and fuel consumption performance of the engine for the variet y 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 **Do Not Cite, Quote, or Release During Review ***** and trailers are often distinct as well. A t ypical truck buyer will purchase only the tractor.

hippers. This occurs in part because trucking 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 nd 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 ch are relatively

small in size and production tractors and trailers
-- requires recognition of the large differences between these manufacturing industries, which can Based on these industry

characteristics, EPA and NHTSA believe that the most straightforward regulatory approach for combination tractors and trailers is to establish cussed below in Section IX, the agencies are adopting standards for the tractors and their engines in this rulemaking, but duty vehicles, EPA an d 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

, the loads that require additional power from the engine include air resistance (aerodyn amics), tire rolling resistance, and parasitic losses (including accessory loads and friction in the drivetrain). The importance of the engine design is that it det ermines the basic GHG emissions and fuel consumption performance of the engine for the variet y of demands placed on the engine, regardless of the characteristics of the cab in which it is the application of improved technologies for lower GHG emissions and fuel consumption for both the cab***** E.O. 12866 Review**

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22 of 771 **Figure I**  **- 1**  **: Com bination Tractor and Trailer Loads**  **26** Accordingl y, for Class 7 and 8 combination tractors, the agencies are each finalizing two sets of standards. For vehicle
- related emissions and fuel consumption, tractor manufacturers are required to meet vehicle
- based standards. Compliance with the vehicle standard will ty

pically be d etermined 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 c hassis dy namometer 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 emissions and fuel consumption while operating the vehicle on a chassis dy

namometer. Instead of using a chassis d ynamometer as an indirect way to evaluate real
- world operation and performance, various characteristics of the vehicle are measured and these measurements are used as inputs to the model. These characteristics relate to key te chnologies appropriate for this subcategory of truck

– including aerod ynamic features, weight reductions, tire rolling resistance, the presence of idle
- reducing technology, and vehicle speed limiters. The model also assumes the use of a representative t yp ical engine, rather than a vehicle
- specific engine, because engines are regulated separately . Using these inputs, the model will be used to quantify the overall performance of the vehicle in terms of CO 2 emissions and fuel consumption. The model’s develop ment 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 Tractors and Their Engines The vehicle standards that EPA and NHTSA are adopting fo r 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 depending on GVWR ( i.e ., whether the truck is Class 7 or Class 8), the height of the roof of the cab, and whether it is a “day cab” or a “sleeper cab.” These later two attributes are important because the height of the roof, designed to corresp ond 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 fuel 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 Class 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 y ear 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 model y ear for illustration. The standards represent an overall fuel consumption and CO 2 emissions reduction up to

26 Adapted from Figure 4.1. C lass 8 Truck Energy Audit, Technology Roadmap for the 21st Century Truck Program: A Government
- Industry Research Partnership, 21CT
- 001, December 2000.***** E.O. 12866 Review**

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23 of 77 1 23 percent from the tractors and the engines installed in them when compared to a baseli ne 2010 model year tractor. The standard values shown below differ somewhat from the proposal, reflecting refinements made to the GEM in response 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. **Table I**  **- 2**  **: Heavy -**  **duty Combination Tractor EPA Emissions Standard s (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 79 66 Mid Roof 115 86 73 High Roof 118 88 71 2017 Model Year Gallons of Fuel per 1,000 Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10.3 7.8 6.5 Mid Roof 11.3 8.4 7.2 High Roof 11.6 8.6 7.0 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 based on EPA’s existing test procedures and regulatory structure for criteria pollutant emissions from medium
- and heav y - dut y engines. As at proposal, the final engine standards vary depending on engine size linked to intended vehicle service class. Consistent with our proposal, the agencies are finalizing an interim alternative engine standard for model ye ars 2014
- 2016. This alternative standard is d esigned to provide a glide path for legacy engine products that may not be able to comply

with the final engine standards for model years 2014
- 16 given the short (approximately

2 y ear) lead time of this program. We believe this alternative standard is app ropriate 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 brought into compliance b y 2014. The alternative standard onl y applies through model ye ar 2016. Separatel y, EPA is also finalizing engine
- based N 2 O and CH 4 standards for manufacturers of the engines used in these combination tractors. EPA is finalizing separate engine
- based standards for N 2 O and CH 4 because the agency believes that emissi ons of these GHGs 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. 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 numerically higher than those we proposed, reflecting new data provided to the agencies in comments on the***** E.O. 12866 Review**

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24 of 771 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 engine technologies will be able to comply

with the final N 2 O and CH 4 “cap” standards with little or no technolog ical 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 finali zing respective standards that will apply to Class 7 and 8 trucks 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 trucks, 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 tractors, to apply to the tractor manufacturer. This standard is independent of the CO 2 tractor standard , as discussed below. Because the current refrigerant used widely

in all these sy stems has a very high global warming potential, EPA is concerned about leakage of refrigerant. 27 There is an air conditioning component to the standards for pickup trucks and vans as well, however those standards are structured differentl y than the A/C standards for tractors, and are discussed separately in Section I .C(2)(b), and Section II.E, below. Because the interior volume to be cooled for most of these truck cabins is si milar to that of light
- dut y trucks, the size and design of current truck A/C systems is also very similar. The compliance 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 s tandards. In the HD National Program, EPA is requiring that manufacturers actually meet a standard

–

27 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.***** E.O. 12866 Review**

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25 of 77 1 as opposed to having the opportunity to earn a credit
-- for A/C refrigerant leakage. Thus, refrigerant leakage control is not accounted for in the final heavy
- 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 pe rcentage 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 pro vide less motivation for manufacturers to install low leakage sy stems even though such s ys tems represent a highl y cost effective means to control GHG emissions. The second difference relates to the expression of the leakage rate. The light
- dut y A/C leaka ge 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 percent of total refrigerant leakage per ye ar. This requires the total refrigerant capacit y of the A/C system 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 leakage over time

– is more appropriate for heavy
- dut y tractors than the light
- duty 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 its A/C sy stem incorporates a combination of low
- leak technologies sufficient to meet the percent leakage of the standard. The “menu” of technologies is very similar to that established in the light
- dut y 2012
- 2016 MY vehicle rule. 28 Finally , EPA did not propose and is not adopting an A/C sy stem efficiency standard in this heav y - duty rulemaking, although an efficiency credit was a part of the light
- duty rule. The much larger emissions of CO 2 from a heav y - dut y trac tor as compared to those from a light
- duty 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 II of this preamble. (b ) He avy -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 program, and the agencies are not adopting additional requirements for MDPVs in this rulemaking. Heav y - 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
28 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 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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26 of 771 vans”) together emit about 20 percent of today ’s GHG emissions from the heav y - dut y vehicle sector. About 90 percent of HD pickups and vans are 3⁄4
- ton and 1
- ton pick
- up trucks, 12
- and 15
- passenger vans, and large work vans that are sold by vehicle manufacturers as complete vehicles, with no secondary manufacturer making substantial modifications prior to registration and use. These vehicle manuf acturers are companies with major light
- duty markets in the United States, primarily Ford, General Motors, and Chry sler. Furthermore, the technologies 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 consump tion standards that are likewise based on the whole vehicle. This complete vehicle approach being adopted by both agencies for HD pickups and vans is consistent with the recommendations of the NAS Committee in their 2010 Report. EPA and NHTSA also believ e that the structure and many of the detailed provisions of the recentl y finalized light
- duty

GHG and fuel economy

program, which also involves vehicle
- based 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 standard for each manufacturer in each model ye ar and the determination of these fleet 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 conducted on chassis dy

namometers using the drive cycles from the EPA Federal Test Procedure (L ight
- dut y FT P or “cit y” test) and Highway Fuel Economy

Test (HFET or “highway” test). 29 For the light
- dut y GHG and fuel econom y standards, the agencies factored in vehicle size by

basing the emissions and fuel economy targets on vehicle footprint (the wheelbase times the average track width). 30 For those standards, passenger cars and light trucks with larger footprints are assigned higher GHG and lower fuel economy target levels in acknowledgement of their inherent tendency to consume more fuel and emit more GHGs per mi le. For HD pickups and vans, the agencies believe that setting standards based on vehicle attributes is appropriate, but feel that a weight
- based metric provides a better attribute than the footprint attribute utilized in the light
- duty vehicle rulemaking . Weight
- based measures such as payload and towing capability are key

29 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 w ith 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). 30 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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27 of 77 1 among the parameters that characterize differences in the design of these vehicles, as well as differences in how the vehicles will be utilized. Buy ers consider these utility
- based attributes when purchasing a heav y - dut y pick
- up or van. EPA and NHTSA are therefore finalizing standards for HD pickups and vans based on a “work factor” attribute that combines their payload and towing capabilities, with an added adjustment for 4
- wheel driv e vehicles. The agencies received a number of comments supporting this approach arguing as the agencies had that this approach was an effective way to appropriately reflect the utility

of work vehicles while setting a consistent metric measure vehicle per formance and to drive technology development. 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 y ear, at 15
- 20
- 40
- 60
- 100 percent in m odel 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 ye ar, as detailed in Section II.C. The final EPA standards for 2018 (including a separate standard to control air conditioning sy stem 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 discusses the rationale behind the separate targets for diesel and gasoline vehicle standards. EPA is also finalizing a compliance alternative whereb y manufacturers can phase in different percentages: 15
- 20
- 67
- 67
- 67
- 100 percent in mod el y ears 2014
- 2015
- 2016
- 2017
- 2018
- 2019, 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 consumption standard alternatives for mo del y ears 2016 and later. To meet the EI SA statutory requirement for three year regulatory stabilit y, the first alternative defines individual gasoline vehicle and diesel vehicle fuel consumption target curves that will not change for model years 2016
- 201 8. The target curves for this alternative are presented in Section II.C. The second alternative uses target curves that are equivalent to the EPA program in each model ye ar 2016 to 2018. Stringency for the alternatives has been selected to allow a manuf acturer, 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. NHTSA is also allowing manufacture rs to voluntarily

opt into the NHTSA HD pickup and van program in model years 2014 or 2015. For these model years, NHTSA’s fuel consumption target curves are equivalent to EPA’s target curves. The agencies received a number 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 received comments arguing that the propo sed standards were aggressive and could only be met given the phase
- in schedules proposed by the agencies.***** E.O. 12866 Review**

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28 of 771 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 represent technically stringent but re asonable 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. The form and stringency

of the EPA and NHTSA standards curves are based on a set of vehicle, engine, and transmission technologies expected to be used to meet the recentl y established GHG emissions and fuel economy standards for 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:

 advanced 8
- speed automatic transmissions  aerod ynamic improvements  electro
- hydraulic power steering  engine friction reductions  improved accessories  low friction lubricants in powertrain components  low er rolling resistance tires  lightweighting  gasoline direct injection  gasoline engine 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 effectiveness 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 manufacturer s 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, as described in Section I.C(2)(c), because, like other vocational vehicles, we have little information on baseline aerody namic performance and expectations 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 wheels. We are including provisions that will enable these***** E.O. 12866 Review**

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29 of 77 1 vehicles to be covered in the chassis
- based HD pickup and van program, rather than the vocational vehicle program. These provisions are described in Section V.B. 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 are 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. (c) Class 2b

- 8 Vocational Vehicles Class 2b
- 8 vocational vehicles consist of a wide variet y of vehicle t ypes. Some of the primary

applications for vehicles in this segment include delivery , refuse, utility , dump, and cement trucks; transit, shuttle, and school buses; emergency vehicles, motor ho mes, tow trucks, among others. 31 These vehicles and their engines contribute approximately

15 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 vehicles are often built as a chassis with an installed engine and an installed transmission. Both the engine and transmissions are t ypicall y manufactured b y other manufacturers and the chassis m anufacturer 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 b y instal ling the appropriate feature
-- such as dump bed, delivery box, or utility

bucket
-- onto the chassis. Vehicle body manufacturers tend to be small businesses 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 focus on chassis manufacturers. Chassis manufacturers play

a central role in the manufacturing process, and the product they produce

– the chassis with engine and transm ission

– 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 a regulatory program. The agencies believe that a focus on the body manu facturers would be much less practical, since they represent a much more diverse set of manufacturers, man y of whom are small businesses, and the part of the vehicle that they add has a limited impact on opportunities to reduce GHG emissions and fuel consumption (given the limited role that aerody namics play s in many

t ypes of lower speed operation typically found with vocational vehicles.) Therefore, the agencies proposed that the standards in this vocational vehicle category would apply

to the chassis manufacturers of all heavy
- duty vehicles not otherwise covered b y the HD pickup and van standards or Class 7 and 8 combination tractor

31 Again, w e note that NHTSA’s final fuel consumption standards will not apply to non
- commercial vehicles like motor homes.***** E.O. 12866 Review**

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30 of 771 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 vehi cles exists in the light
- duty fuel econom y rule. As noted above, NHTSA does not believe that EISA mandates a particular regulatory approach, but rather explicitly

leaves that determination to the agency . NHTSA also notes that its heav y - dut y rule creates a new fuel efficiency program for which the light
- duty program does not necessarily

serve as a useful precedent for considerations of its structure. Unlike the light
- dut y fuel economy 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 technologie s. 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. 32 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 appropriat el y 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 and emissions reductions. Therefore, consistent with our proposal the final standards in this vocational vehicle category apply 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 an d NHTSA 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 combination 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 beli eve that a freight 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, we recognize that may be less appropri ate for future phases of a HD program. , Manufacturers will use GEM, the same customized vehicle simulation model used for Class 7 and 8 tractors, to determine compliance with the vocational vehicle standards. The primary manufacturer
- generated input into the GEM for this category

of trucks will be a measure of tire rolling resistance, 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 th e use of a t ypical representative engine in the simulation, resulting in an overall value for CO 2 emissions

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

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31 of 77 1 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. (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 opportuni ty

for reductions in vocational vehicle GHG emissions and fuel 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 vocational 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 adop ting standards based on the same groupings of truck weight classes 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 discussed in Section II. As for the engines used in Class 7 and 8 combination tractors, we are finalizing an interim alternative engine standard for model ye ars 2014
- 2016. The need for this provision and our considerations in adopting it are the same for the engines used in vocational vehicles as they are combination tractors. As we proposed, these alternative standards will only

be available through model y ear 2016. 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 thro ugh the use of new transmission technologies, vehicle weight reductions and h ybrid drivetrains. In general, the agencies agree with the commenters central contention that there are additional technologies available to improve the fuel efficiency of vocati onal vehicles. As discussed later, we are finalizing provisions to allow new technologies to be brought into the program through the innovative technology credit program. However, we are not finalizing standards that are premised on the use of these addi tional 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 vehic les. In concept, the agencies would need to know the baseline weight, aerody namic performance, and transmission configuration for the wide range of vocational vehicles produced today . We do not have this information even for relativel y small portions of this market such as concrete mixers nor are we well informed regarding the potential tradeoffs to changes to vehicle utility that might exist for changes to concrete mixer designs in response to a regulation. Absent this information and the necessary

regu latory

tools, we believe the standards we are finalizing for vocational vehicles represent the most appropriate standards for this segment. We intend***** E.O. 12866 Review**

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32 of 771 to address fuel consumption and GHG emissions from these vehicles in a more comprehensive manner through future regulation 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 consumption. 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 . We are finalizing a mechanism whereb y credits can be generated by use of other technologies not included in the compliance model. ( See Sections I.E and IV below.) The agencies are setting standards beginning in 2014 model y ear and establishing more stringent standards in 2017 model y ear. 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 mode l y ear. The 2017 model ye ar standards represent a 7 to 10 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**  **St andards 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 36.6 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 share with the agencies as comments on our proposal. EPA expects that manufacturers of current engine technologies will be able to 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 N 2 O and CH 4***** E.O. 12866 Review**

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33 of 77 1 standards, will be determined using the appropriate EPA engine test procedure, as d iscussed in Section II below. As with the other regulatory categories of heavy
- duty vehicle s, 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 leakage standards for Class 2b
- 8 vocational vehicles, primarily be cause 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 installation. (d ) What Manufacturers Are Not Covered by the Final Standards? The NPRM proposed to temporaril y defer 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 “s mall 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 heavy
- dut y vehicle manufacturing and 750 for engine manufacturing. 33 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.
- based and foreign small
- volume heav y - dut y manufacturers. To ensur e that the agencies are aware of which companies would be exempt, the agencies 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. 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 appe ar to qualify as small businesses under the SBA size criterion, which were estimated to comprise a negligible percentage of the U.S. market. 34 Therefore, the agencies believed that deferring the standards for these companies at this time would have a negli gible 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 regulat ory action.

33 See § 1036.150 and § 1037.150 34 Two heavy
- duty

co mb ination 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 company information in cluded 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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34 of 771 The Institute for Policy

I ntegrit y ( IP I) commented that the small business exemption proposed in the NPRM was based on the improper framework of whether the exemption would have a negligible impact, and did not adequatel y explain why the regul ation of small businesses would face special compliance and administrative burdens. IP I argued that the onl y proper basis for this exemption would be if the agencies could 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” includes the authority to exempt certain manufacturers if their inclusion would work against these statutory factors. As noted above, small busin esses 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. For this first rulemaking, the application of technologies is likely to be cost
- prohibitive and infeasible for man y small manufacturers. The short lead time to develop this 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. While NHTSA disagrees that the only anal ys is should be of cost versus benefits, the agency believes that this exemption is cost
benefit justified due to these considerations. Volvo and EMA stated that by exempting small businesses based on the definiti on from SBA, the rules would create a competitive advantage for small businesses over larger entities. EMA commented that the exemption should not apply to market segments where a small business has a significant share of a particular HD market. Volvo ar gued that the exempted businesses could expand their product offerings or sell vehicles on behalf of larger entities, thereb y inappropriatel y increasing the scope of the exemption. The agencies continue to believe that the benefits of this exemption appro ach outweigh the risks of adverse consequences. The agencies anticipate that the gain a manufacturer might achieve b y restructuring its practices and products to circumvent the standards in the first few ye ars of this program will be outweighed by the cos ts, particularly

as small businesses anticipate their potential inclusion in the next rulemaking. Volvo also commented that the agencies should spell out the requirements for the exemption in greater detail. The agencies agree that this may help to clari fy

the process. As suggested b y 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 exemption. E ach declaration must be submitted in writing to EPA as prescribed in Section V below, and a manufacturer would not be considered exempt until EPA and NHTSA have made a formal determination as to their status in writing. As the agencies gain more experienc e with this exemption, these clarifications may be codified in the regulatory text of a future rulemaking. Volvo further commented that the agencies were adopting a definition of “small business” in order to avoid doing a Small Business Regulatory Enforcem ent Fairness Act (SBREFA) and Regulatory Flexibility

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

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35 of 77 1 reiterate that they

have decided not to include small businesses at this time due to the factors described above. The discussion on an RFA anal ys is is lai d 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 program would otherwise achieve. Therefore, the final rules 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 MY 2012
- 2016 program, some manufacturers raised concerns that they may have dif ficulty meeting those standards across their light
- duty vehicle fleets. In response to these concerns, as part of the heav y - dut y proposal, EPA requested comments on additional options for manufacturers to compl y with light
- duty vehicle N 2 O and CH 4 standar ds 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 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. 

### D. **Summary of Costs and Benefits of the HD National Program**  This section summarizes the projected costs and benefits of the final NHTSA fuel consumption and EPA GHG emissions standards. These projections helped 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 costs and benefits as the bases for our respective standards. 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 discounted costs, benefits and net benefits for all heavy
- dut y vehicles projected to be sold in model ye ars 2014
- 2018. These figures depend on estimated values for the social cost of carbon (SCC), as described in Section VIII.G. The costs and benefits summarized 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 growth and future f uel 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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36 of 771 **Table I**  **- 4**  **: Estimated Lifetime Discounted Costs, Benefits, and Net Benefi ts for 2014**  **- 2018 Model**  **Year HD Vehicles assuming the Model Average, 3% Discount Rate SCC Value a,b**  **(2009 dollars)** $billions 3% Discount Rate Program Costs $8.9 Fuel Savings $51 Benefits $7.4 Net Benefits $49 7% Discount Rate Program Costs $8.9 Fuel Savings $35 Benefits $6.7 Net Benefits $33 Notes: a The agencies estimated the benefits associated with four different values of a one ton CO 2 reduction (model average at 2.5% discount rate, 3%, and 5%; 95 th percentile at 3%), which each increase over time. For the purposes of this overview presentation of estimated costs and benefits, however, w e are showing the benefits associated with the marginal value deemed to be central by the interagency working grou p on this topic: the mo del average at 3% discount rate, in 2009 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 sam e 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. Table I
- 5 shows the estimated lifetime reductions in CO 2 emissions (in million metric tons (MMT)) and fuel consumption for all heav y - 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 agencie s’ respective GHG emissions and fuel consumption standards, jointly , are the source of the benefits and costs of the HD National Program. **Table I**  **- 5**  **: Estimated Lifetime Reductions in Fuel Consumption and CO 2**  **Em issions for 2014**  **- 2018**  **Model Year HD Vehicles** All Heavy
- Duty Vehicles 2014 MY 2015 MY 2016 MY 2017 MY 2018 MY Total Fuel (billion gallons) 4.1 3.6 3.6 5.1 5.9 22.4 Fuel (billion barrels) 0.10 0.09 0.09 0.12 0.14 0.5 CO 2 (MMT) a 50.8 45.4 44.7 63.6 72.5 277 Note: a Includes upstream and downstream CO 2 reductions . Table I
- 6 shows the estimated lifetime discounted benefits for all heavy
- 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 2009***** E.O. 12866 Review**

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37 of 77 1 dollars and 2010 emissions
. Table I
- 6 presents benefits based on the $22 value. Section VIII.F presents the four marginal values used to estimate monetized benefits of CO 2 reductions and Sec tion VIII presents the program benefits using each of the four marginal values, which represent only a partial accounting of total benefits due to omitted climate change impacts and other factors that are not readily monetized. The values in the table are discounted values for each model ye ar of vehicles throughout their projected lifetimes. The anal ys is includes other economic impacts such as fuel savings, energy securit y, and other externalities such as impacts on accidents, congestion and noise. Howev er, the model y ear lifetime anal ys is supporting the program omits other impacts such as benefits related to non
- GHG emission reductions. 35 The lifetime discounted benefits are shown for one of four different SCC values considered b y EPA and NHTSA. The val ues in Table I
- 6 do not include costs associated with new technology required to meet the GHG and fuel consumption standards. **Table I**  **- 6**  **: Estimated Lifetime Disco unted Benefits for 2014**  **- 2018 Model Year HD Vehicles Assuming** 

**the Model Average, 3% Discount Rate SCC Value a,b,c**  **(billions of 2009 dollars)** Discount Rate Model Year

2014 2015 2016 2017 2018 Total 3% $10.9 $9.6 $9.3 $13.3 $15.1 $58 7% $8.2 $7.1 $6.7 $9.3 $10.2 $42 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 externalitie s caused by U.S. petroleum consumption and im ports. The analysis also includes 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 reduc ed 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. Refe r to Section VIII.F for more detail, including a list of all four SCC values, 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 f

or all vehicles sold in the model y ears 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 o f the discounted monetized
- fuel consumption and monetized
- CO 2 reductions for the five model y ears 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.

35 Non
- GHG emissions and health
- related impacts were estimated for the calendar year analysi s. 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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38 of 771 **Table I**  **- 7**  **: Estimated Lifetime Reductions and Associated Discounted Monetized Benefits for 2014 -** 

**2018 Model Year HD Vehicles (m onetized**  **values in 2009 dollars)** Amount $ value (billions) Fuel Consumption Reductions 0.5 billion barrels $50.8, 3% discount rate $34.8, 7% discount rate CO 2 Emission Reductions a Valued assuming $22/ton CO 2 in 2010 277 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 Section 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 savings associated with the program. **Table I**  **- 8**  **: Estimated Incremental Technology Outlays for 2014 -**  **2018 Model Year HD Vehicles (billions of 2009 dollars)**  2014 MY 2015 MY 2016 M Y 2017 MY 2018 MY Total All Heav y Duty Vehicles $1.7 $1.5 $1.6 $1.8 $2.3 $8.9 Table I
- 9 shows EPA’s estimated incremental cost increase of the average new heav y - dut y vehicle for each model year 2014
- 2018. The values shown are incremental to a baseline vehicle and are not cumulative. **Table I**  **- 9**  **: Estimated Incremental Increase in Average Cost for 2014 -**  **2018 Model Year HD Vehicles (2009 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 $232 $302 $591 $885 $1,473 Vocational Vehicles $414 $408 $457 $450 $419 

### 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***** E.O. 12866 Review**

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39 of 77 1 required to achieve the same emissions or fuel consumption levels, and at the same time. 36 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 f lexibility : averaging, 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 ABT programs and w ill allow 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 consumpti on levels in other similar vehicles, “bank” the credits for later use, or “trade” the credits to another manufacturer. We are finalizing similar ABT provisions for manufacturers of heavy
- dut y engines. For HD pickups and vans, we are finalizing a fleet av eraging s ys tem 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 coul d only

happen between similar vehicles meeting the very same standards. We proposed this approach for two reasons. First, we were concerned about a level playing field between different manufacturers who may not participate equally

in the various truck and engine 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 trading 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 vehicl es 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 tracto r. 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 t o within 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 es timated credit calculations will fairl y ensure the expected fuel consumption and GHG reductions.

36 NHTSA notes that it has greater flexibility in the HD program to include consideration of credits and othe r 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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40 of 771 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 FTP
- 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. 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 multipli er 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 for ward 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 recogniz ed 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 existing test procedures. As with ABT, the use of innovative technology credits will only be allowed among vehicles and engines of the same defined averaging set, as described above. . A detailed discussion of 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 sourc es, 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 (both 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 conservat ion and energy

securit y; the impacts of standards on fuel savings by customers; the impacts***** E.O. 12866 Review**

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41 of 77 1 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 prov ision from Title II, section 202(a). 37 Section 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 ca use, 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 of those pollutants from new motor vehicles. Any standards under CAA section 202(a)(1) “shal l 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 un der CAA section 202(a) are to take effect onl y “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 p eriod” (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 reasonableness”, which “does not open the door to ‘cry stal ball’ inquiry .” NRDC , 655 F. 2d at 328, quoting International Harvester Co. v. Ruckelshaus , 478 F. 2d 615, 629 (D.C. Cir. 1973). However, “EP A is not obliged to provide detailed solutions to every

engineering 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 o f the device, and give plausible reasons for its belief that 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.” NRD C , 655 F. 2d at 333
- 34. In developing such technology
based 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 m otor 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 202(a) (2)), lead time necessary for compliance (section 202(a)(2)), safet y
37 See 42 U.S.C. 7521 (a). A number of commenters believed that the GHG program was being adopted pursuant to section 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 standard s for emissions of hydrocarbons, carbon mo noxide, oxides of nitrogen, and particulate matter from heavy
- 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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42 of 771 (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
- 624 (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) (congress ional 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 appro priate). In addition, EPA has clear authority to set standards 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)). 38 EPA has interpreted a similar 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 interprets 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 factor s. 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 ‘‘gre atest degree of emission reduction achievable’’ as per 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 re asonable for aircraft engines. Rather, EPA has greater 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, 2 005). This interpretation was upheld as reasonable in 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 Husqvarna 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] co nsideration to the cost of applying ... technology” does 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 Basin Area Rate Cases , 390 U.S. 747, 797 (1968) (same); Federal Power Commission v.

38 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 .***** E.O. 12866 Review**

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43 of 77 1 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 secti on 206 of the Act, based on (necessarily) pre
- sale testing conducted either by EPA or by the manufacturer. The Heavy
- 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 varia bility in use (section 206(a)). EPA established the L ight
- 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 Light
- dut y FTP to fuel econom y measurement ( See 49 U.S.C. 32904(c)). EPA can determine fuel efficiency of a vehicle b y 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 EPA 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 pen alties of up to $37,500 per vehicle for violations of various prohibited acts specified in the CAA. In determining the appropriate penalt y, 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**  EI SA authorizes NHTSA to create a fuel efficiency improvement program for “commercial medium
- and heav y - dut y on - highway vehicles and work trucks” 39 by rule making, which is to include standards, test methods, 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 feasible” for the vehicles to be regulated, while achieving the “maximum feasible improvement” in fuel efficiency
. 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
39 “Co mmercial medium
- and heavy
- duty on - highw ay

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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44 of 771 mechanisms. 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 years of regulatory lead
- time an d three full model y ears 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 st andards 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 fu el 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 is proposing for HD vehicles and engines, the NPRM proposed that interpretation of the statute that the 5
- ye ar 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 ultimatel y finalized for HD vehicles and engines would 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 ye ars 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, which it interpreted as requiring the MD/HD program to have standards that expire in five y ears. 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 does not specify a maximum duration period. In contrast, Section 32902(b)(3)(B) lay s out the minimum 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 ye ar s, 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 and 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 Subsection (b)(3)(B), it would have either mentioned HD/MD vehicles in that subsection or included the same timeline in Subsection (k). 40 Inaddition,

40 “[W]here 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 Congres s acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. United States , 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)***** E.O. 12866 Review**

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45 of 77 1 in order for Subsection (b)(3)(B) to be interpreted to apply to Subsection (k), the agency would need to give less than full weight to the earlier phrase in the statute directi ng the Secretary to prescribe 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 read to mean “in accordance with Subsection (k) and the remainder of Subsection (b).” NHTSA believes this interpretation would be inappropriate. Interpreting “in accordance with Subsection (k)” to mean something indistinct from “in accordance with this Subsection” 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 proposal, and the final rules therefore follow this approach. Another commenter, CBD, expressed concern that lack of an expiration date meant that the standards would remain indefinitely, thus forgo ing the possibility of increased 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 se tting future standards at the maximum feasible 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 f

or MYs 2019 and beyond

– the agencies have alread y previewed the possibility of such a rulemaking in other parts of this final rule preamble. Therefore, NHTSA believes this concern is unnecessary
. (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. (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 p rotocols for the fuel efficiency improvement program. Congress did not speak directl y to the compliance and enforcement protocols it envisioned. Instead, it left the matter generall y to the Secretary
. Congress’ approach is unlike CAFE enforcement for pa ssenger cars and light trucks, where Congress specified a program where a manufacturer either complies with standards or pay s civil penalties. But
(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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46 of 771 Congress did not specify

in 49 U.S.C. 32902(k) what it precisel y meant in directing NHTSA to develop “compli ance and enforcement protocols.” The statute is silent with respect to how “protocol” should be interpreted. The term “protocol” is imprecise. For example, in a case interpreting section 301(c)(2) of the Comprehensive Environmental Response, Compensati on, and L iability Act (CERCLA), the D.C. Circuit noted that the word “protocols” has many definitions that are not much help. Kennecott Utah Copper Corp., Inc. v. U.S. Dept. of Interior , 88 F.3d. 1191, 1216 (D.C. Cir. 1996). Section 301(c)(2) of CERCLA p rescribed the creation of two ty pes of procedures for conducting natural resources damages assessments. The regulations were to specify (a) “standard 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). 41 The court upheld the challenged provisions, which 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 and implement compliance and enforcement protocols, and the Secretary ’s authority to formulate policy

and make rule s to fill gaps left, implicitly or explicitly , by 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 the enforcement mechan isms and decision criteria for non
- compliance. Therefore, NHTSA interpreted its authority to develop an enforcement program to include the authorit y to determine and assess civil penalties for non
- compliance. Several commenters disagreed with this interpre tation. 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 a dopted for the light
- duty program should apply to the HD program as well. Daimler argued that it was likely that EISA did not give NHTSA the authority to assess civil penalties, and Navistar argued that NHTSA could not have the authority as Congress did n ot expressly grant it. NHTSA continues to believe that it is reasonable to interpret “compliance and enforcement protocols” to include 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 specific provision of the statute by regulation.” United States. v. Mead, 533 U.S. 218, 227 (2001), quoting Chevron v. NRDC, 46 7 U.S. 837, 843
- 44 (1984). The delegation of authorit y m ay 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 enfo rcement. Further, interpreting “enforcement protocols” to mean not more than “compliance protocols” would go against the canon noted above that statutes should not be interpreted in a way that “render[s]
41 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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47 of 77 1 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). Further, NHTSA believes that Congress would have anticipated that compliance and enforcement protocols would include civil penalties for the HD sector, 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 inclusi on 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 that Congress created a new sect ion 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 intentionall y when it 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. (ii) Penalty Levels NHTSA 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 comment ed that the penalt y 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 o r 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 .1 of a mile a gallon b y which the applicable averag e fuel economy standard under that section exceeds the average fuel economy,” calculated and applied to automobiles. Volvo further argued that NHTSA was relying upon the CAA as the statutory basis for the penalty

levels. NHTSA recognizes that Section 329 contains a detailed penalty scheme, for light
duty vehicle CAFE standards
. However, Section 32902(k)(2) explicitly directs NHTSA to “adopt and implement appropriate test methods, measurement metrics, fuel econom y standards, 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 compliance and enforcement protocols that wi ll 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 new measurement metrics and a compliance and enforcement program. Further,***** E.O. 12866 Review**

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48 of 771 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 shou ld 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 32912 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 automobiles, a vehicle class which is confin ed to the 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 standards, NHTSA believes that if Congres s intended for particular penalt y 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). See U.S. v. United States , 464 U.S. 16, 23 (1983), quoting United 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 intent ionally and purposel y in the disparate inclusion or exclusion.”) 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 y ears. Within the context of this regulatory timeframe, our program is very aggressive
- with limited l ead time compared to historic heav y - dut y regulations
- but pragmatic in the context of technologies that are available. While we are now onl y finalizing this first step, it is worthwhile to consider how the next regulatory

step may be designed. Technolog ies 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***** E.O. 12866 Review**

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49 of 77 1 advanced technologies will not be necessary to mee t the final standards. Today ’s standards are premised on the use of existing technologies given the short lead time, as discussed in Section III, below. When we begin work to develop a possible next set of regulatory

standards, the agencies expect these a dvanced 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. 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 thos e 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 chassis 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, vehic le 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 Harmo nized Duty C ycle for heav y - dut y engines. EPA is committed to bringing forward these new procedures as part of our overall comprehensive approach 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 be based on collabo rative 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 need s. 

## 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 would be appropriate, cost
- effective, and feasible in the lead time provided. This***** E.O. 12866 Review**

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50 of 771 anal ys is, described in Section III and in more detail in the RIA Chapter 2, considered f or each of the regulatory

categories:

 the level of technology that is incorporated in current new engines and trucks,  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 y ear,  the effectiveness and cost of these technologies,  projections of future U.S. sales for trucks and engines, and  forecasts of manufacturers’ product redesign schedules. 

### A. **What Vehicles Would Be Affected?** EPA and NHTSA are finalizing standards for heavy
- dut y engines and also for what we refer to generally as “heavy
- dut y vehicles.” 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 b y the light
- duty vehicle, light
- dut y truck and medium
duty passenger vehicle greenhouse gas and CAFE standards issued for MYs 201 2
- 2016. Thus, in this notice, unless specified otherwise, the heav y - dut y 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 tru cks, 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 ‘c ommercial medium
and heav y - dut y on - highway vehicle’ as an on
- highway vehicle with GVWR of 10,000 pounds or more. 42 EI SA section 103(a)(6) defines a ‘work truck’ as a vehicle that is rated at between 8,500 and 10,000 pounds gross vehicle weight and is not a medium
- duty passenger vehicle. 43 Therefore, the term “heav y - duty vehicles” in this rulemaking refers to both work trucks and commercial medium
- and heav y - dut y on - highway vehicles as defined b y EISA. Heav y - duty engines affected by the standards are thos e 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 part 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 EPA is finalizing today cover recreational on
highway vehicles, while NHTSA is limiting their scope to not include these vehicles.

42 Codified at 49 U.S.C. 32901(a)(7). 43 EISA Section 103(a)(6) is codified at 49 U.S.C. 32901(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 th e criteria outlined in 40 CFR 86.1803
- 01. The definition specifically excludes 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 rearw ard of the driver’s seat or, (3) has a c argo box (e.g., pick
- up box or bed) of six feet or more in interior length. ( See the Tier 2 final rulemaking, 65 FR 6698, February 10, 2000.)***** E.O. 12866 Review**

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51 of 77 1 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 such vehicle s. 44 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 , Class 2b through 8 vocational vehicles, and the engines installed in them. 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 for heav y - dut y pickups and vans whereb y the enti re vehicle is regulated

– 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 are 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. Toge ther these standards would achieve reductions up to 23 percent from tractors. 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 - duty engines installed in them. NHTSA is finalizing revised fuel consumption standards for tractors, and finalizing as proposed engine standards for heav y - dut y engines in Class 7 and 8 tractors. The agencies' anal ys es, as discussed briefl y below and in more detail later in this preamble and i n the RIA Chapter 2, show that these standards are appropriate and feasible 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 emiss ions are discussed in Section II.E.5. The agencies are finalizing CO 2 emissions and fuel consumption standards for the combination tractors 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

44 Both agencies have authority to develop separate standards for vehicle and engine categories, as appropriate. S

ee 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 fe asible” 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 authority 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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52 of 771 also finalizing heav y - duty e ngine 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 identifie d 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 be 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 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 sam e definition for “tractor” or “truck tractor” in the final rules. EPA proposed a definition for “tractor” § 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 pulling 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 vehic le sold to an ultimate purchaser with a fifth wheel coupling 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 pro visions 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 fifth 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 tract or” in 49 CFR 571.3 as:***** E.O. 12866 Review**

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53 of 77 1 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. Second, EMA/TMA, NTEA and Navistar expre ssed 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 vo cational vehicles and not as tractors, those vehicles should 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: vocational 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 di stances, 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” 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 sim ilar to the NHTSA definition, but included some additional 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 dif ferent definitions could to 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 defin ition should be used by both agencies as the base definition 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 tractor 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 believes that such additional criteria are needed for implementation. NHTSA established the definition for truck tractor in 49 CFR 571.3(b) ye ars ago, 45 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 som e 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

45 33 FR 19703, December 25, 1968.***** E.O. 12866 Review**

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54 of 771 to carry a load other than a part of the weight of the vehicle and the load so drawn.” Similarly , a “dromedary” 46 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. Even though these particular vehicles identified could potentially draw other motor v ehicles like a trailer, they

have also been designed to carry cargo with or without the trailer attached. NHTSA has previousl y i nterpreted its definition for “truck tractor” as excluding these specific vehicles like the Dromedary and automobile/boat trans port 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 passenger 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 vehicles will be subject to the vocational vehicle standards and not the tra ctor standards, but vehicles that did meet the definition above for “tractor” will be subject to the combination tractor standards. In response to the second comment, the agencies have decided not to classify vocational vehicles with sleeper cabs as tract ors. In the NPRM, the agencies proposed that vocational vehicles with sleeper cabs be classified as tractors out of concern that a vehicle could initially

be manufactured as a straight truck vocational vehicle with a sleeper cab and, soon after introducti on 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 an d difficult for a manufacturer to change a vehicle from a straight truck to a tractor, because of modifications required to the vehicle, such as to the vehicle’s air brake sy stem, and also because of the manufacturers ultimate responsibility

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

pe vehicle and not the functions of a line
- haul tractor. NTEA 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 truck 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 tract or. 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 requirement that all vehicles with sleeper cabs be treated as tractors

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

consider revising the definitions in a future rulemaking to address such issues. NHTSA and EPA concluded that the engine and tire improvement s required

46 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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55 of 77 1 in the vocational category are appropriate for this set of vehicles based on the ty pical operation of these vehicles. The agencies did not intend to include vocational vehicles with sleeper cabs, such as an Expediter vehicle, into the tractor c ategory in either the NPRM or in this final action, therefore the agencies did not make any adjustments to the program costs and benefits due to this classification change. In response to the third comment, the agencies have decided to allow manufacturer s to exclude certain vocational
- ty pe tractors from the combination tractor standards. Such vocational tractors will now be subjected to the vocational vehicle standards and not the tractor standards. In today ’s market, as mentioned by Volvo and ATA, we understand that approximately

15 percent, or approximately 15,000 to 20,000, of the Class 7 and 8 tractors could be classified as vocational tractors based upon the work they perform. The overall operation of these vocational
- ty pe tractors resembles other vocational vehicles with a lower average speed and more stop and go activity than line
- haul tractors. Due to their operation st yl e, a FTP certified engine is a better match for these tractors than a SET certified engine, because the FTP cycle uses a lowe r average speed and more stop and go activity 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 aerod ynamic improvements. Conversely, the additional w eight of the aerody namic 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 ty picall y do not hotel overnight and therefore will have little to no benefit through the installation of an idle reduction technology . 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 differences between vocational tractors, which ty pically operate at lower speeds in stop
- and
- go city

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 associated 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 aerody namics, 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 operated as vocational vehicles given their significantl y different t ypical driving cycles. The agencies received several other comments that described criteria that could be used to distinguish between vocati onal 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;***** E.O. 12866 Review**

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56 of 771 (2) an approach angle greater than or equal to 20 degrees nominal design specification, to exclude extended front rails/bumpers for ad ditional 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 veh icles this is usually considered 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. The approach proposed by Volvo 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 me et four of the five specified suspension characteristics (approach angle, break
- over angle, axle clearance, etc.) to be classified as a light truck. While we do not believe that the criteria suggested b y Volvo are workable for all manufacturers and all ap plications, we agree that these criteria would reflect a reasonable basis for reclassifying vehicles as vocational tractors. Two other commenters, EMA/TMA and Navistar, suggested simpl y that the manufacturer should have the burden of establishing that a tractor is a vocational tractor to the agencies’ reasonable satisfaction. The commenter also suggested that factors that could be used to establish that a tractor is actuall y a “vocational tractor”:

(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 bright
line rule as suggested b y Volvo could help to minimize the burden on both the manufacturers and the agencies, as manufacturer - written requests for approval and agency approvals of those requests would not be required for each vocational tractor determination whereas the EMA/TMA and Navistar approach requires the opposite***** E.O. 12866 Review**

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57 of 77 1 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 specific criteria, could be used to identify all the tractors that should be under c onsidered as vocational tractors. The urban beverage delivery

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

of manufacture rs circumventing the s ys tem by incorporating design changes to their line
- haul tractors in order to classify them as vocational tractors required to meet less stringent emission and fuel consumption standards. However, at this time the agencies do not bel ieve 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 combined weight, body st yl e and load handling characteristics, must be considered in the design process. Further, how the vehicle will 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 a lso note that many of these vehicles have front axle weight ratings greater than 14,600 pounds. The reader is referred to 40 CFR section 1037.630 of the EPA’s regulations for additional detail about this allowance. While the agencies agree that these vo cational 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 consi deration of the comments received the agencies have decided to allow manufacturers to exclude certain vocational
- ty pe tractors from the combination tractor standards. A vehicle determined to be a HHD vocational tractor would fall into the HHD vocational v ehicle subcategory and be treated as a vocational vehicle. Similarly , MHD vocational tractors will be treated as a MHD vocational vehicle. Specificall y, the provision being finalized is intended for three broad types of tractors:

(1) Mixed service (onroa d and offroad) vehicles often used in construction, logging, dump operation, and mining. (2) Heav y haul tractors (i.e., tractors with a GCWR over 120,000 pounds). (3) Urban delivery

vehicles such as beverage trucks. The provision being adopted in 40 CFR 1037.630 and 49 CFR Part 523.2 describes the three t ypes of vehicles eligible for this reclassification and requires the manufacturers to describe in their applications their bases for believing that the vehicles qualify as vocational tractors. EPA would deny an application for certification where we determine the manufacturer lacks an adequate basis. The manufacturer would then have to resubmit its application to certify the vehicles in question to the tractor standards. The agencies plan to monitor ho w manufacturers classify their tractor fleets and would***** E.O. 12866 Review**

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58 of 771 reconsider the issue of vocational tractor classification in a future rulemaking if necessary . Because the difference between some vocational tractors and line
- haul tractors is potentially

somewhat su

bjective, we are also including a default annual sales limit of 7,000 vocational tractors per manufacturer, based on a three ye ar rolling average, that would apply

in most circumstances. However, in unusual circumstances, a manufacturer that was able to c learl y demonstrate that it is producing enough truly vocational tractors to exceed this limit in any given model ye ar could petition the agencies to allow it to exceed the limit for that year. The manufacturer could ask for such relief at any point in the model y ear at which it becomes apparent that sales of trul y vocational tractors will likely exceed the limit. EPA if the agencies concur that the manufacturer has demonstrated that all of its vocational tractors meet the criteria. We may also specify ad ditional conditions such as additional reporting requirements. Under the regulations being promulgated, manufacturers will be required to keep records of how they

determined that such vehicles qualify as vocational tractors (whether or not they

exceed the 7,000 vehicle limit). Ty pically , this would be a combination of records of the design features and/or purchasers of the vehicles. The agencies have anal yz ed the design features that reflect the special needs of these vocational tractors in three areas

– mixed service, heavy haul, and urban delivery . Mixed service applications, such as construction trucks, ty picall y 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. 47 The mixed service applications also sometimes require higher front axle weight ratings to accommodate extra loads and/or power take off s ystems for additional capability . Heavy ha ul 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 f or 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 include 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. 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
- h aul tractors sold in 2014 model y ear and beyond will be vocational tractors. As such, these vehicles will experience benefits

47 The agencies have found based on standard truck specifications, that vehicles designed for significant off
- road applications, such as con crete 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/CXU6124x2PinAxleBack.pdf.***** E.O. 12866 Review**

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59 of 77 1 reflective of a FTP
- certified engine and tire rolling resistance improvement at the technology

costs projected in the rules for v ocational vehicles. **(1) What is the form of the Class 7 and 8 Tractor CO**  **2 Emissions and Fuel**  **Consumption Standards?** As proposed, EPA and NHTSA are finalizing 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 cons umption, or its effectiveness. Attributes that characterize differences in the design of vehicles, as well as differences in how the vehicles will be employ ed in
- use, can be key factors in evaluating technological improvements for reducing CO 2 emissions and fuel consumption. 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
- based standard. In addition to the example of the 2012
- 16 MY light
- dut y vehicle fuel econom y and GHG rule, in which the standards are based on the attribute of vehicle “footprint,” the existing heav y - dut y highway engine criteria pollutant emission standards for man y ye ars have been based on a vehicle weight attribute (L ight Heavy , Medium Heavy , Heavy Heavy) 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 truck 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 comb ined 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 con figuration). 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 payload 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 c apacity than Class 8 trucks. Class 8 trucks have a GVWR of greater than 33,000 pounds and a t ypical 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. Consi stent with the recommendation in the National Academ y of Sciences 2010 Report to NHTSA, 48 the agencies are finalizing a load
- specific fuel consumption metric (g/ton
- mile and gal/1,000 ton
- mile) where the

48 See 2010 NAS Report, Note 21 , Recommendation 2
- 1.***** E.O. 12866 Review**

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60 of 771 “ton” represents the amount of payload. Generally , h igher payload capacity trucks have better specific fuel consumption and GHG emissions than lower payload capacit y trucks. Therefore, since the amount of payload that a Class 7 truck can carry is less than the Class 8 truck’s payload capacit y, the baseline fuel consumption and GHG emissions performance per ton
- mile differs between the categories. Itis 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 in creasing 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 efficiency when measured on a per ton - mile basis are only relevant in the context of operations where that greater capacity is needed. For 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 vehicle that is only benefici al 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 tractors 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 p e 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 do this to obtain the bes t aerod yn 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 roo f 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 differs due to the variatio n 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. Therefore, as explained below, the agencies are using the roof height of the tractor to determine the trailer t ype required to be used to demonstrate compliance of a truck with the fuel consumption and CO 2 emissions standards. As with vehicle weight classes, 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 heights offered in the market away from a level customaril y tied to the actual trailers vehicles will haul in
- use.***** E.O. 12866 Review**

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61 of 77 1 Tractor cabs t ypicall y can be divided into two configurations

– day cabs and sleeper cabs. Line haul operations ty picall y require overnight accommodations due to Federal Moto r Carrier Safety Administration hours of operation requirements. 49 Therefore, some truck buy ers 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 hav e 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 technologies, such as extended idle r eduction technologies, which are appropriate onl y for tractors which hotel

-- such as sleeper cabs. To respect these differences, the agencies are finalizing separate standards for sleeper cabs and day cabs. 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 with 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 fai rings 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 reduce fuel consumption and GHG emission s during operation. As proposed, the agencies are treating tractors with adjustable roof fairings as low roof tractors and test with the fairing down. **(2) What are the Final Class 7 and 8 Tractor and Engine CO**  **2 Emissions and**  **Fuel Consumption Standards and T heir Timing?**  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
49 The Federal Motor Carrier Safety Administration’s Hours
- of
- Service regulations put limits in place for when and how long commercial motor vehicle drivers may drive. They are based on an exhaustive scientific rev iew 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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62 of 771 consumption, the kinds of technologies that could be utilized by truc k 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 that the agencies used to set the final tractor standards include improvements in aerodyn amic design, lower rolling resistance tires, extended idle reduction technologies, and lightweighting of the tractor. The technologies that the agencies used to set the engine standards include engine friction reduction, aftertreatment optimization, and turbocompounding, among others. The agencies’ evaluation indicates that these technologies are available today , but have very low applic ation rates in the market. 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 adop t 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 into 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 emissions reductions required for 2017 model y ear 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 credit s 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 y ear, as required b y the lead time and stability requirement within EI SA. The 2014 and 2015 model y ear standards are voluntary in that manufacturers are not subject to them unless they opt - in to the standards. However, once a manufacturer opts - in, the standards are mandatory for that manufacturer. NHTSA is also adopting new tractor standards for the 2017 model year which reflect additional improvements in only the heav y - dut y engines. As proposed, NHTSA is not implementing an in
- use compliance prog ram for fuel consumption because notable deterioration of fuel consumption over the useful life is not currently anticipated. 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,***** E.O. 12866 Review**

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63 of 77 1 and we explain in Section III and Chapter 2 of the RIA that use of additional technologies would be either infeasible in the lead time aff orded, or uneconomical. **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 75 High Roof 122 90 73 2014
- 2016 Model Year Gallons of Fuel per 1,000 Ton
- Mile 50

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10.5 8.0 6.6 Mid Roof 11.6 8.7 7.4 High Roof 12.0 8.9 7.2 2017 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 104 79 66 Mid Roof 115 86 73 High Roof 118 88 71 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 10.3 7.8 6.5 Mid Roof 11.3 8.4 7.2 High Roof 11.6 8.6 7.0 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 conce rned that the 2017 MY tractor standards appeared to be backsliding 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 GEM for the 2017 model y ear for the proposal did not appropriatel y 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. 51 These changes to GEM 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 estimated for these final vehicle standards.

50 Manufacturers may voluntari ly opt
- in to the NHTSA fuel consumption program in 2014 or 2015. If a manufacturer opts
- in, the program becomes mandatory. 51 See RIA Chapter 4 for the engine fuel maps used in GEM v2.0.***** E.O. 12866 Review**

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64 of 771 Based on our analy sis, the 2017 model y ear standards rep resent up to a 23 percent reduction in CO 2 emissions and fuel consumption over a 2010 model ye ar 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 also 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 standards will vary depending on the t ype of vehicle in which they

are used, as well as whether the engines are compression ignited or spark ignited. EPA’s existing criteria pollutant emissions regulati ons for heav y - duty highway engines establish four regulatory service classes that represent the engine’s intended and primary truck application. 52 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 Class 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 po unds 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. For the purposes of the GHG engine emissions and engine fuel consumption s tandards that EPA and NHTSA are adopting, the agencies are adopting these same four regulatory

service classes as the engine subcategories. This subcategory structure enables the agencies to set standards that appropriately reflect the technology

availabl e for engines for use in each t ype of vehicle, and that are therefore technologically feasible for these engines. This is the same engine classification scheme the agencies proposed, and there were no adverse comments. In the NPRM, the agencies proposed C O 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. 53

52 See 40 CFR 1036.140. 53 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.***** E.O. 12866 Review**

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65 of 77 1 **Table II**  **- 2**  **: 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. 54 The agencies’ preliminary

assessment of the findings of the 2010 NAS Report and other literature sources indicated that there are technologies available to reduce fuel consumption by this amount in the final timeframe. 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 consumption and CO 2 emissions for the 201 7 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 increased refinement of the technologies projec ted to be implemented for 2014, plus the addition of turbocompounding, but the agencies’ preliminary

anal ys is indicated that this ty pe of advanced engine technology would require a longer development time than MY 2014. The agencies therefore proposed to p rovide additional lead time to allow for the introduction of this additional technology , and to wait until 2017 to increase stringency to levels reflecting application of this technology
. The agencies proposed that the HD diesel engine CO 2 standards for Cl ass 7 and 8 combination tractors 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. The agencies explained that the three
- year timing, besides being required by EISA, 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 y ear increments, which had caused the heavy
- dut y engine product plans to fall largel y into three ye ar cycles reflecting this regulatory environment. To further harmonize with EPA, NHTSA
54 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. Similarly, the 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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66 of 771 propos ed voluntary

fuel consumption standards for HD diesel engines for MYs 2014
- 2016, allowing manufacturers to opt into the voluntary standards in any

of those model ye ars, with the caveat that opting in would cause the standards to become mandatory for the op t - in and subsequent model y ears. NHTSA proposed that manufacturers could opt into the program b y declaring their intent to opt in to the program at the same time they submit the Pre
- Certification Compliance Report, 55 and that a manufacturer opting into the program would begin tracking credits and debits beginning in the model ye ar 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 engine standards and timing. The agencies received comments from EMA, Navistar, Cummins, ACEEE, Center for Biological Diversity , Detroit Diesel C orporation, 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 y ear 2017 standard may not be feasible since what the agencies characterized as existing technol ogies are not in production for all manufacturers In contrast, 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 wer e 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, beginn ing in 2012 model y ear. 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 y ear on the SET is estimated at 490 g CO 2 /bhp
- hr (4.81 ga l/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 cycle 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. Based on the use of technologies that are available to manufacturers in the 2014 timeframe, but which do not requi re re - design, such as improved aftertreatment s ys tems, friction reduction, improved auxiliaries, turbochargers, pistons, and other components, the agencies continue to believe that the standards in 2014 MY, which will require diesel engine manufacturers to achieve on average a three percent reduction in fuel consumption and CO 2 emissions over the baseline 2010 model year performance, are achievable. However, in recognition that manufacturers face a diverse set of conditions in meeting the standards, we are finalizing an additional flexibility mechanism

– the optional alternate engine standard for 2014 model year, described in more detail below.

55 See 49 CFR 535.8 for information related to the Pre
- Certification Compliance Report.***** E.O. 12866 Review**

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67 of 77 1 We believe that the concern expressed b y Navistar regarding the 2014 MY standards will be addressed b y this alt ernative. The agencies also continue to believe the 2017 MY standards are achievable using the above approaches and, in the case of SET certified engines, turbocompounding. While Navistar 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 sufficie nt lead time for everyone to introduce this technology . We note that we are finalizing these standards as proposed based on the assumption that most manufacturers will need to make improvements to existing engine s ys tems in order to meet the standards. E PA’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
- 2. As explained above, the first set of standards take effect with MY 2014 (mandatory

standard s for EPA, voluntary standards for NHTSA), and the second set take effect with MY 2017 (mandatory for both agencies). Compliance with the CO 2 emissions 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 engines used in tractors reflecting their primary use in steady state operating conditions (ty pified b y 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 stead y state test cycle. The agencies place important weight on the fact that engine manufacturers are expected to redesign and upgrade their products during MYs 2014
- 2017 in making our decisions about the cost
- effectiveness of the standards and the availability of lead time. The final two
- step CO 2 emission and fuel consumption standards recognize the opportunity

for technology

improvements over the rulemaking timeframe, while reflecting the t ypical diesel truck manufacturers’ product pla n 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 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 needed to incorporate technology that will achieve the final GHG and fuel consumption reductions, 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 scheduled redesigns. 56 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. Furth er details on lead time, redesigns and technical feasibility can be found in Section III.

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

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68 of 771 The agencies continue to believe the standards for heav y - dut y diesel engines in model y ears 2014 and 2017 are the most stringent technicall y feasible in the timeframe established in this regulation. The standards will require a 3 percent reduction in engi ne 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 and assumes the introduction, for some e ngines, of technologies such as turbocompounding which are still in development. The standards will not, however, require the introduction of technologies that are still in development

– such as rankine bottoming cycle
- since these approaches cannot be i ntroduced without further technical development or engine re
- design. Given this is the first ever program to regulate fuel efficiency for these engines we believe the standards are the most stringent feasible at this time. Additional discussion on techni cal feasibility is included in Section III below and in Chapter 2 of the RIA. The agencies recognize, however, that the schedule of changes for the final standards may

not be the most cost
- effective one for all manufacturers. The agencies also sought comm ent in the NPRM whether an alternate phase
- in schedule for the HD diesel engine standards should be considered, based on comments received from manufacturers. In developing the proposal, heav y - duty engine manufacturers stated that the phase
- in of the GHG and fuel consumption standards should be aligned with the On Board Diagnostic (OBD) 57 phase
- in schedule, which includes new requirements for heav y - dut y vehicles in 2013 and 2016 model years. The agencies did not adopt this suggestion in the proposal, expla ining that the credit averaging, banking and trading provisions would provide manufacturers with considerable flexibility to manage their GHG and fuel efficiency

standard compliance plans

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

– but 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 manufacturers did not agree that the ABT provisions mitigated their concern about the GHG/fue l consumption standard phase
- in. See 75 FR at 74178. In response to the request for comment in the NPRM on a possible alternate phase
- in schedule, 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 manufacturers with an optional GHG and fuel consumption phase
- in that aligns their product development plans for the engine GHG and fuel consumption standards with their current plans to meet the OBD regulations for EPA and California in 2013 and 2016 model y ears. These commenters argued that meeting the OBD regulation in 2013 model y ear alread y poses a significant challenge, and that having to meet GHG and fu el consumption standards beginning in 2014 could require them to redesign and recertify their products just one y ear later. They

57 On
- board 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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69 of 77 1 argued that bundling design changes where possible can reduce the burden on industry for compl yi ng with regulations, so aligni ng the introduction of the OBD, GHG, and fuel consumption standards could help reduce the resources devoted to validation of new product designs and certification. In order to provide additional flexibility for manufacturers looking to align their technolo gy

changes with multiple regulatory requirements, the agencies are finalizing an alternate “OBD phase
- in” option for meeting the HD diesel engine standards, which delivers equivalent CO 2 emissions and fuel consumption reductions as the primary standards fo r the engines built in the 2013 through 2017 model y ears, as shown in Table II
- 3 . The optional OBD phase
- in schedule requires that engines built in 2013 and 2016 mod el y ears to achieve greater reductions than the engines built in those model y ears under the primary

program, but less reductions for the engines built in 2014 and 2015 model y ears. **Table II**  **- 3**  **: Comparison of**  **CO 2**  **reductions for the HHD and MHD Tractor Standards**

**Under the Alternative OBD Phase -**  **in and Primary Phase -**  **In**

HHD SET Engines MHD SET 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 y ear optional standard include a subset of technologies that could be used to meet the primary 2014 model y ear 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 maintai n equivalent CO 2 emissions and fuel consumption reduction 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***** E.O. 12866 Review**

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70 of 771 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 y ear. Manufacturers 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. Table II
- 4 below presents the final HD diesel engine CO 2 emission standards under the “OBD phase
- in” option. **Table II**  **- 4**  **: 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 While the agencies believe that the HD diesel engine standards are appropriate, cost - effective, and technologicall y feasible in the rulemaking timeframe, we also recognize that when regulating a category of engines for the first time, there will be individual products that may deviate significantl y fr om 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 y ear engines, NHTSA and EPA unde rstand that there is a relativel y small group of engines that are up to approximately 25 percent worse than the average baseline for other engines. For this group of engines, when compared to the ty pical performance levels of the majority

of the engines i n the fleet and the fuel consumption/GHG emissions reductions that the majority of engines would achieve through increased application of technology , the same reduction from the industry baseline may

not be possible at reasonabl y 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 these engines with aty

picall y 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 generall y - applicable standards. To account for this possibility , the agencies requested comment in the NPRM on the establishment of an optional alternative engine standard which would be set at 3 per cent below a manufacturer’s 2011 engine baseline emissions and fuel consumption, or alternativel y, at 2 percent below a manufacturer’s 2011 baseline. The agencies also requested comment on extending this optional standard one ye ar (to 2017 MY) for a***** E.O. 12866 Review**

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71 of 77 1 singl e engine famil y at a 6 percent level below the 2011 baseline. 58 This option would not be available unless and until a manufacturer had exhausted all available credits and credit opportunities, and engines under the optional standard could not generate credits. 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 baselin e, with some above and some below, but also that some HD diesel engines were far enough away from the baseline that they could not meet the generally
applicable standards with any application of technology that would be reasonably cost effective. The agen cies considered the arguments of all stakeholders prior to issuing this final action. The agencies continue to believe that an interim alternative standard is needed for these products, and is the most effective way to set a standard that is technicall y f

easible for all products while achieving worthwhile reductions in fuel consumption. First, as explained at proposal, it is legally permissible to accommodate short term lead time constraints with alternative standards. Second, commenters did not dispute that there are legacy engine families with significantl y higher CO 2 baselines, and that there are no feasible means of these engine families meeting the principal standards in the earl y model ye ars of the program. Although the agencies are of course s ympathetic to the view that technological laggards should not be rewarded, the agencies do not believe that this is the case here. The GHG standards and fuel consumption standards are first
- time standards for these engines, so the possibility of significantly different baselines is not unexpected. 59 More important, the alternative standards require the engines to achieve the same emission reductions and fuel consumption improvements, predicated on use of the same technologies, as all other engines. Thus, 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 required of those engines, and in addition, by 2017 MY, those engin es will be required to make the additional improvements to meet the same standards as other engines (at higher cost, given the greater gap to make up). Thus, the agencies are finalizing a regulatory alternative whereb y a manufacturer, for an interim perio d from 2014
- 2016 model y ears, would have the option to comply with a unique standard based on a three percent reduction from an individual engine’s own 2011 model y ear baseline level. Our assessment is that this three percent reduction is appropriate give n the potential for manufacturers to appl y similar technology packages with similar cost to what we have

58 See 75 FR at 74178
- 741 79. 59 See 75 FR at 74178.***** E.O. 12866 Review**

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72 of 771 estimated for the primary program. 60 This is similar to EPA’s approach in the light
- dut y rule for handling a certain subset of vehicles that were deeme d unable to meet the generall y - applicable GHG standards during the 2012
- 2015 timeframe, and which needed alternate standards in those model y ears. 61 Our assessment is that this three percent reduction is appropriate given the potential for manufacturers to appl y similar technology packages with similar cost to what we have estimated for the primary program. The agencies stress that this option is a temporary and limited option being implemented to address diverse manufacturer needs associated with complyi ng with this first phase of the regulations. As will be codified in 40 CFR 1036.620, this optional standard will be available only for the 2014 through 2016 model y ears, because we believe that manufacturers will have had ample opportunity to benchmark co mpetitive products during redesign cycles and to make appropriate changes to bring their product performance into line with the rest of the industry after that time. As proposed, the final rules require that manufacturers making use of these provisions fo r 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 compl yi ng using this alternate approach. 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

– 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 engines in the class. Sinc e the NHTSA standards are optional in 2014, manufacturers may choose not to adopt either the alternative engine standard or the regular voluntary

standard by

not participating in the NHTSA program in 2014 and 2015. Some commenters argued that manufacturer s 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 either that the 2011 model y ear baseline must be developed by averaging emissions over all engines in an engi ne family certified and sold for that model ye ar 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. If a manufacturer does not certify all eng ine 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 basel ine engine. In addition, the tested configurations must
60 The CBI submitted by Navistar demonstrates that in order to meet the 2 percent reduction from the individual manufacturer 2011 baselines, technologies such as improved aftertreatment efficiency will be required in the 2014 tim eframe and turbocompounding in the 2016 timeframe on tractor engines in order to meet the standards. These same technologies will be used by other manufacturers to meet the standards. 61 See 75 FR 25414
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73 of 77 1 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.
(c) In
- use Standards Section 202(a)(1) of the CAA sp ecifies 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
- u se standards. EPA proposed that the in
- use standards for heav y - duty engines installed in tractors be established b y adding an adjustment factor to the full useful life emissions and fuel consumption results projected in the EPA certification process. Th e 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 additional data during the comment period which identified production variability

which was not accounted for by the agencies 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 provide a reasonable margin for production and test
- to - test variability that could result in differences between the initial em ission 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 emissi on 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 onl y for this initial phase of standards. Manufacturers will be allowed to use an assigned additive 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 technologies, 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 emiss ions from conventional engines to conclude that they

will not increase as the engines age. However, we lack such information about the more advanced technologies. EPA is also finalizing the proposed provisions requiring that the useful life for these en gine and vehicles with respect to GHG emissions be set equal to the respective useful life periods for criteria pollutants. EPA is adopting provisions where the existing***** E.O. 12866 Review**

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74 of 771 engine useful life periods, as included in Table II
- 5 : , 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**  **- 5**  **: 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 proposal, the test procedures related to the tractors are all new, while the engine test procedures build 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 procedur es. (a ) Truck Simulation Model We are finalizing as proposed to set separate engine and vehicle
- based emission standards to achieve the goal of reducing emissions and fuel consumption for both trucks and engines. Engine manufacturers are subject to the engin e standards while the 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 tractor 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 vehi cle 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. Th e 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 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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75 of 77 1 Consistent with proposal, NHTSA and EPA are finalizing a procedure to evaluate fuel consumption and CO 2 emissions respectively through a simulation of whole
- vehicle operation, consistent with the NAS recommendation to use a truck model to evaluate truck pe rformance. 62 The agencies developed the Greenhouse gas Emissions Model (GEM) for the specific purpose of this proposal to evaluate truck performance. The GEM is similar in concept to a number of vehicle simulation tools developed by commercial and governm ent entities. The model developed b y the agencies and finalized here was designed for the express 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 vehicle compliance without the overhead and costs of a more sophisticated model. Details of the 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 Laboratory 's Autonomie, Gamma Technologies' GT
- Drive, AVL’s CRUI SE, Ricardo's VSIM, Dassault’s DYMOLA, and University of Michigan's HE
- VESIM codes are publicly available. In addition, manufacturers of engines, v ehicles, and trucks often have their own in
- house simulation tools. The agencies sought comments regarding other software packages which would better serve the compliance purposes of the rules than GEM, but did not receive an y recommendations. GEM is de signed 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 GEM based on the chassis test re sults from a SmartWay certified tractor tested at Southwest Research Institute. The validation work conducted on these this vehicle is representative of the other Class 7 and 8 tractors. Many aspects of one tractor configuration (such as the engine, tran smission, axle configuration, tire sizes, and control s ys tems) are similar to those used on the manufacturer’s sister models. For example, the powertrain configuration of a sleeper cab with an y 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 emissions 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 time of the proposal, the agencies also conducted a validation of 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 economy of each subcategory

of tractor to be within 2 percent. Test to test variation for heavy
- 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 available for download b y 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 req uested comment on all aspects of this approach to compliance determination in general and to the use of the GEM in particular. The

62 See 2010 NAS Report. Note 21 Recommendation 8
- 4. Page 190.***** E.O. 12866 Review**

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agencies received comments from stakeholders and made changes to GEM v2.0 to address concerns raised in comments review process. The most noticeable changes to GEM include improvements to the graphical user interface (GUI). In response to comments, the agencies have reduced the amount of information required in the Identificat selected subcategory

while graying subcategory ; and added batch modeling capability to reduce the compliance burden to manufacturers. In addition, s ubstantial work went in benchmarking against vehicle test data and other commonly used vehicle simulation models. The model also includes a new driver model, a simplified electric system model, and revised engine fuel maps to better reflect the 2017 mode 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 aerodynamics and tire rolling resistance), i nput the values into 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 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 for these vehi cles is predicated. An example of the GEM input screen is included in Figure II
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76 of 771 agencies received comments from stakeholders and made changes to GEM v2.0 to

raised in comments , along with the comments received during the peer review process. The most noticeable changes to GEM include improvements to the graphical user interface (GUI). In response to comments, the agencies have reduced the amount of information required in the Identificat ion 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 in to model validations and benchmarking against vehicle test data and other commonly used vehicle simulation models. The model also includes a new driver model, a simplified electric system model, and revised engine fuel maps to better reflect the 2017 mode l year engine standards. 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 aerodynamics and tire rolling

nput the values into 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

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 cles is predicated. An example of the GEM input screen is included in

**Figure II**  **- 1**  **: GEM Input Screen Do Not Cite, Quote, or Release During Review ** *** agencies received comments from stakeholders and made changes to GEM v2.0 to the comments received during the peer review process. The most noticeable changes to GEM include improvements to the graphical user interface (GUI). In response to comments, the agencies have reduced the ion section; linked the inputs to the out the items that are not applicable to the subcategory ; and added batch modeling capability to reduce the compliance burden to to model validations and benchmarking against vehicle test data and other commonly used vehicle simulation models. The model also includes a new driver model, a simplified electric system model, l year engine standards. To demonstrate compliance, a Class 7 and 8 tractor manufacturer will measure the performance of specified tractor s ys tems (such as aerodynamics and tire rolling

nput the values into GEM, and compare the model’s output to the standard. The rules require that a tractor manufacturer provide the inputs for each of following standards and for 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 cles is predicated. An example of the GEM input screen is included in***** E.O. 12866 Review**

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77 of 77 1 For the aerod yn amic assessment, tire rolling resistance, and tractor weight reduction, 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 alternatives for aerod y

namic assessment referenced back to a coastdown test procedure, a single procedure for tire rolling resistance coefficient determination, and a prescribed method to determine tractor weight reduction. The agencies are finalizing defined model inputs for d etermining vehicle speed limiter and extended idle reduction technology benefits. The other aspects of vehicle performance are fixed within the model as defined by the agencies and are not varied for the purpose of compliance. (b ) Metric Test metrics which ar e quantifiable and meaningful are critical for a regulatory program. The CO 2 and fuel consumption metric should reflect what we wish to control (CO 2 or fuel consumption) relative to the clearest value of its use: in this case, carrying freight. It should encourage efficiency improvements that will lead to reductions in emissions and fuel consumption during real world operation. The agencies are fina lizing 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 represented as gallons of fuel used to move one ton of freight 1,000 miles, or gal/1,000 ton
- mile. EPA's final CO 2 vehicle standards would be represented as grams of CO 2 per ton - mile. The model converts CO 2 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 co nsiderable 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 gall ons 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 importan ce 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 frei ght 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.***** E.O. 12866 Review**

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78 of 771 With the approach to compliance NHTSA and EPA are adoptin g, 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 thr ough 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 gr am/ton
- mile metric, reductions in mass are reflected both in less mass moved through the drive cy cle (the numerator) and greater payload (the denominator). We adjust the payload based on vehicle mass reductions because we estimate 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 tractor can go up. B ased on this general approach, it can be estimated that for every

1,200 pounds in mass reduction total truck 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 b e clear or straightforward for the agencies to reflect the benefits of mass reduction from large freight carrying vehicles that are often limited in the freight they carry by the gross vehicle weight rating of the truck. There was strong consensus in the public comments for adopting the proposed metrics for tractors. (c) Truck Aerodynamic Assessment The 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 proliferation of truck configurations, the lack of a clearl y 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 manufacturers using a range of techniques, including wind tunnel testing, computational fluid dy namics, and constant speed tests. Consistent with what was stated in the proposal, we believe a broad approach allowing manufacturers to use these multiple different test procedures to demonstrate aerod ynamic performance of its tractor fleet is appropriate given that no single test procedure is superior in all aspects to other approache s. 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 v ehicle testing (40 CFR 86.129
- 00(e)(1)). However, we also recognize the need for consistency and a level playing field in evaluating aerody namic performance. To address the consistency and level playing field concerns, NHTSA and EPA proposed that manufac turers use a two - part screening approach for determining the***** E.O. 12866 Review**

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79 of 77 1 aerod ynamic inputs to the GEM. The first part would have required the manufacturers to assign each vehicle aerodynamic configuration based on descriptions of vehicle characteristics to one of fi ve aerod yn amics bins created b y EPA and NHTSA. The proposed assignment b y bin would have reflected the aerodyn amic characteristics of the vehicle. The agencies, while working with industry , concluded for the final rulemaking that an approach which identi fied a reference aerody namic test method and a procedure to align results from other aerodyn amic 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, 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 yn amic evaluation method in demonstrating a vehicle’s aerod ynamic performance as long as the method is aligned to the reference method. The results from the aerodynamic testing will be the single determining fac tor for aerody namic 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 trucks than of light
- duty

vehicles. As noted in the NA S report, 63 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 aerod ynam ic determination. The agen cies 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) i nstead. We are taking this approach recognizing that the reference method is coastdown testing and it is not capable of determining wind averaged yaw. Wind tunnels are currently the only tool to accuratel y assess the influence of wind speed and direction on a truck’s aerod yn amic performance. The agencies recognize, as NAS did, that the results of using the zero y aw approach may result in fuel consumption predictions that are offset slightl y from real world performance levels, not unlike the offset we see today between fuel economy

test results in the CAFE program and actual fuel econom y performance observed in
- use. We believe this approach will not impact overall technology effectiveness or change the kinds of technology decisions made b y the tractor manu facturers in developing equipment to meet our final standards. However, the agencies are defining an approach to allow manufacturers to gain credit for developing technologies which improve the aerody namic 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 truck’s aerodyn amic drag force through testing, determine the appropriate predefined aerodynamic bin, and then input the predefined Cd value into GEM. Coefficient of drag and frontal area of the tractor
- trailer combination go

63 See 2010 NAS Report, Note 21 , Finding 2
- 4 on page 39.***** E.O. 12866 Review**

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80 of 771 hand
- in
- hand to determine the force required to overcome aerodyn amic drag. The agencie s proposed that the Cd value would be a GEM input derived by the manufacturer and that the agencies would specify the truck’s frontal area for each regulatory subcategory . The agencies sought and received comment recommending an alternate approach where th e aerody namic input tables (as shown in Table II
- 6 and Table II
- 7 ) represent the drag force as defined as Cd multiplied by the frontal area. Bec ause both approaches are essentially equivalent and the use of CdA more directly relates back to the aerod ynamic testing, the agencies are finalizing the use of CdA as recommended b y manufacturers. The agencies are finalizing aerodynamic 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 ae rod ynamics. These Bin I trucks incorporate few, if an y, aerod ynamic features and may have several features which detract from aerod ynamics, such as bug deflectors, custom sunshades, B
- pillar exhaust stacks, and others. The second high roof aerod yn amics c ategory is Bin II which roughl y represents the aerodynam ic performance of the average new tractor sold today . The agencies developed this bin to incorporate conventional tractors which capitalize on a generall y aerod yn amic 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 treatments such as underbody 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 reduction, rearview cameras to replace mir rors, wheel s ys tem streamlining, and advanced bod y designs. The agencies had proposed five aerodynamic bins for each tractor regulatory subcategory . The agencies received comments from stakeholders indicating that this approach was not consistent with the aerod yn amics 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 tractor
- 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 aerody namics on fuel consumption and GHG emissions. On 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 boy , 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 vari ables, manufacturers do not design unique low and mid roof tractor aerody namics but instead use derivatives from their high roof tractor designs. The aerodynamic improvements to the bumper, hood, windshield, mirrors, and doors are developed for the high r oof tractor application and then carried over into the low and mid roof applications. As mentioned above, the ty pes of designs that would move high roof tractors from a Bin***** E.O. 12866 Review**

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81 of 77 1 III to Bins IV and V include features such as gap reducers and integral roof fairi ngs which would not be appropriate on low and mid roof tractors. The agencies considered the comments provided by stakeholders and are finalizing only two aerod ynamic bins for low and mid roof tractors. The agencies are reducing the number of bins to ref lect the actual range of aerod yn amic technologies effective in low and mid roof tractor applications. Thus, the agencies are differentiating the aerodyn amic performance for low and mid roof applications into two bins

– conventional and aerod yn amic. For co mpliance determination, a manufacturer would use the aerody namic results determined through testing to establish the appropriate bin. The manufacturer would then input into GEM the Cd value specified for each bin as defined in Table II
- 6 and Table II
- 7 . For example, if a manufacturer tests a Class 8 sleeper cab high roof tractor and the test produces a CdA value of 6.0, then the manufacturer wou ld assign this tractor to the Class 8 Sleeper Cab High Roof Bin III. The manufacturer would then use the Cd value of 0.58 as the input to GEM. The Cd values in Table II
- 6 and Table II
- 6 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. **Table II**  **- 6**  **: 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 ≥ 7.9 ≥ 7.9 ≥ 7.5 Bin II 6.9
- 7.8 6.9
- 7.8 6.5
- 7.4 Bin III 5.9
- 6.8 5.9
- 6.8 5.5
- 6.4 Bin IV 5.4
- 5.8 5.4
- 5.8 5.0
- 5.4 Bin V ≤ 5.3 ≤ 5.3 ≤ 4.9 Aerod ynamic Input to GEM (Cd) Bin I 0.78 0.78 0.74 Bin II 0.70 0.70 0.66 Bin III 0.62 0.62 0.58 Bin IV 0.54 0.54 0.50 Bin V 0.50 0.50 0.46***** E.O. 12866 Review**

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82 of 771 **Table II**  **- 7**  **: 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 ≥ 6.5 ≥ 5.1 ≥ 6.5 ≥ 5.1 ≥ 6.5 Bin II ≤ 5.0 ≤ 6.4 ≤ 5.0 ≤ 6.4 ≤ 5.0 ≤ 6.4 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
. 64 The agencies believe the ISO test procedure is appropriate to propose for this program because the procedure is the same one used by NHTSA in its fuel efficiency tire labeling program 65 and is consistent with the direction being taken b y the tire industry both in the United States and Europe. The rolling resistance from this test 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 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 wou ld 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 truck and trailer to the steer axle, 42.5 percent to the drive axles, and 42.5 percent to the trailer axles. 66 The trailer tires’ rolling resistance is prescribed b y 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. 67

64 ISO, 2009, Passenger Car, Truck, and Bus Tyres

– Methods of Measuring Rolling Resistance

– Single Point Test and Correlation of Measurement Results: ISO 28580:2009(E), First Edition, 2009
- 07
- 01 65 NHTSA, 2009. “NHTSA Tir e 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). 66 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 over the tandem drive axles (17,000 pounds per axle) and 34,000 pounds over the tandem trailer axles (17,000 pounds per axle). 67 US Environmental Protectio n 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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83 of 77 1 (e) Weight Reduction Assessment In the NPRM, the agencies proposed requiring 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 stee l 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 baseline weights for specific components that can be replaced with light weight components. If 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. L ight
- weight wheels are commerciall y available as are single wide tires and thus data on the weight reductions attributable to these two approaches is readily

avail able. As discussed below, a number of commenters suggested the technologies identified in the proposal would be inadequate to achieve the 400 pound reduction assumed in the standard. We believe with the additional technologies identified below it will be p ossible to achieve 400 pounds reduction consistent with our final standard. 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. Volvo and ATA stated that not all fleets can use single wide tires and if this is the case the 400 pound weight reduction cannot be met. A number of additional commenters

– including American Chemistry

Council, The Auto Policy Center, Iron and Steel Institute, Aluminum Associat ion, Arvin 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 CO2 emissions standards. These grou

ps stated 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 opp ortunities to reduce mass by replacing mild steel

– which currentl y dominates the heav y - 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 h igh 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 customer selecting a 4 X 2 over a 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. In response to the above summarized comments, the agencies***** E.O. 12866 Review**

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84 of 771 evaluated whether additional materials and components could be used 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 rep ort 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 Association in their comments to this rulemakin g. 68 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. 69 Inaddition, The U.S. Department of Energy has several projects underway to improve the freight efficiency of Class 8 trucks which provide relevant data: 70 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 co mponents 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 component s. With regard to high strength steel, the Iron and Steel Institute found that the use of high strength steel can reduce the weight of light duty trucks b y 25 percent. 71 Approximately

10 percent of this reduction results from material substitution and 15 p ercent from vehicle re
- design. While this study evaluated light
- dut y trucks, the agencies believe that a similar reduction could be achieved in heavy
- dut y trucks since the reductions from material 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. 72 This study was also for light
- dut y vehicles. The agencies considered other materials such as plastic composites and ma gnesium substitutes but were not able to obtain weights for specific components made from these materials. We have therefore not included components made from these materials as possible substitutes in the primary program, but they

may be considered throu gh the innovative technology provisions. We may

consider including these materials in a subsequent regulation if data become available. B ased on this analy sis, the agencies developed an expanded list of weight reduction opportunities for the final rulem aking, as listed in Table II
- 8 . The list includes
68 TIAX, LLC. “Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles,” November 19, 2009. Pages 4
- 62 through 4
- 64. 69 Alcoa. “Improving Sustainability of Transport: Aluminum is Part of the Solution.” 2009 70 Schutte, Carol. U.S. Department of Energy, Vehicle Technologies Program. “Losing Weight

– an enabler for a Systems Level Technology Development, Integration, and Demonstration for Efficient Class 8 Trucks (SuperTruck) and Advanced Technology Pow ertrains for Light
- Duty Vehicles” 71 American Iron and Steel Institute. “A Cost Benefit Analysis Report to the North American Steel Industry on Improved Materials and Pow ertrain Architectures for 21st Century Trucks.” 72 Schutte, Carol. U.S. Department of Energy, Vehicle Technologies Program . “Losing Weight

– an enabler for a Systems Level Technology Development, 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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85 of 77 1 additional components, but not materials, from those proposed in the NPRM. For high strength steel, the weight red uction 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 component s 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 redesign of heav y - dut y components nor do we have a regulatory

mechanism to differentiate between material substation and improved design. We are f

inalizing for wheels that both aluminum and light weight aluminum are eligible to be used as light
- weight materials. Onl y 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 applications 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 per cent; 30 percent mass reduction of a hood sy stem with carbon fiber sheet molding compound; 50 percent mass reduction from composite tie rods, trailing arms, and axles; and superplastically formed aluminum body

panels. 73 While the agencies recognize these o pportunities, we do not believe the technologies have advanced far 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 a ctions, but are not including them as part of this primary program. 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 manufac turers be allowed to receive credit for trucks with fewer axles, the agencies recognize that truck 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 i ntended use of the vehicle and not based on a crediting for the mass difference in our compliance program. It is not our intention to create a tradeoff between the right truck to serve a need (e.g. one with more or fewer axles) and compliance with our fin al standards. Therefore, we are not including provisions to credit (or penalize) vehicle performance based on the subtraction (or addition) of specific vehicle components. Table II
- 8 provides weight reduction values for different components and materials
.

73 Schutte, Carol. U.S. Department of Ener gy, Vehicle Technologies Program. “Losing Weight

– an enabler for a Systems Level Technology Development, 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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86 of 771 **Table II**  **- 8**  **: 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 Technologies 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 Fan Shroud 10 2 Fuel Tank Support Structure 40 12 Steps 35 6 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***** E.O. 12866 Review**

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87 of 77 1 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 manu facturers 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. Manufacturer s cannot specify the weight of the light
- weight component themselves, only the material used in the substitute component. T he agencies assume the baseline wheel and tire configuration contains dual tires with steel wheels, along with steel frame and cab c omponents, 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 overal l weight of the vehicle run in GEM. The specified payload 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 discusse d below in the payload discussion. The other two thirds of the weight reduction will be subtracted from the overall vehicle weight prescribed in GEM. Inthe context of this heavy
- dut y vehicle program with only changes to tires and wheels, the agencies do not foresee any related impact on safety
. 74 (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 Fede ral Motor Carrier Safety Administration regulations require a certain amount of driver rest for a corresponding period of driving hours. 75 Extended idle occurs when Class 8 long haul drivers rest in the sleeper cab compartment during rest periods as driver s find it both convenient and less expensive to rest in the truck cab itself than to pull off the road and find accommodations. During this rest period a driver will idle the truck 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 truck will consume approximately

0.8 gallons of fuel and emit over 8,000 grams of CO 2 per hour. An average truck 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 allow 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 manufacture r wishes to receive credit for using IRT to meet the standard, then an automatic main engine shutoff must be programmed and

74 For more in formation on the estimated safety effects of this rule, see Chapter 9 of the RIA. 75 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/***** E.O. 12866 Review**

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88 of 771 enabled, such that engine shutdown occurs after 5 minutes of idling, to help ensure the reductions are realized in
- use. A discussio n 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 i dle shutdown, but rather allowing their use as one part of a suite of technologies feasible for reducing 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 was 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 m iles per y ear, and a diesel auxiliary power unit operating in lieu of main engine during those same idling hours. The agencies received comments regarding the assumptions used to derive the idle reduction value. The agencies are finalizing the calculatio n as proposed. Additional details regarding the comments and calculations 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 detail s on the emission and fuel consumption reduction values are included in R IASection 2.5.4.2. (g ) Vehicle Speed Limiters The NPRM proposed to allow combination tractors that use vehicle speed limiters (VSL) to include the maximum governed speed value as an input to the GEM model for purposes of determining compliance with the vehicl e standards. See 75 FR at 74223. 76 Governing the top speed of a vehicle can reduce fuel consumption and GHG emissions, because fuel consumption and CO 2 emissions increase proportionally to the cube of vehicle speed. 77 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 model 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 model, a manufacturer must preset the limiter in such a way that the setting will not be “capable of being easil y overridden by the fleet or the owner.” If the top speed could be easily overridden, the fuel cons umption/CO 2 benefits of the VSL might not be realized, and the agencies did not want to allow the technology to be used for compliance if the technology could be disabled easily

and the real world benefits not achieved. Many commenters (Cummins, Daimler, EMA/TMA, ATA, AAPC, NADA) supported the use of VSLs as an input to the GEM model, but requested clarification of
76 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 the agencies considered the appropriateness of basing standards on performance of the technology. 77 See 2010 NAS Report, Note 21 , Page 28. Road Load Force Equation defines the aerodynamic portion of the road load as 1⁄2 * Coefficient of Drag * Frontal Area * air density * vehicle speed squared.***** E.O. 12866 Review**

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89 of 77 1 what the specific requirements would be to ensure the VSLsetting would not be capable of being easil y overridden. Cummins and Daimler requested that the final rules explicitly allow vehicle manufacturers to access and adjust the VSLcontrol feature for setting the maximum governed speed, arguing that the diverse needs of the commercial vehicle industry warrant flexibility

in electronic control features, and that otherwise supply chain issues 78 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 mi tigate potential 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” featur e 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 to p feature, it could 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 VSLcontrol featur e, in order to preserve the value of vehicles for second owners 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 these final rules, to retain most of the elements in the proposal. Manufacturers will be allowed to implement a fixed maximum gov erned vehicle speed through a VSL feature and to use the maximum governed vehicle speed as an input to the GEM for certification. The agencies have decided to adopt commenters’ suggestions to allow adjustable lower limits that can be set and governed b y VSLs 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 becaus e 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

78 Commenters stated that OEMs need access for setting appropriate trims for managing the VSL, otherwise significant supply chain issues could result such as part s shortages caused by the need for unique speed governed PCMs.***** E.O. 12866 Review**

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90 of 771 a desire for greater fuel consumpti on 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 GEM to a manufacturer for allowing a lower governed speed in
- use than the certified maximum limit for this first phase of the HD National Program because we can only be certain that the VSLwill 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 purch ase 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 allo w the soft top maximum level to be set to any level higher than the maximum speed governed by the VSL . This approach will provide drivers with the ability

to better navigate through traffic. However, the agencies are requiring that manufacturers providin g a soft top feature must design the s ystem so it 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 “soft top” speed limiter value of 65 mph, the algorithm shall not cause the vehicle speed to decrement causing the vehicle to decel erate while the driver is operating the vehicle at a speed greater that 62 mph (between 62 and 65 mph). The agencies are concerned 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 p er day the control strategy

could allow the vehicle to operate at the “soft top” speed limit at the time of certification. This information will be used to derive a factor to discount the VSLinput used in GEM modeling to determine the fuel consumption an d GHG emissions performance of the vehicle. We also agree with comments that VSL s should be adjustable so as not to potentially limit a vehicle’s resale value. However, manufacturers choosing the option to override the VSLafter a specified number of mil es would be required to discount the benefit of the VSLrelative to the tractor’s full lifetime miles. The VSLdiscount benefits for using soft
- top and expiration features must be calculated using Equation II
- 1 . Additional details regarding the derivation of the discounted equation are included in 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” VSLon the vehicle emissions label.

**Equation II**  **- 1**  **: Discounted Vehicle Speed Limiter Equation** VSLinput for GEM = Expiration Factor * [Soft Top Factor* Soft Top VSL + (1
- Soft Top Factor) * VSL ] + (1
- Expiration Factor)*65 mph***** E.O. 12866 Review**

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91 of 77 1 Inresponse 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. Manufacturers must ensure that the governed speed limit programmed into the VSLmust also be verifiable through on
- board diagnostic scanning tools, and must 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 should 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 different diameter tires, changing the axle (final drive) ratio and transmission gearing, such that a vehicle could travel at speeds higher than the speed lim ited by its VSL . Vehicles subject to FMCSA requirements must be in compliance with 49 CFR § 393.82. The requirements apply to speedometers and states as follows: Each bus, truck, and truck
- tractor must be equipped with a speedometer indicating vehicle sp eed in miles per hour and/or kilometers per hour. The speedometer must be accurate to within plus or 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 provi de a fleet/owner with the means to do so unless the adjustments would affect the VSLsetting or operation. DTNA and ATA additionally requested that the agencies ensure that any VSL provisions adopted under the GHG emissions and fuel efficiency rules ali gn with existing NHTSA standards. The 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 agencie s have taken steps to avoid potential conflicts between the rulemaking being finalized today for fuel consumption and GHG emissions and the anticipated safet y rulemaking, different conclusions may

be reached in a safety
- based rulemaking on VSLs, particular ly in the approach to specifying soft top parameters and VSLexpiration. (h ) Defined Vehicle Configurations 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 truck 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 a re 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.***** E.O. 12866 Review**

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92 of 771 (i ) Vehicle Drive Cycles The simulation model (GEM) 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 time). As noted by

the 2010 NAS Rep ort, 79 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 trucks to use a constant speed highway drive cycle will drive significant aerod yn 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 capa bility . The unique nature of the kinds of CO 2 emissions control and fuel consumption technology means that the same technology can be of benefit during some operation but cause a reduced benefit under other operation. 80 To maximize the GHG emissions and fu el 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 fu el consumption compliance testing should reasonabl y represent the primary actual use, notwithstanding that every truck 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 81 , 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 during the NPRM. 82 The key advantage of the California ARB 5 mode cycle is that it provides the flex ibility to use several different modes and weight the modes to fit specific truck application usage patterns. For proposal, EPA anal yz ed the five cycles and found that some modifications to the modes were to allow sufficient flexibility in weightings. Th e 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 c ycl es at 65 mph and 55 mph respectivel y. The three cycles that were

79 See 2010 NAS Report, Note 21 , Chapters 4 and 8. 80 This situation does not typic ally occur for heavy
- duty

emission control technology designed to control criteria pollutants such as PM and NO X . 81 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 82 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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93 of 77 1 proposed 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 speed limits in each state to determine the national average truck speed limit. State inter state speed limits for trucks vary between 55 and 75 mph, depending on the state. 83 Based on this information, the national median truck speed limit is 65 mph. The agencies also anal yz ed the national average truck speed limit weighted by VMT for each stat e based on VMT data b y state from the Federal Highway Administration as described in RIA section 3.4.2. Based on this information, the national average VMT
- weighted truck speed limit is 63 mph. The agencies continue to believe that the appropriate high s peed cruise speed should be set at the national average truck speed limit to appropriately balance the evaluation of technologies such as aerody 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 they did not account for external factors such as grades, wind, traffic conditio n, etc. They also believe that the acceleration rates are too low. The agencies recognize that the proposed drive cycles do not incorporate the external factors described b y Allison. Parallel to the approach used to evaluate light
- dut y vehicles, the dri ve 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
- avera ged condition and use a modified Cd value in GEM. 84 Similarly , the agencies are adopting provisions for the innovative technology demonstration that allows for the use of on
- road testing which includes grades for technologies whose benefits are reflected w ith grade. Lastly , the agencies’ final drive cycles for highway

operation contain a constant speed, as proposed. The acceleration and deceleration rates are only used to bring the vehicle to the cruising speed and the CO 2 emissions and fuel consumption f rom these portions of the drive cycle are not included in the composite emissions and fuel consumption results. The agencies did not include the speed dithering, which is representative of actual driving and traffic conditions, in the proposed constant sp eed portion of the cycles because the dithering does not provide any additional distinction between technologies but only added complexity

to the cycle. The agencies believe this approach is still appropriate for the final action. Allison referred the age ncies 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 o nly 14 percent of miles traveling at

83 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 84 See Section IV.B.3.b***** E.O. 12866 Review**

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94 of 771 speeds greater than 60 mph. NHTSA and EPA recognize that there is a variation in the 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 treated 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 op eration. For proposal, EPA and NHTSA relied on the EPA MOVES anal ys is of Federal Highway Administration data to develop the mode weightings to characterize ty pical operations of heav y - dut y trucks, per Table II
- 9 below. 85 A detailed discussion of drive cycles is included in RIA Chapter 3. 86 The agencies are adopting the proposed drive cycle weightings for combination tractors. **Table II**  **- 9**  **: Drive Cycle Mode Weightings** Transient 55 mph Cruise 65 mph Cruise Day Cabs 19% 17% 64% Sleeper Cabs 5% 9% 86% (ii) 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 truck is important because it in part determines the impact of technologies, 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 which require that trucks trav el without full loads, the density of payload, and the availability 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 Survey

and found that approximately

9 percent of combination tractor miles travelled empt y, 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

85 The Environmental Protection Agency. Draf t MOVES2009 Highway Vehicle Population and Activity Data. EPA
- 420
- P
- 09
- 001, August 2009 http://www.epa.gov/otaq/models/moves/techdocs/420p09001.pdf 86 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 w as obtained by FTP and HFET testing in any case. Id. Neither of these constraints exists for Cl ass 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. 3 2902(k)(2) authorizing NHTSA, among other things, to adopt and implement appropriate “test methods, measurement metrics, ... and compliance protocols”.***** E.O. 12866 Review**

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95 of 77 1 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). 87 As described above, the amount of payload that a tractor can carry depends on the category (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 Federa l Highway Administration Truck Payload Equivalent Factors using Vehicle Inventory and Use 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 truck ranged from 36,247 to 40,089 pounds, depending on the average distance travelled per day
. 88 The same results found that Class 7 trucks carried between 18,674 and 34,210 pounds of payload also depending on average distance travelled per day . Based on this data, th e agencies are 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 predefin ed 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 from actual traile r weight measurements conducted b y EPA and weight data provided to I CF International b y the trailer manufacturers. 89 Details of the individual weight inputs by regulatory

category , as shown in Table II
- 9, are included in RIA Chapter 3.

**Table II**  **- 10**  **: Combination Tractor Weights** MODEL TYPE CLASS 8 CLASS 8 CLASS 8 CLASS 8 CLASS 8 CLASS 8 CLASS 7 CLASS 7 CLASS 7 Regulatory Subcategory Sleeper

Cab High Roof Sleeper

Cab Mid Roof Sleeper

Cab Low Roof Day Cab

High Roof Day Cab

Mid Roof Day Cab

Low Roof Day Cab

High Roof Day Cab

Mid Roof Day Cab

Low Roof Tractor Tare We ight (lbs) 19,000 18,750 18,500 17,500 17,100 17,000 11,500 11,100 11,000 Trailer W eight (lbs) 13,500 10,000 10,500 13,500 10,000 10,500 13,500 10,000 10,500 Payload (lbs) 38,000 38,000 38,000 38,000 38,000 38,000 25,000 25,000 25,000 Total W eight (lbs) 70,500 66,750 67,000 69,000 65,100 65,500 50,000 46,100 46,500

87 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, where the survey data allowed developing the distribution of loads instead of merely the average loads. 88 The U.S. Federal Highway A dministration. 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 89 ICF International. Investigation of Costs for S trategies 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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96 of 771 The agencies received comments from UMTRIand ATA regarding the values assumed for the combination tractor weights. UMTRIrecommended 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 10,00 0 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 pro posed tractor
- trailer weights because the changes suggested by the commenters will not change the evaluation of the technologies included in this phase of the HD program. NHTSA and EPA will evaluate additional sources of weight information in future phases of the program. (iii) Standardized Trailers As proposed, NHTSA and EPA are adopting provisions so that the tractor performance in the GEM will be judged b y assuming it is pulling a standardized trailer. The agencies believe that an assessment of the tractor ae rod yn amics should be conducted using a tractor
- trailer combination where the likely tractor trailer combination is known. We believe this approach best reflects the impact of aerodyn amic technologies in actual use, where tractors are designed and used with a trailer. Therefore, the aerody namic test procedures and GEM model approach for high roof tractors that are typically used with box trailers is being finalized based on the use of a standardized box trailer. In a change from our proposal we are finali zing provisions to allow for low and mid roof trailers to be tested without a defined trailer. GEM will continue to use an predefined typical trailer in assessing overall performance. We are finalizing this change in response to comments from truck manuf

acturers which have convinced us that the range of trailer designs and loads (e.g. flat trailers carrying sheets of steel versus flat trailers carrying industrial equipment) can vary

to such a large degree that specifying one particular trailer for aerod yn amic assessment would not be appropriate and could potentially lead to tractor designs that while beneficial when used with the specified test trailer were actuall y harmful in
- use when used with the wide range of potential trailers and load configurations. In addition to assessing the tractor with a trailer, it is appropriate to adopt a standardized trailer used for testing, and to vary the standardized trailer b y the regulatory category . This is similar to the standardization of payload discussed above, as a way to reasonabl y reflect in
- use operating conditions. High roof tractors are optimally designed to pull box trailers. The roof fairing on a tractor is the feature designed to minimize the height differential between the tractor and t ypical trailer to reduce the air flow disruption. Low roof tractors are designed to carry flat bed or low
- boy

trailers. Mid roof tractors are designed to carry

tanker and bulk carrier trailers. The agencies conducted a survey of tractor - trailer pairing in
- use to eval uate the representativeness of this premise. The survey of over 3,000 tractor
- trailer combinations found that in 95 percent of the combination tractors the tractor’s roof height was paired appropriatel y for the type of***** E.O. 12866 Review**

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97 of 77 1 trailer that it was pulling. 90 The a gencies also have evaluated the impact of pairing a low roof tractor with a box trailer in coastdown testing and found that the aerody namic force increases by

20 percent over a high roof tractor pulling the same box trailer. 91 Therefore, drivers have a lar ge incentive to use the appropriate matching to reduce their fuel costs. However, the agencies recognize that in operation tractors sometimes pull trailers other than the ty

pe that it was designed to carry . In this final action, the agencies are matching trailers to roof height for the GEM model assessment, as proposed. As discussed above the aerod yn amic test procedure for low and mid
- roof tractors will be conducted without the use of a standardized trailer. The other aspects of the test procedure such as empty trailer weight, location of payload, and tractor
- trailer gap are being finalized for each regulatory

subcategory

to provide consistent test procedures. These provisions are identical to those proposed. (iv) Standardized Drivetrain The agencies’ asses sment of the current vehicle configuration process at the truck dealer’s level is that the truck companies provide tools to specify the proper drivetrain matched to the bu yer’s specific circumstances. These dealer tools allow a significant amount of custo mization 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 (including vehicle speed and r oad grade), and payload. Each combination of engine, drive cycle, and payload has a single optimal transmission and final drive ratio. As proposed, the agencies are specifying the engine’s fuel consumption map, drive cycle, and payload; therefore, it mak es sense to also specify the drivetrain that matches. (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 engi ne 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 would require fewer vehicle reductions than those technicall y feasible reduction s 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 2014 through 2016 model y ears and represents an average engine which meets EPA’ s final 2014 model y ear engine CO 2 emissions standards. The same fuel map would be used for NHTSA’s voluntary standards in the 2014 and 2015 model y ears, as well as its mandatory

program in the 2016 model y ear. A second fuel consumption map will be used beginning in 2017 model y ear and represents an engine which meets the 2017 model ye ar 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 use d in GEM for the final rulemaking to address comments received. Details

90 U.S. EPA. Truck and Trailer Roof Height Match Analysis Memorandum from Amy Kopin to the Docket, August 9, 201 0. Docket Identification Number EPA
- HQ
- OAR
- 2010
- 0162
- 0045. 91 See the RIA Chapter 2 for additional detail.***** E.O. 12866 Review**

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98 of 771 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) and there is stability in the tractor vehicle (not including engine) standards for the full rulemaking period. 92 These inputs are appropriate given the separate regulatory requirement that Class 7 and 8 combination tractor manufacturers use onl y certified engines. (i ) Heavy
-Duty Engine Tes t 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 e ngines under the CAA would be expressed 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. 93 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 comments related to the metrics for HD engines; therefore, we are adopting the metrics as proposed. EPA’s criteria pollutant st andards for engines currently require that manufacturers demonstrate compliance over the transient FTP cycle; over the steady
- state SET procedure; and during not
- to - exceed testing. EPA created this multi
- lay ered approach to criteria emissions control in r esponse to engine designs 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 manufa cturers calibrate engine s ys tems for compliance under all operating conditions. We are not concerned if off
- cycle manufacturers further calibrate these designs 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. With r egard to GHG and fuel consumption control, the agencies believe it is more appropriate to set standards based on a single test procedure, either the Heavy
- dut y FTP or SET, depending on the primary expected use of the engine. It is critical to set standar ds based on the most representative test cycles in order for performance in
- use to obtain the intended (and feasible) air qualit y benefits. Tractors spend the majority

of their operation at steady state conditions, and will obtain in
- use benefit of techno logies 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 driving conditions typified b y
92 As noted earlier, use of the 2017 model year fuel consumption map as a GEM input results in numerically more stringent final vehicle standards fo r MY 2017. 93 See NAS Report, Note 21 , at page 39.***** E.O. 12866 Review**

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99 of 77 1 combination tracto r trailer operation and is well reflected in testing over the SET test procedure. However, when used in driving t ypified by transient operation as we expect for vocational vehicles and as is represented b y the Heav y - duty FTP, turbocompounding shows very

l ittle 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 e missions 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 Cy cle 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 regeneration emission rates and frequency factors t o 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 this ap proach and stated there alread y exist sufficient incentives for manufacturers to limit regeneration frequency
. Conversely , Volvo opposed the omission of IRAF requirements for CO 2 emissions because emissions from regeneration can be a significant portion o f the expected improvement and a significant variable between manufacturers
. 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 met b y engine designs that lead to frequent and extend regeneration events. Hence, we believe engine manufacturers are alread y reducing regeneration emissions to the greatest degree possible. In addition 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 project the rege neration frequency and duration of future engine designs in the timeframe of this program. Such a projection would be inherently difficult to make and quite likely would underestimate the progress engine manufacturers will make in reducing infrequent rege nerations. 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***** E.O. 12866 Review**

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100 of 771 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 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 together. A “chassis d yn amometer test” for heav y - duty vehicles wou ld 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 i mplementing such a program by the 2014 model y ear. The agencies recognize that such testing requires expensive, specialized equipment that is not yet widespread within the industry . The agencies have onl y identified approximately 11 heavy
- dut y chassis si tes in the United States today

and rapid installation of new facilities to comply with model y ear 2014 is not possible. 94 In addition, and of equal if not greater importance, because of the enormous numbers of truck configurations that have an impact on f uel consumption, we do not believe that it would be reasonable to require testing of man y combinations of tractor model configurations on a chassis d ynamometer. 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, eight engines, 17 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 for man y different combinations that would need to be tested if a standard was adopted based on a chassis test procedure. The agencies received comments from ACEEE and UCS supporting a full vehicle testing approach, but recognizing 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 this rulemaking, although we believe such an approach is likely to 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 Flexibility and Credit Provisions for Tractors and Engine**  **Used in These Tractors** EPA and NHTSA are finalizing four flexibility provisions specifically

for heavy
duty tractor and engine m anufacturers, as discussed in Section IV below. These are an averaging, banking and trading program for emissions and fuel consumption credits, as

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

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101 of 77 1 well as provisions for early credits, advanced technology credits, and credits for innovative vehicle or eng ine 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 s et which generated the credit (for example, credits generated by HD engines used in tractors can only be used by

HD engines). EPA is also adopting a N 2 O emission credit program, as described in Section IV below. **(5) Deferral of Standards for Tractor and Engin**  **e Manufacturing Companies That Are Small Businesses**  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. 95 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 tractor and engine manufacturers. The agencies have identified two entities that fit the SBA size criterion of a small business. 96 The agencies estimate that these small entities comprise less than 0.5 percent of the total heav y - dut y combination tractors in the Un ited States based on Polk Registration Data from 2003 through 2007, 97 and therefore that the exemption will have a negligible impact on the GHG emissions and fuel consumption improvements from the final standards. 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 Pi ck** **up Truck s and Vans**  The primary

elements of the EPA and NHTSA programs for complete HD pickups and vans are presented in this section. These provisions also cover incomplete HD pickups and vans that are sold b y vehicle manufacturers as cab
- chassis (chass is
- cab, box
- delete, bed
- delete, cut
- away van) 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 procedure 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. Se ction II.E discusses additional standards and provisions for N 2 O and CH 4 emissions, for impacts from vehicle air conditioning, and for ethanol
- fueled and electric vehicles.
95 See § 1036.150 and § 1037.150 96 The agencies have identified Ottawa Truck, Inc. and Kalmar Industries USA as two potential small tractor manufacturers. 97 M.J. Bra dley. Heavy
- duty Vehicle Market Analysis. May 2009.***** E.O. 12866 Review**

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102 of 771 **(1) What Are the Levels and Timing of HD Pickup and Van Standards?**  (a ) Vehicle

-Based Standa rds 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, read y 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 distinguishes this category from other, larger heavy
- dut y vehicles that t ypically have o nl y the engines covered b y C AA engine emission standards, expressed in grams per brake horsepower
- hour. 98 As a result, Class 2b and 3 complete vehicles share much more in common with 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 companies with large light
- duty vehicle and light
- duty

truck sales in the United Stat es, (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 truck 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 consumption reductions from vehicle design improvements beyond engine changes (such as through optimizing aerod ynamics, 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 consumption standards, as is being done for the other heav y - dut y categories. This approach for complete vehicles is consistent with Recommendation 8
- 1 of the NAS Repo rt, 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 affect 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 features. 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 diversity in the past by

making weight
- based distinctions where necessary , fo r 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

98 As discussed briefly in Section I and in more detail in Section V, this regulatory category also covers som e incomplete Class 2b/3 vehicles.***** E.O. 12866 Review**

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103 of 77 1 engines. Where appropriate, distinctions b ased on fuel type 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 techn ology

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
- based attribute to assign targets also avoids interfering with the ability of th e 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 reductions 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 light
- duty vehicles, we believe that the past practice in EPA’s heav y - duty pro gram 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 as payload and towing capabilit y are key among the things that characterize di fferences 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 i n 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 emissions and fuel consumption, because testing under existing EPA procedures fo r criteria pollutants is conducted with the vehicle loaded to half of its 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. 99 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 consid er 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 influenc ing 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

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

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104 of 771 consumption standards for this group of vehicles. GVWR is a function of not only payload 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 combined weight, which adds the maximum combined towing and payload weight to the curb weight. Similar concerns about using weight
- based attributes that includ e 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” (74 FR 49685, September 28, 2009). The agencies believe that using payload and tow ing 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 standards 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 a djustment accounts for the fact that 4wd, critical to enabling the many off
- road heav y - duty

work applications, adds roughly 500 lb to the vehicle weight. There was consensus in the public comments supporting this attribute, and the agencies are adopting i t 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 duty pickups and vans. Widespread support for the proposed work factor
- based approach to standards and fleet average approach to compliance was expressed in the comment s 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 i s defined according to SAE Recommended Practice J2807 APR2008, GVWR is defined consistent with EPA’s criteria pollutants program, and curb weight is defined 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***** E.O. 12866 Review**

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105 of 77 1 2b versus Class 3 need not be made in setting standards levels for these vehicles. 100 Th is 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 parallel 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 truck designers wishing to reduce GHG emissions and fuel consumption by reducing the weight of their trucks. However, the sizeable dive rsity 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/ton
- 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, commenters agre ed 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 segment h ave 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 effect o n the relative distribution of vehicles with differing capabilities in the fleet, which means that buy ers should still be able to purchase the vehicle that meets their needs. (c) Standards The agencies are finalizing standards based on a technology anal ys is p erformed 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 correspondin g 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

100 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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106 of 771 attribute
- based fuel consumption target standards, also shown in Figure II
- 2 and II
- 3, applicable in model year 2018
. These figures also shows phase
- in standards for model ye ars before 2018, and their derivation is explained below, a long with alternative implementation schedules to ensure equivalency 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 standards that apply to the combined diesel and gasoline fleet of HD pickups and vans produced by a manufacturer in each model year.

**Figure II**  **- 2**  **: EPA CO 2**  **Target Standards and NHTSA Fuel Consumption Target Standards for Diesel HD Pickups and Vans**  **101**

101 The NHTS A 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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107 of 77 1 **Figure II**  **- 3**  **: EPA CO 2**  **Target Standards and NHTSA Fuel Consumption Target Standards for Gasoline HD Pickups and Vans**  **102** 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 Consumption 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 equipped with 4wd, otherwise equals 0 lb Towing Capacit y = GCWR (lb)

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

102 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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108 of 771 **Table II**  **- 11**  **: Coefficients for HD Pickup and Van Target Standards 103**  **Diesel Vehicles** Model Year a b c d 2014 0.0478 368 0.000470 3.61 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 0.000409 3.14 **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**  **- 12**  **: Coefficients 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 3.61 2015 a 0.0474 366 0.000466 3.60 2016
- 2018 0.0440 339 0.000432 3.33 2019 and later 0.0416 320 0.000409 3.14 **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 timeframe. See Section III.B for a detailed analy sis of thes e

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

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109 of 77 1 vehicle, engine and transmission technologies, including their feasibility , 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 2018 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 will be achieved b y the EPA program from a direct air conditioning leak age 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 efficie ncy 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 our program maintains product choices available to vehicle bu yers. 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 thereb y could shift market share away from diesels. EMA argued for fuel
- neutralit y based on historical precedent and the fact that GHGs emitted by one ty pe of engine are no different than those emitted by another t ype of engine. We believe that both engine ty pes have roughl y equivalent redesign burdens as evi denced b y the feasibility

and cost analy sis 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 lev el than for gasoline vehicles. Other industry

commenters, including those with sizeable diesel sales, expressed general support for the standards. Environmental groups and others commented that the proposed standards were not stringent enough, citing the heavy
- dut y vehicle NAS study finding that technologies such as h ybridization are feasible. However, in the ambitious timeframe 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 cy cles through 2018, our assessment shows that the standards we are establishing are appropriate. More advanced technologies considered in the NAS report would be appropriate for consideration in future rul emaking activity . Additional conventional technologies identified by

commenters as promising in light
- duty applications and potentially useful for HD applications are discussed in RIA Chapter 2. The NHTSA fuel consumption target curves and the EPA GHG tar get 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 m easured 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 provis ion for manufacturers to use CO 2 credits to help demonstrate***** E.O. 12866 Review**

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110 of 771 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 no t 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 s ame conversion factors that are used 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 and 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 prop osed provision that the GHG standards be phased in graduall y over the 2014
- 2018 model y ears, with full implementation effective in the 2018 model y ear. 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 in model ye ars 2014
- 2015
- 2016
- 2017
- 2018, respectively . These percentages reflect stringency

i ncreases from a baseline performance level for model ye ar 2010, determined b y the agencies based on EPA and manufacturer data. Because these vehicles are not currentl y regulated for GHG emissions, 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 y ears. These y ear - by
- ye ar functions have been derived in the same way as the 2018 function, b y t aking a percent reduction in CO 2 from a common unregulated baseline. F or 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
- 11 , reflec t 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 change over these model years, described below. Under this option the phase
- in will be 15
- 20
- 67
- 67
- 67
- 100 percent in model y ears 2014
- 2015
- 2016
- 2017
- 2018
- 2019, respectively
. Table II
- 12 , 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 explained below, the stringency of this alternative was established by NHTSA such that a manufacturer with a stable production volume and mix over the model year 2016
- 2018 period could use Averaging, Banking and Trading to compl y with either alternative and have a similar credit balance at the end of model y ear 2018. Under the above
- described alternatives, each manufacturer will need to demonstrate compliance with the applicable fl eet average standard using that year’s***** E.O. 12866 Review**

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111 of 77 1 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 requested comment on, involving pha sing 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 y e ars 2016 and later. Manufacturers will select an alternative at the same time they submit the model y ear 2016 Pre
- Certification Compliance Report; and, once selected, the alternative will apply for model y ears 2016 and later, and could not be reversed. T o meet the EISA statutory requirement for three years of regulatory stability, the 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 and later. The target line function coefficients are provided in Table II
- 12
. The second alternative will be equivalent to the EPA target line functions i n each model y ear starting in 2016 and continuing afterwards. Stringency of fuel consumption standards will increase gradually for the 2016 and later model y ears. Relative to a model ye ar 2010 unregulated baseline, for 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 y ears 2016
- 2017
- 2018
- 2019 is 67
- 67
- 67
- 100 percent , respectively , of the 2018 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 y ear 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 in model y ears 2014 or 2015. If a manufacturer elects to opt into the program, the program would become mandatory and the manufacturer would not be allowed to reverse this decision. To opt into the program, a manu facturer must declare its intent to opt in to the program at the same time it submits the Pre
- Certification Compliance Report. See regulatory text for 49 CFR 535.8 for information related to the Pre
- Certification Compliance Report. If a manufacturer elec ts to opt into the program in 2014, the program would be mandatory for 2014 and 2015. A manufacturer would begin tracking credits and debits beginning in the model y ear in which they

opt into the program. The handling of credits and debits would be the s ame as for the mandatory

program. 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 y ear. Relative to a model y ear 2010 unregulated baseline, for both gas oline and diesel vehicles,***** E.O. 12866 Review**

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112 of 771 stringency

would be 15
- 20 percent of the model y ear 2018 target line function (under the NHTSA second alternative) in model y ears 2014
- 2015, respectivel y. The corresponding absolute standards targets levels are provided in Figure II
- 2 and II
- 3, and the accompan yi ng equations. **(2) What Are the HD Pickup and Van Test Cycles and Procedures?**  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 re quired 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
- dut y test, other test parameters for running the HFET, such as test vehicle loaded weight, are identica l 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 testing on the Li ght
- duty FTP and the HFET will be weighted b y 55 percent and 45 percent, respectively, an d 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 consumption 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 believe 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 patterns, 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. T his is substantially more challenging than loading to the light
- duty

vehicle test condition of curb weight plus 300 pounds, but we believe that this loading 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 considerable 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 any comme nters provide such information. We are therefore using ALVW for test vehicle loading in GHG and fuel consumption testing.***** E.O. 12866 Review**

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113 of 77 1 Additional provisions for our final testing and compliance program are provided in Section V.B. **(3) How Are the HD Pickup and Van Standar**  **ds Structured?** 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 stan dards for HD pickups and vans are largely based 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 y ear, 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 y ear. Vehicle models with larger payload/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 m anufacturer is a production
- weighted average of the 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 ye ar, 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 tes t 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 y ear is over. EPA will issue a certificate for the vehicle s 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 ce rtificate to the extent needed to bring the manufacturer’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. The emissions and fuel consumption levels of the test vehicles will be used to calculate the production
- weighted fleet averages for the manufacturer, after application of the appropriate deterioration factor to each result to obtain a full use ful life value. See generally 75 FR 25470
- 25472. 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***** E.O. 12866 Review**

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114 of 771 deterioration factor be applied at the time of certification: an additive assigned deterioration 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 C O 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 2 02(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 r equired under EISA, and because it is not currently 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 complianc e with the fleet average standard, which will be based on the production
- weighted average of the new vehicles (as explained below). EPA is finalizing the proposed provision that the in
- use standards for HD pickups and vans be established by adding an adjus tment factor to the full useful life emissions 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 usef ul life for criteria pollutants: 11 y ears 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 direc tly to calculate the fleet average emissions 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 af

fect measured in
- use levels. For this reason, 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 re sults 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, plu s 10 percent. This is the same as the approach 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 us e a variety of mechanisms to conduct assessments 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 apply to vehicles that have entered customer service. The same standards appl y to vehicles used in pre
- production and production line testing, except that deterioration factors are not applied.***** E.O. 12866 Review**

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115 of 77 1 **(4) What HD Pickup and Van Flexibility Provisions Are Being Established?**  This program contai ns 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, altern ative compliance paths, and corporate fleet 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 production 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 ave rage 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 m anufacturer whose fleet generates credits in 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 2012
- 2016 MY light
- duty vehicle National Program, 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 year and was subsequently carried over to the current model ye ar, with a limitation on the carry
- back of credits to three years, consistent with th e light
- duty program. We are finalizing the proposed provision that, after satisfying an y need to offset pre
- existing deficits, a manufacturer may bank remaining credits for use in future ye ars. We are also finalizing the proposed provision that manufact urers may certify their HD pickup and van fleet a ye ar early , 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 dis cussed 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 advanced technology

vehicles and with the agencies’ res pective 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 technolog ies that are shown by the manufacturer to provide GHG and fuel consumption reductions in real world driving, but not on the test cy cle. See Section IV.B.We believe that it is also appropriate to take steps to recognize the benefits of flexible
- fueled vehi cles (FFVs) and dedicated alternative
- fueled vehicles based on the approach taken by EPA in the light
- duty

vehicle rule for later models y ears (2016 and later). However, unlike in that rule, we do not believe it is appropriate to create a provision for ad ditional credits similar to the 2012
- 2015 light
- dut y program because the HD sector does not have the incentives mandated in EI SA for light
- dut y***** E.O. 12866 Review**

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116 of 771 FFVs, and so has not relied on the existence of such credits in devising compliance strategies for the early

mod el y ears 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, we did seek comment on how to properl y recognize the impact of the use of alternative fuels, and E85 in parti cular, in HD pickups and vans, including the proper accounting for alternative fuel use in FFVs in the real world. 104 See 75 FR at 74198. FFV performance will be determined in the same way as for light
- dut y vehicles, with a 50
- 50 weighting of alternative and conventional fuel test results through MY 2015, and a 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). See 75 FR at 25434. For dedicate d alternative fueled vehicles, NHTSA will require that vehicles be tested with the alternative fuel, and a petroleum equivalent fuel consumption level be calculated based on the Petroleum Equivalency Factor (PEF) that is determined by the Department of Ene rgy . 

### D. **Class 2b -**  **8 Vocational Vehicles** 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, 105 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 in size, shape and function. The agencies were unable to develop a specifi c vehicle definition based on the characteristics of these vehicles. Instead at proposal, we proposed to define that Class 2b
- 8 vocational vehicles as all heav y - duty vehicles which are not included in the Heavy
- 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 truck. We are finalizing that definition as proposed reflecting the same challenges we faced at proposal regarding defining th e 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 standards. The agencies note that we are adding vocational tractors to the vocational vehicle category

i n 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 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 vocational requirements. They stated that components such as transmissions, axles, frames, and tires differ from the similar pickup truck and vans in the Class 2b and 3 market. Given the consensus on this issue, the agencies are finalizing the proposed approach to classify

Class 4 pickup trucks in the vocational vehicle category
. As mentioned in Section I, vocation al vehicles undergo a complex build process. Often an incomplete chassis is built by a chassis manufacturer with an engine purchased

104 E85 is a blended fuel consisting of nominally 15 percent gasoline and 85 percent ethanol. 105 See above for discussion of applicability of NHTSA’s standards to non
- commercial vehicles.***** E.O. 12866 Review**

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117 of 77 1 from an engine manufacturer and a transmission purchased from another manufacturer. A body manufacturer purchases an inco mplete chassis 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 bui lder 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 baseline fuel 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 establis hing the baseline CO 2 and fuel consumption performance for the wide variet y 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 establi sh 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 comp lexity 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 ach ieve 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 agencies 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. 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, stating that separate engin e 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 testing beginning in 2017. A CEEE and Sierra Club stated that the proposed standards and test procedures should move the agencies closer to full vehicle testing. While the agencies understand that full vehicle standards would allow integrated truck/engine manufacturers additional technologies to comply with the regulation which are not available under the current program design

– such as electrified accessories and weight reduction
-- the agencies are finalizing separate standards for vocational vehicles that apply to chassis manu facturers and engine standards that appl y to engine***** E.O. 12866 Review**

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118 of 771 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 complex ity of the task associated with assessing the potential for fuel consumption and GHG emissions improvement for each t ype of vocational vehicle. Thus, the agencies are finalizing a set standards for the chassis manufacturers of vocational vehicles (instead of the bod y builders) and for the engine manufacturers. 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 to vocational vehicles. The agenci es considered the possibility of including other technologies in determining the proposed stringency of the vocational vehicle standards, such as aerod ynamic 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. For example, the aerodynamics of a recovery vehicle are impacted significantly

by the equipment such as the arm located on the exterior of the truck. The agencies found little opportunity to improve the aerodynamics of the equipment on the truck. The agencies also evaluated the aerodyn amic opportunities discussed in the NAS report. The panel found that there was minimal fuel consumption reduction opportunity

through aerod yn amic technologies for bucket trucks, transit buses, and refuse trucks 106 primarily due to the low vehicle speed in normal operation. The panel did report that there are opportunities to reduce the fuel consumption of straight trucks by approximately 1 percent for trucks which operate at the average speed typical of a pickup and delivery

truck (30 mph), although the opportunity is greater for trucks which operate at higher speeds. 107 Thus, the proposed vocational vehicle standards for fuel consumption and GHG emissions were based solely on the use of low rolling resistance tires. The agencies received comments from the Motor Equipment Manufacturers Association, Eaton, NRDC, NESCAUM, NACAA, ACEEE, I CCT, Navistar, Arvin Meritor, the Union of Concerned Scie ntists 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 require the incorporation of these technologies. The agencies assessed these technologies and have concluded that they may have the potential to reduce fuel consumption and GHG emissions, but the ag encies have not been able to estimate baseline fuel consumption and GHG emissions levels for each type of vocational vehicle and for each t ype of technology, given the wide variety of models and uses of vocational vehicles. For example, idle reduction tec hnologies such as APUs and cabin heaters can reduce workday idling associated with vocational trucks. However, characterizing idling activity for the vocational segment in order to quantify the benefits of idle reduction technology is complicated b y the v ariet y of dut y cycles found in the sector. Idling in school buses, fire trucks, pick
- up trucks, delivery trucks, and other ty

pes

106 See 2010 NAS Report, Note 21 , page 133. 107 See 2010 NAS Report, Note 21 , page 110.***** E.O. 12866 Review**

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119 of 77 1 of vocational vehicles varies significantly . Given the great variet y of dut y cycles and operating conditions of vocational ve hicles and the timing of these rules, it is not feasible at this time to establish an accurate baseline for the idle reduction technologies evaluated. Similarly , for advanced drivetrains and advanced transmissions determining a baseline configuration, or a set of baseline configurations, is extremely difficult given the variet y 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 configurat ions, because baseline emissions and fuel consumption are the benchmarks against which standards are developed. For some technologies, such as weight reduction and improved auxiliaries

– such as electricall y driven power steering pumps and the vehicle’s a ir conditioning sy stem -- the need to limit technologies to those under the control of the chassis manufacturer restricted the agencies’ options for incorporating the technologies into the final rules. For example, lightweight components that are under th e 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 timeframe proposed, rather than delayi ng 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. As the program progresses an d 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 tires. 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 timeframe 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 agencies’ anal ys e s, as discussed briefly below and in more detail later in this preamble and in the RIA Chapter 2, show that these final standards appear appropriate under each agency ’s respective statutory

authorities. Together these standards are estimated to achieve red uctions 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 from the HD engines. The final heav y - dut y engine standar ds 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 chassis manufacturers. As discussed further below, the agencies are setting CO 2 and fuel consumption standards for these chassis based on tire rolling resistance improvements and for the engines based on engine technologies. The fuel consumption and GHG emissions impact***** E.O. 12866 Review**

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120 of 771 of tire rolling resistance is impacted by the mass of the vehicle. However, the impact of mass on rolling resistance is relativel y small so the agencies proposed to aggregate several vehicle weight categories under a single 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) which is consistent with the nomenclature used in the diesel engine classifi cation. The agencies received comments supporting the division of vocational vehicles into three regulatory categories from DTNA. The agencies also received comments from Bosch, Clean Air Task Force, and National Solid Waste Management Association support ing a finer resolution of vocational vehicle subcategories. Their concerns include that the agencies’ truck configuration in GEM is not representative of a particular vocational 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 we feel this adequatel y balances simplicity while still obtaining reductions in this diverse segment. Finer distinctions in regulatory subcategories would not change the technologies or reductions expected from the vocational vehicle category . As the agencies move towards future heavy
- duty fuel consumption and GHG regulations for pos t - 2017 model y ears, 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. EPA received comments supporting the exclusion of recreational vehicle s, emergency

vehicles, school buses from the rulemaking. 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 EPA has decided to finalize standards for these individual vehicle categories as we proposed. NHTSA will continue to exempt recreational vehicles. We have taken this decision reflecting that any individual vocat ional truck segment is likely to be a small contributor to overall fuel consumption and GHG emissions on its own. Absent regulations for the vast majorit y of vehicles in this segment, our program will fall short of its goals. Further since the proposal, the agencies have met 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 consiste nt with our final vehicle standards and meeting the full range of other performance characteristics desired in the vehicle market will be broadl y available b y the 2014 model year. **(1) What Are the Vocational Vehicle and Engine CO**  **2 and Fuel Consumption**  **Standard s and Their Timing?**  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 asso ciated 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 underlying the standards for Class 7/8***** E.O. 12866 Review**

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121 of 77 1 tractors, including 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 to base th e 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, air handlin g improvements, combustion optimization, turbocompounding, and waste heat recovery , ultimately determining to based the final standards on the performance of all of the technologies except turbocompounding and waste heat recovery s ys tems. The agencies’ ev aluation indicates that these technologies, as described in Section III.C, are available today in the heavy
duty tractor and light
- duty

vehicle markets, but have very low application rates in the vocational 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
- effect ive and technologically feasible and appropriate within 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 agen cies defined tire rolling resistance as a frictional loss 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 ener gy in response to this deformation, thus using more fuel 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 durability , 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 attribute s, 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, they generally also make 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 contri butor to energy losses of vocational vehicles, after engines. 108 Given this finding, the agencies considered the
108 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.***** E.O. 12866 Review**

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122 of 771 availability

of LRR tires for vocational applications by examining the population of tires available, and concluded that there appeared to be fe w LRR tires for vocational applications. 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 haul tire market, given that line haul vehicles generally drive significantly

more miles and therefore have significantly higher operating costs for fuel than vocational vehicles, and much greater incentive to improve fuel co nsumption. 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 buy ers 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 rolling 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 t ire 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 2 percent redu ction in fuel consumption as modeled by the GEM. (i ) Summary of Comments The agencies received many comments on the subject of tire rolling resistance. Comments included suggestions for alternative test procedures; whether LRR tires should be applied to certa in ty

pes 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 (these particular comments are discussed in Section II.D of the preamble); 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 man y comments from stakeholders, such as D aimler 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. Comments related to the capability of emergency

vehicles are discussed and responded to in greater detail above in Section II.D. Regarding whether LRR tires are available 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
- based requirement for***** E.O. 12866 Review**

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123 of 77 1 Class 2b
- 8 vocational chassis appeared to require tires with rolling resistance values of approximately

8.0
- 8.1 kg/metric ton or better, and that limited data available for smaller diameter tires, such as LT tires used on man y light heav y duty trucks and vans, suggested that there exist few if an y choices for tires that would comply . Given this concern about the availability

of compliant tires, particularly in the case of tires smaller than 22.5”, during the proposed regulatory time frame, AAPC and For d requested revisions to the requirement, or the modeling method, to establish different standards for vehicles that use different tire classes, with separate requirements for L T tires, 19.5” tires, and 22.5” tires. AAPC argued that standards should be se t based on data collected on high volume in
- use tires, and that they

should be set at a level that ensures the availabilit y of multiple compliant tires. Oshkosh went further and stated that the agencies did not even need to use GEM for determining compliance with the vocational standards, since all the variables other than tire RR C are predefined inputs, and therefore the agencies could simply set a standard for tires on vocational vehicles that required them to have rolling resistance values lower than 8. 0 kg/metric ton. (ii) Summary of Research Done Since the Notice of Proposed Rulemaking Since the NPRM, the agencies have conducted substantial additional research on tire rolling resistance for medium
- and heav y - duty applications. This research involved direct discussions with tire suppliers, 109 assessment of the comments received, additional review of tire products available, and a more thorough review of tire use in the field. 110 In addition, EPA has conducted tire rolling resistance testing to help inform the fi nal rulemaking. 111 The agencies discussed many aspects of low rolling resistance tire technologies and their application to medium
- and heav y - duty vehicles with tire suppliers since publication of the NPRM. Several tire suppliers indicated to the agencies that low rolling resistance tires are currently 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 supplier conve rsations also made the agencies aware that availability of low rolling resistance tires varies b y 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 efficiency benefits for the application of low rolling resistance technologies; specifically the long
haul, on
- highway

applications that drive many miles and use large amounts of fuel. These suppliers stated that this choice was 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. 112 Other suppliers stated that they have made conscious
109 Records of these ex parte communications, and additional information submitted by the supplier companies and not CBI, are available at Docket No. EPA
- H Q
- OAR
- 2010
- 0162. 110 See Docket EPA
- HQ
- OAR
- 2010
- 0162 111 See Docket EPA
- HQ
- OAR
- 2010
- 0162 112 More tire types and sizes have been developed for vocational vehicle applications than for long
- haul applications. In some cases, suppliers offer up to 17 different vocational tire designs, and for each design***** E.O. 12866 Review**

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124 of 771 efforts to reduce the rolling resistance of all of their medium
- and heav y - duty vehicle tire offerings, including vocational appl ications, in an effort 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, environmental conditions, and on
- road and off
- road surface conditions that vocational vehicles are subjected to. Some vehicle manufacturer commenters had suggested that changes in tire tread block design that improve rolling resistance may

adverse ly

affect tire performance 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 providing 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 indic ated that 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. That supplier argued that taking 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 reductio ns. That 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 consistently responded that they would not produce a tire that compromis es 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 t ires. The testing measured the RR C of tires representing 16 different vehicle applications in Classes 4
- 8. 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 tractors; and 21 tires classified as light
- truck (LT) tires intended for Class 4 vocational vehicles such as deli very vans. In addition, approximately

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

variability . While all of the tires were tested using the I SO 28580 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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125 of 77 1 method, approximately

20 tires were also tested using SAE J1269 to compare the two test methods. 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. To comply with the proposed vocational vehicle fuel consumption and GHG emissions standar ds, a manufacturer would need to achieve an average tire RR C value of 8.1 kg/metric ton. The measured average RRC of 7.4 kg/metric ton is better than the average value that would be needed to meet vocational vehicle standards. Of those eight y - eight tires tested, twent y 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 analy ses examining the tire data by tire size to determine the range and distribution of RRC values within each tire size showed each tire size generall y had tires ranging 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 ty pe, the majority

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 a pplication showed an overall average of 6.9 kg/ton, the lowest overall average rolling resistance of the different tire applications tested. 113 This is consistent with what the agencies heard through comments and meetings with tire suppliers whose efforts have focused on tractor applications, particularl y for long
- haul applications, which yield 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 T225/75 R16 and LT245/75R16 with 11 and 10 samples tested, respectivel y. Some auto manufacturers have indicated that RR C values for tires fitted to these Class 4 vehicles t ypically have a higher RR C values than tires found on commercial vocational vehicles because of the smaller diameter wheel size and the I SO testing protocol. The test data showed 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 11.0 114 and the range for the LT245/75R16 tires ranged from 6.6 to 9.8 kg/metric ton. Overall, the average for the tested LT tires was 8.9 kg/metric 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/metric ton and the standard deviation for is 1.2 kg/metric ton. Review of the data shows that for each tire size and vehicle ty pe, there are many tires available that would enable compliance with the proposed standards for vocational vehicl es 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/metric ton.

113 The RRC values for these applications ranged from 5.4 to 9.2 kg/metric ton. 114 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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126 of 771 The agencies also 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 deve loped an adjustment factor for data measured at each of the test labs . When applied, this correction factor showed that for 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 fo r 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 relative to proposed standards. The agencies concluded that although laboratory
- to - laboratory and test machine
- to - test machine measure ment variability exists, the level observed is not excessive relative to the distribution of absolute measured RR C performance values and relative to the proposed standards. Based on this, the agencies concluded that the test protocol and the proposed standards are reasonable for this program. (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. 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 model 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 incorporated 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.

**Table II**  **- 13**  **: 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 standards are being revised based on the significant availability of tires for vocational vehicles applications which have performance better than the originall y proposed 8.1 kg/metric ton target. As evidenced in the discussion of the EPA tire testing results, 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 range of vocational vehicle t ypes and classes; thus agencies believe the original target value of 8.1 kg/metric ton was possibly too lenient after reviewing th e testing data. Therefore, the agencies believe it is appropriate to reduce the proposed standard to an RRC value 7.7 kg/metric ton for non
- LT tire ty pe. As discussed previously , this value is the test average***** E.O. 12866 Review**

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127 of 77 1 of all vocational tires tested (including LT) which takes a conservative approach over setting a target based on the average of only the non
- LT Vocational tires tested. For LT tires, based on both the test data and in alignment with the comments from AAPC and Ford Motor Compan y, the agencies recognize the need to provide an alternative based on the test data and discussions with vehicles manufacturers. In lieu of having two sets of Li ght Heav y - Dut y vocational vehicle standards, the agencies are finalizing an adjustment factor which applies to the RRC t est results for L T tires. The agencies developed an adjustment factor dividing the overall vocational test average RRC of 7.7 by the LT Vocational Average of 8.9. This yields an adjustment factor of 0.87. For LT vocational vehicle tires, the measured RR C v alues 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
- 14 . Similarly , NHTSA is finalizing the following fuel consumption standards for the 2016 model y ear, 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. As with the 2017 MY standards for Class 7 and 8 trac tors, EPA and NHTSA are adopting more stringent vocational vehicle standards for the 2017 model year which reflect the CO 2 emissions reductions required through the 2017 model ye ar engine standards. See Section II.B.2. As explained in Section II. D. (2) (c)(iv) below, engine performance is one of the inputs into the compliance model, and that input will change in 2017 MY to reflect the 2017 MY engine standards. T he 2017 MY vocational vehicle standards are not premised on manufacturers installing additional vehicle technologies. Thus, although chassis manufacturers will not be required to make further improvements in 2017 MY to meet the standards, the standards wil l be more stringent to reflect the engine improvements required in that year. This is because in 2017 MY GEM vehicle modeling outputs (in grams per ton mile and gallons per 1,000 ton mile) will automatically

decrease since engine efficiency will improve i n that y ear. The agencies chose to set the vocational vehicle standard in 2017 to reflect the 2017 engine improvements even though chassis manufacturers are not affected b y the change in stringency
.***** E.O. 12866 Review**

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128 of 771 **Table II**  **- 14**  **: 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 387 234 226 NHTSA Fuel Consumption (gallon per 1,000 ton
- mile) Standard Effective 2016 Model Year 115 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 38.0 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 Heavy
- Dut y Class 2b
- 5 Medium Heav y Duty Class 6
- 7 Heav y Heav y - Duty

Class 8 Fuel Consumption 36.6 22.1 21.8 (iv) Off

-Road and Low

- Speed Vocational Vehicle Standards There are several reasons that the agencies proposed to base the vocational vehicle standards on the use of low rolling resistance tires alone. First, technologies that improve vehicle fuel efficiency and reduce CO 2 emissions may not be equally

effective on all vehicles depending on the kinds of work they do or if they travel at low spee ds, as discussed above. For example, some aerodynamic improvements could physicall y be applied to vocational vehicles, but because so many vocational vehicles rarely reach the sustained speeds that line
- haul tractors do, appl yi ng aero features to vocation al vehicles would result in very

little benefit for those vehicles compared to the benefit expected for line
- haul tractors. The agencies believe it does not make sense to require technology without expected benefits, and commenters generally supported that approach in response to the NPRM. Another important reason for basing the vocational vehicle standards on improvements to tires alone is the complexity associated with establishing a baseline emissions and fuel consumption rate for technology use in voc ational vehicles, given the diversity of vehicles and duty

cycles in this segment. A baseline is needed since it is the benchmark against which standards are established. L ast and importantly , in order to be included in this regulation, technologies to r educe vocational vehicle emissions would need to be under the control of the chassis manufacturer. The technologies available to chassis manufacturers are fairl y limited. Some vocational vehicles, because of they are primarily

designed for off

- road us e, may not be good candidates for low rolling resistance tires. These vehicles may

115 Manufacturers may voluntarily opt
- in to the NHTSA fuel consumption program in 2014 or 2015. If a manufacturer opts
- in, the program becomes mandatory.***** E.O. 12866 Review**

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129 of 77 1 travel on
- road for very

limited periods of time, such as in traveling across an urban road, or if they are off
- loaded from another vehicle onto a road and then driven off
- r oad. 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. The agencies are also targeting other vehicles that travel at low
- speeds and meant to be used both on
- and off
- road, as the application of certain technologies to these vehicles not only

may not provide the same level of benefits as it would for pure on
- road vehicles, but it may

also actuall y impair the vehicle’s ability to do its off
- road job. 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 regulation s. 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 “mot or vehicles” per 40 CFR 85.1703, the fact that they spend the most of their operations off
- road might be reason for excluding them from the vocational vehicle standards. Vocational vehicles, such as those used on oil fields and construction sites 116 , experi ence very little benefit from LRR tires or from any other technologies to reduce GHG emissions and fuel consumption. The agencies proposed to allow a narrow range of these de facto off
- road trucks 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 only

tire performance parameter which trades of f with TRR are 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, these trucks were proposed to be exempted from vehicle standards but were still required to use certified engines, which would provide fuel consumption and CO 2 emission reductions in all vocational applications. To ensure that these trucks 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 off road trucks primarily used off
road tires and are low speed vehicles as well. Based u pon this understanding, the agencies specifically

proposed that a truck must meet the following requirements 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 exc lusion to cover other ty pes of vocational vehicles. Several manufacturers (IAFC, FAMA, NTEA, NSWMA, AAPC, RMA, Navistar and DTNA) requested the exemption of specific vehicle t ypes, such as on/off
-
116 Vehicles such as concrete mixers, off
- road dump trucks, backhoes and wheel loaders.***** E.O. 12866 Review**

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130 of 771 road emergency

vehicles, refuse vehicles low speed transit buses or school buses, because their usage was viewed as being incompatible with LRRTs. Navistar opposed 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 utilizes 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 fire or hazardous materials incidents which would require operations on dirt and gravel roads, fields or other off
- road environments. Commenters also contended that by re quiring a 55
- mph limitation, the proposed exemption would be impractical for emergency vehicles due to the need to responding quickly to life
- threatening events. The refuse truck manufacturers and trade associations, NSWMA and AAPC, commented that the sol id 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, IA FC and Oshkosh) opposed compliance with the LRR standard for 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 impr oving the LRR aspects of these tires or even to conducting testing to determined CRR values. 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 the agencies proposed in the NPRM. The agencies believe that the intent underlying the exemption for vocational vehicles in the NPRM was correct but the proposals were either unsuitable for the i ndustry or too restrictive to capture the 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 ty pe 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 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 regulated by NHTSA. These vocational vehicles will be exempted from compl yi ng with the vehicle standards of these rules but are still required to have certified engines. As such, an y vocational vehicle including vocational tractors primarily used off
- road 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 characteristics making them unsuitable for operation on roads; and meeting one or more of the following criteria:  Any vehicle equipped with an axle that has a gross axle weight rating (GAWR) of 29,000 pounds; or***** E.O. 12866 Review**

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131 of 77 1  Any truck or bus that has a speed attainable in 2 miles 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 res tricted tires rated at 55 mph or below. The agencies’ reasoning in adopting a speed restricted exemption for tires is that the majority of mixed service tires used for off
- road use were identified as being restricted at 55 mph or less. Also, as identifie d by FMVSS No. 119, speed restricted tires at a rating of 55 mph or less are incapable of meeting the same on
- road performance standards as conventions tires. Using a speed restriction as a criteria for exemption will also provide the possibility for cert ain low
speed vehicles to be inadvertently exempted as well (i.e., low speed cit y delivery tractors) but the risk of allowing the low volume of these vehicle to be exempted far outweighs the potential loss of creating a segment of vehicles that are preclud ed from performing their intended applications. Therefore, the final rule includes an exemption for any mixed service off

- road tire equipped on an applicable vocational vehicle that is speed restricted at 55 mph or less. Manufacturers choosing to exempt vehicles based on the above criteria should provide a description of how they meet the qualifications for each vehicle family group in their end
- of

- the ye ar and final y ear reports (see Section V). (b ) Heavy
- duty Engine Standards for Engines used in Vocation al Vehicles EPA is finalizing GHG standards 117 and NHTSA is finalizing fuel 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 emi ssions and fuel consumption profiles differ significantly depending on whether 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 statutory 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 present the estimated costs and benefits of the heav y - dut y engine standards in Section III. In developing the final rules, the agencies have evaluated the kinds of technologies that cou ld be utilized by

engine manufacturers compared to a baseline engine, as well as the 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.

117 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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132 of 771 EPA’s existing criteria pollutant emissions regulations for heavy
- dut y highway engines establish 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 truck applicat ion, as shown in Table II
- 15 (40 CFR 1036.140). 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. All heavy
- dut y engines are covered either under the heav y - dut y pickup truck and van category or under the heavy
- duty

engine standards. **Table II**  **- 15**  **: 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 standard s for HD diesel engines to be installed in vocational vehicles, as shown in Table II
- 16
. **Table II**  **- 16**  **: 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 are technologies available to reduce fuel con sumption in all these engines by this level in***** E.O. 12866 Review**

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133 of 77 1 the final timeframe in a cost
- effective manner. 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 vocational 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 i n 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 becau se 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 heav y - dut y engine and truck manufacturer product plans to fall largel y into thre e ye ar cycles reflecting this regulatory environment. 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

stand ards in an y of those model years, with the caveat that opting in would cause the standards to become mandatory for the opt
- in and subsequent model ye ars. NHTSA proposed that manufacturers could opt into the program by declaring their intent to opt in at the same time they submit the Pre
- Certification Compliance Report, 118 and that 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 manufacturers to g enerate 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 manufacturers to achiev e, 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 standards for the LH D and MHD 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 model year C O 2 emissions from data provided to EPA by the 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 perfor

mance in the 2010 model y ear, which overall averaged 630 g CO 2 /bhp
- hr (6.19 gal/100 bhp
- hr). 119 Furthermore, the technologies available to reduce fuel consumption and CO 2 emissions from these two categories of engines are similar. The agencies considered c ombining these engine categories into a single category , but decided to maintain these two separate engine categories with the same standard level to respect the different useful life periods associated with each category.

118 See 49 CFR 535.8 for information related to the Pre
- Certification Compliance Report. 119 Calculated using the conversion 10,180 g CO 2 /gallon for diesel fuel.***** E.O. 12866 Review**

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134 of 771 For vocational engines certifie d on the FTP cycle, the agencies proposed to require a 5 percent reduction for HHD engines and 9 percent for LHD and MHD engines. For LHD and MHD engines in 2017 MY, the 9 percent reduction is based on the assumption that valvetrain friction reduction can be achieved in MHD engines in addition to turbo efficiency

and accessory

(water, oil, and ful pump) improvements, improved EGR cooler, and other approaches being used for HHD engines. For LHD and MHD diesel engine standards, the agencies maintained the sa me emissions and fuel consumption standards for the two categories since analysis 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. Furthermore, as noted above, the technologies available to reduce fuel consumption and CO 2 emissions from these two categories of engines are similar. Commenters who discussed the HD diesel engine standards generall y did not differentiate between the st andards for engines used in combination tractors and the engines used in vocational vehicles. As explained above in Section II.B.2.b, some commenters, such as EMA/TMA, Cummins, DTNA, and other manufacturers, supported the standards proposed in the NPRM, a s long as the flexibilities proposed in the NPRM were 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 fo r 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 stand ard, 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 providing additional lead time to allow for the introduction of this additional technol ogy , and waiting until 2017 to increase stringency to levels reflecting application of this technology
. See Chapter 2 of the RIA for more details. For MHD engines, the 9 percent reduction is based on the assumption that valvetrain friction reduction can be achieved in MHD engines in addition to turbo efficiency and accessory

(water, oil, and fuel pump) improvements, improved EGR cooler, and other approaches being used for HHD engines. While it made sense to set standards at the same level for LHD and MH D 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 engines 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. 120 In addition to the differences in the baseline performance, the agencies believe that there may be some technologies available to

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

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135 of 77 1 reduce fuel consumption and CO 2 emissions that may be appropriate for the LHD/MHD diesel engines but not for the HHD diesel engines, such as turbocompounding. Therefore, th e agencies 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 HD diesel engine CO 2 emission standards and fuel consumption standards for vocational vehicles are presented in Table II
- 16 . 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 all standards will be evaluated based on the composite HD FTP cycle. In the NPRM, the agencies proposed standards based on the Heavy
- duty FTP cycle for engines used in vocational vehicles reflecting their primary use in transient operating conditions (ty

pified by 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 agencies proposed two separate certification cycles for HD diesel engines

– one for HD diesel engines used in 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 vehic le. 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 designed to meet the SET
- based standard. They stated that some vocational trucks 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 stead y - state cycle to better reflect the vehicle’s real use. In response, while the agen cies 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. The agencies are therefore providing the option in these final rules for some vocational vehicles, but not others, to have SET certified engines. Heav y heav y - dut y vocational engines will b e allowed to be SET certified for vocational trucks, since SET certified HHD engines must meet more stringent GHG and fuel consumption standards than FTP certified engines. We believe this will provide manufacturers additional flexibility while still achi eving the expected fuel consumption and CO 2 emissions reductions. However, medium heav y - dut y vocational engines will not be allowed to be SET
- certified, because medium heavy
- dut y engines certified on the FTP must meet a more stringent standard than engine s certified on the SET, and the agencies are not confident that fuel consumption and CO 2 emissions reduction levels would necessarily be maintained.***** E.O. 12866 Review**

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136 of 771 As discussed above in Section II.B.2.b, the agencies place important weight on the fact that engine manuf acturers are expected to redesign and upgrade their products during MYs 2014
- 2017 in making our decisions about the cost
- effectiveness of the standards and the availability of lead time. The final two
- step CO 2 emission and fuel consumption standards recognize the opportunit y for technology improvements over the rulemaking timeframe, while reflecting the t ypical diesel truck manufacturers’ product plan cycles. Over these four model y ears there will be an opportunity for manufacturers to evaluate almost eve ry

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 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 needed to incorporate technology that will achieve the final GHG and fuel consumption reductions, and to do this as part of the normal engin e 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 scheduled redesigns. 121 This time period will also prov ide 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 recogn ize, 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 Section 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 would provide them with greater flexibility . In the context of HD diesel engines for use in vocational vehicles, Volvo specificall y requested an “OBD phase
- in” option in its comments to the NPRM. They argued that bundling design changes where possible can reduce the burden on industry for complying 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 emissions and fuel savings are maintained. Thus, in order to provide additi onal 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 HD diesel engine standards which delivers equivalent CO 2 emis sions and fuel consumption reductions as the primary standards for the engines built in the 2013 through 2017 model y ears, as shown in Table II
- 17
. **Table II**  **- 17**  **Comparison of CO 2**  **reductions for the Engine Standards under the**

**Alternative OBD Phase -**  **in and Primary Phase -**  **In**

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

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137 of 77 1 HHD FTP LHD/MHD FTP 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 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
- 18 presents the final HD diesel engine CO 2 emission and fuel consumption standards under the optional “OBD phase
- in” option.

**Table II**  **- 18**  **: 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) 618 618 577

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 if a manufacturer selects the OBD phase
- in option, it must certify its engines starting in the 2013 model y ear and continue using this phase
- in through 2016 model year. Manufacturers 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***** E.O. 12866 Review**

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138 of 771 rulemaking timeframe, 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. The discussion above described HD diesel engine s for use in combination tractors, but the same supporting information is relevant to the agencies’ consideration of an alternate standard for HD diesel engines for use in vocational vehicles. In the NPRM, the agencies proposed an optional engine standard for vocational vehicles based on a five percent reduction from the products own 2011 model y ear baseline level, but requested comment on whether a two percent reduction would be more appropriate. 122 The comments received in response did not directly addres s engines for vocational vehicles, but the agencies believe that the information provided b y Navistar and others is equally applicable to HD diesel engines for combination tractors and for vocational vehicles. Our assessment for the final standards is that a 2.5 percent reduction is appropriate for LHD and MHD engines and 3 percent is appropriate for HHD engines given technologies available for application to legacy products b y model y ear 2014. Unlike the majority of engine products in this segment, engin e 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 substantiall y redesigned or replaced in the next five ye ars. Hence while the technolo gies 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 engi nes b y 2014. We have concluded that if we limit the reductions to those improvements which reflect further enhancements of already 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 year 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 is a temporary and limited option being implemented to address diverse manufacturer needs associated with complying with this first phase of the regulations. As will be codifie d in 40 CFR 1036.620, this optional standard will be available onl y for the 2014 through 2016 model years, because we believe that manufacturers will have had ample opportunity to benchmark competitive products during redesign cycles and to make appropriat e 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 un der the alternative standard could not generate credits. The final rules require that manufacturers making use of these provisions would need to exhaust all credits available to the averaging set prior to using this flexibility and would not be able to ge nerate emissions credits from other engines in the same regulatory averaging set as the engines complying using this alternate approach. The agencies note that manufacturers choosing to utilize this option in MYs 2014
- 2016 will have to make a greater rel ative improvement in MY 2017 than the rest of the

122 See 75 FR at 74202.***** E.O. 12866 Review**

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139 of 77 1 industry , since they

will be starting from a worse level

– for compliance purposes, emissions from engines certified and sold at the alternate level will be averaged with emissions from engines certified an d sold at more stringent levels to arrive at a weighted average emissions for all engines in the class. Since the NHTSA standards are optional in 2014, manufacturers may choose not to adopt either the alternative engine standard or the regular voluntary

s tandard by

not participating in the NHTSA program in 2014, 2015, and 2016. As discussed above in Section II.B.2.b, some commenters argued that manufacturers could game the standard b y establishing an artificiall y high 2011 baseline emission level. This co uld 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 mitigat e this possibility , the agencies are requiring either that the 2011 model ye ar baseline must be developed by averaging emissions over all engines in an engine averaging set certified and sold for that model y ear so as to prevent a manufacturer from develop ing a single high GHG output engine solely for the purpose of establishing a high baseline or meet additional criteria. 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 configurations 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. 123 Unlike the purpose
- built heav y - dut y diesel engines t ypical of this segment, 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 still prefer gasoline engines over diesel engines. In the past, this was the case since gasoline s tations were more prevalent than stations that sold diesel fuel. Because they are developed for HD pickups and vans, the agencies evaluated these engines in parallel with the heav y - dut y pickup truck and van standard development. As in the pickup truck an d van segment, the agencies anticipate that the manufacturers will have onl y one engine re
design within the 2014
- 18 model y ears under consideration within this proposal. The agencies therefore proposed the following fuel consumption and CO 2 emissions standards for gasoline engines for use in vocational vehicles, which represent a five percent reduction in CO 2 in the 2016 model y ear over the 2010 MY baseline through use of technologies such as coupled cam phasing, engine friction reduction, and stoichiomet ric gasoline direct injection.

123 EPA’s heavy
- duty

engine certification database at http://www.epa.gov/otaq/certdata.htm#largeng.***** E.O. 12866 Review**

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140 of 771 In our meetings with all three of the major manufacturers in the HD pickup and van segment, confidential future product plans were shared with the agencies. Reflecting those plans and our estimates for when engine chang es will be made in alignment with those product plans, we had concluded for proposal that the 2016 model y ear 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 fo r heav y - duty pickups and vans, we project that all manufacturers will have redesigned their gasoline engine offerings b y the start of the 2016 model y ear. 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 y ear. The baseline 2010 model y ear 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 year standards that require manufacturers to achieve a five percent reduction in CO 2 compared to the 2010 MY baseline through use of technologies s uch as coupled cam phasing, engine friction reduction, and stoichiometric gasoline direct injection. Additional detail on technology feasibility

is included in Section III and in the RIA Chapter 2. 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 - duty FTP, effective in the 2016 model y ear. Similar to EPA’s non
- GHG standards approach, manufacturers may generate and use credits b y the s ame engine subcategory to show compliance with both agencies’ standards. (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 apply to individual vehicles and engines. NHTSA is not finalizing in
- use standards that would apply

to the vehicles and engines in a similar fashion. EPA proposed that the in
- use standards for heav y - duty engines installed in tractors be established b y adding an adjustment factor to the full useful life emissions and fuel consumption results projected in the EPA certification process. The agency propose d 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 additional data during the comment period which identified production variability

whic h was not accounted for by the agencies 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***** E.O. 12866 Review**

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141 of 77 1 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 resu lts 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 engi neering 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 initi al phase of standards. Manufacturers will be allowed to use an assigned additive 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 assi gned DF for CO 2 emissions from engines including advance or innovative technologies, 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 convention al engines to conclude that they

will not increase as the engines age. However, 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
- 19 , be broadened to in clude CO 2 emissions and fuel consumption for both engines and 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 and because it is not currently anticipated there will be notable deterioration of fuel consumption over the engines’ useful life. **Table II**  **- 19**  **: 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***** E.O. 12866 Review**

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142 of 771 **(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, e ngine test procedures, and a test procedure for evaluating h yb rid powertrains (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 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 fi nal 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 dri ving 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 t o 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. NHTSA and EPA are finalizing an approach consistent with proposal to evaluate fuel consumption and CO 2 emissions respectively through a simulation of whole
- vehicle operation, consistent with the NAS rec ommendation to use a truck model to evaluate truck performance. The agencies developed the GEM for the specific purpose of this proposal 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 agencies and finalized here was designed for the express purpose of vehicle compliance demonstration and is therefore simpler and less configurable than similar commercial products. This approac h gives a compact and quicker tool for evaluating vehicle compliance without the overhead and costs of a more complicated model. Details of the model are included in Chapter 4 of the RIA. EPA and NHTSA have validated 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***** E.O. 12866 Review**

benchmarked a GT
- Drive simulation of the combination tractor tested at Southwest Research against the experimental test results from the chassis dynamometer in the same manner as done for GEM. Then the agencies developed three vocational vehicle models (LHD, MHD, and H HD) and simulated them using both GEM and GT 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 cycles

– the Calif

ornia ARB Transient cycle, 55 mph cruise, and 65 mph cruise cy cle. The final simulation model is described in greater detail in RI A Chapter 4 and is available for download by interested parties at (http://www.epa.gov/otaq/). The agencies are finalizi manufacturer would measure the performance of tires, input the values into GEM, and compare the model’s output to the standard. Tires are the only technology on which the agencies’ own feasibility anal ys is f GEM input screen is included in would be derived b y the man in this action. The agencies are adopting as proposed that the remaining model inputs would be fixed values that are pre Chapter 4, including the engine fuel consumption map to be used in the simulation.

124 See RIA Chapter 4, Table 4 ***** E.O. 12866 Review**

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143 of 77 1 Drive simulation of the combination tractor tested at Southwest Research against the experimental test results from the chassis dynamometer in the same manner as done for GEM. Then the agencies developed three vocational vehicle models

HD) and simulated them using 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

ornia ARB Transient cycle, 55 mph cruise, and 65 mph cruise cy cle. The final simulation model is described in greater detail in RI A Chapter 4 and is available for download by interested parties at (http://www.epa.gov/otaq/). The agencies are finalizi ng that for demonstrating compliance, a chassis manufacturer would measure the performance of tires, input the values into GEM, and compare the model’s output to the standard. Tires are the only technology 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
- 4 . The input values for the simulation model would be derived b y the man ufacturer from tire test procedure finalized by the agencies in this action. The agencies are adopting as proposed that the remaining model inputs would be fixed values that are pre
- defined by the agencies and are detailed in the RI A the engine fuel consumption map to be used in the simulation.

**Figure II**  **- 4**  **: Example GEM Input Screen**

See RIA Chapter 4, Table 4
- 8. **Do Not Cite, Quote, or Release During Review *****

Drive simulation of the combination tractor tested at Southwest Research against the experimental test results from the chassis dynamometer in the same manner as done for GEM. Then the agencies 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

ornia ARB Transient cycle, 55 mph cruise, and 65 mph cruise cy cle. 124 The final simulation model is described in greater detail in RI A Chapter 4 and is available for download by interested parties at (http://www.epa.gov/otaq/). ng that for demonstrating compliance, a chassis manufacturer would measure the performance of tires, input the values into GEM, and compare the model’s output to the standard. Tires are the only technology on which the or these vehicles is predicated. An example of the . The input values for the simulation model ufacturer from tire test procedure finalized by the agencies in this action. The agencies are adopting as proposed that the remaining model inputs defined by

the agencies and are detailed in the RI A the engine fuel consumption map to be used in the simulation.***** E.O. 12866 Review**

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144 of 771 (b ) Tire Rolling Resistance Assessment In terms of how tire rolling 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 correlation of measurement results
. 125 The agencie s 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, 126 by European regulations, 127 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, but found t hat all of the existing test methods had similar levels of and sources of variability . 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. The agencies received many comments on the subject of tire rolling resistance, including suggestions for alternative test procedures and compliance issues. Regarding whether the agencies should base tire RRC inputs for the 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 preferred b y OEM s 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 test, 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 clear 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
125 See http://www.iso.org/iso/iso

_ catalogue/catalogue

_ tc/catalogue

_detail.htm?csnumber=44770. 126 75 FR 15893, March 30,2010 127 http://www.energy.ca.gov/2009publications/CEC
- 600
- 2009
- 010/CEC
- 600
- 2009
- 010
- SD
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145 of 77 1 measurement methodology would not adequatel y address production tire variability and measurement variability
. Commenters state d that machine
- to - machine differences are a significant source of variation, 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 ar gued that the I SO 28580 test method is unique in that it specifies a procedure 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 depends 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 testin g reference lab for use with ISO 28580, referencing the European T yr e and Rim Technical Organization (ETRTO) estimate that RR C 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 th an what is required through the ISO procedure. Based on the additional tire rolling resistance research conducted b y the agencies, we have decided to use the I SO 28580 test procedure, as proposed, to measure tire performance for these final rules. The agen cies believe this test procedure provides two advantages over other test 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 tes t 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 variation. In addition, the I SO 28580 test procedure is either used, or propose d to be used, by several groups including the European Union through Regulation (EC) No 661/2009 128 and the California Air Resources Board (CARB) through a staff recommendation for a California regulation 129 , 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. Because the IS O has not y et specified a reference lab and machine for the ISO 28580 test procedure, NHTSA announced in its March 2 010 final rule concerning the light duty 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 correlate their test results. NHTSA has not y et announced the reference test machine(s) for the tire fuel efficiency consumer information program. Therefore, for the light dut y tire fuel efficiency rule, the agencies are postponing the specificat ion of a procedure for machine
-

128 http://eur
- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:200:0001:0024:EN:PDF (last accessed May 8, 2011). 129 http://www.energy.ca.gov/2009publications/CEC
- 600
- 2009
- 010/CEC
- 600
- 2009
- 010
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146 of 771 to - machine alignment until a tire reference lab is established. The agencies anticipate establishing this lab in the latter part of 2011 with intentions for the lab to accommodate the light
- dut y tire fuel efficiency program and, potentially , reference testing for medium and heav y dut y tires. Under the ISO 28580 lab alignment procedure, machine alignment is conducted using batches of alignment 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 final ized and heav y - dut y LATs are not currently available, the agencies are postponing the use of these elements of I SO 28580 to a later date when they are available. However, in the interim, the agencies note the lab
- to - lab comparison results mentioned previou sly . This data showed there was very low variability

between the two labs and the machines that were used for the tire testing. Based on the test data, the agencies judge the it is reasonable to implement the program with current levels of variability , and prior to finalizing a lab alignment procedure and before heavy
- dut y LATs are available. For the final rules, the agencies are also including a warm up cy cle 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 safet y standard No. 109 (FMVSS No. 109). 130 Finally , the agencies intends to include 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 , that 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 SmartWayTM program. The agencies have learned that there is limited testing equipment available that is capable of testing single wide tires; single wide tires require a wider test machine drum than required fo r conventional tires. Although the number of machines available is limited, the agencies believe the equipment is adequate for the testing and reporting of RR C for this program. The agencies also continue to believe the ISO test method is the most appropriate for this program because the method is the same one used b y the NHTSA tire fuel efficiency consumer information program, 131 by European regulations, 132 and by the EPA

130 49 CFR 571.109. 131 75 FR 15893, March 30,2010***** E.O. 12866 Review**

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147 of 77 1 SmartWay

program. 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 explained pre ference 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. As discussed above, the agencies are taking the approach of using RRC for the H D fuel efficiency

and greenhouse gas program to align with the measurement methodology alread y employ ed 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 re commendation for a California regulation. 133 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 rollin g resistance for the GEM input. The agencies considered RRF largel y because in the NPRM for Passenger Car Tire Fuel Efficiency (TFE) program, NHTSA had proposed to use RRF . A key

distinction 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 developed 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 audie nces, and thus how the information will be used, are much different for the two programs. 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 generally have numerica lly

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 t ires that carry lower loads. The agencies believe this key distinction helps define the ty pe 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 truck 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 RR C 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. Using the RR C value for determining the rolling resistance also takes into account the load carrying capability for the tire being tested, which, intuitively , can lead to some

132 Commission Regulation 661/2009, 2009 O.J. (L 200) 1, available at http://eur
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:200:0001:0024:EN:PDF (last accessed May 8, 2011).***** E.O. 12866 Review**

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148 of 771 potentially

confusing results. Several vocational truck 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 the 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 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 below the proposed standards, as measured by RR C , are av ailable to the industry regardless of segment or application. Based on these considerations, the agencies have decided to use the RR C metric for the HD fuel efficiency and GHG emissions program. (c) Defined Vehicle Configurations in the GEM As discussed above, the agencies are finalizing a methodology that chassis manufacturers would use to quantify the tire rolling resistance values to be input into the GEM. Moreover, the agencies are are defining the remaining GEM inputs ( i.e., specifying them by

rule), which differ b y the regulatory subcategory (for reasons described in the RIA Chapter 4). The defined inputs include the drive cycle, aerod ynamics, truck curb weight, payload, engine characteristics, and drivetrain for each vehicle t ype, am ong 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 fu el consumption standards for these trucks 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 agenci es received comments that a payload
- based metric is not appropriate for all t ypes of vocational vehicles, specifically 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 the same technologies be applied to meet the standard. Thus, the agencies are adopting the proposed metric, but will revisit the issue of metrics in any future action, if required, depending on the breadth of each standard.***** E.O. 12866 Review**

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149 of 77 1 (ii) Drive cycle The drive cycles proposed for the vocational vehicles consist of the same three modes used for the Class 7 and8 combination tractor s. The 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 FTP cycle to evaluate compliance with the stand ards for 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 over 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 vehicle 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. 134 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 a s buses 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 mak e the test more representative. Bendix suggested using the CILCC as the general purpose mixed urban/freeway cycles and to use four representative cycles: mixed urban, freeway , cit y bus, refuse, and utility . Bendix suggested using the Standardized On
- Roa d 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 averag e 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 cycle for the urban transit bus vocation or creating an Urban Transit Bus cycle with s everal 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 supported their assertions about urban bus vehicle speed with d ata 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 steady state will penalize technologies such as hy bridiz ation.
134 The Environmental Protection Agency. Draft MOVES2009 Highway Vehicle Population and Activity Data. EPA
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150 of 771 Clean Air Task Force said the agencies have not adequatel y addressed the diversity of the vocational truck fleet since they are not distinguished b y different dut y cycles. They

urged the agencies to sub
- divide vocational trucks by expected use, wi th 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 accurate way in future rulemakings for MY2019 and later trucks. 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 would likely lead to unintended consequences
- such as customers being driven for regulatory

re asons to purchase a transmission that does not suit their actual operation. Similarly , Volvo said medium
- and heavy
- duty vehicles are uniquely

built for specific applications 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 suggested 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 Laboratory analy sis) reducing stead y 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 Oakridg e 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 stated 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 should 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 agencies 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
- applicabl e use of low rolling resistance tires. The drive cycles which we are adopting treats all vocational applications***** E.O. 12866 Review**

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151 of 77 1 equally and require the same technologies be applied 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

Administration data to distribute vehicle miles traveled by road ty pe. 135 Similar to the issue of metrics discussed above, the agencies would revisit drive cycles and weightings in any future action which may

develop standards which are specific to applications. (iii) Empty Weight and Payload The total weight of the vehicle is the sum of the tractor curb weight and the payload. Th e agencies are proposed to specify each of these aspects of the vehicle. The agencies developed the proposed truck curb weight inputs based on industry information developed b y IC F. 136 The final curb weights are 10,300 pounds for the LH trucks, 13,950 poun ds 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 e ach vehicle subcategory
. 137 The proposed payloads were 5,700 pounds for the Light Heavy
- Duty trucks, 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 regard ing the proposed curb weights and payloads for vocational vehicles. BAE said a Class 8 transit bus has a ty

pical curb weight of 27,000 pounds and maximum payload of 15,000 pounds. Daimler commented that Class 8 buses have a GVWR of 42,000 pounds. Autoca r said that Class 8 refuse trucks ty picall y have a curb weight of 31,000 to 33,000 pounds, ty pical average payload of 10,000 pounds, and typical maximum payload of 20,000 pounds. UMTRIsuggested using 80,000 pounds total weight for tractors. ATA said that ty pical 3 axle trucks (Class 2
- 8) have a total weight of 11,000 pounds. ATA based their recommendations on FHWA L ong - Term Pavement Data Base on truck weights over the last several ye ars. 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 appropriate 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 pounds 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, an d 15,000 pounds for Heav y Heav y - Dut y trucks. Additional information is available in RIA Chapter 3.
135 The Environmental Protection Agency. D raft MOVES2009 Highway Vehicle Population and Activity Data. EPA
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- 001, August 2009 http://www.epa.gov/otaq/models/moves/techdocs/420p09001.pdf 136 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. 137 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***** E.O. 12866 Review**

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152 of 771 (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 st andard. To maintain the separate assessments, the agencies are adopting the proposed approach 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 standardize 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 GEM , 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 agenci es are finalizing two distinct sets of fuel consumption maps for use in GEM. The first fuel consumption map would be used in GEM for the 2014 through 2016 model y ears and represent a diesel engine which meets the 2014 model year engine CO 2 emissions stand ards. A second fuel consumption map would be used beginning in the 2017 model y ear 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 s tandard). The agencies have modified the 2017 MY heav y heav y duty diesel 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 strin gency of the vocational vehicle standard (not including the engine) between 2014 MY and 2017 MY so that there is stability in the vocational vehicle (not including engine) standards for the full rulemaking period. These inputs are reasonable (indeed, seem ingl y necessitated) given the separate final regulatory requirement that vocational vehicle chassis manufacturers use onl y 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 drivetrain 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 s ingle 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 propose d 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 represented as gal/100 bhp
- hr. The NAS panel did not specificall y discuss or re commend a metric to evaluate the fuel consumption of heav y -***** E.O. 12866 Review**

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153 of 77 1 duty engines. However, as noted above they did recommend the use of a load
- specific fuel consumption metric for the evaluation of vehicles. 138 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 comments related to the metrics for HD engines; therefore, we are adopting th e metrics as proposed. EPA’s criteria pollutant standards for engines currently require that manufacturers demonstrate compliance over the transient Heav y - duty FTP cycle; over the steady
- state SET procedure; and during not
- to - exceed testing. EPA created this multi
- layered appro ach 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 cycle. 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 off
- cycle manufacturers further calibrate these designs 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 stead y - state operating conditions for all engines could lead to undesirable outcomes. With regard to GHG and fuel consumption control, the agencies believe it is more appropriate to set standards based on a single test procedure, either the Heav y - dut y FTP or SET, depending on the primary expected use of the e ngine. 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 benefits. We are finalizing standards based on the composite Heavy
- dut y FTP cycle for e ngines used in vocational vehicles reflecting these vehicles’ primary use in transient operating conditions ty

pified by both frequent accelerations and decelerations as well as some steady cruise conditions as represented on the Heavy
- duty 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 vocational 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 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 procedures. Cummins and Daimler supported and stated there alread y exists sufficient incentives for manufacturers to lim it 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

138 See NAS Report, Note 21 , at page 39.***** E.O. 12866 Review**

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154 of 771 For propo sal, 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 re duce 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 alread y red

ucing regeneration emissions to the greatest degree possible. In addition to believing that regenerations are already controlled to the extent technologically possible, we believe that attempting to include regeneration emissions in the standard setting c ould 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 timeframe of this program. Such a projection would be inherently 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 achi eve b y not including regeneration emissions. Therefore, the agencies are finalizing an approach as proposed which does not include the regenerative emissions. (e) Hybrid Powertrain Technology Although the final vocational vehicle standards are not premised o n 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 use of h ybrid powertrain technology as described in Section IV. Credits generated b y use of h ybrid powertrains could be used to meet any 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 technologie s could be applied to any 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 ybrid powertrain when evaluating compliance with the tr uck 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 Final Flexibility and Credit Provisions**  EPA and NHTSA are final izing 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 fuel consumption credits, as well as provisions for ear ly 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 FTP test cycle. With the exception of the advanced***** E.O. 12866 Review**

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155 of 77 1 technology

credits, cre dits generated under these provisions can only be used within the same averaging set which generated the credit (for example, credits generated by HD vocational vehicles can only be used by

HD vehicles). EPA is also adopting a N 2 O emission credit program, as described in Section IV below. **(4) Deferral of Standards for Small Chassis Manufacturing and Small Engine**  **Companies** EPA and NHTSA are finalizing an approach to defer greenhouse gas emissions and fuel consumption standards from small vocational vehicle chas sis manufacturers meeting the SBA size criteria of a small business as described in 13 CFR 121.201 (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. 139 The agencies estimate th at these small entities comprise less than 0.5 percent of the total heav y - dut y vocational vehicle market in the United States based on Polk Registration Data from 2003 through 2007, 140 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. 141 Based on 2008 and 2009 model y ear engine certification data submitted to EPA for non
- GHG emissions 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 f

inal exemption from the standards established under this proposal 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.

139 The agencies have identified Lodal, Indiana Phoenix, Autocar LLC, HME, Giradin, Azure Dynamics, DesignLine International, Ebus, Krystal Koach, and Millenium Transit Services LLC as potential small business chassis manufacturers. 140 M.J. Bradley. Heavy
- duty Vehicle Market Analysis. May 2009. 141 The agencies have identified Baytech Corporation, Clean Fuels USA, and BAF Technologies, Inc. as three potential small businesses.***** E.O. 12866 Review**

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156 of 771 

### E. **Other Standards Prov isions**  In addition to finalizing CO 2 emission standards for heav y - dut y vehicles and engines, EPA is also finalizing separate standards for N 2 O and CH 4 emissions. 142 NHTSA is not finalizing comparable separate standards for these GHGs because they are not di rectly

related to fuel consumption in the same way that CO 2 is, and NHTSA’s authority under EISA exclusively

relates to fuel efficiency . N 2 O and CH 4 are important GHGs that contribute to global warming, more so than CO 2 for the same amount of emissions due to their high Global Warming Potential (GWP). 143 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 th e Class 7 and 8 tractor or Class 2b
- 8 chassis manufacturers because these emissions 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 flexibi lity for 2012
- 14 MY light
- duty vehicles. As described below, 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. Almost universally

across current engine designs, both gasoline
- 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 an d 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 technologies 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, r eductions 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 engine 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 act 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

142 NHTSA's statutory responsibilities relating to reducing fuel consumption are direct ly related to reducing CO 2 emissions, but not to the control of other GHGs. 143 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 Report.***** E.O. 12866 Review**

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157 of 77 1 increase N 2 O and CH 4 emissions if manufacturers do not address these emissions in thei r 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 alrea dy used and available today . Because EPA believes 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 these standards are designed to cap current emissions, EPA is finalizing the same standards for all of the model years to which the rules apply
. 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 st andards 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 CO 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 certain 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 espec iall 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 finalizin g 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 beli eve 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’s proposal to extend certification requirements to all
- electric HD vehicles and vehicles and engines designed to run on ethanol fuel.***** E.O. 12866 Review**

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158 of 771 **(1) What is EPA’s Approach to Controllin**  **g 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. 144 N 2 O is emitted from gasoline and diesel vehicles mainly during specific cataly st temperature conditions co nducive 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 engin es 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 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, the se future advanced gasoline and diesel technologies do not inherently require 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 145 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 f or 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 formatio n, 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 w ith reduction in CO 2 as allowed in the CO 2 eq option discussed in Section 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 believes 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 technologies 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 emission 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 st andard would ensure that the design of advanced NO X control systems for future diesel and lean
- burn gasoline vehicles would control N 2 O emission levels. While current NO X control
144 Value adapted from “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990
- 2007. April 2009. 145 Memorandum “N 2 O Data from EPA Heavy
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159 of 77 1 approaches used on current heavy
- dut y diesel vehicles do not compromise N 2 O emissions and actuall y result in N 2 O control, we believe that the standards would discourage an y 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 comply with heavy
- dut y vehicle emission standards for NO X would not increase their emission levels, and th at 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. (a ) Heavy
-Duty Pickup Truck and Van N 2 O Exhaust Emission Standard EPA is finalizing the proposed per
- veh icle N 2 O emission standard of 0.05 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 y ear 2014 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 design ed 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 y ear. 146 Manufacturers ty pically use design targets for 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 not adopting a more stringent standard for current gasoline and diesel vehicles because the stringent heavy
- dut y NO X standards alread y result in significant N 2 O control, and we do not expec t 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 y ear . The manufacturers of complete pickup trucks and vans (Ford, General

146 Memorandum “N 2 O Data from EPA Heavy
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160 of 771 Motors, and Chry sler) are already impacted b y the light
- dut y GHG r ule and will therefore have this equipment and capability in place for the timing of this proposal. Overall, we believe that manufacturers of HD pickups and vans (both gasoline and diesel) would meet the standard without implementing an y significantly ne w technologies, only

further refinement of their existing controls, and we do not expect there to be an y significant costs associated with this standard. (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 engine performance. The final N 2 O standard becomes e ffective 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 y ear of the CO 2 gasoline 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 standard remains the same over the useful life of th e 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 compliance 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 a gencies 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 requiring the measurement to be conducted over the H eav y - Duty FTP cycle because it is alread y required for criteria emissions. Averaging of N 2 O emissions between HD engines will 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 y ear diesel engines as demonstrated in the ACES Study and in EPA’s testing of two additional engines with selective catal yt ic reduction aftertreatement s ystems. 147 Manufac turers 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 deteriorat e in use, very little
147 Coordinating Res earch 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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161 of 77 1 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. EPA sought additional data on the l evel 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. 148 The agencies reanal yz ed a new data set, as shown in Table II
- 20 , 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**  **- 20**  **: 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

148 Engine Manufacturers Association. See Docket EPA
- HQ
- OAR
- 2010
- 0162.***** E.O. 12866 Review**

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162 of 771 statement based on good engineering judgment through th e 2014 model ye ar, but requires measurement beginning in 2015 model y ear ( 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

the 2015 model ye ar would need to acquire and install appropriate measurement equipment in response to this final program. EPA has established four separate N 2 O measurement methods, all of which are commercially

available today . EPA expects that most manufacturers 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 truck manufacturers to compl y with the N 2 O requirements is to install a certified engine. **(2) What is EPA’s approach to controllin**  **g 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. 149 EPA is finalizing a standard that would cap CH 4 emission levels, with the expectation that current heav y - dut y vehicles and e ngines 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 i ncreases 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 chassis certified engines directl y result in stringent CH 4 control. It is believe d that the current emission control technologies used to meet the stringent NMHC standards achieve the maximum feasible reductions and that no additional technologies are recognized 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 any 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 gasoline and diesel vehicles, the heav y - dut y h ydrocarbon standards will generally p revent increases in CH 4 emissions

149 Value adapted from “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990
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163 of 77 1 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 standards in controlling overall HC emissions. EPA believes that this level f or 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 compressed natural gas vehi cles, 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. 150 However, CH 4 emissions levels in the gasoline and die sel 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 levels of CH 4 cannot be guaranteed to remain at current levels as vehicle techno logies 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 control 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 m ost 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 standard and appear to have effective CH 4 control by nature of the h ydrocarbon c ontrols, 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 final CH 4 cap standard should not require an y different emission control desi gns beyond what is alread y 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 engin e. 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 curre nt 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 y ear 2014 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 o f the Light
- duty FTP and HFET cycles, with the same 55% city weighting and 45% highway weighting.

150 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)).***** E.O. 12866 Review**

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164 of 771 The level of the standard is approximately two times the average heavy
- duty gasoline and diesel truck and van levels. 151 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 met by current gasoline vehicles with no increase from today ’s CH 4 lev els. Similarly , since current diesel vehicles generall y have even lower CH 4 emissions than gasoline vehicles, 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 E

ngine 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 composite Heavy
- 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 full 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 y ear of the gasoline engine CO 2 standards. Without this alignment, manufacturers would not have any flexibility , such as CO 2 eq credits, in meetin g 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 and gasoline heav y - duty engines. The level of the standard would gene rall y be achievable through normal emission control methods alread y required to meet 2007 emission standards for NMHC and EPA is therefore not attributing any cost to this part of this program (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
. 152 As with N 2 O, this final level recognizes that manufacturers 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 cur rent 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 subtr acted 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. Th e 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 install a certified engine.
151 Memorandum “CH 4 Data from 2010 and 2011 Heavy
- Duty Vehicle Certification Tests”. 152 Coordinating Research Council Report: ACES Phase 1 of the Advanced Collaborative Emissions Study, 2009.***** E.O. 12866 Review**

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165 of 77 1 **(3) Use of CO**  **2 Credits**  As proposed, if a manufactur er 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 emissions above the standard by taking steps to further reduce CO 2 . A m anufacturer choosing this option would convert 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 Mg of positive CO 2 credits to offset 1 Mg of negative CH 4 credits or use 298 Mg of positive CO 2 credits to offset 1 Mg of negative N 2 O credits. 153 By using the Global Warming Potential of N 2 O and CH 4 , the approach recognizes the inter
- correlation of these compounds in impac ting global warming and is environmentall y neutral for demonstrating compliance with the individual emissions caps. 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 to 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 duty 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 est ablished to cap emissions and to prevent future emissions increases, and were 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 lieu 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 - equivalent basis, along with CO 2 into their otherwise applicable CO 2 emissions standard level. For flexible 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 conc erns that they were having difficulty

meeting the N 2 O and/or CH 4 standards, especially in the earl y ye ars of the program for a few of the vehicle models in their existing fleet. This is problematic in the near
- term because there is little lead time to imp lement unplanned redesigns of vehicles to meet the standards. In such cases, manufacturers may need to
153 N 2 O has a GWP of 298 and CH 4 has a GWP of 25 according to the IPCC Fourth Assessment Report.***** E.O. 12866 Review**

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166 of 771 either drop vehicle models from their fleet or to comply using the CO 2 equivalent alternative. On a CO 2 equivalent 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. 154 See 75 FR at 74211. This could be especially chal lenging 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 proposal, 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 t echnology changes (e.g., calibration or catal ys t 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 additional flexibilities in the light
- duty vehicle progr am 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 fleet

—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 equivalent 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 emissions above the applicable standard. This is similar t o 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 - dut y vehicle approach of allowing CO 2 credits on a C O 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 represented a significant improvement over the approach a dopted for light
- dut y vehicles. Manufacturers support de
- linking N 2 O and CH 4 , and commented that the formation of the pollutants do not necessarily trend together. Manufacturers also commented that a deficit against the N 2 O or CH 4 cap would be required t o be covered with CO 2 credits for that
154 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 p rior 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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167 of 77 1 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 manufacturers to use the CO 2 - equivalent approach for the ir 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

Inte grity 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. 155 Manufacturers supported not only ad opting the aspects of the heavy
- 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, manufacturers 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 any 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, respectively , 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 provide 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 usin g CO 2 credits to meet N 2 O and CH 4 standards on a test group basis as needed for MYs 2012
- 2016. 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 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 emission s fleet wide, making significant investments in existing vehicle technologies, or curtailing the use of certain technologies. 156 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 plans b y MY 2015 appears to

155 The Institute for Policy Integrity questioned whether EPA had provided adequate notice of the pro posal, 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 requesting comment on poss ible 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). 156 “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,***** E.O. 12866 Review**

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168 of 771 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 s tandards. In response to comments from manufacturers and 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 20 16 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 rulemakin g. With regard to comments on changing the test procedures over which N 2 O and CH 4 emissions are measured to determine compliance 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 emissions 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 Direct Emi**  **ssions From Air Conditioning** Air conditioning s ys tems contribute to GHG emissions in two way s – direct emissions through refrigerant leakage and indirect exhaust emissions due to the extra load on the vehicle’s engine to provide power to the air conditioni ng s ys tem. HFC refrigerants, which are powerful GHG pollutants, can leak from the A/C s ystem. 157 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. 158 The most commonly

used refrigerant in automotive applications

– R134a, has a high GWP of 1430. 159 Due to the high GWP of R134a, a small leakage of the refrigerant has a much greater global warming impact than a similar amount of emissions of CO 2 or other mobile source GHGs.

157 The United States has submitted a proposal to the Montreal Protocol which, if adopted, would phasedown production and consump tion of HFCs. 158 The U.S. EPA has reclamation requirements for refrigerants in place under Title VI of the Clean Air Act. 159 The global warming potentials used in the NPRM analysis are consistent with Intergovernmental Panel on Climate 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. framew ork for addressing climate change. The global warming potential values from the IPCC Second Asse ssment 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.***** E.O. 12866 Review**

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169 of 77 1 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 truck life. 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 moving freight is very small. Therefore, a credit approach is not appropriate for this segment of vehicles because the value of the credit is t oo small to provide sufficient incentive to utilize feasible and cost
- effective air conditioning leakage improvements. 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 truck 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 final izing 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 instal lation, with consequent difficulties in developing a regulatory s ys tem. EPA is finalizing a leakage standard which is a “percent refrigerant leakage per ye ar” to assure that high
- quality , low
- leakage components are used in each air conditioning sy stem de sign. The agency believes that a single “gram of refrigerant leakage per ye ar” would not fairly address the variety

of air conditioning system designs and layouts found in the heavy
- dut y truck sector. EPA is finalizing a standard of 1.50 percent leakage per ye ar for heav y - dut y pickup trucks and vans and Class 7 and 8 tractors. The final standard was derived from the vehicles with the largest sy stem refrigerant capacity

based on the Minnesota GHG Reporting database. 160 The average percent leakage per ye ar of the 2010 model y ear vehicles 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 se al is the dominant source of leakage in belt
- driven air conditioning sy stems, the agency

is seeking comment on whether the stringency of a single “percent refrigerant leakage per year” standard fairl y addresses the range of s ys tem refrigerant capacities li kely

to be used in heavy
- dut y trucks. 161 Since sy stems with less refrigerant may have a larger percentage of their annual leakage from the compressor shaft seal than sy stems with more refrigerant capacit y, their relative percent refrigerant leakage per ye ar could be higher, and a more extensive application of leakage reducing technologies could be needed to meet the standard). EPA welcomes comments relative to the stringency of the standard, and on whether manufacturers who adopt measures that improve the g lobal

160 The Minnesota refrigerant leakage data can be found at http://www.pca.state.mn.us/climatechange/mobileair.html#leakdata. 161 Society of Automotive Engineers Surface Vehicle Standard J2727, issued August 2008, http://www.sae.org***** E.O. 12866 Review**

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170 of 771 warming impact of leakage emissions substantially beyond that achieved by the final standard should in some way be credited for this improvement. 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
- GWP refrigerant. One alternative refrigerant, HFO
- 1234y f, has been approved for use in light
- dut y pa ssenger vehicles under EPA’s Significant New Alternatives Program (SNAP). While the scope of this SNAP approval does not include heav y - duty 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 currently acting on a petition to de
- list R
- 134a as an acceptable refrigerant for new, light
- duty passenger vehicles. The timeframe and scale of R
- 134a de
listing is y et 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 heav y - dut y vehicles, and that the timeframe for the de
- listing of R
- 134a is not known, EPA believes that a leakage standard for heav y - duty vehicles is still appropriate. EPA believes that reducing A/C sy stem leakage is both highl y cost - effective and technologicall y feasible. The availability of low leakage components is being driven b y the ai r conditioning program in the light
- dut y GHG rule which apply to 2012 model year and later vehicles. 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 qualit y of the components, fittings, seals, and hoses of the A/C sy stem. 162 All of these technologies are alread y in commercial use and exist on some of today’s s ys tems, and EPA does not anticipate an y signif

icant improvements in sealing technologies for model years beyond 2014. However, EPA does anticipate that updates to the SAE J2727 standard will be forthcoming (to address new materials and components which perform better than those originall y used in the SAE anal ys is), and that it will be appropriate to include these updates in the regulations concerning refrigerant leakage. Consistent with the 2012
- 2016 light
- dut y GHG rule, we are estimating costs for leakage control at $18 (2008$) in direct manufacturing costs. Including a low complexity indirect cost multiplier (ICM) of 1.14 results in costs of $21 in the 2014 model year. Time based learning is considered appropriate for A/C leakage control, so costs in the 2017 model y ear would be $19. These cost s are applied to all heavy
- dut y pickups and vans, and to all combination tractors. EPA views these costs as minimal and the reductions of potent GHGs to be easil y feasible and reasonable in the lead times provided by the final rules. EPA proposes 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 closely on an industry
- consensus leakage scoring method, described below. This leakage scoring m ethod is correlated to experimentally
- measured leakage rates from a number of vehicles using the different available A/C components. Under the

162 Team 1
- Refrigerant Leakage Reduction: Final Report to Sponsors, SAE, 2007.***** E.O. 12866 Review**

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171 of 77 1 final approach, manufacturers would choose from a menu of A/C equipment and components used in their vehicles in order to establish leakage scores, which would characterize their A/C s ystem leakage performance and calculate the percent leakage per ye ar as this score divided by the s ys tem refrigerant capacity
. Consistent with the light
- duty GHG rule, EPA is finalizi ng a requirement that a manufacturer would compare the components of its A/C sy stem with a set of leakage
reduction technologies and actions that is based closely on that being developed through the Improved Mobile Air Conditioning program and SAE Internat ional (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 correlation with average real
- world leakage in new vehicles. Like the cooperative industry
- government program, our final approach would associate each co mponent 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 truck program, the total A/C leakage sco re would 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 would result in estimates of likely leakage emissions reductions that would be comparable to t hose that would eventuall y result from performance
- based testing. At the same time, comments are encouraged on all developments that may lead to a robust, practical, performance
- based test for measuring A/C refrigerant leakage emissions. CO 2 emissions are also associated with air conditioner efficiency , since air conditioners create load on the engine. See 74 FR 49529. However, EPA is not setting air conditioning efficiency standards for vocational vehicles and combination tractors. The CO 2 emissions d

ue to air conditioning s ys tems in these heavy
- dut y trucks are minimal compared to their overall emissions of CO 2 . For example, EPA conducted modeling of a Class 8 sleeper cab using GEM to evaluate 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 emissions by less than 0.3 g CO 2 /ton
- mile, or approximately

0.3 perc ent of the baseline Class 8 sleeper cab CO 2 emissions. 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 GHG rule, where we require that manufacturers attest to the durability of components and s ys tems 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 s ys tems, and provide an engineering analy sis which demonstrates component and s ys tem durability
.***** E.O. 12866 Review**

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172 of 771 **(6) Indirect Emissions From Air Conditio**  **ning** As just noted, in addition to direct emissions from refrigerant leakage, air conditioning sy stems 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 emi ssions 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 directl y tied to usage, indirect emissions are full y a function of A/C usage. **(7) Ethanol**  **- Fueled and Electric Vehicles**  Current EPA emissions control regulations explicitly appl y to heav y - duty

engines and vehicles fueled b y gasoline, methanol, 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 fuel ty pe, including applicati on to all
- electric vehicles (EVs). This provision will take effect in the 2014 model y ear, 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 remain optional f

or 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 percent 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 alread y 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 fuel as is used t oday 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 appl yi ng 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 conduct 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 t ypically have the benefit to the environment as one of their reasons for con sidering alternative fuels, (2) uncertified vehicles are not eligible for the substantial credits they could likely

otherwise***** E.O. 12866 Review**

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173 of 77 1 generate, (3) EVs have no tailpipe or evaporative emissions and thus need no added hardware to put them in a certifiable 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 auto motive products make the emission control sy stems essential to reliable vehicle performance. Regarding technological feasibility , as mentioned above, HD FFV manufacturers alread y 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 stringent Tier 2 s tandards in place for light
- dut y vehicles. 

## 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. Spec ifically

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 evaluated and their costs and effectiveness, and the development of the final standar ds based on application of technology in light of the attribute based distinctions and related compliance measurement procedures. We also discuss consideration of standards that are either more or less stringent than those adopted. This program is b ased 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 by each agency ’s statutory

requirements, and is largel y based on the need for reductions, the effectiveness of the emissions control technology , the 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 central focus of this final rulemaking. The NPRM proposed Alternative 6, and incorporated a broad range of technologies, described further below, after anal yzing the potential costs and benefits of each alternative and weighing the statutory factors prescribed b y 49 U.S.C. 32902(k)(2). This section 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 improvement 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

highway vehicles and work trucks.” The agency received comments on whether NHTS A had properl y applied these statutory factors when determining the appropriate stringency level and technologies for the proposed standards.***** E.O. 12866 Review**

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174 of 771 CBD submitted several comments on whether NHTSA had met EI SA’s mandate to set standards “designed to achieve the m aximum feasible improvement” and, to that end, appropriatel y considered feasible technologies in setting the stringency level. CBD stated that the proposed rule had been limited to currentl y available technology, and that none of the alternatives containe d all of the available technology , which it argued violated EI SA. CBD also stated that the phase
- in schedule violated the technology
forcing intention of EISA, and that the agencies misperceived their statutory mandates, arguing that the agencies are requ ired to force technological innovation through aggressive standards. NHTSA recognizes that Congress intended EPCA (and by extension, EI SA, which amended it) to be technology
- forcing. See Center for Auto Safety v. National Highway Traffic Safety Admin., 7 93 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 NHTSA 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 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 context of the MD/HD rule beyond a pl ain 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). EPCA “gives NHTSA discretion to decide how to balance the statutory factors

– as long as NHTSA’s b alancing does not undermine the fundamental purpose of EPCA: energy conservation.” Id . at 1195. Where Congress has not directly spoken to a potential issue, NHTSA’s interpretation must be a “reasonable accommodation of conflicting policies... committed to the agency ’s care by the statute.” Id . (discussing consideration of consumer demand) (internal citations omitted). In the context of light
- duty , 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. (emphasis in original). This interpretation is applicable to the heav y - duty process, which prescribes statutory factors commiserate to, and equall y broad as, those prescribed for light
- duty . 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 promulgated in this final rule, but not in a way

that requ ires the application of technology not even yet in existence, as CBD suggests. As described in Section I. F. (2) above, the proposed fuel consumption would remain in effect indefinitely at their 2018 or 2019 levels, as Congress did not specify a maximum duration period. CBD stated that this would be a per se violation of EI SA, as, 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 stan dards would remain indefinitel y “until amended b y 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***** E.O. 12866 Review**

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175 of 77 1 automobiles regulate d under light
- dut y CAFE, § 32902(k) does not specify a maximum number of ye ars that fuel econom y 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

a s including the discretion to define expiration periods where Congress has not otherwise specified. This is particularl y appropriate for the heav y - dut y sector, where fuel efficiency regulation is unprecedented. NHTSA believes that it would be unwise to s et an expiration period for this first rulemaking absent both Congressional direction and a known compelling reason for setting a specific date. Given the lead time mandated b y EISA, NHTSA believes that the phase
- in schedule provides an appropriate balan ce between the technology
- forcing purpose of the statute and EI SA
- mandated considerations of economic practicabilit y. NHTSA is sensitive to the unique production practices of manufacturers of medium
- and heav y - dut y engines and vehicles, and believes that a phase
- in schedule is necessary in order to provide manufacturers enough flexibility to incorporate the proposed technologies into their production schedules. 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 is one such reasonable accommodation. Allison Transmission commented that NHTSA had improperl y relied on the NAS report and failed to do sufficient independent analy sis, which Allison claimed did not meet the statutory

obligation to provide an adequate basis for the rule. Consistent with EI S A’s direction, NAS submitted a report evaluating MD/HD fuel economy standards to NHTSA in March of 2010. NHTSA reviewed the findings and recommendations of the NAS report when developing the proposed rule, as was clearly intended b y Congress, but also con ducted an independent study , laid on in Section X of the NPRM. In conducting its analy sis of the NAS report, several key recommendations, such as the use of fuel efficiency metrics, were found to be the best approach to implementing the new program. How ever, the results of its own study , along with EPA’s, led NHTSA to develop several aspects of the rule that are inconsistent with the NAS report, such as the separate regulation of engines and vehicles and the regulation of large manufacturers. NHTSA beli eves that in explicitly directing the NAS report in the development of the new MD/HD program, Congress intended for it to play an important role in the agencies’ anal ys is. The purpose of NHTSA’s study , conducted in the time available, was to bring togethe r the NAS recommendations and the agencies’ independent anal ys is to explain further the basis for the proposed standards. Navistar 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. Navistar further commented that the proposed rule overall is not technologically feasible, stating that the proposed standards assume technologies which are not in production for all manufacturers. NHTSA has previously

interpreted “technological feasibility” to mean “whether a particular method of improving fuel economy can be available for commer cial application in the model y ear***** E.O. 12866 Review**

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176 of 771 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 stand ard 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, 188 (1977). Consistent with these previous interpretations, NHTSA believes that a techn ology does not necessarily

need to be currently

available or in use for all regulated parties to be “technologicall y feasible” for this rule, as long as it is reasonable to expect, based on the evidence before the agency , that the technology will be availa

ble in the model y ear 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 th e standards are based on fleet penetration rates of those technologies. As discussed below, it is reasonable to assume that all the technologies incorporated in this final rule, including SCR
- equipped engines, will be available over the period the standards are in effect. 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 drafting this rule. Specificall y, IPI commented 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 regulation of trailers. The NPRM 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 potentially impacted stakeholders. NHTSA agrees that the regulation of trailers, when appropriate, is likely to provide fuel efficiency benefits. However, as discussed below, we continue to believe that both agencies must perform a more comprehensive assessment of the trailer industry , and therefore that their inclusion at this time is not feasible. 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 ben efits. 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 alread y require the maximum feasible fuel efficiency improvements for the HD fleet in the 2014
- 2018 timeframe. Thus, even though, given the considerable cost
- effectiveness of the technologies required by this rule, standards that maximized net benefits would likely be more stringent than those being promulgated in this final rule, NHTSA believes that standards that maximized net benefits would not***** E.O. 12866 Review**

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177 of 77 1 be appropriate or technologically feasible in the rulemaking timeframe. The Executive Orders cited b y IP I do not require an agency to select a regulatory

alternative that is inconsistent with its statutory obligations. Thus, NHTSA has set fuel consumption standards for MYs 2016
- 2018 HD vehicles and engines at the maximum feasible level, but not at the level that maximizes net benefits. Here, the focus of the standards is on a ppl 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) operat e 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 amount of power produced per unit of fuel consumed. V ehicle
- 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 functions. 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 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 veh icle 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 ypically develop man y different models based on a limited number of platforms. The platform t ypicall 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 va lve), 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 c atal 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 serie s 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 combination 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 tires, 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.***** E.O. 12866 Review**

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178 of 771 The platform approach allows for efficient use of design and manufacturing resources. 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 y ears or more. Recently , EPA’s non
- GHG heav y - dut y engine program provided new emissions standards every three model y ears. Heavy
- dut y engine and truck manufacturer product plans t ypically have fallen into three year cycles to reflect this regime. While the recent non
- GHG emissions standards can be handled generall y with redesigns of engines and trucks, a comple te redesign of a new heav y - dut y engine or truck t ypically 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 manufacturer’s plans for the next several ye ars, including plans related to emissions, fuel efficiency , and safety regulations. A redesign of either engine or truck platforms often inv olves a package of changes designed to work together to meet the various requirements and plans for the model for several model y ears after the redesign. This often involves significant engineering, development, manufacturing, and marketing resources to c reate a new product with multiple new features. In order to leverage this significant upfront investment, manufacturers plan vehicle redesigns with several model ye ars of production in mind. Vehicle models are not completel y static between redesigns as li mited 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 aerod yn 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 technolog ies involving several different sy stems in the engine and vehicle that are available 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 aerod ynamic efficiency. Incorporation of such technologies during the periodic engine, transmission or vehicle redesign process would allow manufacturers to develop appropriate packages of technology upgrades that combine technologies in way s that work to gether 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 proces s. We considered redesign cycles both in our costing and in assessing the lead time required. As described below, the vast majority of technology

required b y this program is commerciall y available and already being utilized to a limited extent across the fleet. Therefore the majority

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 develo pment and limited use of more advanced technologies, such as advanced aerodynamics in tractors and hy brid powertrains in some vocational vehicle applications.***** E.O. 12866 Review**

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179 of 77 1 In evaluating truck efficiency , NHTSA and EPA have excluded fundamental changes in the engine or truck’s performance. 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 mainta in 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 heav y dut y vehicles and engines. The agencies worked together to de termine 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 fol lowed a bill of materials approach utilized by the agencies in the 2012
- 16 MY light
- dut y fuel economy and GHG final rule. A bill of materials, in a general sense, is a list of components or sub
- sy stems that make up a sy stem

— in this case, an item of techno logy which reduces GHG emissions and fuel consumption. In order to 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 source s for cost
- related information. In general, the direct costs of fuel consumption
- improving technologies for heavy
- duty pickups and vans are consistent with those used in the 2012
- 2016 MY light
- duty GHG rule, except that the agencies have scaled up certain costs where appropriate to accommodate the larger size and/or loads placed on parts and s ys tems in the heav y - dut y classes relative to the light
- duty classes. For loose heav y - dut y engines, the agencies have consulted various studies and have exercised engi neering judgment when estimating direct costs. For technologies expected to be added to vocational 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 dollars 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) multiplier 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 (wi th the exception that here return on capital has been incorporated into the I CMs, where it had not 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 projections 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. 163 Inaddition to the 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 a s for truck manufacturers. The report from

163 RTI International. Heavy
- duty Truck Retail Price Equivalent and Indirect Cost Multipliers. July 2010.***** E.O. 12866 Review**

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180 of 771 RTIprovides a description of the methodology , as well 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 to 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 an y adverse comments related to this methodology
. Details of the direct 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 factors 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, tec hnology

costs are higher. The changes made to the I CMs and the indirect cost calculations are discussed in Section VIII of this preamble and are detailed in Chapter 2 of the RIA. EPA and NHTSA believe that the emissions reductions called for b y the fi nal 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 encourage 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. 164 The variation in the des ign 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 combination tractors, as noted in Sectio n II.B. The focus of this section is on the feasibility of the combination tractors, 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 Sciences report of Technologies and Approaches to Reducing the Fuel Consumption of Medium
- and Heav y - Duty

Vehicles, 165 TIAX’s assessment of technologies to support the NAS panel

164 “T ractor” is defined in 49 CFR Part 571.3 to mean “ a truck designed primarily for drawing other motor vehicles and not so c onstructed as to carry a load other than a part of the weight of the vehicle and the load so drawn .” 165 Committee to Assess Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles; National Research Council; Transportation Research Board (2010). Techn ologies and Approaches to Reducing the***** E.O. 12866 Review**

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181 of 77 1 repo rt, 166 EPA’s Heav y - duty Lumped Parameter Model 167 , the anal ys is conducted by the Northeast States Center for a Clean Air Future, International Council on Clean Transport ation , Southwest Research Institute and TIAX for reducing fuel consumption of heav y - dut y lo ng haul combination tractors (the NESCCAF/I CCT study), 168 and the technology

cost anal ys is conducted by I CF for EPA. 169 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 assessed current and future technologies for reducing fuel consumption, 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 provide 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 develo ped to assess the impact and interactions of GHG and fuel consumption reducing technologies 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 he avy - duty engine technologies. The NESCAFF/I CCT study assessed technologies available 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 tractors?** Manufacturers can reduce CO 2 emissions 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 are pr emised 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 y ears 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 y ear, and then discuss the ty pes of technologies that the agencies considered to improve performance relative to this baseline, while section III.A.2 discusses the technology

packages the agencies used to determine the final standard levels
. Fuel Consumption of Medium
- and Heavy
- Duty Vehicles. (“The NAS Report”) Washington, D.C. , The National Academies Press. Available electronically from the National Academy Press Website at http://www.nap.edu/catalog. 166 TIAX, LLC. “Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles,” November 19, 2009. 167 U.S. EPA. Heavy
- duty Lum ped Param eter Model. 168 NESCCAF, ICCT, Southwest Research Institute, and TIAX. Reducing Heavy
- Duty Long Haul Com bination Truck Fuel Consumption and CO 2 Emissions. October 2009. 169 ICF International. “Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy
- Duty On
- Road Vehicles.” July 2010. Docket Number EPA
- HQ
- OAR
- 2010
- 0162
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182 of 771 (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 provided through MJ Bradley , 170 we believe the aerod ynamic configuration of the bas eline 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 baseline Class 7 and 8 day cab tractor consists of an aerod ynam 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, 171 dual tires with steel wheels on the drive axles, and no vehicle speed limiter. The b aseline 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 th e 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 higher than existing studies show. I CCT cited three studies including a Society o f 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, combined 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 mo re 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 technologies: There are opportunities to reduce aerodynamic drag from the tractor, b ut it is difficult to assess the benefit of individual aerody namic 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 bo ttom. 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 surfa ce 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 entrapped 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 featur es which has a Cd value

170 MJ Bradley. Heavy
- duty Market Analysis. May 2009. Page 10. 171 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
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183 of 77 1 of approximately

0.80. 172 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. 173 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 for the drive tire. 174 Lo w rolling resistance (LRR) drive tires are currently offered i n 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 reducin g 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 agenc ies considered evaluating vehicle mass reductions on a total vehicle basis for tractors and vocational trucks. 175 The agencies considered defining a baseline vehicle curb weight and the GEM model 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 vehic le 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 dependent on customer features added to vehicles and critical t o 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 homogenous 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 provide d by

the manufacturer even though we cannot estimate the actual curb weight of
172 See TIAX, Note 184, Page 4
- 50. 173 See SmartWay, Note 171 , above. 174 Ibid. 175 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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184 of 771 the vehicle. In this way , we accounted for mass reductions where we can accurately account for its benefits. For the final action, based on anal ys is, the agencies developed an expanded list of weight reduction opportunities, as listed in Table II
- 5 in Section II. 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 perc ent 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 du e 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 redesign of heav y - dut y components nor do we have a regulatory

mechanism to differentiate between material substation and improved design. We are finalizing for wheels that both a luminum and light weight aluminum are eligible to be used as light
- weight materials. Onl y 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 ava ilable for other components. 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. However, 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 app lied 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 operated 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 i dling 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. 176 EPA and NHTSA agree with the TIAX assessment of a 6 percent redu ction in overall fuel consumption reduction. 177 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 mph). The GEM shows that using a vehicle speed limit er set at 62 mph on a sleeper cab

176 See the RIARIA Chapter 2 for details. 177 See the 2010 NAS Report, Note 165 , above, at 128.***** E.O. 12866 Review**

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185 of 77 1 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. 178 Transmission: As discussed in the 2010 NAS r eport, 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 improveme nt is very dependent on the driver of the truck, such that reductions ranged from 0 to 8 percent. 179 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 real ize 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 improvement 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. 180 The 2012
- 16 MY light
- dut y fuel econom y and GHG final 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 many 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 use 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 2020 timeframe and pr ovide a potential fuel consumption reduction of 10 percent, of which 6 percent is idle reduction which can be achieved through other idle reduction technologies. 181 The limited reduction potential outside of idle reduction for Class 8 sleeper cab tractors i s due to the

178 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. 179 See TIAX, Note 166 , above at 4
- 70. 180 See the 2010 NAS Report, Note 165 , page 67. 181 See the 2010 NAS Report, Note 165 , page 128.***** E.O. 12866 Review**

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186 of 771 mostly highway operation and limited start
- stop operation. Due to the high cost and limited benefit during the model years 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 opportuni ties to reduce fuel consumption, such as driver training and route optimization. The agencies have included discussion of several of these strategies in RIA Chapter 2, but are not using these approaches or technologies in the standard setting process. Th e agencies are looking to other resources, such as EPA’s SmartWay Transport Partnership and regulations that could potentially be promulgated by

the Federal Highway

Administration and the Federal Motor Carrier Safet y Administration, to continue to encourag e the development and utilization of these approaches. (b ) Baseline Engine & Engine Technologies The baseline engine for the Class 8 tractors is a Heav y Heav y - Dut 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 201 0 model y ear 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 t urbocharged with a variable geometry

turbocharger. The following discussion of technologies describes improvements over the 2010 model ye ar baseline engine performance, 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. Navistar provided comments stating that the agencies used an artificially low baseline CO 2 emissions level which was tilted toward the use of SCR aftertreatment sy stem. Conversely , the agencies received comments from several environmental groups (UCS, CATF, ACEEE) supporting a greater reduction in engine CO2 emissions and fuel consumption based on the NAS report. Navistar also stated that the agencies’ baseline engine is inappropriate since there is not 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). 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***** E.O. 12866 Review**

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187 of 77 1 improved combustion chamber design, higher fuel injection pressure, improved injection shaping and timing, and higher peak cylinder pressures. 182 Turbochargers: Improved efficien cy of a turbocharger compressor or turbine could reduce fuel consumption by approximately 1 to 2 percent over variable geometry turbochargers in the market today
. 183 The 2010 NAS report identified technologies such as higher pressure ratio radial compressor s, 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 efficient ly designed flow paths (including those associated with air cleaners, chambers, conduit, mass air flow sensors and intake manifolds) and by designing such s ys tems for improved thermal control. Improved turbocharging and air handling s ys tems must include h igher 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 received comments from Honey well confirming that turbochargers provide a role in reduc ing the CO 2 emissions from engines. Other components that offer opportunities for improved flow efficiency include cylinder heads, ports and exhaust manifolds to further reduce pumping losses. Variable air breathing s ystems such as variable valve actuati on 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 EGR sy stems. Low Temperature Exhaust Gas Recirculation: Most medium
- and heav y - duty vehicle dies el 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) before being returned to the engine intake manifold. EGR is a technology employed to reduce peak c ombustion 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 chang es such as more advanced injection timing that will increase engine efficiency slightl y more than 1 percent. 184 Because low
- temperature EGR reduces the engine’s exhaust temperature, it may not be compatible with exhaust energy recovery sy stems such as turbo compounding or a bottoming cycle. Engine Friction Reduction: Reduced friction in bearings, valve trains, and the piston
- to - liner interface will improve efficiency . Any friction reduction must be carefully

182 TIAX. Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles. November 2009. Page 4
- 13. 183 TIAX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, Nov 19, 2009, Page 4
- 2. 184 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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188 of 771 developed to avoid issues with durability or perfo rmance capabilit y. Estimates of fuel consumption improvements due to reduced friction range from 0 to 2 percent. 185 Reduced 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 pump, 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 electrically

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 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 have more effect in short
- haul/urban applications and less benefit in line
- haul applications. 186 B endix, in their comments to the agencies, confirmed that there are engine accessories available that can improve an engine’s fuel efficiency
. 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 are considering it as part of the baseline engine, as noted above). Because SCR is a highl y effective NO X aftertreatment approach, it enables engines to be optimized to maximize fuel efficiency, rathe r 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
- cy linder EGR
- based emissions sy stem and b y an even greater percentage compared to 2010 in
- cylinder approaches. 187 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; alternatively , these advances could b e 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 reduction in fuel use over 2010 model year s ys tems in the 2014 model y ear. 188 The agencies estimate an add itional 1 to 2 percent reduction may be feasible in the 2017 model year through additional refinement.

185 TIAX, Assessment of Fuel Economy Technologies for Medium
- and Heavy
- duty Vehicles, Final Report, Nov. 19, 2009, pg 4
- 15 186 TIAX. November 2009. Page 3
- 5. 187 Stanton, D. “Advanced Diesel Engine Technology Development for High Efficiency, Clean Com bustion.” Cummins, Inc. Annua l Progress Report 2008 Vehicle Technologies Program: Advanced Com bustion Engine Technologies, US Department of Energy. Pp 113
- 116. December 2008. 188 TIAX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, Nov 19, 2009, pg. 4
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189 of 77 1 Mechanical Turbocompounding: Mechanical turbocompounding 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. 189 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 s ys tems. Electric Turbocompounding: This approach is similar in concept to mechanical turbocompounding, except that the power turbine drives an electrical generator. The electricit y produced can be used to power an electrical motor supplementing the engi ne 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 modeled results by industry and DOE have shown improvements of 3 to 5 percent. 190 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 energy 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. 191 However, none of the bottoming cycle or Rankine sy stems has been demonstrated commerciall y and are currently in onl y the research stage. The agencies received comments from environmental stakeholders encouraging the agencies to include bottoming cycle technologies in setting the 2017 model year standards. The agencies have evaluated the status of the developm ent of bottoming cycle and continue to believe that its development is not y et at a stage to be included in 2017 model year technology package on which the standards are based. **(2) Projected Technology Package Effectiveness and Cost**  (a ) Class 7 and 8 Combinatio n 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’ timeframes through the increased application of aerod ynamic technologies, LRR tires, weight reduction, extended idle reduction technologies, vehicle sp eed limiters, and engine improvements. As discussed above, the agencies believe that h yb rid powertrains s ys tems for tractors will not be sufficientl y developed and the necessary manufacturing capacity put in place to base a standard on an y significant vol ume of h ybrid tractors. As highlighted by the 2010 NAS report, the agencies do believe that h ybrid powertrains have the potential in the longer term to provide significant improvements in fuel efficiency and to reduce

189 NESCCAF/ICCT study (p. 54) and TIAX (2009, pp. 3
- 5) 190 K. G. Duleep of Energy and Environmental Analysis, R. Kruiswyk, 2008, pp. 212
- 214, NESCCAF/ICCT, 2009, p. 54 191 See 2010 NAS Report, Note 165 , page 57.***** E.O. 12866 Review**

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190 of 771 greenhouse gas emissions. The agenci es also are not including drivetrain technologies in the standard setting process, as discussed in Section II. The agencies evaluated each technology and estimated the most appropriate application rate of technology into each tractor subcategory . The ne xt sections describe the effectiveness of the individual technologies, the costs of the technologies, 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 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 exhaus t stacks at the B
- pillar, which increase drag. As noted earlier, our assessment of the baseline new high roof tractor fleet aerodynamics consists of approximately

25 percent Bin I, 70 percent Bin II, and 5 percent Bin III tractors. The baseline rolling r esistance 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. 192 The agencies assumed no application of vehicle speed limiters, weight reduction technologies, or idle reduction technologies in the baseline tractor. The agencies use the inputs in GEM to derive the baseline CO 2 emissions and fuel consumption of Class 7 and 8 tractors. The results are included in Table III
- 1
.

192 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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191 of 77 1 **Table III**  **- 1**  **: Baseline Tractor Definitions** 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)**  Baseline 0.77 0.72 0.77 0.72 0.77 0.87 0.68 **Steer Tires (Crr kg/metric ton)** Baseline 7.8 7.8 7.8 7.8 7.8 7.8 7.8 **Drive Tires (Crr kg/metric ton)** Baseline 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

**Extended Idle Reduction (gram CO**  **2 /ton**  **- mile reduction)**  Baseline N/A N/A N/A N/A 0 0 0 **Vehicle Speed Limiter** Baseline -- -- -- -- -- -- -- **Engine** Baseline 2010 MY

11 L Engine 2010 MY

11 L Engine 2010 MY

15 L Engine 2010 MY

15 L Engine 2010 MY

15 L Engine 2010 MY

15 L Engine 2010 MY

15 L 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/Mid Roof High Roof Low/Mid Roof High Roof Low Roof Mid Roof High Roof CO 2 (grams CO 2 /ton - mi le) 115 135 87 101 79 87 91 Fuel Consumption (gal/1,000 ton mi le) 11.3 13.3 8.6 9.9 7.7 8.6 9.0 (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 GEM. Table III
- 3 describes the performance levels for the range of Class 7 and 8 tractor aerodynamic packages and vehicle technologies. 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 output to determine the final CO 2 emissions and fuel consumption levels.***** E.O. 12866 Review**

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192 of 771 Aerodynamics The aero dy

namic packages are categorized as Bin I, Bin II, Bin III, Bin IV, or Bin V based on the aerod yn amic performance determined through testing conducted by the manufacturer. 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 coefficie nt 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 part of this program. The tire performance was evaluated in three levels

- the baseline (averag e), 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 inc remental 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 stak eholders regarding idle reduction technologies (IRT). Two commenters asked us to revise the default value associated with the IRT technology , and two commenters want to use IRT in GEM even without automatic engine shut down (AES). The agencies proposed AE S after 5 minutes with no exceptions to help ensure that the idle reductions are realized in
- use. Use of an AES ensures the main engine will be shut down, whereas idle reduction technologies alone do not provide that level of certainty
. Without an automat ic shutdown of the main engine, actual savings would depend on operator behavior and thus be essentially unverifiable. The agencies are finalizing the calculation 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 commenters requested that the level of emissions reductions vary in GEM by different idle reduction technologies, and one commenter requested that the application of battery

po wered 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
- us e. Or some vehicles may be sold with one IRT but then***** E.O. 12866 Review**

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19 3 of 77 1 choose to install alternative ones in
- use. The agencies cannot verify the savings which depend on operator behavior. 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 respons e to comments, are adopting provisions for the optional expiration of an AES. Thus, the initial buy er could select AES only for the number of miles based on the expected time before resale. Similar to vehicle speed limiters, we would discount the impact b ased 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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194 of 771 **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 0.78 0.77 0.78 0.77 0.87 0.74 Bin II 0.71 0.70 0.71 0.70 0.71 0.82 0.66 Bin III 0.62 0.62 0.58 Bin IV 0.54 0.54 0.50 Bin V 0.50 0.50 0.46 **Steer Tires (Crr kg/metric ton)** Baseline 7.8 7.8 7.8 7.8 7.8 7.8 7.8 Bin I 6.6 6.6 6.6 6.6 6.6 6.6 6.6 Bin II 5.7 5.7 5.7 5.7 5.7 5.7 5.7 **Drive Tires (Crr kg/metric ton)** Baseline 8.2 8.2 8.2 8.2 8.2 8.2 8.2 Bin I 7.0 7.0 7.0 7.0 7.0 7.0 7.0 Bin 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 es : 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 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***** E.O. 12866 Review**

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195 of 77 1 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 r easons for not requiring the maximum feasible 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 identi fied technologies would be either ineffective or not technically feasible. The addition of ineffective technologies provides no environmental benefit, increases costs and is not a basis upon which to set a maximum feasible improvement. For example, the a gencies 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 aerod ynam ic technologies wi ll increase fuel consumption and hence CO2 emissions to a greater degree than the reduction that would be accomplished from the more aerod ynamic nature of the truck. To simply set the standard based on the largest reduction possible estimated narrowl y ove r 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 nor the requirements of the CAA and EPCA. Aerodynamics Application Rate The impact of aerod ynamics 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 applications 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 ami c 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. 193 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 successfull y apply these aero dy

namic packages. 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

193 TIAX. Assessment of Fuel Economy Technologies for Medium
- and Heavy
- Duty Vehicles. No vember 2009. Page 4
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196 of 771 demonstrated before being applied across a wider fraction of the fleet. Our averaging, banking and trading provisions provide manufacturers with the fl exibility to implement these technologies over time even though the standard changes in a single step. The final aerod ynamic application for the other tractor regulatory categories is less aggressive than for the Class 8 sleeper cab high roof. The agenc ies 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 wher e aerod ynamic technologies have the greatest benefit. The 2002 VIUS data ranks trucks by major use. 194 The heav y trucks usage indicates that up to 35 percent of the trucks may be used in on/off

- road applications or heavier applications. The uses include c onstruction (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 application of SmartWay techn ologies 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 r oof 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 such as gap reducers and integ ral 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 ro of 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 II” bins. Low Rolling Resistance Tire Application Rate 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 onl y 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 easil y be 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 characteris tics in opposing directions. Similar to the discussion regarding lesser aerody namic

194 U.S. Department of Energy. Transportation Energy Data Book, Edition 28
- 2009. Table 5.7.***** E.O. 12866 Review**

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197 of 77 1 technology

application in tractor segments other than sleeper cab high roof, the agencies believe that the final standards should not be premised on 100 percent applicatio n of LRR tires in all tractor segments given the interference with vehicle utility that would result. The agencies are basing their anal ys es on application rates that vary by subcategory recognizing that some subcategories require a different balancing o f performance versus rolling resistance. 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 thei r 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 Inst itute, Arvin Meritor, Aluminum Association, and environmental groups and NGOs identifying 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 o ptions 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 timeframe. For tractors where single wide tires are not appropriate, the manufacturers have additional options to available achieve weight reduction, such as body panels and chassis components. Therefore, the agencies are adopting the proposed 100 percent application of a 400 pound weight reduction package to all tractors. Idle Reducti on Technology Application Rate 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 p roposed, 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 perce nt 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 in the available lead time. 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***** E.O. 12866 Review**

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198 of 771 reviewed literature t o 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
. 195 Id lin g 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 estimates” of the idle time and energy use for thes e 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. 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 application 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 man y comments which raised concerns about the proposed mandatory 5 minute automatic engine shut down without override capabilit y (in terms of safet y, extrem e 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. C ARB provides AES exceptions (or overrides) within its existing heav y - duty vehicle anti
- idling law, which were developed to address these same t ypes of concerns. The exceptions we are adopting include override capability during exhaust emissions control de vice regeneration, during engine servicing and maintenance, when battery state of charge is too low, in extreme ambient temperatures, when engine coolant temperature is too low , and during PTO operation
. The RIA provides more detail about these final over ride provisions in Section 2.5.4.3. Vehicle 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 are 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

ope rate trucks in a distribution network of primaril y local roads. Under those conditions, aerod ynamic fairings used to reduce aerodynamic drag provide little benefit due to the low vehicle speed while adding additional mass to the vehicle. A vehicle manufa cturer could choose to install a VSL set a 55 mph for this customer. The resulting truck modeled in GEM could meet our final emission standard without the use

195 Gaines, L., A. Vyas, J. Anderson. Estimation of Fuel Use by Idling Commercial Trucks. January 2006.***** E.O. 12866 Review**

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199 of 77 1 of an y specialized aerod ynamic fairings. The resulting truck would be optimized for its intende d application and would be fully compliant with our program all at a lower cost to the ultimate truck purchaser. 196

. 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 av oids unintended adverse impacts. Although 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. How ever, at this point the agencies are not in a position to determine in how many additional situations use of a VSLwould result in similar benefits to overall efficiency . Setting a mandatory expected use of such VSL carries the risk of requiring VSLin si tuations that are not appropriate from an efficiency

perspective. To avoid such possibility , the agencies are not premising the final standards on use of VSL , and instead will rely on the industry

to select VSL when circumstances are appropriate for its u se. The agencies have not included either the cost or benefit due to VSLs in analy sis 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 s takeholders including the American Trucking Association have advocated for more widespread use of vehicle speed limits to address fuel efficiency

and greenhouse gas emissions. Table III
- 4 provides the final application rates of each technology broken down by weight class, cab configuration, and roof height.

196 The agencies note that because a V SL 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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200 of 771 **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 40% 0% 40% 0% 30% 30% 0% Bin II 60% 30% 60% 30% 70% 70% 10% Bin III 60% 60% 70% Bin IV 10% 10% 20% Bin V 0% 0% 0% **Steer Tires (Crr 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 (Crr 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 derived 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 w as derived as 10 percent times 0.68 plus 70 percent times 0.60 plus 20 percent times 0.55, 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. 197 In other words, EPA is finalizing the use of a 2014 model y ear fuel consumption map in GEM to derive the 2014 model year tractor standard and a 2017 model y ear fuel consumption map to derive the 2017 model y ear tractor standard. 198 The agencies then ran G EM 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 Chapter 2.

197 See Section III.A.2.b below explaining the derivation of the engine standards 198 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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201 of 77 1 **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/Mid Roof High Roof Low/Mid Roof High Roof Low Roof Mid Roof High Roof Aerodynamics (Cd) 0.73/0.84 0.63 0.73/0.84 0.63 0.73 0.83 0.57 Steer Tire CRR (k g/m etric ton) 6.99 6.87 6.99 6.87 6.87 6.87 6.54 Drive Tire CRR (k g/m etric ton) 7.38 7.26 7.38 7.26 7.26 7.26 6.92 We ight Reduction (lb) 400 400 400 400 400 400 400 Extended Idle Reduction (g/ton mi le) -- -- -- -- 5 5 5 Vehicle Speed Lim iter -- -- -- -- -- -- -- 2014 MY Final Standard Engine 2014 MY 11L 2014 MY

11L 2014 MY

15L 2014 MY

15L 2014 MY

15L 2014 MY

15L 2014 MY

15L 2017 MY Final Standard Engine 2017 MY 11L 2017 MY

11L 2017 MY

15L 2017 MY

15L 2017 MY

15L 2017 MY

15L 2017 MY

15L The level of the 2014 and 2017 model y ear final standards and percent reduction from the baseline for each subcategory are included in Table III
- 6
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202 of 771 **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 75 High Roof 122 90 73 2014
- 2016 Model Year Gallons of Fuel per 1,000 Ton
- Mile 199

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 10.5 8.0 6.6 Mid Roof 11.6 8.7 7.4 High Roof 12.0 8.9 7.2 2017 Model Year CO 2 Grams per Ton
- Mile

Day Cab Sleeper Cab Class 7 Class 8 Class 8 Low Roof 104 79 66 Mid Roof 115 86 73 High Roof 118 88 71 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 10.3 7.8 6.5 Mid Roof 11.3 8.4 7.2 High Roof 11.6 8.6 7.0 A summary

of the final technology

package costs is included in Table III
- 7 with additional details available in the RIA Chapter 2.

199 Manufacturers may voluntarily op t - 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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203 of 77 1 **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 class es. To see the actual estimated technology costs 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 whic h 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 rat es, are available within the lead time provided, 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 of the substantial fuel savings. 200 This is even more cost effective than the estimated cost effectiveness for CO 2 eq removal and fuel economy

improvements under the light
- duty vehicle rule, already considered b y the agencies to be a highly cost effective reduction. 201 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 t on of the rule, considering fuel savings, is negative

– fuel savings associated with the rule more

200 See Section VIII.D below
. 201 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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204 of 771 than offset projected costs by a wide margin. See Table VIII
- 5 in Section VIII below. Given that the standards are technicall y feasible within the lead tim e afforded by the 2014 model y ear, are 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 fina l standards represent a reasonable choice under section 202(a) of the CAA and 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 because 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 increased 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 a pplication 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 standards for tractors based on the use of hybrid 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 o perations. We know, 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 timeframe 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 alread y capture many of the same emissions. 202 (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 year 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 heavy heavy
- dut y diesel engines based on 2009 model y ear confidential manufacturer data and from testing conducted b y EPA. The agencies adjusted the p re - 2010 data to represent 2010 model ye ar engine maps by

using predefined technologies including SCR and other sy stems that

202 According to the 2010 NAS Report, hybrid pow ertrains 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 im provement of 4 percent at a cost of $25, 000. Page 146.***** E.O. 12866 Review**

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205 of 77 1 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 indi vidual 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 subcategory (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 thi s 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 y ear 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 friction, improved lubrication, and improved water pump and oil pump designs to reduce parasitic losses. The after treatment 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 eng ine efficiency improvements. We note that individual technology

improvements are not additive due to the interaction of technologies. The agencies assessed the impact of each technology over each of the 13 SET modes to project an overall weighted SET cycl e 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 engine enhancements already developed beyond the research phase and are available as “off the shelf” technologies f or 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 refle cts 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 manufacturer s would have insufficient lead
- time to complete the necessary

product development and validation work necessary to include this technology

across the industry

by model y ear 2014. As explained earlier, EPA’s heav y - duty highway engine standards for criteria pollutants apply

in three y ear 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 opport unity for technology

improvements over this timeframe while reflecting the t ypical heav y - dut y engine manufacturer product plan redesign and refresh cycles. Thus, the agencies are***** E.O. 12866 Review**

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206 of 771 finalizing to set a more stringent standard for heavy
- dut y engines beginning in the 2017 model y ear. The MHDD and HHDD engine technology package for the 2017 model ye ar includes the continued development of the 2014 model y ear 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 y ear 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 package. We gave consideration to finalizing an even more stringent standard based on the use of waste heat recovery via a Rankine cycle (also called bottoming cycle) but concluded that there is insufficie nt 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 improvements beyond 2015 model 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. 203 The Department of Energy , along with industry are both working to develop waste 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, Caterpillar clearly noted that the work is a research pro ject and therefore does not imply commercial viability
. 204 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. 205 Cummi ns, also in coordination with DOE, is also active in developing 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 engin e efficiency improvement during their research, but indicated the need to focus their future development on areas with the highest recovery

opportunities (such as EGR, exhaust, and charge air). 206 Cummins also indicated that future development would focus o n reducing the high additional costs and sy stem complexity . 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 ap proach represents a significant opportunity to reduce fuel consumption and GHG emissions in the future. EPA and NHTSA are therefore both

203 TIAX Report (2009). Page 4
- 29. 204 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/vehiclesandf uels/pdfs/deer_2010/w ednesday/presentations/deer10_kruiswyk. pdf 205 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 206 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/vehiclesandfuels/pdfs/deer_2009/session5/deer09_nelson_1.pdf***** E.O. 12866 Review**

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207 of 77 1 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 developed the final 2014 model y ear 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 2 010 model y ear baseline values determined using the SET cycle. EPA developed the 2017 model y ear CO 2 emissions standards for diesel engines while NHTSA similarly developed the 2017 model y ear diesel engine fuel consumption standards by applyingthe 6 perc ent reduction from the 2017 model y ear technology package (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
.

**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 general forms of overhead that do no t 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 such an estimate, EPA has instead r elied 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 provide 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 use of ICMs. See also 75 FR 2537 6. 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 sy stems 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.***** E.O. 12866 Review**

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208 of 771 For 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 stems, 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 r efining 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 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 hardware and ignoring the millions of dollars spent to develo p the 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 the 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 dollars) per manu facturer 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 comments 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 instrumentatio n (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 revised the equi pment 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 engine 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 would be incurr ed in 2013). In aggregate, this averages out to less than $1 per engine in 2013 using an annual sales value of 600,000 light
- , medium
- and heav y - HD engines. Where we projected that additional new hardware was needed to the meet the final standards, we dev eloped the incremental costs for those technologies and marked them up using the ICM approach. Table III
- 10 below summarizes those estimates of cost on a per item basis. All costs shown in Table III
- 18 include a low complexity I CM of 1.15 and flat
- portion of the curve learning is considered applicable to each technology
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209 of 77 1 **Table III**  **- 10**  **: Heavy -**  **duty Diesel Engine Component Costs for Com bination Tractors (2009$)**  Technol ogy 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 $875 MHHD and HHDD Total (combination tractors) $234 $1,091 Note: a Costs 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 technolog y package cost for a engine being placed in a combination tractor 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’ respective 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 standar ds 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
- 10. Use of these technologies would add only a small amount to the cost of the vehicle, 207 and the associated reductions are highl y cost effective, an estimated $20 per ton of CO 2 eq per vehicle. 208 This is even more cost effective than the estimated cost effectiveness for CO 2 eq removal under the light
- duty vehicle rule, already consider ed b y the agencies to be a highly cost effective reduction. 209 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, cos ts 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).

207 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 Emissi ons for Heavy
Duty On
- Road Vehicles.” July 2010. 208 See Tractor CO 2 savings and technology costs in Table 7
- 5 in RIA Chapter 7.. 209 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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210 of 771 (vi) Tempo rary Alternative Standard for Certain Engine Families As discussed 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 cons umption (or fuel econom y) standards and that such control has 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 utilized 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 performanc e levels below what is t ypical for the industry as a whole today. Manufacturers have been graduall y replacing these legacy 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 time add additional technologies beyond those identified b y 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. (Be cause 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 Allow ance provision whereb y a limited number of vehicles of a subset 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 similar 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, would 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 engine 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 technology

packages 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 standard continues past the 2016 MY. By this time, the engines should have gone through a***** E.O. 12866 Review**

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211 of 77 1 redesign cycle which will allow manufacturers to replace those legacy engines which resulted in abnormall y h igh baseline emission and fuel consumption levels and to achieve 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). Manu facturers would, of course, be free to adopt other technology 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 flexibili ties 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 witho ut agency approval, but are finalizing to require that manufacturers notify the agency

of their choice and to include in that notification a demonstration that it has exhausted all available credits and credit opportunities. Manufacturers would also 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) Alternative Engine Standards Considered The agenc ies 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 considered 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 201 7 model y ear 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 reduct ions. 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 y ear. 

### 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 informati on comes primarily from EPA’s certification databases, CFEIS and VERIFY, which contain the publicly available data 210 regarding emission and fuel economy results. This information is not extensive because manufacturers have not been required to chassis test HD diesel vehicles for EPA’s

210 http://www.epa.gov/otaq/certdata.htm***** E.O. 12866 Review**

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212 of 771 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 occurred 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 s upplement 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 rulemaking. 211 Heav y - dut y pickup trucks and vans are sold in a variet y 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 (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 adjustment 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. 212 The agencies requested and received from each of the three major manufactur ers 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 an d 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 from 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 assessment 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 penetration of these technologies in the latest model y ear (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
- spe ed 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, and (3) substantial remaining
211 Memorandum from Cleophas Jackson, U.S.EPA, to docket EPA
- HQ
- OAR
- 2010
- 0162, "Heavy
- Duty Greenhouse Ga s and Fuel Consumption Test Program Summary ", September 20, 2010. 212 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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213 of 77 1 potential for optimizing cataly tic diesel NO X aftertreatm ent to improve fuel econom y (the new heav y - dut y NO X standards having taken effect in the 2010 model y ear). 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 eff ectiveness levels, the agencies could then make a determination of appropriate final standards. The assessment of feasibility , described immediately below, takes into account the projected costs of these technologies. The derivation of these costs, large ly 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 consi stently applied to essentially

all vehicles across this sector by the 2018 model y ear. Therefore we did not apply varying penetration rates across vehicle t yp es and models in developing and evaluating the final standards. Since the manufacturers of HD p ickups and vans generall y onl y have one basic pick
- up truck and van with different versions (( i.e. , different 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 impro vements over several ye ars, changes to the HD pickups and vans to meet new standards must be carefully planned with the redesign cycle taken into account. The opportunities for large
- scale changes ( e.g. , new engines, transmission, vehicle bod y and mass) thus occur less frequentl y than in the light
- dut y fleet, typicall y at spans of 8 or more ye ars. However, opportunities for gradual improvements not necessarily

linked to large scale changes can occur between the redesign cycles. Examples of such improveme nts are upgrades to an existing vehicle model’s engine, transmission and aftertreatment sy stems. Given this long redesign cycle and our understanding with respect to where the different manufacturers are in that cycle, the agencies have initially

determin ed 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’ redesign 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 assessed 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 t o manufacturers’ resulting need to develop some of these technologies for heav y - dut y applications sooner than or simultaneously with light
- duty

development efforts. See generally 75 FR 25467
- 25468 explaining wh y attempting major changes outside the redesi gn cycle period raises very significant issues of both feasibility

and cost. On the other hand, waiting 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.***** E.O. 12866 Review**

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214 of 771 The final phase
- in schedule, 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 with needed lead time via a gradually accelerating ramp
- up of technology

penetration. 213 By

expressing the final phase
- in in terms of increasing fleetwide stringency

for each manufacturer, while also providing for credit generation and use (including averaging, carry
- forward, and carry
- back), we believe our program affords manufacturers subs tantial 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 total production in each year), greater application levels on only a portion of the fleet, or a mix o f 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 technologies may well prove feasible and cost
- effective in this timeframe, 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. H owever, 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 gasoli ne 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 tems in heavy
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 timeframe, due to the small sales volumes relative to the light
- dut y s ector. 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 timeframe, 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.

213 The NHTSA program provides voluntary standards for model years 2014 and 2015. NH TSA and EPA are also providing an alternative standards phase
- in that meets 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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215 of 77 1 More difficult to characterize is the degree to which more or less stringent stand ards 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 o n 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 veh icle GHGs and fuel econom y, and have generated a robust set of effectiveness values. **(1) What Technologies Did the Agencies Consider?**  The agencies 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 available, well known, and could be incorporated into vehicles once production decisions are made. Several of the technologies hav e already been introduced into the heavy 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 expected to be in production in highway vehicles over the next few y ears. These are technologies which are capable of achieving significant improvements in fuel econom y and reductions in CO 2 emissions, at reasonable c osts. The agencies did not consider technologies 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 regard ing applicability of certain advanced technologies 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 ga soline 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. Inlight dut y applications, 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 duty 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. Similarly, other light dut y technologies (i.e., c yl inder deactivation, engine start stop) were also determined to not be compatible with the duty cycle of heav y dut y vehicles for similar reasons. Due to the relatively aggressive implementation of this rule and the lack of commercialization in the heav y d ut y market, h ydraulic hy

brid s ys tems were not considered a technology

that could be implemented in the timeframe of this rule, particularl y in the HD pickup and van sector.***** E.O. 12866 Review**

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216 of 771 The technologies considered in the agencies’ anal ysis are briefl y described belo w. They fall into five broad categories: e ngine technologies, transmission technologies, vehicle technologies, electrification/accessory technologies, and hy

brid technologies
. 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 gasoline and diesel fuels. When oil prices are higher, diesel sales tend to increase. Th is 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 pickups and vans, we are treating gasoline and diesel engines separately so each has a set of baseline technologies. We discuss performance improvements in terms of changes to those baseline engines. Our cost and inventory estimates contained elsewhere reflect the current fleet baseline with an appropriate mix of gasoline and diesel engin es. 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 th e 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 fi nalizing 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 improve 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 reduce 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***** E.O. 12866 Review**

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217 of 77 1 within the cylinder, which allows for higher compression ratios and increased thermody namic efficiency
.

 Diesel engine improvements and diesel aftertreatment i mprovements

– improved EGR sy stems and advanced timing can provide more efficient combustion and, hence, lower fuel 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:

 Improved automatic transmission controls

– optimizes shift schedule to maximize fuel efficiency

under wide ranging conditions, and minimizes losses associated with torque converter slip 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 emissions.

 Aerodynamic drag reduction

– is achieved b y changing ve hicle shape or reducing frontal area, including skirts, air dams, underbody covers, and more aerod ynamic side view mirrors.

 Mass reduction and material substitution

– Mass reduction encompasses a variet y of techniques ranging from improved design and bett er 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, steering, 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
assisted steering s ys tems that have advantages over traditional hydraulic power***** E.O. 12866 Review**

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218 of 771 steering because it replaces a continuously operated hydraulic pump, thereby reducing parasitic losses from the accessory drive.

 Improved accessories

– may include high efficiency

alternators, electrically driven (i.e., on
- demand) water p umps and cooling fans. This excludes other electrical accessories such as electric oil pumps and electrically driven air conditioner compressors.

 Air Conditioner Systems

– These technologies include improved hoses, connectors and seals for leakage contro l. They also include improved compressors, expansion valves, heat exchangers and the control of these components for the purposes of improving tailpipe CO 2 emissions as a result of A/C use. 214  **(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 2012
- 2016 MY light
- duty vehicle rule, the agencies took a fresh look at technology cost and effectiveness values for purposes of this final action. For costs, the agencies recon sidered 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 emplo yedby 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 methodologies used in EPA’s ongoing study with FEV, Incorporated. This study c onsists 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. 215 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 between 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 expressed in 2009 dollars using a ratio of gross domestic product (GDP) value s for the associated calendar years, 216 and indirect costs were accounted for using the new

214 See RIA Chapter 2.3 for more detailed technology descriptions. 215 U.S. Environmental Protection Agency, “Draft Report

– Light
- Duty Technology Cost Analysis Pilot Study,” Contract No. EP
- C
- 07
- 069, Work Assignment 1
- 3, Septem ber 3, 2009. 216 NHTSA examined the use of the CPI multiplier instead of GDP for adjusting these do llar values, but found the difference to be exceedingly small

– only $0.14 over $100.***** E.O. 12866 Review**

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219 of 77 1 approach developed b y EPA and used in the 2012
- 2016 light
- duty rule. NHTSA and EPA also reconsidered how costs should be adjusted by modifying or scaling content ass umptions to account for differences across the range of vehicle sizes and functional requirements, and adjusted the associated material cost impacts to account for 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 2012
- 2016 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
- duty requirement of curb plus 300 lb. The adjustments were made on an individual technology basis by assessing the specific impact of the add ed 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 Report, recent CAFE compliance data, and confidential manufacturer estimates of technology

effec tiveness. 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 attributes such as performance and drivability were taken into account. The agencies note that the ef fectiveness values estimated for the technologies may represent average values applied to the baseline fleet described earlier, and do not reflect the potentially
- limitless spectrum of possible values that could result from adding the technology

to differe nt vehicles. For example, while the agencies have estimated an effectiveness of 0.5 percent for low friction lubricants, each vehicle could have a unique effectiveness estimate depending on the baseline vehicle’s oil viscosity rating. Similarly , the redu ction 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 charac teristics of the tires being applied, characteristics which must be balanced between fuel efficiency , safet y, and performance. Aerod yn amic drag reduction is much the same
—it can improve fuel efficiency and reduce CO 2 emissions, but it is also highly depen dent on vehicle
- specific functional objectives. For purposes of this NPRM, NHTSA and EPA believe that employing average values for technology effectiveness estimates 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 th at the technology costs included in this NPRM take into account onl y those associated with the initial build of the vehicle.***** E.O. 12866 Review**

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220 of 771 (a ) Engine Technologies NHTSA and EPA have reviewed the engine technology estimates used in the 2012
- 2016 light
- dut y 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 technologies considered for this program. (i ) Low Friction Lubricants One of the most basic methods of re ducing fuel consumption in both gasoline and diesel engines is the use of lower viscosit y engine lubricants. More advanced multi
viscosity engine oils are available 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 viscosity Group III s ynthetic) and through changes to lubricant additive packages ( e.g. , friction modi fiers 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 as 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, durability testing would be required to ensure that durability is not compromised. The shift to low er 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 2012
- 2016 MY light
- dut y 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 percent. 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 f

or 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 this technology and, as such, this estimate applies to all model years. 217 , 218

217 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 ba se 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) 218 Note that the costs developed for low friction lubes for this analysis reflect the costs associated with any engine changes that would be required as well as any durability testing that may be required.***** E.O. 12866 Review**

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221 of 77 1 (ii) Engine Friction Reduction) In additi on 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 t o friction, and just over half is due to frictional losses within the engine. 219 Examples include improvements in low
- tension piston rings, piston skirt design, roller cam followers, improved crankshaft design and bearings, material coatings, material subst itution, more optimal thermal management, and piston and cylinder surface treatments. Additionally , as computer - aided modeling software continues to improve, more opportunities for evolutionary friction reductions may

become available. 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 2012
- 2016 light
- dut y final rule, the 2010 NAS Report, and NESCC AF and Energy and Environmental Anal ys is reports, as well as confidential manufacturer data, indicate 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. Consi stent with the 2012
- 2016 MY light
- dut y vehicle rule, the agencies estimate the cost of this technology at $15 per cylinder compliance cost (2008$), including the low complexity

I CM markup value of 1.24. Learning impacts are not applied to the costs of thi s 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. 220 For overhead valve engines, which have onl y one camshaft to actuate both inlet and exhaust valves, couple cam phasing is the onl y variable valve timing implementation op tion available and requires only one cam phaser. 221 Based on the 2012
- 2016 light
- duty final rule, previously
- received confidential manufacturer data, and the NESCCAF report, NHTSA and EPA estimated the

219 “I mp act of Friction Reduction Technologies on Fuel Economy,” Fenske, G. Presented at the March 2009 Chicago Chapter Meeting of the ‘Society of Tribologists and Lubricated Engineers’ Meeting, March 18th, 2009. Available at: http://www.chicagostle.org/pro gram/2008
- 2009/Impact%20of%20Friction%20Reduction%20Technologies%20on%20Fuel%20Economy%20
- %20with%20VGs%20removed.pdf (last accessed July 9, 2009). 220 Although couple cam phasing appears only in the single overhead cam and overhead valve branches of the dec ision tree, it is noted that a single phaser with a secondary chain drive would allow couple cam phasing to be applied to direct overhead cam engines. Since this would potentially be adopted on a limited number of direct overhead cam engines NHTSA did not include it in that branch of the decision tree. 221 It is also noted that coaxial camshaft developments would allow other variable valve timing options to be applied to overhead valve engines. However, since they would potentially be adopted on a limited number of overhead valve engines, NHTSA did not include them in the decision tree.***** E.O. 12866 Review**

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222 of 771 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. Because of this, the baseline analysis of technology

for the 2010 heavy

dut y gasoline fleet already includes the bene fits 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 the 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 cyl inders 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 re duced 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. Cylinder dea ctivation 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 N oise Vibration and Harshness (NVH) concerns and to allow a greater operating range of activation. Cylinder deactivation is a technology key ed to more lightly

loaded operation, and so may be a less likel y technology choice for manufacturers designing for e ffectiveness 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 Chry sler 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 v ehicles, operating at lower relative loads for normal driving, have the potential to operate in part
- cylinder mode more frequentl y. For heav y dut y vehicles tested and operated at loaded conditions, the power to weight ratio is considerabl y lower than the light duty 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.***** E.O. 12866 Review**

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223 of 77 1 (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 fuel 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 efficiency without the onset of combu stion 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 recently introduced vehicles with SGDIe ngines, including GM and Ford and have announced their plans to increase dramatically the number of SGDI engines in their portfolios. The 2012
- 2016 light
- dut y final rule estimated the range of 1 to 2 percent for SGDI. NHTSA and EPA reviewed this estimate for purposes of the NPRM, and continue to find it accurate. Consistent with the 2012
- 2016 light
- dut y final rule, NHTSA and EPA cost estimates for SGDI take into account the changes required to the engine 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 noise, specifically 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 y ear. Flat
- portion of the curve learning is applied to this technology . This technology was considered for gasoline engines onl y, as diesel engines alread y empl oy

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 losses 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 lower engine speeds than equivalent
- displacement natura lly
- aspirated gasoline engines. Additionally, diesel fuel has a higher energy

content per gallon. 222 However, diesel fuel also has a higher carbon to hydrogen ratio, which increases the amount of CO 2 emitted per gallon of fuel used b y approximately

15 perc ent over a gallon of gasoline.

222 Burning one gallon of diesel fuel produces 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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224 of 771 Based on confidential business information and the 2010 NAS Report, two major areas of diesel engine design will be improved during the 2014
- 2018 timeframe. These areas include aftertreatment improvements and a broad range o f 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 standards. As the experience base for SCR expands over the next fe w y ears, 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 conside red in the 2012
- 2016 light
- duty final 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. The agencies have estimated the cost of this technology at $25 for eac h 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 c ost. 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 consumption. Importantly , the engineering work involved would be expec ted to result in cost savings to the aftertreatment and control hardware (lower platinum group metal loadings, lower reductant dosing rates, etc.). Those savings are considered to be included in the $25 per percent estimate described here. Given the 4 pe rcent average expected improvement in fuel consumption results in an estimated cost of $119 (2009$) for a 2014 model y ear 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 Im

provements Diesel engines in the HD pickup and van segment are expected to have several improvements in their base design in the 2014

– 2018 timeframe. These improvements include items such as improved combustion management, optimal turbocharger design, and improved thermal management. This technology was not considered in the 2012
- 2016 light
- duty

final 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 tems and components. These costs are considered collectivel y in our costing analysis and termed “diesel engine improve ments.” 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 eff iciency 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 2009 dollars and are applicable in the 2014MY. Applying a low complexity I CM of 1.24 results in a cost of***** E.O. 12866 Review**

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225 of 77 1 $184 (2009$) 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 t echnology estimates used in the 2012
- 2016 light
- duty final rule. In doing so, NHTSA and EPA considered or reconsidered all available sources and updated the estimates as appropriate. The section below describes each of the transmission technologies consi dered for the final standards. (i ) Improved Automatic Transmission Control (Aggressive Shift Logic and Early Torque Converter Lockup) Calibrating 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 fuel consumption can be improved by transmission control changes. Given that the Aggressive Shift Logic and Earl y Torqu e 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 combined in the modeling. We consider these t echnologies 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 timeframe. (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 diminishing 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 alread y, and 7
- and 8
- speed automatics have entered production in light
- dut y vehic les, albeit in lower
- volume applications in luxury

and performance oriented cars. As discussed in the light
- duty final GHG rule, confidential manufacturer data projected that 6
- speed transmissions could incrementally reduce fuel consumption by 0 to 5 perc ent 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***** E.O. 12866 Review**

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226 of 771 transmission. GM has publicly claimed a fuel economy

improvement of up to 4 percent for its ne w 6
- speed automatic transmissions. 223 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 improved autom atic transmission control, 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 transmissions were not considered in the 2012
- 201 6 light
- duty final rule, they are considered as a technology of choice for this analy sis in that manufacturers are expected to upgrade the 6
- speed automatic transmissions being implemented today with 8
- speed automatic transmissions in the 2014
- 2018 timeframe. 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. (d ) Electrification/Accessory Technologies (i ) Electrical Power Steering or Electrohydraulic 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 eliminates the parasitic losses associated with belt
- driven power steering pumps whic h 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 vehicle h ybridization technologies since it provides power steering when the engin e 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 2012
- 2016 light
- duty final rule estimated a 1 to 2 percent effectiveness based on the 2002 NAS report for light
- dut y 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 potentially 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 complexity 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

223 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
- l ineup
- 082707.jsp (last accessed Sept. 18, 2008).***** E.O. 12866 Review**

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227 of 77 1 applicable. EHPS sy stems are considered to be of equal cost and both are considered 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 realized b y driving the pumping accessories electrically , and only when needed (“on
- demand”). Al ternator improvements include internal changes resulting in lower mechanical and electrical losses combined with control logic that charges the battery at more efficient voltage levels and during conditions of available kinetic energy from the vehicle whic h 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 losses. Indirect benefit may

be obtained by

reducing the flow from the water pump electrical ly

during the engine warm
- up period, allowing the engine to heat more rapidl y 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 eff iciency engine alternator. Intelligent cooling can more easily be applied to vehicles that do not ty

pically carry heavy payloads, so larger vehicles with towing capacity present a challenge, as these vehicles have high cooling fan loads. 224 The agencies co nsidered 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 deci ded to not include electric oil pump technology
. NHTSA and EPA jointly reviewed the estimates of 1 to 2 percent effectiveness estimates used in the 2012
- 2016 light
- dut y final rule and found them to be accurate for Improved Electrical Accessories. Consiste nt with the 2012
- 2016 light
- duty final 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 y ear. Improved accessory s ys tems are in production curre ntly 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

reduci ng the energy

demand needed to overcome forces resisting motion,
224 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.***** E.O. 12866 Review**

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228 of 771 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 add itional mass reduction taken from indirect ancillary s ystems and components, as a result of full vehicle optimization, effectivel y compounding or obtaining a secondary

mass reduction from a primary mass reduction. For example, use of a smaller, lighter en gine with lower torque
- output subsequently allows the use of a smaller, lighter
- weight transmission and drive line components. L ikewise, the compounded weight reductions of the body , engine and drivetrain reduce stresses on the suspension components, stee ring 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 produc es 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 significantly

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.” 225 This means for each one pound reduction in a primary component, up to 1.8 pounds can be reduc ed 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 whether or not the powertrain components can be included in the mass reduction effort, wi th 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. 226 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 side impact/intrusion sy stem, may actuall y result in a significantl y higher weight savin gs 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 reviewing reports on weight reduction methods and practices to ascertain if compounding effec ts 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 c ooling s ys tems and HVAC sy stems. It is estimated that up to 1.25 kilograms of secondary weight savings can be achieved for

225 “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/d atabase/custom/Mass%20Compounding%20
- %20Final%20Report.pdf 226 “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. Accessed on the Internet on April 30, 2009 at: http://www.autoaluminum.org/dow nloads/IBIS
- Pow ertrain
- Study.pdf***** E.O. 12866 Review**

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229 of 77 1 every kilogram of weight saved on a vehicle when all subsy stems are redesigned to take into account the initial primary weight savin gs. 227 , 228 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 a llows better optimization of the sectional thicknesses of structural components 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 o r the reduced use of separate fasteners. In addition, some “bod y on frame” vehicles are redesigned with a lighter “unibod y” construction.

 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 substitution 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 efficient 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 savings 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.

227 “Future Generation Passenger Compartment
- Validation (ASP 241)” Villano, P.J., Shaw , J.R., Polewar czyk, 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
- 0 190. 228 “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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230 of 771 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 efficie nt engine. Nissan will be reducing average vehicle curb weight by 15% b y 2015. 229 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
. 230 Mazda plans to reduce vehicle weight b y 220 pounds per vehicle or more as models are redesigned. 231 , 232 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 increased change
- over from previously used bod y - on - frame automobile and light
- truck designs to newer unibody designs. 229 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 to the different designs for the expected dut y c ycl es of a “work” vehicle, mass reductions are still available particularly to areas unrelated to the components 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/material 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 i n an estimated CO 2 reduction of 1.6 and 3.2 percent respectivel y. These effectiveness values are 50% of the 2012
- 2016 light
- duty final rule values due to the elimination of engine downsizing for this class of vehicle. Consistent with the 2012
- 2016 light
- d ut y final rule, the agencies have estimated the cost of mass reduction at $1.32 per pound (2008$). For this analy sis, the agencies are estimating a 5% mass reduction or, given the baseline weight of current trucks and vans, are estimating costs of $497, $ 585, $552, and $620 for Class 2b gasoline, 2b diesel, 3 gasoline, 3 diesel trucks and vans, respectivel y. All values are in 2009 dollars, are applicable in the 2014 model y ear and include a low complexity I CM of 1.24. Flat
portion of the curve learning i s considered applicable to mass reduction technologies. The agencies have recently completed work on an Interim Joint Technical Assessment Report that considers light
- dut y GHG and fuel economy standards for the

229 “Lighten Up!,” Brooke, L., Evans, H. Automotive Engineering International, Vol. 117, No. 3, March 2009. 230 “2008/9 Blueprint for Sustainability,” Ford Motor Company. Available at: http:// www.ford.com/go/sustainability (last accessed February 8, 2010). 231 “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). 232 “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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231 of 77 1 ye ars 2017 through 2025. 233 Inthat report, th e agencies used updated cost estimates for mass reduction which were not available in time for use in the proposal so they were not used. Since publication of that report, much work has been conducted to update the cost estimates and that work is ongoing and expected to be part of the upcoming joint light
duty proposed rule for 2017 MY and later. Since that work is ongoing, it is not considered read y for use in this analy sis and, therefore, we have chosen to use the same cost estimates as used in the prop osal for this action. (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 and CO 2 emissions. Other tire de sign characteristics ( e.g. , materials, construction, and tread design) influence durability , traction (both wet and dry grip), vehicle handling, and ride comfort in addition to rolling resistance. A t ypical LRR tire’s attributes would include: increased t ire 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 s uspension 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 was based on the 2010 NAS Report findings and consistent with the 2012
- 2016 light
- duty f inal rule. Based on the 2012
- 2016 light
- duty final 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). 234 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
based 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 required to move it through the air. While these factors change with air density and the s quare 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 are as 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
233 “Interim Joint Technical Assessment Report: Light
- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards for Model Years 2017
- 2025;” September 2010; available at http://epa.gov/otaq/climate/regulations/ldv
- ghg
- tar.pdf and in the docket for this rule. 234 “T ires and Passenger Vehicle Fuel Economy,” Transportation Research Board Special Report 286, National Research Council of the National Academies, 2006 , Docket EPA
- HQ
- OAR
- 2009
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232 of 771 reductions, with a somewhat lower effectiveness, may be achieved through the use of revised exterior components (ty picall y at a model refresh in mid
- cycle) and add
- on d evices 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 aerod ynamic drag exterior mirrors. The 2012
- 2016 light
- duty final rule estimated that a fleet average of 10 to 20 percent total aerod ynamic drag reduction is attainable which equates to incremental reductions 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 aerod ynam ic drag reduction was considered due to the different structure and use of these vehicles equating t o incremental reductions in fuel consumption and CO 2 emissions of 1 to 2 percent. Consistent with the 2012
- 2016 light
- dut y final rule, the agencies have estimated the cost for this technology at $58 (2009$) including a low complexity I CM of 1.24. This cos t 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 individual technologies was appropriatel y adjusted to match the expected effectiveness when implemented in a he av 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 vehicles, the technology packages were determined to generall y require the technologies previousl y discussed resp ective to unique gasoline and diesel technologies. Although some of the technologies may alread y 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 e xpected, the available test data shows that some vehicle models will not need the full complement of available technologies to achieve the final standards. 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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233 of 77 1 **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 $116 N/A $116 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 $58 $58 $58 $58 Electric (or electro/hydraulic) power steering $115 $115 $115 $115 Aftertreatment improvements N/A $119 N/A $119 Mass reduction (5%) $497 $585 $552 $620 Air conditioning $21 $21 $21 $21 Total $1,558 $1,446 $1,617 $1,484 At 15% phase
- in in 2014 $234 $217 $234 $223 **(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 approximately

$$1,473 for MY 2018 heav y - duty 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 ve hicles, estimated to result in reductions of 18 MMT of CO 2 eq emissions over the lifetimes of 2014 through 2018 MY vehicles. 235 The reductions are cost effective, estimated at $120 per ton of CO 2 eq removed in 2030. 236 This cost is consistent with the light
- duty rule which was estimated at $100 per ton of CO 2 eq removed in 2020 excluding fuel savings. Moreover, taking into account the fuel savings associated with the program, the cost becomes
- $190 per ton of CO 2 eq in 2030. The cost of controls is fully reco vered due to the associated fuel savings, with a pay

back period within the fifth and sixth year of ownership, as shown in Table VIII
- 6 below. Given the large, cost effective emission reductions based on use of feasible technologies which are available in the lead time provided, plus the lack of adverse impacts on vehicle safet y or utility, EPA and NHTSA regard these final

235 See Table VI
- 4. 236 See Table VIII
- 3
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234 of 771 standards as appropriate and consistent with our respective statutory authorities under CAA section 202 (a) and NHTSA’s EISA authority under 49 U.S.C. 32902(k)(2). 

### C. **Class 2b -**  **8 Vocational Vehicles** Vocational vehicles cover a wide 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 s uch as bod y 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 fi rst 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 believe that future rulemakings will con sider 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 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 fi nal 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 Vocational 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 tractors. This has a significant effect on the t ypes 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

losses of a t yp ical vocational vehicle. The technologies are sim ilar to the ones considered for tractors. Argonne National Lab conducted an energy audit using simulation tools to evaluate the energy losses of vocational vehicles, such as a Class 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 aerodynamics, two percent to***** E.O. 12866 Review**

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235 of 77 1 transmission losses, and the remaining four percent of losses to axles and accessories for a medium
- duty

truck traveling at 30 mph. 237 Low Rolling Resistan ce 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). The 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 buy ers to value tire traction and durability more heavil y than rolling resistance. Therefore, the agencies concluded that a regulatory program that seeks to optimize tire 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 th at the fuel consumption reduction opportunity for reduced rolling resistance ranged between one and three percent in the 2010 through 2020 timeframe. 238 The agencies estimate that average rolling resistance from tires in 2010 model year can be reduced by 10 percent by

2014 model y ear based on the tire development achievements over the last several y ears in the line haul truck market which would lead to a 2 percent reduction in fuel consumption based on GEM. Aerod ynamics: The Argonne National lab work shows that aerod yn amics have less of an impact on vocational vehicle energy losses than do engines or tires. In addition, the aerod ynamic performance of a complete vehicle is significantly influenced by the bod y of the truck. The agencies are not finalizing to regulate bod y builders in this phase of regulations for the reasons discussed in Section II. Therefore, we are not basing any of the final standards for vocational vehicles on aerod ynamic improvements. Nor would aerod yn amic 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 t o 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 signific ant 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 can 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 timeframe ranged between 2 and 8 percent. 239 Initially , the agencies considered reflecting transmission choices and
237 Argonne National Lab. Evaluation of Fuel Consumption Potential of Medium and Heavy
- duty Vehicles through Modeling and Simulation. October 2009. Page 89. 238 See 2010 NAS Report, Note 165 , page 146. 239 See 2010 NAS Report, Note 165 , pp 134 and 137.***** E.O. 12866 Review**

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236 of 771 technology

in our standard setting process for both tractors and vocational vehicles (see previous discussion above on automated manual and automatic transmissions for tractors). We have however decided not to do so for the following reasons. The primary

factors that determine optimum gear selection are vehicle weight, vehicle aerod ynamics, vehicle speed, and engine performance typically considered on a two dimensional map of engine speed and torque. For a given power demand (determined b y speed, aerody namics and veh icle 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 delivery from the engine is the product of speed and torque a wide range of t orque 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 e ngine 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 fue l 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 combination given the finished vehicle weight, general aerod yn 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 small entities that are final bodybuilders, would need to set a large number o f 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 themselves be excessively burdensome. Finally , the agencies would need the underl yi ng data regarding effectively all of the vocational trucks produced today

in order to determine the appropriate standards. Because the market is alread y motivated to reach these optimizations themselves today, because we have insufficient data to determ ine 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 model or in our standard setting. Idle Reduction: Episodic idl ing 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

– suc h 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 compacting 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. 240 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.

240 Gaines, Linda, A. Vy as, J. Anderson (Argonne National Laboratory). Estimation of Fuel Use by Idling Commercial Trucks . January 2006.***** E.O. 12866 Review**

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237 of 77 1 Hy brid Powertrains: Several t ypes of vocational v ehicles 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 either a significant amount of stop - and
- go activity

or spend a large portion of th eir operating hours idling the main engine to operate a PTO unit. The industry is currently

developing three t ypes of h ybrid powertrain s ys tems

– hy draulic, electric, and plug
- in electric. The h ybrids 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 h ybrids, including overall s ys tem cost, battery technology , and lack of cost - effective electrified accessories. We have not predicated the standards based on the use of h ybrids reflecting the still nascent level of technology development and the very small fraction of vehicle sales they would be expected to account for in this timeframe
-- on the order of only

a per cent or two. Were we to overestimate the number of hy brids 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 high hopes for future advancements in hy brid technologies to encourage their production through incentives. However, to create an incentive for early introduction of h yb rid 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 ty picall 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 the 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 2012
- 2016 MY light
- duty vehicle rule, the agencies took a fresh look at technology effectiveness value s 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 estimates. The agencies also co nsidered 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 represent 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 friction 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***** E.O. 12866 Review**

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238 of 771 EPA believe that emplo ying average values for technology effectiveness estimates is an appropriate way

o f 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 as the baseline in the light
d uty GHG 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 as the proposal. The agencies did not receive 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, roller 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 241 and EEA 242 reports as well as confidential manufacturer data used in the light
- duty vehi cle 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 mo dify

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 2012
- 2016 MY light
- dut y vehicle rule, previously
- received confidential manufa cturer 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 deactivation can improve engine efficiency

by disabli ng 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 within the deactivated cylinders is simply compr essed and expanded as an air spring, with reduced friction and heat losses.
241 Northeast States Center for a Clean Air Future. “Reducing Greenhouse Gas Emissions from Light
- Duty Motor Vehicles.” September 2004. 242 Ene rgy 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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239 of 77 1 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 i n 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 driving, have the potential to operate in par t cylinder mode more frequently . Therefore, the agencies reduced the effectiveness assumed from this technology for trucks because of the lower displacement
- to - weight ratio relative to light
- duty vehicles. NHTSA and EPA adjusted the 2010 light
- dut y vehic le final rule estimates using updated power to weight ratings of heav y - duty trucks and confidential business information and confirmed a range of 3 to 4 percent for these vehicles. Stoichiometric gasoline direct injection: SGDI (also known as spark
- igniti on 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 c yl inder 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 bo osting and variable valvetrain designs. The 2012
- 2016 MY light
- duty vehicle final 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 business 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 vehicles, 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 t ypicall 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
. 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 y ear engine with an aftertreatment s ystem which meets EPA’s 0.2 grams o f NO X/bhp
- hr standard with an SCR 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. The following discussion of technolog ies describes improvements over the 2010 model y ear baseline engine performance, unless otherwise noted. Further discussion of the baseline engine and its***** E.O. 12866 Review**

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240 of 771 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 w ould be used for compliance purposes for the engines used in Class 7 and 8 tractors. See Section II.B.2.(i) above. 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 such as higher pressure ratio radial compressors, axial compressors, and dual stage turbochargers as design paths to improve turbocharger efficie ncy. Low Temperature Exhaust Gas Recirculation: Most LHDD, MHDD, and HHDD 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) before being returned to th e engine intake manifold. EGR is a technology employ ed 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 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 Friction Reduction: Reduced friction in bearings, valve trains, and the piston
- to - liner interface will improve efficiency . Any friction reductio n must be carefully developed to avoid issues with durability or performance capabilit y. Estimates of fuel consumption improvements due to reduced friction range from 0.5 to 1.5 percent. 243 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 eff iciency of approximately

4 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. 244 As more effective low
- temperature cataly sts are developed, the NO X conversion eff

iciency of the SCR sy stem will increase. Next
- generation SCR sy stems 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 continue d optimization of the catal ys t could offer 1 to 2 percent reduction in fuel use

243 TIAX, Assessment of Fuel Economy Technologies for Medium
- and Heavy
- duty Vehicles, Final Report, Nov. 19, 2009, pg 4
- 15 244 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 Technologies, US Department of Energy. Pp 113
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241 of 77 1 over 2010 model year s ystems in the 2014 model year. 245 The agencies also estimate that continued refinement and optimization of the SCR sy stems could provide an additional 2 per cent reduction in the 2017 model y ear. Improved Combustion Process: 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 injec tion shaping and timing, and higher peak cylinder pressures. 246 Reduced 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 pump, 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. Elec trification may result in a reduction in power demand, because electrically

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 the y 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 i mprovement 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. 247 **(2) What Is the Projected Technology Package’s Effectivenes**  **s and Cost?** (a ) Vocational Vehicles (i ) Baseline Vocational Vehicle Performance The baseline vocational vehicle model is defined in GEM, as described in RIA Chapter 4.4.6. The agencies used a baseline rolling resistance coefficient for today ’s vocational vehicle fleet of 9 kg/metric ton. 248 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 y ear diesel engine, as described in RIA Chapter 4. Using these values, the baseline performance of these vehicles is included in Table III
- 12
.

**Table III**  **- 12**  **: Baseline Vocational Vehicle Perform ance** 

245 TI AX Assessment of Fuel Economy Technologies for Medium and Heavy
- duty Vehicles, Report to National Academy of Sciences, Nov 19, 2009, pg. 4
- 9 246 See 2010 NAS Report, Note 165 , page 56. 247 TIAX. 2009. Pages 3
- 5. 248 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 tir e 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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242 of 771 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. 9 24. 9 23. 7 CO 2 Baseline (grams CO 2 /ton
- mile) 41 7 25 3 241 (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 , weight reduction, drive train improvement, and h ybrid power trains ar e not included for the reasons discussed above in Section III.C (1). 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 y ear fuel consumption map in GEM to derive the 2014 model y ear truck standard and a 2017 model y ear fuel consumption map to derive the 2017 model y ear truck standard. (These fuel consumption maps reflect the main standards for HD diesel engines, not the al ternative engine standards.) EPA estimates that the rolling resistance of tires can be reduced by 10 percent in the 2014 model y ear. The vocational vehicle standards for all three regulatory categories were determined using a tire rolling resistance coefficient of 7.7 kg/metric ton with a 100 percent application rate b y 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 LHD/MHD and 15L for HHD Trucks 2017 MY 7Lfor

LHD/MHD and 15L for HHD 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 over the 2010 model year baseline vehicle with a 2010 model y ear baseline engine.***** E.O. 12866 Review**

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243 of 77 1 **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) 38.0 23.0 22.2 2017 MY Fuel Consumption Standard (gallon/1,000 ton - mi le) 36.6 22.1 21.8 2014 MY CO 2 Standard (grams CO 2 /ton mi le) 387 234 226 2017 MY CO 2 Standard (grams CO 2 /ton mi le) 373 225 222 Percent Reduction from 2010 baseline in 2014 MY 7% 8% 6% Percent Reduction from 2010 baseline in 2017 MY 11% 11% 8% (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 these final standards based on the costs used in the proposal, but revised to reflect 2009$ and new I CMs. EPA and NHTSA developed the costs of LRR tires based on the I CF report. The estimated cost per truck is $162 (2009$) for LHD and MHD trucks and $194 (2009$) for HHD trucks. These costs include a low complexity I CM of 1.18 and are applicable in the 2014 model y ear. (iv) Reasonableness of the Final Standards 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 eq per vehicle in 2030. 249 This is even less than the estimated cost effectiveness for CO 2 eq removal under the light
- dut y vehicle rule, alread y considered b y the agencies to be a highly cost effective reduction. 250 Moreover, the modest cost of controls is recovered almost immediatel y due to the associated fuel savings, as shown in the pay back analy sis included in Table VIII
- 7. Given that the standards are technicall y feasible within the lead time afforded by the 2014 model y ear, are inexpensive and highl y cost effective, and do not have other adverse potential impacts (e.g., there are no projected negative impacts on safety 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 authorities.

249 See Section VIII.D. 250 As noted 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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244 of 771 (v) Alternative Vehicle Standards Considered The agencies are not finalizing vehicle standards less stringent than the final standards because the agencies believe thes e 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 technologies, t o encourage use of h ybrid powertrains. See Section IV.C. 2 below. For these reasons, the agencies are not adopting more stringent standards for vocational vehicles. (b ) Gasoline Engines (i ) Baseline Gasoline Engine Performance EPA and NHTSA developed the refere nce heav y - 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 m anufacturer 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 y ear engine, because this is the most current information 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 valve 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 fricti on 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 application rate of this technology package to the heav y - 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 e ar based on the agencies’ projection of the engine redesign schedules of the small number of engines in this category
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245 of 77 1 (iii) Gasoline Engine Technology Package Cost For the proposed costs, the agencies considered both the direct or “piece” costs and indirect cos ts of individual components of technologies. For the direct costs, the agencies followed a BOM approach employ ed by NHTSA and EPA in the 2012
- 2016 LD rule. In the final rule, the agencies are using marked up gasoline engine technology costs developed for the HD Pickup Truck and Van segment because these engines are made by the same manufacturers (primarily by Ford and GM) and are simply , sold as loose engines rather than as complete vehicles. Hence the engine cost estimates are fundamentall y the same. Th e agencies did not receive an y 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 applicable to both co upled cam phasing and SGDI
. **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 appear to be 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, 251 and the associated reductions are highl y cost effective, an estimated $20 per ton of CO 2 eq per vehicle. 252 This is even more cost effective than the estimated cost effectiveness for CO 2 eq removal and fuel econom y improvement under the light
- dut y vehicle rule, alread y considered b y the agencies to be a highl y cost effective reduction. 253 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 EI SA authorit y at 49 U.S.C. 32902(k)(2).
251 Sam ple 2010 MY vocational vehicles 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.” July 2010. 252 See Vocational Vehicle CO 2 savings and technology costs in Table 7
- 4 in RIA Chapter 7. 253 The light
- duty rule had an estimated cost per ton of $50 w hen conside ring 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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246 of 771 (v) Alternative Gasoline Engine Standards Considered The agencies are not finalizing gas oline 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 penetration 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 reflecting the inclusion of cylinder de activation 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. (c) Diesel Engines (i ) Baseline Diesel Engine Performance EPA and NHTSA developed the baseline heav y - duty diesel engines to represent a 2010 model y ear engine compliant with the 0.20 g/bhp
- hr NO X standard for on
- highway heav y - dut y engines. The agencies utilized 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 y ear engine maps by using predefined technologies including 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 y ear 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 estimated 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 y ear 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***** E.O. 12866 Review**

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247 of 77 1 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. It should be pointed out that individual technology

improvements ar e 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 y ear of 3 percent for HHD diesel engines and 5 perc ent 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 duty engine manufacturer product plans have fallen into three year cycles to reflect this environment. EPA is finalizing set CO 2 emission stand ards recognizing the opportunity for technology

improvements over this timeframe 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 y ear. The 2017 model y ear technology package for LHD and MHD diesel engine includes continued development and refinement of the 2014 model y ear 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 y ear. The HHD diesel engine technology packages for the 2017 model y ear include the continued deve lopment of the 2014 model y ear technology package plus turbocompounding. A similar approach to evaluating the impact of individual technologies as taken to develop the overall reduction of the 2014 model year package was taken with the 2017 model y ear pac kage. The Heav y - duty 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 technology package to determine the final 2017 MY standards. Th e agencies believe that bottom cycling technologies are still in the development phase and will not be ready for production by

the 2017 model ye ar. 254 Therefore, these technologies were not included in determining the stringency of the final standards. How ever, we do believe the bottoming cycle approach represents a significant opportunit y to reduce fuel consumption and GHG emissions in the future. EPA and NHTSA are therefore both finalizing provisions described in Section IV to create incentives for manuf acturers 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
.

254 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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248 of 771 **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 i s of the incremental part costs, research and development activities, and additional equipment, such as emissions equipment to measure N 2 O emissions. Our general approach used elsewhere in this action (for HD pickup trucks, gasoline engines, Class 7 and 8 tractors, and Class 2b
- 8 vocational vehicles) estimates a direct 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 stan dards 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 development on the new parts and sy stems and including those costs in the purchase price pai d 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 alread y 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 estimate 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 t o 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 improved combustion sy s tem. 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 expected to compl y in large part via technology

changes that are not reflected in new hardw are but rather knowledge gained through laboratory

and real world testing that allows for improvements in control sy stem calibrations

– changes that are more difficult to 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, technician support, dynamometer cell time, and fabrication of prototy pe parts are estimated at $6.8 million (2009$) per manufacturer per y ear over the***** E.O. 12866 Review**

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249 of 77 1 five y ears 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 comments 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 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 manuf acturer per engine 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 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
- , medium
- and heav y - HD engines. EPA also developed the incremental piece cost for the components to meet e ach 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
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250 of 771 **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) $11 (LHD) $6 (MHD &

HHD) $10 (LHD) Exhaust Manifold (flow optimized, improved thermal management) $0 $0 Turbocharger (improved efficiency) $18 $17 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) $11 (MHD & HHD) $15 (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, rolle r tappet) $82 (MHD) $109 (LHD) $76 (MHD)

$101 (LHD) Note: a Note that costs for aftertreatment improvements for MHD and HHD 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 e ach diesel engine regulatory subcategory

are included in Table III
- 19
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251 of 77 1 **Table III**  **- 19**  **: Diesel Engine Technology Costs per Engine (2009$)**  2014 2017 LHD Diesel $388 $358 MHD Diesel $234 $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 have already been demonstrated and their effectiven ess 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, 255 and the associated reductions are highl y cost effective, an estimated $20 per ton of CO 2 eq per vehicle. 256 This is even more cost effective than the estimated cost effectiveness for CO 2 eq removal and fuel econom y improvement under the light
- dut y vehicle rule, alread y considered b y the agencies to be a highl y cost effective reduction. 257 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). (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 considered finalizing diesel e ngine 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 available for production by the 2017 model ye ar. 

## 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 Executive Order 135 63. 258 The primary flexibility

provisions for combination

255 Sam ple 2010 MY vocational vehicles 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.” July 2010. 256 See RIA Chapter 7, Table 7
- 4. 257 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 i n 2030. See 75 FR 25515, Table III.H.3
- 1. 258 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***** E.O. 12866 Review**

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252 of 771 tractors and vocational vehicles are incorporated in a program of averaging, banking, and trading of credits that EPA and NHTSA developed in association with each agency ’s respective CO 2 and fuel con sumption standards (see Section II above). For HD pickups and v ans, the primary

flexibility

provision is the fleet averaging program patterned after the agencies’ light
- dut y GHG and CAFE programs. Furthermore, EPA is not finalizing an emission credit program associated with the final N 2 O, CH 4 , or HFC standards but wi ll allow manufacturers to comply with these standards using CO 2 credits. This section also describes other finalized flexibility provisions that apply , including advanced technology credits, innovative technology credits and earl y compliance credits. 

### A. **Aver aging, Banking, 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 a nd 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 as 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 progressive pace than without ABT. ABT programs may

be 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 b y 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 rule because the agencies are not promoting the use of new technologies but rather the use of existing technologies. However, without 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 25412
- 13. 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 proposed ABT provisions, consistent with each agency ’s statutory authorit y. The agencies worked closely

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 collectivel y as “the ABT prog ram” except where agency - specific distinctions are required. As explained at proposal, and discussed in detail below, the structure of the GHG and fuel consumption ABT program for HD engines was based closel y on EPA’s earlier approaches that red uce burdens and maintain flexibility and freedom of choice for the public.” 76 FR 3821 (Jan. 21, 2011).***** E.O. 12866 Review**

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253 of 77 1 ABT programs for HD engines; the proposed 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 were proposed to be 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 b y dividing their product lines into groups expect ed 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 averaging se t at levels above ( i.e. , that do not meet) the applicable emission or fuel consumption standard. The increased emissions or fuel consumption over the standard would need to be offset b y one or more engine (or vehicle) families within that manufacturer’s averaging set that are certified below ( i.e. , that exceed) the same emission or fuel consumption standard, such that the average emissions or fuel consumption from all the manufacturer’s engine families, weighted b y engine power, regulatory useful life, and production volume, are at or below the level of the emission or fuel consumption standard 259 Total credits for each averaging set within each model ye ar are determined b y summing together the credits calculated for every e ngine 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 program for criteria pollutants, manufacturers are restricted to averaging, banking and trading onl y credits generated b y the engine families 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 credit s for averaging, banking, and trading. Particularly , the agencies requested comment on removing prohibitions on averaging and 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 Class 8 sleeper cabs). The agencies received man y comments on the restrictions proposed for the ABT program, namely on the proposal th at credits could onl y be averaged within the specified vehicle and engine subcategories and not averaged across subcategories or between vehicle and

259 The inclusion of engine pow er, useful life, and production volume in the averaging calculations allows the emissions or fuel consumption credits or de bits to be expressed in total emissions or consumption over the useful life of the credit
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254 of 771 engine categories. Man y commenters, including Union of Concerned Scientist (UCS), NY Dept of Transportatio n, 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 manu facturers will pay penalties rather than comply with the standards, the program could actually cause an increase in emissions 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 reduce the restrictions on credit averaging across vehicle subcategories or engine subcategories or averaging sets within similar vehicl e 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 corres ponding weight classes not only share the same useful life but also use the same emission and fuel consumption technologies and therefore should be placed into the same engine averaging set. EMA/TMA argued that the NPRM restrictions would inhibit a manufac turer’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 c ould make up any deficit selling more low
- roof tractors with regional hauling operations. The same market shift could eliminate a manufacturer’s ability

to generate credits using its aerodynamic high
- roof sleeper cab tractors and could create a credit defi cit if there is a demand for more of the less aerod ynamic 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 subcatego ries would allow a manufacturer more flexibility to deal with these ty

pes of market and customer demand situations. Finally , several commenters, including Ford, DTNA NAD, NTEA and Navistar, requested that the agencies reduce the proposed restrictions even further by allowing credit averaging between vehicle categories and engine categories. Navistar argued that more flexibility was necessary

for manufacturers like itself to increase innovation at a reasonable cost, stating that that more restrictions would increase costs within a shorter timeframe. Based on comments received, the agencies 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 pro viding 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 th e ABT program will adversely affect the fuel efficiency

and GHG emission goals of this regulation. This joint final rule requires vehicle and engine manufacturers to meet increasingl y more stringent emission and fuel consumption standards which will resul t in emission reductions and fuel consumption savings. Manufacturers will not have the option of not meeting the standards. The ABT***** E.O. 12866 Review**

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255 of 77 1 program simply

provides each manufacture the flexibility to meet these standards based upon their individual products and i mplementation plans. CBD also 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. NHTSA strongl y b elieves 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 feasible improvem ent. EI SA gives NHTSA broad authority to develop “compliance and enforcement protocols” that are “appropriate, cost
- effective, and technologically feasible,” and the agency believes that compliance flexibilities such as the opportunity to earn and use cre dits 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 restricted fr om considering the availability of credits in determining the maximum feasible level of stringency

for the fuel economy

standards, 260 in this HD National Program, NHTSA and EPA have based the levels of stringency in part on our assumptions of available flexi bilities 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 fuel consumption/GHG stan dards 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 improvem ents than they

would have without credit options. Further, this is consistent with the direction in EO 13563 to “seek to identify , as appropriate, means to achieve regulatory

goals that are designed to promote innovation.” After reviewing the other comment s, the agencies have determined that some 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 ve hicles. 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 credit averaging across the same weight class vocational and tractor engi ne 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 co rresponding subcategories into different weight classes. In essence, the HD pickup truck and van category

is one large averaging set that will remain as proposed. Vehicle manufacturers, large and small, will be able to average and trade credits generated within larger averaging sets across subcategories within similar vehicle weight classes. However, the agencies are maintaining the restrictions against averaging vehicle credits with engine credits or between vehicle weight classes or engine subcategorie s. 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

260 49 U.S.C. 32902(h).***** E.O. 12866 Review**

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256 of 771 manufacturers. For example, a manufacturer that produces both engines and h eav y - dut y highway vehicles could mix credits across engine and vehicle categories 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

structure. 261 Similarly , large volume manufacturers of engines could shift credits between heav y heav y - dut y diesel engines and light heav y - dut y diesel engines to gain an advantage in one subc ategory over other manufacturers that may

not have multiple engine offerings over several regulatory engine subcategories. Finall y, relating credits between averaging sets of engines would be problematic because of the differences in regulatory useful liv es. The agencies want to avoid having credits from longer useful life categories flood shorter useful life categories, adversel y impacting compliance with the final CO 2 and fuel consumption standards in the shorter useful life category . The agencies beli eve 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. 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, but sought comments on alternative approaches f or reconciling deficits. DTNA, the only commenter who specifically commented on this in the proposal, supported the three ye ar period and stated that it was sufficient for reconciling deficits. The agencies have therefore included in the final rule the p roposed 3 y ear reconciliation period. 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 y ears. This restriction reduces the chance of m anufacturers passing forward deficits 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 program. Navistar requested that the agencies drop the 5
- ye ar credit expiration date proposed for the heavy
- dut y pickup and van category

and not specify

an expiration date for earned credits. Navistar stated that such credits are necessary t o further improve the flexibilities 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 earl y in the phase
- in to be he ld and used without discounting throughout the phase
- in period. We do not see how extending the life of credits can assist manufacturers in dealing with lead time issues.

261 These concerns were not present in the 2012
- 2016 MY light
- duty vehicle rule, where most manufacturers offer diverse product lines and there is not as much disparity among useful lives. That rule consequently does not restrict CO 2 credit trading opportunities betw een light
- duty vehicle sectors.***** E.O. 12866 Review**

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257 of 77 1 For engines, vocational vehicles and tractors, EPA also proposed that CO 2 credits ge nerated 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 agencies’ surplus cre dits not expire. DTNA suggested that the agencies drop any 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 lifespan for credits might be nece ssary or appropriate. DTNA argued that in some of EPA’s past programs, EPA had delay ed a final decision about credit expiration until development of the subsequent rule when, EPA had a better understanding of associated credit 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 consider ation, the agencies recognize that this is a new program and it is unknown whether any manufacturers will have credit surpluses b y the end of the first phase of standards, much less whether some manufacturers will have significantl y 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, as adopted in the light
- dut y vehicle program and proposed and adopted for the HD pickup trucks and vans. Consistent with past EPA practice, the agencies will address credit life in an y follow
- on rulemaking. The following sections provide further discussions of the flexibilities provided in this rule under the ABT program and the agencies’ rationale for providing them. **(1) Heav** **y -**  **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 regulatory engine subcategories. As described above, the agencies ag ree with commenters that increasing the size of averaging sets from within subcategories to across subcategories within the same engine weight classe would provide important additional flexibilities for engine manufacturers without negativel y impacting fue l savings or emissions reductions, and 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 - dut y (LHD) diesel, medium heavy
- dut y (MHD) diesel, heavy

heavy
- dut y (HHD) 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 whic h are certified for installation 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 sets if appropriate in a potential future rulemaking. Credits generated b y engine manufacturers under this ABT program are restricted for use onl y within their engine averaging set, based on performance against the standard as defined in Section II.B and***** E.O. 12866 Review**

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258 of 771 II.D \ \J2756DAAEC001.AA.AD.EPA.GOV \ Share \ Projec t\GHG Heavy

Duty Truck Rule 2009 \ 1NPRM \

Preamble \Primary

Working Documents \

P02 Proposed Standards.doc
. Thus, LHD diesel engine manufacturers can onl y use their LHD diesel engine credits for averaging, banking and trading with LHD diesel engines, not with M HD diesel or HHD diesel engines. This limitation is consistent with ABT provisions in EPA’s existing criteria pollutant program for engines and will help avoid the credits earned from longer useful life subcategories from flooding shorter useful life subc ategories, which would adversel y impact fuel savings and emissions reductions that would otherwise be achieved through compliance with the emission and fuel consumption standards in the shorter useful life subcategories. The compliance program for the final rule 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 (FCL). The agencies did not receive comment on this proposal and continue to believe that it is the best approach. The FCLis a new term we proposed for this program to differentiate the purpose of this credit generation technique from the Family Emission L imit (FEL) previously used in a similar context in other EPA rules. A manufacturer may define its FCLat 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 consumption standard, as discussed in Section II. Credit calculation for the 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 conversion factor in bhp
- hr/mile which i s 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. T he 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 **Equa tion**  **IV -**  **2 : Final HD Engine Fuel Consumption credit (deficit) in gallons** ***** E.O. 12866 Review**

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259 of 77 1 HD Engine Fuel Consumption credit (deficit) (gallons) = (Std

– FCL) x (CF) x (Volume) x (UL ) x 10 2 where Std = the standard associate d 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
- ho ur 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 2 = conversion to gallons To calculate credits or deficits, manufacturers 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 FCLm ay 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 re gulatory 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 reduction from the engine family ’s 201 1 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 following the model ye ar for which that d eficit 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 y ear. 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 values are 110,000 miles; for MHD diesel engines, 185,000 miles; and for HHD diesel engines, 435,000 miles. As described in Section II above, for purposes of EPA’s standards, an engine***** E.O. 12866 Review**

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260 of 771 manufacturer may

choose to comply

with the N 2 O or CH 4 cap standards using CO 2 credits. 262 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 warming. To account for the differe nt global warming potential of these GHGs, manufacturers will determine the amount of CO 2 credits required by 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. In general the agencies do not expect manufacturers to use this provision, but are providing it as an alternative 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 y ear for which that deficit was generated at which time the deficit must be reconciled with surplus credits. Manufacturers must use credits once those credits have been generated to offset a shortfal l before those credits can be banked or traded for additional model y ears. This restriction reduces the chance of an engine manufacturer passing forward deficits before reconciling their shortfalls and exhausting those credits before reconciling past defi cits. Deficits will need to be reconciled at the reporting dates for year three. Also, surplus credits earned in the engine categories will not have an expiration date. The agencies will consider during the next phase of rulemaking whether to retain or to reset each manufacturer’s banked credit surplus. Additional flexibilities for engines are discussed later in Section IV(B)
. **(2) Heavy**  **- Duty Vocational Vehicles and Tractors**  In addition to the engine AB T 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 propose d averaging sets which aligned with the proposed twelve regulatory subcategories; however in response to the comments described, which requested that averaging sets be expanded across subcategories within similar weight classes, the agencies are finalizing only three averaging sets

– LH D, MHD, and HHD based upon the three weight classes. In other words, all HHD (Class 8) tractors and HHD vocational vehicles will be treated as a single averaging set. Similarly , all MHD (Class 7) tractors and MHD (Class 6
- 7 ) vocational vehicles will be treated 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 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 allows for a straightforward compliance program for each sector, with aspects that are independently quantifiable and verifiable.
262 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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261 of 77 1 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
- FEL) x (Payload Tons) 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 f

or 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) p roduction 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
FEL) 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 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 (gallons/1,000 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 3 = conversion to gallons***** E.O. 12866 Review**

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262 of 771 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 once those credits have been generated to offset a shortfall before those cre dits can be banked or traded for additional model y ears. 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 wi ll need to be reconciled at the reporting dates for year three. Also, surplus credits earned in the vehicle categories will not have an expiration date. The agencies will consider during the next phase of rulemaking whether to retain or to reset each manufacturer’s banked credit surplus. Additional flexibilities for HD vocational vehicles and tractors are discussed later in Section IV.B. **(3) Heavy**  **- Duty Pickup Truck and Van Flexibility Provisions**  The NPRM included specific flexibility provisions for manufac turers of HD pickups and vans, similar to provisions adopted in the recent rulemaking for light
- duty car and truck GHGs and fuel econom y. The agencies are finalizing the flexibilities as proposed in the NPRM. In the heav y - duty pickup and van category a m anufacturer’s credit or debit balance will be determined b y calculating their fleet average performance and comparing it to the manufacturer’s CO 2 and fuel consumption standards, as determined b y 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 y ear 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. The end
of
- year reports will provide the appropriate data to reconcile pre
- compliance estimates with final model y ear figures. In addition to production weighting, the EPA credit calculations include a factor for the vehicle useful life, in miles, in order to allow the expression of credits in metric tons, as in the light
- duty GHG program. The NHTSA credit calculation uses standard and performance levels in fuel consumption units (gallons per 100 miles), as opposed to fuel econom y units (mpg) as done in the light
- duty program, along with the vehicle useful life, in miles, allo wing 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 Std

– 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)***** E.O. 12866 Review**

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263 of 77 1 FC Std = Fleet average fuel 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) V olume = the total production of vehicles in the regulatory class UL= the useful life for the regulatory class (miles) As described above, HD pickup and van manufacturers will be able to carry forward deficits from their fleet
- wide average for three y ears before reconciling the shortfall. Manufacturers will be required to provide a plan in their pre
- model y ear reports showing how they

will resolve projected credit deficits. However, just as in the engine category , manufacturers will need to use credits e arned once those credits have been generated to offset a shortfall before those credits can be banked or traded for additional model y ears. This restriction reduces the chance of vehicle manufacturers passing forward deficits before reconciling their shor tfalls and exhausting those credits before reconciling past deficits. Also, surplus credits earned in the HD pickup and van category will not have an expiration date. The agencies will consider during the next phase of rulemaking whether to retain or to r eset each manufacturer’s banked credit surplus. Additional flexibilities for heav y - dut y pickup and van category are discussed below in Section IV.B. 

### B. **Additional Flexibility Provisions** The NPRM proposed additional provisions to facilitate reductions in GH G emissions and fuel consumption beginning in the 2014 model y ear. While EPA and NHTSA believed the ABT and flexibility structure would be sufficient to encourage reduction efforts b y heavy
- dut y highway engine and vehicle manufacturers, the agencies under stood that other efforts could create additional opportunities for manufacturers to reduce their GHG emissions and fuel consumption. These provisions would provide additional incentives for manufacturers to innovate and to develop new strategies and cleane r technologies. The agencies requested comment on these provisions, as described below. In addition, the 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 b y not including the conversion factor that exists in the light
- dut y s tatutory

language. The commenters argued that Congress’ intent to incentivize NGVs 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 this rulemaking, as evidenced b y the incentives in the light
- dut y statutory text. AGA and Hayday suggested that the agencies were not including the NGV incentive from light
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264 of 771 duty because C ongress did not explicitly include it in 49 U.S.C. 32902(k), and argued that this would contradict the agencies’ inclusion of other incentives similar to the light
duty rule. The agencies continue to believe that alternative
- fueled vehicles, including NGVs, provide fuel consumption benefits 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 be also be applied to the heavy
- dut y program, 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 consumpt ion benefits that FFVs will obtain in GEM accuratel y reflect their energy benefits and thus provide sufficient incentives for these vehicles. The agencies would like to clarify that the decision not to include an NGV incentive was based on this determinat ion, not on a belief that incentives present in the light
- dut y rule could not be developed for the heav y - dut y rule if they

were not explicitly

included in Section 32902(k). 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 , y et one operated on natural gas would have a lower carbon dioxide emissio ns 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 consumption for FFVs and alte rnative fuel vehicles finalized in the LDV 2012
- 2016 GHG and fuel consumption standards. The incentive effectivel y reduces the calculated fuel consumption for FFVs and alternative fuel vehicles by a factor of 85 percent. The commenters argued that the in centive 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 have reviewed this issue and continue to believe that the light
- duty conversion factor is not appropriate for this rule. Instead, the agencies are finalizing a conversion process from CO 2 to fuel consumption that we believe accurately reflects the fuel consumption of the vehicles while at the same time providing a significant incentive for the alternative fuel u se. Using the agencies’ calculation, NGVs will exhibit an approximate 20 percent benefit over conventional fuel use. We believe this is a substantial enough advantage to spur the market for these vehicles. The calculation at the same time does not overe stimate the benefit from this technology , which could reduce the effectiveness of the regulation. Therefore, the final rule does not include the light
- dut y 0.15 conversion factor for NGVs.***** E.O. 12866 Review**

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265 of 77 1 **(1) Early Credit Option**  The NPRM proposed that manufacturers of HD eng ines, HD pick
- up 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 m anufacturer’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 “early credits” to utilize in its ABT program. As noted in the NPRM, the start dates fo r EPA’s GHG standards and NHTSA’s fuel consumption standards vary by regulatory

category (see Section II for the model y ears when the standards become effective), meaning that the early credits provision, if selected b y a manufacturer, could begin during d ifferent model y ears. 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 y ear of the mandatory standards and that limitations on the use of credits 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 b e appropriate to appl y t o earl y credits from HD engines, combination tractors, and vocational vehicles, as a greater incentive for earl y compliance. The agencies received 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 a lso 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 ye ar. Additionally , 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 sh ould 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 removal of these restrictions would further benefit the environment. CBD stated that earl y cr edits 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 verifiable. 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 engines and vehicles earlier than they would have planned. However, the agencies do not want to provide a windfall of credits to manufacturers that may alread y have one or more products that meet the standards. Therefore, the final rule will include the proposed option for a manufacturer to obtain earl y credits for products if they certify their entire subcategory

at GHG emissions and fuel consumption levels below the standards. The agencies are making a clarification in this rule that the manufacturers must certify their entire subcategory , not necessarily their entire averaging set, because the averaging sets***** E.O. 12866 Review**

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266 of 771 are broadened under the final rulemaking from the proposed categories in the NPRM. In addition, the agencies are providing the flexibility for combination tractor manufacturers to obtain earl y credits for their additional sales, as compare d to their 2012 model y ear sales, of SmartWay

certified combination tractors in 2013 model year. The agencies view this subcategory

of vehicles as the onl y segment of vehicles or engines where the true additional reductions due to the earl y 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 fro m their 2013 model y ear SmartWay

combination tractor sales b y first calculating the difference between the number of SmartWay

certified combination tractors sold in 2012 model y ear versus 2013 model y ear. The increment in sales determines the number of 20 13 model y ear SmartWay

tractors which can be used to certify for earl y credits. The manufacturer would then determine each tractor configuration’s performance b y modeling in GEM, using each vehicle configuration’s appropriate inputs for coefficient of dra g, tire rolling resistance, idle reduction, weight reduction, and vehicle speed limiter. Next, the difference between a specific tractor configuration’s performance and the 2014 MY standard for the appropriate regulatory subcategory

(Class 8 sleeper cab h igh 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, during the years when the EPA standards are mandatory , manufacturers wil l have the option of complying with NHTSA fuel consumption standards equivalent to the EPA emission standards in order to accumulate credits in the ABT program. NHTSA would like to clarify that for the early

credit provision, implementation must occur in MY 2013 exactly as implemented under the EPA emission program, and not in the model y ear immediately before the NHTSA standards become mandatory . 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. The agencies also received comments from EMA/TMA and Cummins opposing the requirement to certify six months prior to the first model y ear of the mandatory standards for earl y credits. The commenters argued and the agencies agreed that this restriction could cause some delay s in technology rollout and are therefore removing this requirement for the final rule s . The agencies reviewed the restriction and evaluated the 2012
- 2016 MY L ight
- duty early credit program. No such restriction exists for LD vehicles. Upon reconsideration we believe that this requireme nt is not necessary for our implementation of the program
. Several commenters, including DTNA, Edison Electric Institute, Eaton, and Bosch, supported adding the provision to further incentivize earl y credits by using a 1.5 multiplier, stating that it would encourage earl y introduction of technology . Cummins and UCS opposed the added provision stating that the opportunity to earn credits at their***** E.O. 12866 Review**

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267 of 77 1 normal value should be sufficient incentive for early compliance. The agencies believe that this incentive will further encourage faster implementation of emission and fuel savings technology

and help to reduce the costs manufacturers will incur in efforts to comply 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. 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 2013 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 average standards, this credit opportunity entails certifying a manufacturer ’s entire HD pickup and van fleet in model y ear 2013. Industry commenters argued that earl y credits should be calculated against a target curve that is less stringent than the 2014 curve. We disagree. Because it is the first y ear of a 5
- year phase
- in, the 2014 model year has quite modest emissions and fuel consumption reductions targets of onl y 15 percent. Targeting even less significant improvements over the baseline would unduly increase the prospect for windfall credits by

individual manufacturers wh o may have better than average baseline fleets. Again, the agencies consider the availability of earl y credits to be a valuable complement to the overall program to the extent that they encourage earl y implementation of effective technologies. **(2) Advanced Te**  **chnology Credits** The NPRM proposed targeted provisions that were expected to promote the implementation of advanced technologies. Specifically , manufacturers that incorporate these technologies would be eligible for special credits that could be applied t o other heav y - dut y vehicles or engines, including those in other heav y - duty categories. The eligible technologies include :

 Hy brid powertrain designs that include energy storage s ys tems
 Rankine cycle engines

 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 c omment 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 their introduction. MEMA asked that the agencies expand the list of technologies that are el ig ible for Advanced Technology

Credits to include advanced transmission and drivetrain technologies, tire and wheel accessories, and advanced engine accessories technologies***** E.O. 12866 Review**

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268 of 771 (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 wheel improvements be allowed to receive credit through the Advanced Technology Credit Program. The advanced technolo gy credit program is intended to encourage development of technologies that are not yet commerciall y available. Inorder to provide incentives for the research and development needed to introduce these technologies, Advanced Technology

Credits are allowed to be applied to any heavy
- dut y vehicle or engine and are not limited to the vehicle category generating the credit. Because of this flexibility in the application of ATCs, it is important that the list of eligible technologies be restricted to those that are not yet available in the market. In addition, the technologies must lend 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 tires, the agencies have alread y established a mechanism for quantifying reductions associated with these approaches. For example, the agencies assumed in the regulatory impact analy sis that some electrifie d accessories will be used to comply with the regulations. Specificall y, 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 would receive credit though engine certificatio n process. (See RIA Chapter 2). Any reductions in engine load and resulting emissions and fuel consumption resulting from accessory electrification will be accounted for in engine dynamometer testing. However, other electrified accessories, such as power steering and air conditioning may not

– if they

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 (2). With regard to tire rolling resistance improvements, light weight wheels, and weight reduction associated with the use of super single tires, these are already credited in program and are accounted for in GEM modeling. Some improved transmissions

– such as automatic manuals
- have been available commercially for ten y ears and as such, this technology would not be eligible for ATC. However, the agencies acknowledge the importance of including advanced transmissions and drivetrains in the program. As such, we are allowin g credit to be established through the Innovative Technology Credit Program described in Section IV. B (2). Likewise, with regard to weight reduction, the agencies are allowing additional weight reduction approaches to be used for tractors through GEM mod eling. 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 the re could be significant 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 lis t 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.***** E.O. 12866 Review**

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269 of 77 1 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 th at these added flexibilities are absolutely

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, includi ng ACEEE and Cummins 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 reviewing these comments, the agencies have determined that the relativel y low volumes expected in this timeframe are likel y to mitigate an y potential adverse impact. Further, the credit multiplier will provide enough added benefit to the po tential hy brid community

to help reduce barriers to market entry for these new technologies. Therefore, the final rule includes 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 y ear 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 y ears 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 y ear and work factor. If advanced technology credits generated by

pickups and vans are used in another HD vehicle category , these credits would, of course, be subtracted from the manufacturer’s pickup and van category credit balance. Commenters generally supported the introduction of hy

brid and zero tailpipe emission vehicles, but did not comment on the specific provisions discussed above. We are finalizing 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 s ources such as refineries and powerplants to EPA regulatory programs that focus specifically 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, we have decided to***** E.O. 12866 Review**

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270 of 771 maintain consistency

with past practice for setting vehicle emissions standards under Clean Air Act section 202(a)(1), whereb y we treat all vehicles equall y, based on tailpipe
only emissions performance. We also recognize that the ongoing EPA/NHTSA rulemaking to reduce GHGs and fuel consumption in MY 2017 and later light
- duty vehicles is also further examining this issue, and may yield information and policy direction relevant to the planned follow
- on rulemaking for the heavy
- dut y sector. (b ) Vocational Vehicle and Tractor Hybrids For vocational vehicles or combination tractors incorporating h ybrid powertrains, we proposed two methods for establishing the number o f 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 pe rformance 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 the benefit asso ciated 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 vehicle “A”. Th e “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. 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 _B = ___ (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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271 of 77 1 4. Improvement Factor x GEM Fuel Consumption Result_B = ___ (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 yp ical operation of these vehicles is very similar to the overall drive cycles final in Section II. Therefore, the agencies are finalizing to u se 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% 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 avoiding main engine operation and related CO 2 emissions and fuel consumption during PTO operation. To appropriatel y address benefit s, exercising the conventional and hy brid vehicles using their PTO would help to quantify the benefit to GHG emissions and fuel consumption reductions. The duty cycle to quantify

the h yb rid CO 2 and fuel consumption impact over this broader set of operatio n would be the three primary drive cycles plus a PTO duty cycle. Our proposed PTO cycle was based on consideration of using alternate, appropriate duty cycles with Administrator approval in a public process. The PTO duty cycle takes into account the sale s impact and population of utility trucks and refuse haulers. As described in RIA Chapter 3, the agencies proposed to add an additional PTO cycle to measure the improvement achieved for this ty pe of h yb rid powertrain application. The weightings for the hybrids with PTO are included in Table IV
- 2
.***** E.O. 12866 Review**

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272 of 771 **Table IV**  **- 2**  **: Final Drive Cycle Weightings for Hybrid Vehicles with PTO** Transient 55 mph 65 mph PTO Vocational Vehicles with PTO 30% 15% 27% 28% A number of comments were received on the proposed hy brid chassis testing approach. The comments can be grouped into four main categories which are as follows: 1) a better definition is needed for what constitutes a hy brid; 2) improved test cycles are needed; 3) improved methods are needed for h ybrid testing; and 4) parity between vehicle and engine cycles is needed to ensure a fair comparison of hy brids using the different approaches proposed by the agencies. 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 clarification

– 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 propose d cycle

– the CARB heav y - heav y dut y truck transient mode cycle, was developed as a composite cycle based on a wide range of medium and heav y dut y vehicles but does not reflect the high acceleration and deceleration of vehicles used in urban applications an d which is ty pical for hy

brid vehicles and does not reflect the level of acceleration and deceleration t ypical 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 hy brids 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 cy cles are functionally

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 required to conduct coast down testing for h ybrid vehicles to establish road loads for each t ype of vehicle. Inste ad, they

asked that the agencies define default road load values for manufacturers to use for hy brids. EMA/TMA said that conducting coast down tests is expensive. They

also argued that road load is irrelevant to determining hy brid performance since the c hassis dy namometer method requires a comparison of a vehicle***** E.O. 12866 Review**

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273 of 77 1 that is identical in all respects except those factors directly relating to the hy

brid powertrain. Cummins, I CCT, and Center for Clean Air Policy expressed general support for chassis dy

namomete r 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 has been mitigated. Should a manufacturer contemplate chassis testing or powerpack testing to assess hy brid ve hicle performance, coast down testing will still be needed for vocational applications to develop the road load values. (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 considered 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 acc urate 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 e ffect, the engine will need 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 stem s. 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 vehicle s. 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 sy stems 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 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. T he agencies asked for comments on the most appropriate test procedures to accurately

reflect the performance improvement associated with hy brid sy stems tested using these or other protocols.***** E.O. 12866 Review**

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274 of 771 A number of comments were received on the proposed engine testing approaches. Comments were received from EMA/TMA, Cummins, Allison, Hino, and ICCT, stating that the h ybrid 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 hy brid sy stem” and a clearer definition for hy brids needs to be developed. For example, Allison stated that the DRIA say s that a “complete hy brid sy stem” can exclude the trans mission. They added that a hy

brid sy stem must include a transmission. EMA/TMA stated that simulated chassis dy namometer testing should include hy

brid components. EMA/TMA stated that the agencies proposal that part 1065 may be amended, but did not provid e specifics on how it might be amended. They suggested the following changes to part 1065: 1) all engine and h ybrid components capable of providing or recovering traction power be included in the control volume; 2) use of h ybrid s ys tem torque curves rathe r than engine torque curves; 3) reference to J2711 for management of energy storage devices; 4) adhere to conventional calculation of emissions with only

positive work counted; and 5) provide an estimate of maximum available kinetic energy

in 1065 to ensur e that energy capture is consistent with real world operation of h yb rids. Hino said that energy

recapture from regenerative 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 vehicles. 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. Inresponse to the concerns detailed above and raised by engine manufacturers, hy brid s ys tem manufacturers, environmental groups, and NGOs regard ing 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 ybrid applications will be evident. The new weighting factors between dut y c yc les for h ybrid certification will be 75% for the transient, 9% for the 55 mph cruise cy cle, and 16% for the 65 mph cruise cycle. The basis for this change m ay 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. Concerns were raised b y hy brid s ys tem manufacturers that the potential for a competitive advantage could exist f or hy brids using different methods for certification based solel y on the test method chosen. For determination of the allowable brake energy that may be used for the test cycle with hy brid engines, it is important to provide consistency

between test method s. 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

for all powertrain test cell***** E.O. 12866 Review**

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275 of 77 1 (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 adopting the proposed dut y cycles
. The agencies proposed a transient dut y c ycl e, a 55 mile
- per - hour steady state cruise and a 65 mile
- per - hour steady 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 age ncies remain essentially unchanged. The modification being adopted with today ’s final action is to address the distribution of the emissions impact associated with each dut y c yc le. In addition, the agencies are finalizing to 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 can follow the procedure outlined below in the Innovative Technology

Credit section. L ikewise, a manufacturer seeking to certify a hy brid using an alternative approach, such as simulation modeling, would need to follow the procedure described in the Innovative Technology Credit section. Manufacturers whose alternative hy brid testing procedure is approved through the Innovative Techno logy Credit Program would receive credits through the Advanced Technology Credit Program. 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 applications of h ybrids can be evaluated for credit. They included h ydraulic, 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 with 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. Cummins supported three proposed options fo r evaluating hy brids. ICCT supported option 1 and 3, but not 2. EMA/TMA commented that the proposed post
transmission powerpack testing does not provide sufficient detail and control volume should be defined for manufacturers so that they understand whic h components to include in the test. I CCT stated that EPA and NHTSA need to ensure that: 1) each hy brid 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 a h yb rid system, 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 offe red 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***** E.O. 12866 Review**

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276 of 771 engin e 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 re garding an inappropriate baseline were 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 provides 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 continu e to incentivize 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 vehicle 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 produ ction vehicle and 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 advantage 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 appropriatenes s of the selection 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 s pecific 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 techno logy with improvements 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 co nsistent with how 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 las t option attempts to include the benefits of the previous options, 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 previo us model y ear ensures 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 regardin g 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***** E.O. 12866 Review**

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277 of 77 1 application. This approach is intended to be used in conjunction with the basic premise that the “A” vehicle will be the vehicle most similar t o the h ybrid “B” vehicle. Should no apparent baseline be available, the vehicle being displaced b y the hy brid may be determin ed 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 agencie s 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 baseli ne, the closest baseline vehicle may be selected b y the manufacturer and will be evaluated b y the agencies
. **(3) Innovative Technology Credits**  The agencies proposed a credit opportunity intended to apply

to new and innovative technologies that reduce fuel con sumption and CO 2 emissions, but for which the reduction benefits are not captured over the test procedure used to determine compliance with the standards (i.e., the benefits are “off
- cycle”). See 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 test cycles, and that some of these technologies might merit some additional CO 2 and fuel consumption credit generating potential for the manufacturer. Eligible innovative technologies are t hose technologies that are newly

introduced 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 protect ion, active aerod yn amic features, and adjustable ride height. This would include known technologies if they are not y et widel y utilized in a particular subcategory . Further, any credits for these technologies would need to be based on real
- world fuel cons umption 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 technologies 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 i t 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. The agencies proposed that this optional credit opportunity would be available through the 2018 model y ear reflecting that technologies may be common by then, but the agencies sought comment on the need to extend beyond model y ear 2018. EPA and NHTSA also proposed that credits generated using innovative technologies be restricted within the subcatego ry averaging set where the credit was***** E.O. 12866 Review**

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278 of 771 generated but requested comments on whether these innovative technology credits should be fungible across vehicle and engine categories. The agencies also proposed 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 vehicles, and g/b hp
- 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 repeatable 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 25440. We proposed that the technologies upon which the credits are based would be subject to full useful life compliance pro visions, 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, the 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. In cases where the benefit of a technological approach to reducing CO 2 emissions and fuel consumption cannot be adequately r epresented 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 demonstr ation program would have to be robust, verifiable, and capable of demonstrating the real
- world emissions benefit of the technology with strong statistical significance. See 75 FR 25440. Finally , the agencies also explained in the NPRM that the CO 2 and f uel 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 statisticall y robust and based on real world driving conditions. As with the similar procedure for alternative off
- cycle credits under the 2012
- 2016 MY light
- duty 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 designed, includin g 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 all 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 providing***** E.O. 12866 Review**

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279 of 77 1 further discu ssion that addresses and clarifies the provision in response to the comments solicited and the comments received. A number of organizations, including DTNA, MEMA, Navistar, Green Truck Association, Eaton, ACEEE, and NESCAUM, commented that technologies suc h 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 th ese commenters. The NPRM did not provide a specific list of technologies that the agencies would consider “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 co nsumption but for which the benefits are not captured utilizing the FTP procedures, SET procedures and 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 not alread y been considered, if the associated emission and fuel savings can be measured and validated, and if the technology and measurement methodology have been approve d by the agencies. 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 reque sted that the agencies prescribe specific processes and procedures in the final rule by which innovative technologies can be submitted for review and approval. EMA/TMA requested that the agencies provide guidance on the certification process, and suggest ed that existing fuel consumption test procedures developed jointly by the Society of Automotive Engineers (SAE) and the Technology & Maintenance Council (TMC), specifically

that the Ty

pe II and Ty

pe III procedures be used. Eaton requested that the agenci es identify test methods that can be used for certification in order to provide transparency

and certaint y, and promote early technology introduction. In response to these comments, the agencies are further defining the process for the final rule. In c ases where the benefit of a technological approach to reducing CO 2 emissions and fuel consumption cannot 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 technologies 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 engine and/or vehicle to prevent double counting of emissions reductions or gaming. Since innovative credits will be available for use within the same avera ging set as the engine or vehicle which employ the innovative technology , the agencies are defining innovative credit approaches by regulatory

category .***** E.O. 12866 Review**

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280 of 771 (a ) Heavy
-Duty Pickup Truck and Van Innovative Technology Credits For HD pickups and vans, EPA and NHTSA pr oposed that they would review and approve manufacturer
- provided test preocedures 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
- cycle approach currently used in EPA’s fuel econom y labeling program for light
- duty vehicles 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 real
- 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 remains a candidate approach that manufa cturers may pursue in making their demonstrations for innovative technology 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. 263 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 me thodology and credits onl y if certain criteria were met. 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 uncert ainty 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 availabilit y in the Federal Register notifying the public of a m anufacturer’s proposed alternative off

- cycle credit calculation methodology and provide opportunity 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 age ncies are adopting provisions to determine the separation of engine credits and vehicle credits based on the method which is selected b y the manufacturer to determine the effectiveness of the innovative technology
. For example,

263 See 75 FR 25440.***** E.O. 12866 Review**

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281 of 77 1 improvements to the engine that are demonstrated in either the engine dyn amometer test or powerpack test will clearl y be engine credits. Improvements that are demonstrated using chassis d ynamometer or on - road test will be considered vehicle credits. However, the agencies recognize 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 proces s. Furthermore, the agencies adopting an approach for HD engines and vehicles which 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, that is similar to the light
- duty process to address the concerns of some commenters mentioned above. The first path would not require a public approval process of the test method. The “pre
- approved” test methods for HD engines and ve hicles would include the A
- to - B chassis testing, powerpack testing, and on
- road testing. The agencies are also adopting as proposed a second test method approval path which provides a manufacturer the ability to submit an alternative evaluation approach t o EPA and NHTSA which must be approved b y the agencies prior to the demonstration program. As with HD pickup trucks and vans, such submissions of data should be submitted to the agencies and would be subject to a public evaluation process in which the pub lic would have opportunity for comment. 264 Baseline emissions and control emissions would need to be clearly demonstrated over a wide range of real world driving conditions and over a sufficient number of vehicles to address issues of uncertainty with the d ata. 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 re garding the methodology , but not include an y C onfidential 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 anal ys es 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 engine 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 co nducted 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 c ycl e, then it will require prior approval 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 P rocedure Ty pe III Issues 1987
- 06, with

264 See 75 FR 25440.***** E.O. 12866 Review**

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282 of 771 additional 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 grade. Th e agencies will take into account published and relevant research in determining whether the grade is representative. 265 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 evaluation 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. Lastly, the ambient air temperature must be betwe en 5 and 35°C. The agencies also would 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 proposed route prior to testing for approval. As discussed in Section II.B.2, e the agencies are finalizing aerodynamic drag values which represent zero degree yaw (i.e., representing wind from directly in front of the vehicl e, not from the side). We 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 trucks than of light
- dut y vehicles. To provide additional incentive for manufacturers using innovative aerodyn amic 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 gain credit for developing technologies which improve the aerod ynamic performance in crosswind conditions, similar to those experienced b y vehicles in use. This approach allows a manufacturer to demonstrate that the wind average drag coefficient for a particular model shows an improvement under conditions other than zero degree ya w. If a manufacturer can demo nstrate that the wind average drag coefficient for an aerody namic configuration is lower than the wind average drag coefficient for the non
- aerody namic configuration, then the manufacturer may take the delta between the aerod ynamic and non
- aerod yn amic wind average drag coefficient (CdA), discount by

25 percent, and subtract this difference from the zero degree y aw Cd A value for that configuration, and use this reduced CdA value to determine the aerod ynamic bin for that configuration. The manufacturer woul d use the Cd value associated with appropriate bin to determine the Cd value which will be used in GEM for all tractors using this aerody namic package. The agencies 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 a dvisable given the large number and variability of different technology

t yp es and the uncertaint y in this provision. DTNA stated that the credits
265 The agencies would consider information such as the study conducted by Oak Ridge National Lab which fo und 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 Projec t 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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283 of 77 1 should be fungible across engine and vehicle classes to be treated the same as advanced technology

and ABT cre dits. 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 also believe it is reasonable to proceed with some caution at this time due to the uncertaint y that exists about the credits to be acquired. Therefore, the final rule includes the restriction on the innovative technology credits. The NPRM proposed that this optional credit opportunity be available through the 2018 model y ear, refl ecting that technologies may be common by then, but sought comment on the need to extend beyond model y ear 2018. The agencies received comments from DTNA, Navistar, Eaton, Cummins and Bosch supporting the extension of this provision beyond model y ear 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 s the GEM will not incorporate an y newer technology until it is updated in phase two of the program, and manufactures will therefore continue to need the innovative technology provision for receiving credi ts for technologies not accounted for in GEM. The agencies have reviewed these concerns and believe that they are valid. Therefore, the final rule s do not state that this provision ends in model y ear 2018. **(4) N**  **2 O Credit**  EPA received a comment from an indu stry stakeholder requesting a provision to provide allow manufacturers of heavy
- dut y engines manufacturers to gain credit for redesigning aftertreatment sy stems to reduce N 2 O emissions. It can be argued that such credits would be necessary where the N 2 O r eductions are achieved at the expense of slightly higher CO 2 emissions , since both are greenhouse gas emissions. The agency agrees that it is appropriate to consider all greenhouse gas emissions together for such situations where trade
- offs among the emis sions exist due to technology selections. Thus, EPA is adopting an interim provision which allows engine manufacturers to generate CO 2 credits for very low N 2 O emissions. Specificall y, manufacturers that certify engines with full useful life N 2 O FEL emis sions 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 manufacturer certifies an engine famil y 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 family

to a 0.03 g/hp
- hr N 2 O FELand generate enough CO 2 credits to offset CO 2 emission s 2.98 g/hp
- hr above the standard. The agency is limiting this provision to model y ears 2014 through 2016, the same years that NHTSA’s program is voluntary , to maintain alignment between the CO 2 emissions and fuel consumption standards.***** E.O. 12866 Review**

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284 of 771 

## V. **NHTSA**

**and EP A**  **Com pliance, Certification, an**  **d 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 Section II. To achieve the goals projected in the proposal to this rule, it is important for the agencies to have an effective and coordinated compliance program for our respective standards. As is the case with the Light
- Dut y GHG and CAFE program, 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 pro cess for both manufacturers and the agencies by

building on existing practice wherever possible, and by structuring the program such that manufacturers can use a single data set to satisfy the requirements of both agencies. It is also important to conside r the provisions of EPA’s existing criteria pollutant program in the development of the approach used for heav y - dut y certification and compliance. The existing EPA heav y - duty highway engine emissions program has an established infrastructure and methodolo gy that will allow for an effective integration with this final GHG and fuel consumption program, without needing to create new unique processes in many instances. The compliance program will address the importance of the impact of new control methods for heav y - dut y vehicles as well as other control sy stems and strategies that may extend beyond the traditional purview of the criteria pollutant program. The heav y - duty

compliance program uses a variety of mechanisms to conduct compliance assessments, inc luding preproduction certification and postproduction testing and in
- use monitoring once vehicles enter customer service. Specifically , the agencies are establishing a compliance program that utilizes existing EPA testing protocols and certification proced

ures. 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 provisions in the program for advanced technologies. This rule includes a process to foster the use of innovative technologies, not y et contemplated in the current certification process. EPA will continue to conduct compliance preview meetings which provide the agency an opportunity

to review a manufacturer’s ne w 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 for manufacturers to begin pre
- certification meetings with EPA earl y enough to addr ess issues of certification and compliance for both integrated and non - int egrated 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 proce ss 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***** E.O. 12866 Review**

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285 of 77 1 and NHTSA sought comments in the NPRM on additional strategies for providing informatio n useful to the public regarding industry’s progress toward reducing GHG emissions and fuel consumption from this sector while protecting sensitive business information. In response, commenters (Sierra Club and UCS) also had strong interests for the agenc ies 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 dut y vehicles thereb y empowering fleet purchasers to make better inform ed choices. Another commenter (ACEEE) specificall y requested that the agencies publish a heav y duty truck trend report describing vehicles and engines sold, including fuel efficiency

and GHG performance and the use of advanced technology . It was further recommended (by ALA and EDF) that the agencies 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, in buy ers guid e similar to the fuel economy guides that EPA and NHTSA provide for the light duty CAFE program. An interest in having a consumer based label for 2b
- 3 pickup trucks and vans providing fuel econom y and emission information like in the light dut y CAFE progr am was also expressed (ICCT and UCS). ACEEE, I CCT and UCS requested that the agencies publish annual reports describing the vehicles and engines sold, fuel efficiency and GHG performance results and the technologies used to comply with standards. Anoth er commenter (ACEEE) specificall y requested that the agencies should publish a heav y duty truck trend report describing vehicles and engines sold, including fuel efficiency and GHG performance and the use of advanced technology . This same commenter reques ted that the agencies should collect and publicly disseminate existing vehicle performance data and data generated in future model y ears. The agencies agree that there is a need for sharing heav y - dut y emissions and fuel consumption information and therefo re 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 clos el y parallel light
- dut y pick
- ups 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. Vehicle emission s tandards established under the CAA apply throughout a vehicle’s full useful life.***** E.O. 12866 Review**

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286 of 771 Under EPA existing criteria pollutant emission standard program for heav y - duty pickup trucks and vans, vehicle manufacturers certify a group of vehicles called a test 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 emissions, whic h 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 test 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 vehicle models and configurations in order to get more precise model
- level fuel econom y and CO 2 emission levels. This same approach would be applied to heav y - dut y pickups and vans. Additionally, like the light
duty program, approved use of anal yt ically derived fuel eco nom y (ADFE) will be allowed to predict the fuel efficiency and CO 2 levels of some vehicles in lieu of testing when deemed appropriate by the agencies. The degree to which anal yt ically derived fuel econom y is allowed and the design of the adjustment factor s is covered 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 s trategies 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 measure compliance for GHG emissi ons. 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 control strategy . This would all ow 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, a s with criteria pollutants. For EPA, the final approach for certification would follow the current process, which would require manufacturer submission of certification applications, approval of the application, and receipt of the certificate of conformi ty prior to introduction into commerce of an y engines. EPA proposes the certificate of conformit y be a single document that would be applicable for both criteria pollutants and greenhouse gas pollutants. NHTSA would assess compliance with its fuel consumption standards based on the results of the EPA GHG emissions compliance process for each engine family
.***** E.O. 12866 Review**

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287 of 77 1 (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 exha ust emissions from heav y - dut y vehicles as a complete entity . Instead, a compliance assessment of the engine is undertaken as described above. Vehicle manufacturers installing certified engines are required to do so in a manner that maintains all functio nality

of the emission control sy stem. While no process exists for certifying these heav y - dut y vehicles, the agencies believe that a process similar to the one we propose for used for heav y - dut y engines can be applied to the vehicles. The agencies are fi nalizing related certification programs for heav y - dut y vehicles. Manufacturers would divide their vehicles into families and submit applications to each agency

for certification for each family . However, the demonstration of compliance would not require emission testing of the complete vehicle, but would instead involve a computer 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 stead y state cr

uise 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 would return the expected CO 2 emissions, in g/ton
mile, and fuel co nsumption, 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 trucks between a gross vehicle weight rating between 8,500 and 14,000 pounds that are not alread y covered under the MY 2012
- 2016 light
- duty truck and medium
- duty

passenger vehicle GHG standards. In this section “trucks” refers to heav y - duty pickup trucks and vans between 8,500 and 14,000 pounds not already covered under the light
- duty 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 consumpti on 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 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 e fficient use of emission control hardware (i.e., cataly tic converters). The standards for CH 4 and N 2 O would be set as caps that would limit emissions increases and prevent backsliding from current emission levels. In lieu of meeting the caps, EPA is allo wing manufacturers the option of offsetting an y N 2 O emissions or any CH 4 emissions above the cap by taking steps to***** E.O. 12866 Review**

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288 of 771 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 H FET (California requirement) 266 . These rules will use the same testing procedures alread y required for heav y - dut y chassis certification, namely the L ight
- dut y FTP and the HFET but extend the requirement for chassis certification for CO 2 emissions to diesel
- powered vehicles. 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, veh icle towing capacity and two
- wheel versus four
- wheel drive configuration. The attribute
- based standard targets will be used to determine a manufacturer fleet standard and is subject to an average banking and trading scheme similar to the light
- dut y GHG ru le. This rule will require nearly all heavy
- dut y trucks between 8,500 and 14,000 pounds gross vehicle weight rating that are not already covered under the light
- dut y truck and medium
- duty

passenger vehicle GHG standards to have a CO 2 , CH 4 and N 2 O values assigned to them, either from actual chassis dy namometer testing or from the results of a representative vehicle in the test group with appropriate adjustments made for differences. This requirement will apply based on whether the vehicle manufacturer sol d the vehicle as a complete or nearl y complete vehicle. 267 Manufacturers will be allowed to exclude vehicles they

sell to secondary

manufacturers without cabs (often known as rolling chassis), as well as a very small number of vehicles sold with cabs. Spec ificall y, a manufacturer can certify

up to two percent of its vehicles with complete cabs, or up to 2,000 vehicles if its total sales in this category was less than 100,000, as vocational vehicles. To the extent manufacturers are allowed to engine certify for criteria pollutant (non
- GHG) requirements today , they will be allowed to continue to do so under the final regulations. 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 to recodify them in the new part 1037. Most of the new part 1037 would not apply

for heavy
- dut y pickup trucks and vans. How 40 CFR part 86 applies, and which provisions of the new 40 CFR part 1037 apply for heavy
- dut y pickup trucks and vans is described in §1037.104. (a ) Certification Process CAA section 203(a)(1) prohibits manufacturers from introducing a new motor ve hicle into commerce unless the vehicle is covered by an EPA
- issued certificate of
266 Diesel engines are engine
- certified with the option to chassis certification Feder ally and for California 267 The final regulations would use the term “cab
- com plete vehicle” to refer to incomplete vehicles sold with complete cabs, but lacking a cargo carrying container.***** E.O. 12866 Review**

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289 of 77 1 conformity . Section 206(a)(1) of the CAA describes the requirements for EPA issuance of a certificate of conformity , based on a demonstration of compliance with the emission standards established b y EPA under section 202 of the Act. The certification demonstration requires emission testing, and certification is required for each model ye ar. 268 Under existing heav y - duty chassis certification and other EPA emission standard pr ograms, vehicle manufacturers certify a group of vehicles called a test group. A test group t ypically includes multiple vehicle car lines and model ty pes that share critical emissions
- related features. 269 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 within the emissions bin assigned, and 2) contribute to fleetwide compliance with the applicable emissions standards when the y ear is over. EPA issues a certificate for the vehicles included in the test group based on this demonstration, and includes 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. The certification process often o ccurs several 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 allows for the orderl y production of vehicles. The use of conditions on the certificate has been an effective way to ensure that manufacturers comply throughout their usef

ul life and meet fleet standards when the model y ear is complete and the accounting for the individual model sales is performed. EPA has also adopted this approach as part of its LD GHG compliance program. This rule will similarly

condition each certificate of conformit y 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 EPA 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 address certification and compliance. Vehicle manufacturers will initiate the formal certification process with the ir submission of application for a certificate of conformity

to EPA similar to the light duty program.

268 CAA Section 206(a)(1). 269 The specific test group criteria are descr ibed in 40 CFR 86.1827
- 01, car lines and model types have the meaning given in 40 CFR 86.1803
- 01.***** E.O. 12866 Review**

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290 of 771 (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 certification; one certificate is issued per test group/ evaporative famil y combination. These groupings cover vehicles with similar emiss ion control sy stem designs expected to have similar emissions performance (see 40 CFR 86.1827
- 01). The factors considered for determining 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. Vehicles having these features in common are generall y placed in the same test group. 270 This rule will retain the current test gro up structure for heav y - dut y pickups and vans in the certification requirements for CO 2 . 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 compliance with the fleet average CO 2 standard as described below. EPA’s issuance of a certificate will be conditioned upon the manufacturer’s subsequent model level test ing 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 - duty diesel vehicles under 14,000 pounds GVWR to optionally chassis certify (see 40 CFR 86.1863
- 07(a)). As discussed earlier, this rule will now require all HD vehicles under 14,000 pounds GVWR to chassis certify except as noted in Section II. EPA recognizes that the existing heav y - duty chassis test group criteria do not necessarily

relate to CO 2 emission levels. See 75 FR 25472. For instance, while some of the criteria, such as combustion cycle, engine t ype 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 included in EPA’s test group criteria. 271 Most important among these may be vehicle weight, horsepower, aerod ynamics, vehicle size, and performance features. To remedy this, EPA will allow manufacturers provisio ns that are similar to the LD GHG rule that would yield more accurate CO 2 estimates than only using the test group emission data vehicle CO 2 emissions. EPA believes that the current test group concept is appropriate for N 2 O and CH 4 because the technologi es that would be employ ed to control N 2 O and CH 4 emissions may generall y be the same as those used to control the criteria pollutants. However, manufacturers will determine if this approach is adequate method for N 2 O and CH 4

270 EPA provides for other groupings in certain circumstances, and can establish its own test groups in cases where the criteria do not apply. See 40 CFR 86.18 27
- 01(b), (c) and (d). 271 EPA noted this potential lack of connection between fuel economy testing and testing for emissions standard purposes when it first adopted fuel economy test procedures. See 41 FR 38677, Sept. 10, 1976.***** E.O. 12866 Review**

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291 of 77 1 emissions compliance or if test ing 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. For 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 other 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

deri ved fuel econom y. This model level data will become the official certification 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 i gnore the emissions performance of vehicle models in their fleet with lower 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 testing 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 fleet 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 set 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 receiving 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 th at manufacturers submit a compliance plan for their entire fleet prior to the certification of an y test group in a given model year. Preferably , this compliance plan would be submitted at the manufacturer’s annual certification preview meeting. This previ ew 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 y ear. This plan should include the manufacturer’s***** E.O. 12866 Review**

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292 of 771 estimate of its attribute
- ba sed 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 y ear 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 demo nstration will need to include a credible plan for addressing deficits accrued 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 demonstration, but understands that initial projections can vary considerably

from the reality of final production and emission results. In addition, the compliance plan must be approv ed 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 standards result in each manufacturer having a fleet average CO 2 standard unique to its heav y - duty truck fleet of GVWR between 8,500
- 14,000 pounds and that standard will be separate from the standard for passenger cars, light
- trucks, and other heavy
- 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 standard are payload and towing capacit y as described in Section II. . Generally , fleets with a mix o f vehicles with increased payloads or greater towing capacit y (or utilizing four wheel drive configurations) will face numerically less stringent standards (i.e., higher CO 2 grams/mile 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 ye ar based on projected production volume of its vehicle fleet, the final compliance values will be based on the final model y ear production figures. A manufacturer’s calculation of fleet average emissions at the end of the model y ear will be based on the production
- weighted average emissions of each model in its fleet. The payload and towing capacity 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 86.18 16
- 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 , manufacturers will be able to test, and possibly model, more configurations of vehicles than were historically . The existing criteria pollutant program requires the worst case configuration be tested for emissions certification. For HD chassis certification, this usually meant onl y testing the vehicle with the hi ghest ALVW, road
- load, and engine displacement within a given test group. This worst case configuration may onl y represent a small fraction of the test group production volume. By testing the worst case,***** E.O. 12866 Review**

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293 of 77 1 albeit possibly

small volume, vehicle configurati on, the EPA had a reasonable expectation that all represented vehicles would pass the given emissions standards. Since CO 2 standards are a fleet standard based on a combination of sales volume and work factor (i.e., payload and towing capability), it may be in a manufacturer’s best interest to test multiple configurations within a given test group to more accuratel y estimate the fleet average CO 2 emission levels and not accept the worst case vehicle test results as representative of all models. Additionall y, vehicle models for which a manufacturer desires to use analy

tically derived fuel econom y (ADFE) to estimate CO 2 emission levels may need additional actual test data for vehicle models of similar but not identical configurations. The agencies are allow ing 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 duty ADFE program with its current minimum test requirem ents would unduly increase testing burden. In addition to concerns over implementing the light duty ADFE program for heav y dut y GHG compliance, commenters noted the need to develop a new HD ADFE methodology that addressed unique HD concerns. EPA and NHTS A 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 which is allowed in the LD program. Since ADFE equatio ns are not final at the time of this rule, 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 carbon balance methodology used historically

to determine fuel consumption for the light
- duty labeling and CAFE programs, whereby the carbon
- related combustion products HC and CO are included on an adjusted basis in the compliance calculations, along with CO 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 small. NHTSA and EPA are not adopting the CREE methodology f or 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 proposal 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 little real world benefit. (ii) CO2 In
- Use Standards and Testing Section 202(a)(1) of the CAA requires emission standards to appl y to vehicles throughout their statutory useful life. Sect ion II discusses in
- use standards. Currently , EPA regulations require manufacturers 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 in their first and third y ears of service. This testing is***** E.O. 12866 Review**

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294 of 771 referred to as the In
- Use Verification Program, which was first implemented as part of EPA’s CAP 2000 certification progr am (s ee 64 FR 23906, May 4, 1999). An in
- use program was alread y set forth in the 2012

– 2016 MY light
- dut y vehicle rule similar to the proposed heav y - dut y 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
- duty program in regard to testing, vehicle selection, and reporting. See 75 FR 25474
- 25476. (e) Cab

- Chassis Vehicles and Complete Class 4 Vehicles As discussed in Section I.C(2)(a), we are including most ca b
- chassis Class 2b and 3 vehicles 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 would treat these vehicles as equivalent to the complete van or truck product they

are derived from. The manufacturer would determine which complete vehicle configuration it produces most closel y matches the cab
- chassis product leaving its facility , and would include each of these cab
- chassis vehicles in the f leet averaging calculations as though it were identical to the corresponding complete vehicle. Any in
- use testing of these vehicles would do likewise, with loading of the tested vehicle to a total weight equal to the ALVW of the corresponding complete vehi cle configuration. If the secondary manufacturer had altered or replaced an y vehicle components in a way

that would substantially

affect CO 2 emissions from the tested vehicle (e.g., axle ratio has been changed for a special purpose vehicle), the vehicle m anufacturer could request that EPA not test the vehicle or invalidate a test result. Secondary

(finisher) manufacturers would not be subject to requirements under this provision, other than to comply with anti
- tampering regulations. However, if they modi fy vehicle components in such a way that GHG emissions and fuel consumption are substantially

affected, they

become manufacturers subject to the standards under this proposal. We realize that this approach does not capture the likely loss of aerody

namic ef ficiency involved in converting these vehicles from standard pickup trucks or vans to ambulances and the like, and thus it could assign them lower GHG emissions and fuel consumption than they

deserve. However, we feel that this approach strikes a fair bal ance between the alternatives

—grouping these vehicles with vocational vehicles subject only

to engine standards and tire requirements, or creating a complex and burdensome program that forces vehicle manufacturers to track, and perhaps control, a plethora of vehicle configurations they currently do not manage. We request comment on this final provision and any suggestions for way s to improve it. EPA and NHTSA requested comment on whether Class 4 trucks that are very similar to complete Class 3 pickup truck models should be 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***** E.O. 12866 Review**

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295 of 77 1 Class 3 trucks that make such regulation inap propriate. As a result, we are keeping Class 4 trucks in the vocational vehicle category
. **(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 certificatio n test data over from 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 proposal. On May

11, 2004, EPA updated its fees regulation based on a study of the costs associated 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 proposal is not known. EPA will assess i ts compliance testing and other activities associated with the rule and may

amend its fees regulations in the future to include an y warranted new costs. **(4) Compliance Reports**  (a ) Pre
- Model Year Report In the NPRM, EPA and NHTSA proposed that manufacturers must submit earl y model y ear 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 understood that earl y model y ear reports would contain estim ates 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 agencies viewed the necessity for requiring 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 submitted prior to the beginning of the model y ear and prio r 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 ypically held with a manufacturer before the earliest date that the mo del y ear can begin which is January 2nd of the calendar year prior to the model y ear. Manufacturers voluntaril y choose to participate in precertification***** E.O. 12866 Review**

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296 of 771 compliance meetings but meetings are not required by EPA and NHTSA regulations. Manufacturers opt t o participate in precertification meetings 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 conformity . The NPRM preamble text did not specify

an exact date for manufacturers to submit early compliance reports to the agency . NHTSA attempted to adopt requirements in its regulatory text for manufactures to submit their early

compliance reports no later than the end of December two y ears prior to th e model y ear. NHTSA also proposed for manufacturers to provide compliance information for the current model y ear and to the extent possible two y ears into the future. NHTSA chose its submission deadline and model y ears for reporting based upon the same d ates required by EPA in its CAFE provisions for light duty pickups and vans beginning in model ye ar 2012. The NPRM included requirements for manufacturers to submit earl y model y ear compliance reports separately to each agency

based upon limitations exis ting 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 CO 2 emissions and fuel consumption results, and were to inclu de 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 credit deficit plan for manufacturers planning to accrue defi cits 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 y ear reports or applications for certifications of conformity , as a substitute to its own compli ance report, so long as EPA’s reports were submitted with equivalent fuel consumption information. In either case, NHTSA reserved the right to ask manufacturers to provide additional information if necessary to verify its fuel consumption requirements und er 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 manu facturer’s compliance plan 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 agenc ies implement a single uniform reporting template that could be submitted to both agencies simultaneously . DTNA requested that NHTSA eliminate its pre
- certification compliance report, arguing that report was overl y burdensome. For the final rule, the ag encies have decided to require manufacturers to submit a single report, hereafter referenced as the pre
- model y ear report, to satisfy both agencies requirements for receiving compliance reports in advance of the model year. The agencies considered the co mmenters’ 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 establishes a harmonized***** E.O. 12866 Review**

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297 of 77 1 approach b y which manufac turers will submit a single report through the EPA database 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 database sy stem, 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 o f heav y - dut y pickup trucks containing both emissions and equivalent fuel consumption information falls within each agencies’ statutory authority
. The final rule requires a manufacturer to submit the joint pre
- model y ear 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 compl y in model y ear 2014 could submit its pre - model ye ar report during its precertification meeting which could occur before January 2, 2013, or could provide its pre
- model y ear report an y time prior to submitting its first application. In either case, a manufacturer would not be able to certify an y of i ts test groups until the EPA Administrator approves its pre
- model y ear report. NHTSA will use the pre
- model y ear report as preliminary model y ear data. The final rule adopts for the pre
- model y ear reports similar requirements as proposed in the NPRM. A s mention, the NPRM proposed for reports to include an estimate of the manufacturer’s attribute
- based standards, expected testing results and estimated production volumes. The agencies agree that this information is essential for tracking compliance of manufacturers and is therefore adopted for the final rule. As discussed in the NPRM, the final rule requires manufacturers to identify any vehicle exclusions and other flexibilities afford for heav y - duty pickup and vans. The summary of the required informat ion for each pre
- model y ear 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 Weight 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 expected emissions and fuel consumption test group results and fleet average performance;  A statement declaring whether the manufacturer will use fixed or increasing standards; acknowledging that once selected, the decision cannot be reversed and the manufacturer must continue to comply with the same alternative for subsequent model y ears;  A statement declaring whether the manufacturer chooses to comply earl y in MY 2013 for EPA and NHTSA. The manufacturers must acknowledge that once selected, the decision cannot be reversed and the manufacturer***** E.O. 12866 Review**

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298 of 771 will continue to c omply

with the fuel consumption standards for subsequent model y ears;  A statement declaring whether the manufacturer chooses to comply voluntarily

with NHTSA’s fuel consumption standards for model ye ars 2014 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 y ears;  The list of cab
- complete vehicles and the method use to certify , as vocational vehicles and e ngines, 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 vehicles a manufacturer is designating to include in the low volume exclusion; and  A credi t 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 has occurred. (b ) Final Reports The NPRM proposed for manufacturers participating in the ABT program to provide two ty

pes of y ear end r eports; 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 y ear and final report no later than 270 day s after the calendar ye ar. 272 Manufacturers not participating in the ABT program were required to provide an EOY report within 45 day s after the calendar y ear but no final reports were required. The final ABT report due was established coinciding with EPA’s existing criteria pollutant r eport for heavy
- dut y engines. 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 y ear. 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. Comments in response to the NPRM re quested that for manufacturer s not using ABT provisions, the EOY report due 90 days after the end of the calendar year should be combined with the ABT report due 90 days after the same model year
. Commenters also requested that the exempted off

- road vehic le report be consolidated with the EOY report.

272 Corresponding to the compl iance model year***** E.O. 12866 Review**

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299 of 77 1 For the final rule, the agencies will retain the NPRM proposal for EOY and final reports. The final rule establishes a harmonized approach b y which manufacturers will submit a single report through the EPA database system 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 y ear 2012, the agencies are not prepared to receive information through the EPA database sy stem, manufacturers are expected to submit wri tten reports to the agencies. The agencies are also combining the EOY reports for all manufacturers whether or not using the ABT program. A summary of the required information in the final rule for EOY and final reports is as follows:

 A finalized list o f each unique vehicle configuration included in the manufacturers fleet describing the designations, attribute based
- values (GVWR, GCWR, Curb Weight and drive configurations) 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;  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 des ignating 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 has 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 y ear identifying the approaches used to determinate compliance and the production volumes. 

### C. **Heavy -**  **Duty Engines (1)**  **Compliance A pproach**  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 heavy
- dut y engines, the certificate specifies that the engine meets all requirements as se t forth in the***** E.O. 12866 Review**

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300 of 771 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 deter

mine the level of emissions deterioration throughout the useful life of the engine. In addition to compliance with emission standards, manufacturers are also required to warrant their products against emission defects, and demonstrate that a service networ k is in place to correct an y 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 a ny emission related components installed by a second part y (i.e., vehicle manufacturer). EPA believes this compliance structure is also valid for administering the final GHG regulations for heav y - dut y engines. (a ) Certification Process In order to obtain a certificate of conformity , engine manufacturers must complete a compliance demonstration, normally consisting of test data from relatively new (low
hour) engines as well as supporting documentation, showing that their product meets emi ssion standards and other regulatory requirements. To account for aging effects, low
hour test results are coupled with testing
- based deterioration factors (DFs), which provide a ratio (or offset) of end
- of
- life emissions to low
- hour emissions for each po llutant 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 eng ine 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 characteristics are the combustion cycle, aspiration m ethod, and aftertreatment sy stem. Under this system, 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 (“c hild ratings”) are expected to have emissions at or below the parent model and therefore in compliance with emission standards. An y 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. We believe this is appropriate because this worst case engine configuration would be expected to have the highest in
- use fuel consumption and GHG emissions within the family . 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. This higher fuel consumption rate is misleading in the context of comparing engines within a single engine family . This apparent contradiction can be most easily understood in terms of an example. Fo r 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 horsepower engines would be expected to ope rate identically

when the demanded power from the engines is 400 horsepower or***** E.O. 12866 Review**

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301 of 77 1 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 horsep ower 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 faster than the 400 horsepower truck result ing 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. The reason th at 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 th e engine to overcome friction and air pumping work within the engine. The fuel consumed and GHG emissions produced to overcome this internal work and to produce useful (brake) work are both measured in the test cycle but onl y the brake work is reflected i n 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 through 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 pumping 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 internal work can be thought of as a fixed offset identical between both en gines. 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 . F or 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 co nsumption 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
. This approach is being contemplated for administrative convenience and we seek comments on alternatives to address compliance testing. Consistent with the current regulations, manufacturers may

electively

subdivide a grouping of engines which would otherwise meet the criteria for a single family if they have evidence that the emissions ar e different over the useful life. The agency

utilizes a 12
- digit naming convention for all mobile
- source engine families (and test groups for light
- dut y vehicles). This convention is also shared b y the California Air Resources Board which allows manufac turers to potentially use a single***** E.O. 12866 Review**

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302 of 771 family name for both EPA and California ARB certification. Of the 12 digits, 9 are EPA
defined and provide identifying characteristics of the engine famil y. The first digit represents the model year, through use of a pre defined code. For example, “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
duty vehicle (V) and heavy
- dut y 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 displac ement is in liters. For engine families with multiple displacements, 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) 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 proposal. 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 standar ds, the heavy
- duty diesel regulatory

category is subdivided 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) diesel 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

diff erent regulatory

useful lives. For this reason, expectations 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

GHG rule. During th e light
duty GHG 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 ar e zero (for additive 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 segment s, the regulatory

useful lives are significantly longer (185,000 and 435,000 miles, respectivel y). For this reason, the agency is not convinced that engine/aftertreatment wear will not have***** E.O. 12866 Review**

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303 of 77 1 a negative impact on GHG emissions. To address useful life compli ance 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 compression, 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 regeneration 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 facto rs could reasonabl y be expected to change fuel consumption, CO 2 emissions would be expected to change accordingl y. HHD diesel engines may also require some degree of aftertreatment maintenance throughout their useful life. For example, one major heav y - d ut y engine manufacturer 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 fil ters at 300,000 miles. This maintenance or lack thereof if service is neglected, could have serious negative implications to CO 2 emissions. In addition, there may be emissions
- related warranty implications for manufacturers to ensure that if rebuilding or specific emissions 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 reducti ons by allowing 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 operator. 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 the refore demonstrate 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 manufac turer determines that maintenance is necessary on critical emission
related components within the useful life period, they must have a reasonable basis for ensuring that this maintenance will be completed as scheduled. This includes any adjustment, cleanin g, repair, or replacement of critical emission
- related components. Ty pically , the agency

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 intervals. 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.***** E.O. 12866 Review**

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304 of 771 (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, manufacture rs may choose an FCLat an y l evel above their certified emission level to provide a larger compliance margin. If subsequent certification or confirmatory

testing reveals emissions above the FCL , the new, higher result becomes the FCL
. The FCL is also us ed to determine the Family Emission L imit (FEL), which serves as the emission limit for any subsequent field testing conducted 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 percent for the final rule. Our initial proposal included a 2 percent margin based on round
- robin testing of the same engine at severa l laboratories. Since that time, additional data has indicated that it may be more appropriate to use a 3 percent margin to also account for production variability between engines. Under this final rule, the FEL will always be 3final percent higher than the FCL. Engine Emission Testing Under current non
- GHG engine emissions regulations, manufacturers are required 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 s peed 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 comp aring 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 stead y 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 forced 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***** E.O. 12866 Review**

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305 of 77 1 chamber 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 “h ot” 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 on 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 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 stead y cruise conditions, such as those used in line
- haul semi
- trucks. As a result, the steady
- st ate SET procedure was added, consisting of 13 stead y - 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 standard s (including deterioration factors). Inaddition, emissions at each mode could not exceed the NTE emission limits. Alternatively , manufacturers could run the test as a ramped
- modal cycle. In this case, the cycle still consists of the same speed/torque mod es, 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 proce dures 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 changed for 2010 and later engines. It is well known that fuel consumption, and the refore CO 2 emissions, are highl y dependent on the drive cycle over which they are measured. Stead y cruise conditions, such as highway

driving, tend to be more efficient, having 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 proposal, 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 typical 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 met for both cycles. 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 heav y - duty engines be tested over both transient and steady
- state tests. However, only

the results from either the transient or steady
- stat e test cycles would be used to assess compliance with GHG standards, depending on the t ype of vehicle in***** E.O. 12866 Review**

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306 of 771 which the engine will be used. Engines that will be used in Class 7 and 8 combination tractors would use the ramped
- modal cycle for GHG certification, and engines used in vocational vehicles would use the Heav y - dut y FTP cycle. In both cases, results from the other test cycle would be reported but not used for a compliance decision. Engines will continue to be required to show criteria pollutant compli ance over both cycles, in addition to NTE requirements. The agencies proposed that manufacturers submit both data sets from the transient test at the time of certification. This includes providing both cold start and hot start transient heav y - dut y FTP emis sions results, as well as the composite emissions at the time of certification. The proposed rules also required that manufacturers submit modal data from the ramped
- modal cycle test.. This was proposed in an effort to improve the accuracy of the simul ation model being used for assessing CO 2 and fuel consumption performance and overall engine emissions performance. However several comments were submitted with concerns that modal data was non - discernable when batch sampling was used for certification t esting. Thus, an additional certification test (or tests) would need to be done using either continuous anal yz ers 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 significant data from these modal points which could be used to satisfy our model refinement goals. Therefore, we believe it is appropriate to still re quire the submission of modal data, however manufacturers may submit development data from production
- level engine calibrations to satisfy

this modal data requirement. The agencies also recognize that even minor variations in test fuel properties can hav e an impact on measured CO 2 emissions. Therefore, measured CO 2 results are to be corrected using a reference energy content, which is defined in the regulations. This correction must be performed for each test and each batch of test fuel. However, manuf acturers 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 vali dity 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 engin e 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 exhausted all credit opportunities. Durability testing***** E.O. 12866 Review**

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3 07 of 77 1 Another element of the current certification process is the requirement to complete durability

testi ng to establish DFs. As previously mentioned, manufacturers are required to demonstrate that their engines compl y with emission standards throughout the regulatory

compliance period of the engine. This demonstration is commonly made through the combinatio n of low
- hour test results and testing based deterioration factors. For engines without aftertreatment devices, deterioration factors primaril y account for engine wear as service is accumulated. This commonly includes wear of valves, valve seats, and pist on rings, all of which reduce in
- cylinder pressure. Oil control seals and gaskets also deteriorate with age, leading to higher lubricating oil consumption. 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 reduce 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 p ollutants. 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 sub strate, 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 devi ce much more so than on consistent engine
- out emissions. At this time, we anticipate that most engine component 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 sign ificant 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 class. The DFs are then calculated by comparing the high
- hour to low
- hour emission levels, either b y divi sion 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. F or this reason, durability testing for the determination of DFs is not commonly

repeated from model y ear to model y ear. In addition, some DFs may be allowed to carry

over between families sharing a common architecture and aftertreatment sy stem. EPA prefer s 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 deterioration factors available for these final rules. T herefore, we are allowing manufacturers to use EPA
- assigned DFs for CO 2 .***** E.O. 12866 Review**

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308 of 771 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 the ir criteria pollutant durability demonstrations (if available), which will aid the agency in developing more accurate assigned DFs. 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 meth ods impact emissions and therefore must be accounted for at the time of certification. In accordance 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 tim e 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 ad justment factors. Upward adjustment factors are added to all emission results derived from a test 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 , separate 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 regener ation frequency

to as long an interval as possible and to reduce the during 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 addin g 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 requiri ng the use of infrequent regeneration adjustment factors for CO 2 or fuel efficiency in this program.***** E.O. 12866 Review**

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309 of 77 1 Auxiliary Emission Control Devices As part of the engine control strategy , there may be devices or algorithms which reduce the effectiveness of emission c ontrol sy stems under certain limited circumstances. These strategies are referred to as Auxiliary Emission Control Devices (AECDs). One example would be the reduced use of EGR during cold engine operation. In this case, low coolant temperatures may cause the electronic 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 pr ovide 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 enrichme nt, 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 n ot result 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, consis tent with 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 re quiring manufacturers of mobile
- source engines to report the emissions of CO 2 , N 2 O, and CH 4 (74 FR 56260, October 30, 2009). While CO 2 is commonly

measured during certification testing, CH 4 and N 2 O are not. CH 4 has traditionally

not been included in crite ria 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 systems were not widel y used on heav y - dut y engines and therefore N 2 O emissions were insignificant. Both 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 c omprehensive 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 first y ear 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***** E.O. 12866 Review**

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310 of 771 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 catal ys t over another will effectivel y determine compliance with N 2 O standards over the useful life of the engine. Since catal yt ic activity

gener all 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 represe ntation 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 formulate deterioration factors for these final rules. We also do not believe it is appropriate to require all new durabilit y testing to satisfy th is requirement, as this would result in a nontrivial burden to engine manufacturers. Instead we will be assigning deterioration factors for N 2 O and CH 4 for this rule. If the use of assigned deterioration factors jeopardizes compliance with the emission s tandards, we will also allow manufacturers to propose unique testing
- based deterioration factors for these pollutants. (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 half of the regulatory usefu l life (specified in hours and y ears, whichever comes first). The exact time of this warranty is dependent on the regulatory class 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 part 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 list is adequate for addressing GHG emissions 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 metering components  EGR
- Sy stem components  Crankcase
- ventilation valves  All components related to charge
- air compression and coo ling  All sensors and actuators associated with an y of these components***** E.O. 12866 Review**

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311 of 77 1 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 cor rections 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 cu stomers with affected units and repairing the defect at no cost 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 E ngine manufacturers are required to outline maintenance schedules 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 fo r certification. Maintenance that is deemed to be critical to 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 engine. 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 inclu ding 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. During durability testing of the engine, manufacturers are required to follow their spe cified 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 m aintenance as outlined in 40 CFR part 86. **(2) Enforcement 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 specifications 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 addi tion, this label also provides a means for identifying 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 certi fied configuration. We do not anticipate an y major changes 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 mos t significant addition will be the inclusion of Family Certification L evels or Family Emission L imits***** E.O. 12866 Review**

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312 of 771 for GHG pollutants, if the manufacturer is participating in averaging, banking, and trading. In addition, the label will need to indicate whether the eng ine is certified for use in vocational vehicles, tractors, or both. (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 product 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 found to be producing engines that performed acceptabl y over the certification test cycle, while ch anging 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 ac tive 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 continuing to meet criteria pollutant emission s tandards 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. To assess compliance, emission results from a well defined area of the speed/torque map of the e ngine, known as the NTE zone, are compared to the emission standards. To account for potential increases in measurement and operational variability, certain allowances are applied to the standard which results in the standard for NTE measurements (NTE lim it) to be at or above the dut y cycle emission standards. In addition, EPA also conducts an annual in
- use testing program of heavy
- duty engines. Testing procured vehicles with specific engines over well
- defined drive routes using a constant trailer load al lows 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 tested using an engine dynamometer over the certification test cycles. If deficiencies are confi rmed the agency will either work with the manufacturer to take corrective action 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 mo del y ear), which we believe is equally applicable to in
- use measurements. Methods of CO 2 in
- situ measurement are well established 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 measure ment challenges that may be impractical to overcome for this testing, and therefore it is not recommended that they be included in in
-***** E.O. 12866 Review**

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313 of 77 1 use testing requirements at this time. While measurement of CO 2 may be practical and important, implementing an NTE emiss ion 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 that manufacturers be required to su bmit CO 2 data from in
- situ testing, in both g/bhp
- hr and g/ton
- mile, but these data will be used for reference purposes only (there would be no NTE limit/standard for CO 2 ). For engine
- based (dy namometer) in
- use testing, compliance with CO 2 emission standards will be judged off of the FCLof the engine famil y. **(3) Other Certification Provisions**  (a ) Carryover/Carry Across Certification Test Data EPA’s current certification program for heav y - duty engines allows manufacturers to carry certification test data over and across certification testing from one model y ear 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 ) Certification Fees The CAA allows EPA to collect fees to cover the c osts of issuing certificates of conformity

for the classes of engines covered by this proposal. On May

11, 2004, EPA updated its fees regulation based on a study of the costs associated 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 proposal is not known. EPA will assess its compliance testing and other activities associated with the rule and may amend its fees regulations in the future to include an y warranted new costs. (c) Onboard Diagnostics Beginning with the 2010 model y ear, manufacturers have been phasing in on
board diagnostic s ys tems (OBD) on heav y - dut y engines pursuant to the he avy - dut y OBD rulemaking finalized by

the EPA in 2009. 273 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. Consistent with the light
- duty vehicle GHG rule, we believe that monitoring of these components and sy stems for criteria pollutant emissions will have an equally beneficial effect on CO 2 emissions. Therefore, we have not finalized any additional unique onboard diagnostic provisions for heavy
- dut y GHG

273 U.S. EPA, “Control of Air Pollution from Ne w 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***** E.O. 12866 Review**

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314 of 771 emissions. The proposal for this action also did not propose new or different diagnostic requirements from those finalized in the previous action taken b y EPA. T he Agencies received comments from engine manufacturers, h ybrid 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 and requested a delay until 2020 with a phase
- in of enforcement liability starting that same ye ar. In response to the comments that the agencies should consider delaying implementation of the provisions of a separate action to facilitate introduction of hybrid technology , the agencies are taking an approach that is consistent with certain provisions of the existing final action for heav y - dut y OBD. To that end, manufacturers who certify hy brid s ys tems 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 onl y to allow time for them to be able to address communication protocol development concerns (e.g. SAE J1939), component development concerns (e.g. hardware and software) , service information (e.g. service website availability), diagnostic communication with generic scantools, etc., and to address the availability of heav y - dut y OBD compliant engines with sufficient lead
- time for additional hy brid diagnostic s ys tem developm ent given resource constraints as engine manufacturers are focused on meeting the 2013 requirements for conventional products at this time. Hy brid manufacturers have indicated that the interaction between hy brid s ystems and OBD compliant engines are not we ll understood at this time, for example if the sy stem shuts down the vehicle at idle, the idle diagnostics cannot run. In addition, there are man y different h ybrid systems being developed which make much of this technology both immature and low volume, en gine manufacturers are concerned that this would result in high costs due to frequent design changes that could result as this technology develops and have asked for flexibility for unique hy

brid applications. Consistent with the Agencies goals to incenti vize the development of hy brid designs (s ys tems designed to capture wasted energy

and reuse fuel consumption) we are allowing h ybrid manufacturers time to develop their sy stems while simultaneously developing the capability to meet HD OBD requirements. Co mmunication protocol development is an integral part of developing 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 developed 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. 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 such that the y work for all manufacturers and as such. Development of this communication protocol and criteria for the messages can take a substantial amount of time. Hy brid manufacturers have stated that until such time as a ‘plug and play scheme’ is available, hy

bri d volumes will not be able to increase significantly . At this time, there are onl y a few such messages that have been developed for use in h ybrid systems, and there is much***** E.O. 12866 Review**

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315 of 77 1 additional development needs to take place. The type of messages needed must firs t be identified once 2013 HDOBD compliant engines are available 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 likely take at least X y ears to completely develop the protocol for use with the different variations of hy brid s ys tems and architectures, different t ypes of energy storage sy stems, and for s ys tems us ed in the wide variet y of applications in the heav y - dut y market, and we agree with this assessment. While we recognize that a level of communication exists today between engines and transmissions for this industry , the level of control and impact on engin e s ystem operation becomes much more significant once h ybrid technology is introduced. The purpose of the h ybrid energy s ys tem is to supplement overall vehicle power demands. As such, the methods used for integrating the energy from the hy

brid s ys tem int o 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 o n the engine. Existing transmission sy stems and other powertrain components do not exercise the level of control the hybrid will need to 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 ys tems on both existing hy brid products and on hy

brid sy stems currentl y under development. Software s ys tems in existing p roducts have been developed to provide proprietary diagnostic capability

(as no standardized sy stem such as J1939 had been developed for these s ys tems), however, these software s ys tems are not OBD complaint. These products will likely have to have entirel y 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 X ye ars to develop and X to validate. Hardware may also need to be changed to accommodate OBD on hy brid sy stems, 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 X of dollars) cannot support a hardware ch ange for h yb rids alone, rather, existing h ybrid s ys tems will have to wait until such a hardware upgrade is planned for other reasons. In addition, new hardware programs, such as developing a new ECU can take X y ears. While it is possible for some of this work to be done concurrentl y, 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 phase
- in, the Agencies have determined that to require manufacturers of sy stems that depend on the availability of the OBD compliant engines to then be able to immediately

implement additional requirements may be impractical in many

instances. Given the phase
- in HD OBD that alread y exists however, we do not believe a delay to***** E.O. 12866 Review**

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316 of 771 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 ys tems will be available. Additionally , there is an expectation that engine manufacturers, their suppliers and customers will have to continue to work cooperatively 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 heav y - duty 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. 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 stem configurati ons. 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 been in produc tion 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. Hybrid s ys tems put into production after the publication of this final rulemaking would be required to meet the 2009 heav y - dut y OBD requirements in 2016 consistent with the next phase
- in date for heav y - dut y OBD, while those hybrid systems already in production as of the publication of this final rulemaking have until 2017 to be compliant with these OBD requirements. In the interim, engine s ys tem diagnostics must meet CARB’s Engine Manufacturer Diagnostic Sy stems Requirements (EMD) including s ys tem monitoring requirements for NO X aftertreatment, fuel s ys tems, exhaust gas recirculation, particulate matter traps, and emission
- related electronic components. 274 Inaddition, these sy stems must maintain existing OBD capability and calibrations for certified engines used in hy brid applications with the ex ception of having liability for failure to meet diagnostic performance requirements (e.g. detection thresholds). Hybrid systems must also continue to maintain existing diagnostic capability to ensure proper function consistent with the performance for whi ch the hy brid sy stem is certified as well as, safe operation of the hy brid s ys tem . (d ) Applicability of Current High Altitude Provisions to Greenhouse Gases EPA is requiringfinalizing that engines covered b y this proposal 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 - duty engines to appl y at all altitudes. EPA does not expect engine CO 2 , CH 4 , or N 2 O emissions to be significantl y different at high altitudes based on engine

274 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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317 of 77 1 calibration s 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 test 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 nee d to 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 evaluate and quantify any emission impact and validit y 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, 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 as6 5 percent below a baseline value established from their corresponding 2011 model
- ye ar products. If a manufacturer elects to participate in this program they must indicate this on their 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 cons umption standards have been calculated. This 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. **(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 engines. The pre
certification reports included requirements for manufactures to submit information to***** E.O. 12866 Review**

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318 of 771 identify the t ypes of engines, expected test results, production volumes and credits. The reporting requirements were general in nature despite having an existing emissions program for heav y dut y engi nes. The existing ABT program for NOx 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 r eport provisions in 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 GH G 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 y ear 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 certificates of conformity to obtain earl y model estimates. Currently, the applications for certificates are not required to include the fuel con sumption information required by NHTSA. Therefore, the agencies are adopting provisions in the final rule for manufacturers to provide emission and equivalent fuel consumption estimates in the manufacturer’s applications for certification. The agencies w ill treat information submitted in the applications as a manufacturer’s demonstration of providing earl y compliance information, similar to the pre
- model y ear report submitted for heavy
- dut y pick trucks and vans. The final rule establishes a harmonized a pproach b y which manufacturers will submit applications through the EPA VERIFY database 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 y ear 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 agency ’s to carry out their earl y compliance activities. (b ) Final Reports For engines, the NPRM proposed for manufacturers to submit EOY reports 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 y ear and final report no later than 270 day s after the calendar y ear. 275 Manufacturers not participating in the ABT program were required to provide an EOY report within 45 day s after the cal endar ye ar but no final reports were required. The final ABT report due was established coinciding with EPA’s existing criteria pollutant report for heav y - duty engines complying with NOx and PM standards. Similar to that program, the proposed EOY and fin al reports required receiving engine ty

pe designation, engine family and credit plans for engine manufacturers. In response to the NPRM, there were no comments received on the final reports for engines. For the final rule, the agencies will retain the NPRM proposal for the EOY and final

275 Corresponding to the compliance model year***** E.O. 12866 Review**

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319 of 77 1 reports. However, the agencies will consolidate the reporting as done for other vehicle categories and will require emissions and equivalent fuel consumption information to be submitted to EPA. The final rule establishes a harmonized approach by which manufacturers will submit applications to EPA the 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 by model y ear 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 agencies are also combining the EOY reports for manufacturers not using ABT to provide a produc t volume report due 90 days after the end of the model year and the ABT report required 90 days after the model year. A summary of the required information in the final rule 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  Useful 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 will be required to submit various submissions to the agencies to comply with various aspects of the rule. These requests have differing criteria for submission and approval. Table V
- 1 below provides a summary of the ty pes of submission, required submission dates and the EPA and NHTSA regulations that appl y. The agencies will review and grant an y requests considering the timeliness of the submissions and the completeness of the requests.

**Table V**  **- 1**  **: Summary of Required Information for Compliance******* E.O. 12866 Review**

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320 of 771 

### 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 standard s. 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 te chnologies, and vehicle speed limiting sy stems. Unlike engine certification however, this certification would be based on a load
specific basis (g/ton
- mile or gal/1,000 ton
- mile as opposed to work
- based, or g/bhp
- hr). This would take into account the ant icipated vehicle loading that would be experienced in use and the associated affects on fuel consumption and CO 2 emissions. Vehicle manufacturers would 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 Su bmi ss io n Ap pl ie s to Re qu ired S ubmi ss io ns Dat e EP A Re gu latio n Re feren ce NH TS A

Re gu la tio n Re fe re nc e

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ure rsmeet in g th e Sm al l B usi ne ss Ad mini st ratio n (S BA ) s iz e crite ri a o f a s ma ll b us in es s as de sc ri be d in 1 3 CF R 121 .201. Be fo re int rodu cing an y ex clu ded v ehicle i nt o U. S. for co mme rce §10 36. 15 0 §53 5. 8 Ince nt iv es for early in tr od uc ti on The pr

ovi si ons ap pl y wi th respe ct t o tr acto rsan d voc atio

na l ve hi cl es p

roduc ed i n model ye arsbefor

e 20 14 EP A mustb e n otif ie d be fo re t he manufa ctu rer su bmi ts it app licati on s fo r certif ica tes of conf

ormi ty §10 36. 15 0 §53 5. 8 Vo lu nt ary co mpli an ce for NHT SA st an dards Eng

ine ma nu fact

ure rss eek in g early comp li an ce in mode l y ea rs 201 4 to 20 16. NH SAT must be notif ied be fo re t he manufa ctu rer su bmi ts it app licati on s fo r certif ica tes of conf

ormi ty NA §5 35. 8
Mo de l ye ar 2014 N2 O s tan da rd s. M an ufa ctu rerst hat ch oos e t o sh owco mpl ia nc e wi th t

he MY 201 4 N2 O st an dard

s req ue st in g to us e an en gi ne er

in g an aly si s EP A mustb e n otif ie d be fo re t he manufa ctu rer su bmi ts it app licati on s fo r certif ica tes of conf

ormi ty §10 36. 15 0 NA
Exe mp ti on from EOY r ep ort s Man ufa ctu resw ith surp lus

credit s at th e en d of t

he mode l ye ar 90
-daysafte r th e cal en dar ye ar en ds §10 36. 73 0 §5 35. 8

Alte rn at iv e en gi ne s tan dard

s Eng ine ma nu fact

ure rsn ot ab le to co mp ly w ith 1 03 6. 104 and wan ti ng to u se t

he alte rn at iv

e en gine s tan dard
. EP A an d NH TS A mus t b e no ti fi ed b ef ore t he manuf ac tu re r su

bmi tsi t ap pl icati on s for certi fi ca tes of conform

it y §10 36. 15 0 §53 5. 8

Alte rn at e phas e in Eng ine ma nu fact

ure rsw an

t to co mp ly w ith alternat e phas e i n st an da rd s . EP A an d NH TS A mus t b e no ti fi ed b ef ore t he manuf ac tu re r su

bmi tsi t ap pl icati on s for certi fi ca tes of conform

it y §10 36. 15 0 §53 5. 8***** E.O. 12866 Review**

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321 of 77 1 conditions. The vehicle manufacturer also bears responsibility in the event that an emission
- related recall is necessary
. (a ) Certification Process In order to obtain a certificate of conformity for the tra ctor, vehicle manufacturers would 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 through out 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 family . Examples of charact eristics that would define a vehicle sub
- family for heav y - dut y vehicles are wheel and tire package, 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 and fuel consumption standards. Any vehicle within the family can be subject to selective enforcement auditing in addition to confirmatory

or other administrator testing. We anticipate vehicle families for Class 7 and 8 combination tractors to utilize the standardized 12
- digit naming convention, as outlined in the engine certification section of this chapter. As with engines, each certifying vehicle manufacturer will have a unique thre e digit code assigned to them. Currently , there is no 5 th digit (industry sector) code for this class of vehicles, for which we propose to use the next available character, “2.” Since we are finalizing that the engine is one of several family defining features, we still believe it is appropriate to include engine displacement in the family name. If the test
group consists includes multiple engine models with varying displacements, the largest would be specified in the vehicle famil y name, consistent with c urrent practices. The remaining characters would remain available 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 provisi ons, number of wheels, and general construction. However, further inspection reveals key

differences related to GHG emissions. Payloads hauled by Class 7 tractors are significantl y less than Class 8 tractors. In addition, Class 8 vehicles may have provisi ons 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 reaso nable to expect differences in CO 2 emissions, and therefore these properties form the basis for the final combination tractor regulatory subcategories.***** E.O. 12866 Review**

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322 of 771 The various combinations of payload, cab size, and roof profile result in eight final regulatory

subcate gories for Class 7 and 8 tractors. Class 7 tractors are divided into two regulatory

subcategories: one for low and mid roof height profiles, and one for high roof profiles. Both Class 7 subcategories is 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 y ear, 435,000 mile regulatory useful life.final (b ) Demon strating Compliance With the Final Standards (i ) CO2 and Fuel Consumption Standards Consistent with existing certification processes for light
- dut y vehicles and heav y duty pickups and vans, emissions testing of the complete vehicle would be the preferred metho d for demonstrating compliance with vehicle emission standards. However, vehicle
- level certification is new to the heav y - duty vehicle segment above 14,000 lb. Therefore, most vehicle manufacturers are not adequatel y equipped to conduct vehicle
level emis sion testing for Class 7 and 8 combination tractors. Chassis dyn amometers, emission sampling equipment, and staff engineering support are a few of the factors that would add significant cost to vehicle development in a relativel y short amount of time, whi ch may

make the prospect of vehicle testing quite onerous. In addition to the infrastructure and testing facilities the industry would need to add, the agencies have not completed the extensive work ultimately desirable for us to propose new test procedur es and standards based on the use of a chassis test procedure. Moreover, as explained in Section II.C, because of the enormous numbers of truck configurations that have an impact on fuel consumption, we do not believe that it would be reasonable, at least initially , to require testing of many combinations of tractor model configurations on a chassis dy

namometer. Recognizing these constraints related to time, staffing, and capitol, we are requiring only a vehicle simulation model option for demonstrating c ompliance at the time of certification. However, we do believe that a chassis based test procedure as currentl y utilized for vehicles below 14,000 pounds could be a better long
term approach to regulate all heav y - dut y vehicles and we will be working towar ds this goal for future rulemaking efforts. Model Vehicle modeling will be conducted using the agencies’ simulation model, GEM, which is described in detail in Chapter 4 of the RIA. Basically , 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 mechanical attributes, control algorithms, and driver inputs. The majority of these inputs will be predetermined b y EPA and NHTS A for the purposes of vehicle certification. The net results from 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 fue l consumption result will be used for demonstrating compliance with the fuel consumption standards.***** E.O. 12866 Review**

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323 of 77 1 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

class, fewer inputs may

be required. These inputs include the regulatory class, c oefficient of drag, steer tire rolling resistance, drive tire rolling resistance, vehicle speed limit, vehicle weight reduction, and idle reduction credit. For GEM inputs relating to aerod ynamics, the agencies have finalized lookup tables for frontal area and coefficient of drag based on t ypical performance levels across the industry . Manufacturers are responsible for assessing the aerod yn amic performance of their vehicles through testing or a combination of testing and modeling. This test data is then use d to select the most appropriate agency
- defined bin for entry into 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 GEM. Tire rolling resistance may be determined by

either the vehicle or tire manu facturer. 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 should 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” limits based on driver behavior an d limit expiration dates (or 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 GEM. This is based on an equation including terms for VSL expiration (expiration factor) and VSL soft
- 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 chapter 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 rear tires/wheels and/or aluminum (or light
- weight aluminum) wheels to reduce the weight of their vehicles. T he agencies have defined standard weight reduction levels associated with each combination for entry into GEM. These reductions are listed in pounds per tire or wheel, so manufacturers will need to multiply

this reduction by

the number of affected wheels for their total GEM entry . Manufacturers 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 GEM as such. This benefit cannot be scaled to reflect shorter or longer allowed idle times. The agencies will enter the appropriate engine map reflecting use of a certified engine in the truck (and will enter the same value even if an engine family is certified to***** E.O. 12866 Review**

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324 of 771 the temporary

percent reduction alternative standard, in order to evaluate vehicle perf ormance 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 agency reserves the right to independentl y evaluate the inputs to the model by way of Administrator testing to validate those model inputs. The agency also reserves the right to evaluate vehicle performance using the inputs to the mo del provided by the manufacturer to confirm the performance of the s ystem using GEM. This could include generating emissions results using the GEM and the inputs as provided b y the manufacturer based on the agency ’s own runs. This could also include condu cting 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 results. The exception being that the manufacturer may continue to use th eir 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 enteri ng 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 stead y - state. For the transient test, we are finalizing to use the heav y heav y - dut y diesel truck (H HDDT) transient test cycle, which was developed by the California Air Resources Board and West Virginia Universit y to evaluate heav y - dut y vehicles. The transient mode simulates urban, start
- stop driving, featuring 1.8 stops per mile over the 2.9 mile durat ion. The two stead y 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 MOVES database, and common highway speed limits, we are finalizing these two po ints 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 then normalized to the payload and distance covered, so as to yield a gram/ton
- mi le 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 configuration within a vehicle famil y The results from all three tests are then c ombined 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 mor e 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***** E.O. 12866 Review**

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325 of 77 1 to cover the highest mileage in the shortest time. For these reasons, we propose d that the cycles be weighted differently for these two groups of vehicles. For Class 7 and 8 trucks with day cabs, we propose d 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. 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 catego ries: 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 aerod ynamic features, such as fairings, side
- skirts, air dams, air foils, etc, which are installed b y the manufacturer to reduce aerod ynamic drag on the vehicle. These features have a significant impact on GHG emissions and thei r emission reduction properties are assessed early in the useful life (at the time of certification). These features are expected to last the full life of the vehicle without becoming detached, cracked/broken, misaligned, or otherwise not in the original state. 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 require ments. To assess useful life compliance, we recommend a design
- based approach which would ensure that the manufacturer has robustly designed these features so they can reasonabl y be expected to last the useful life of the vehicle. The category

of maintenan ce items refers to items that are replaced, renewed, cleaned, inspected, or otherwise addressed in the preventative maintenance schedule specified b y the vehicle manufacturer. Items that have a direct influence on GHG emissions are primaril y l ubricants. S ynthetic engine oil may be used by

vehicle manufacturers 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 r easonable 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 wear, the rolling resistance due to friction is likely

to stay th e same or decrease. With all other components remaining equal (tires, aerod ynamics, etc), the overall drag force would stay the same or decrease, thus not significantl y changing GHG emissions at the end of useful life. Itis 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.***** E.O. 12866 Review**

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326 of 771 For the reasons explained above, we believe 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 maintenance instructions provided by the vehicle manufacturer. The vehicle manufactur er 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 demonstration 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 similar to that of the main body of the vehicle (fiberglass, steel, aluminum, e tc) 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 - dut 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 heav y - duty vehicles, the load added b y the air conditioning system is comparativel y small compared to other power requirements of the vehicle. Therefore, we are not targeting an y GHG reduction due to decreased air conditioning usage or higher efficiency A/C units for this final rule. 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 vehicles, similar to light
- duty vehicles. To address this, EPA is finalizing a des ign
- based standard for reducing refrigerant leakage from heav y - dut y vehicles. This standard is based off using the best practices for material selection and interface sealing, as outlined in SAE publication J2727. 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 capacity
. At the time of certification, manufacturers will be required to outline the design of their sy stem, including the sp ecification 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 y ear. If the certifying manufacturer does not comple te installation of the air conditioning 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 c ertification, and manufacturers must 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***** E.O. 12866 Review**

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327 of 77 1 efforts. For these reasons, we are not finalizing an NTE
- based in
- use testing program for Class 7 and 8 combination tractors for this rule.. 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 o f installed emission
- related 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
- reduc ers. In addition, the presence 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
- enforceab le for the reasons mentioned 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 substantial reduction in GHG emissions. The tire repla cement intervals for this class of vehicle is normally 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 co mmon on new equipment, the aftermarket 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 ti res. 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 will specify whi ch 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 GEM, and compliance with the famil y (or subfamily) emissions limit will need t o be shown. . As described in the in
- use testing section, it is important to have the abilit y to determine if the vehicle is in the certified configuration both at the time of sale, as well as at any point within the useful life. Perhaps the most practica l and basic method of verifying that a vehicle 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 y ear, vehicle 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 fie ld inspection. Possible examples may include 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 certifi ed configuration.***** E.O. 12866 Review**

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328 of 771 Several comments were received 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, including generic emission control s ystem (EC) identifiers for vehicles would add a significant burden while providing little usable information for inspectors. A common example given in the comments was that simply ident ifying “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 s uch as a compliance statement, vehicle famil y 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

- 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 select able 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 overl 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, uniqu e 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 intended or if it has been modified prior to being offered for sale. EPA is requiring that limited aerodynamic components (roof fairings, side skirts, & gap reducers), vehicle speed limiters, LRR tires, and idle reduction comp onents be identified on the label. The following identifiers must be used for the emission control label: Vehicle Speed Limiters***** E.O. 12866 Review**

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329 of 77 1 - VSL

– Vehicle speed limiter

- VSL S

– “Soft
- top” vehicle speed limiter

- VSL E

– Expiring vehicle speed limiter

- VSLD

– Vehi cle speed limiter with both “soft
- top” and expiration Idle Reduction Technology

- IR T5

– Engine shutoff after 5 minutes or less of idling Tires

- LRRA

– Low rolling resistance tires (all)

- LRRD

– Low rolling resistance tires (drive)

- LRRS

– Low rolling re sistance tires (steer) 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) 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 vehic le configurations. 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 mentioned above are present. In addition to the label, manufact urers 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 heavy
- duty vehicles. These requests mainly involved labels similar to that 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***** E.O. 12866 Review**

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330 of 771 array 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. Addition ally , 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 for this final action
. **(3) Othe**  **r 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 installed which act to reduce CO 2 emissions at the time of initial sale. This includes all aerod ynamic features, tires, idle reduction s ys tems, speed limiting sy stem, and other equipment added to reduce CO 2 emissions. In additio n, the manufacturer must ensure these components and s ystems remain functional for the warrant y period defined in 40 CFR Part 86 for the engine used in the vehicle, generall y defined as half of the regulatory useful life. As with heavy
- dut y engines, manufa cturers may offer a more generous warranty , however the emissions related warranty may not be shorter than any

other warranty offered without charge for the vehicle. If aftermarket components are installed (unrelated to emissions performance) which offer a longer warrant y, this will not impact emission related warranty obligations of the vehicle manufacturer. Several 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, agency 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 fo r them to independently warrant their products. We see this as no different than requiring turbocharger or fuel injector manufacturers to provide warranties related to heav y - dut y engines. However, we do believe that vehicle manufacturers can and should ho ld tire manufacturers responsible for warrant y of their products as part of their sourcing and purchasing agreements. As proposed in the NPRM, tires are onl y required to be warranted for the first life of the tires (vehicle manufacturers are not expected to cover replacement tires). The vehicle manufacturer is also required to warrant the A/C system against design or manufacturing defects causing refrigerant leakage in excess of the standard. The warranty period for the A/C sy stem is identical to the veh icle warranty 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 the 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.***** E.O. 12866 Review**

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331 of 77 1 (b ) Maintenance Vehicle manufacturers are required to outline 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 service to the GHG emission contr ol 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
- related 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 reasonable 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. M anufacturers 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 ve hicle 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, th ese 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 rule, and will lik ely

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 tires throughout the life of heav y - duty

vehicles, we recognize that it is inappropriate at this time to hold vehicle manufacturers responsible for ensuring that this occurs. Additionally , we believe that owner/operators have a legitimate financial motivation for ensuring their vehicles are a s 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. Therefore we are requiring that vehicle manufacturers supply adequate information in the owner’s manual to allow the owner/operator of the vehicle to purchase tires meeting or exceeding the rolling resistance performance of the original equipment tires. We expect that these i nstructions will be submitted to EPA as part of the application for certification. (c) Certification Fees Similar to engine certification, the agency will assess certification fees for heavy
duty vehicles. The proceeds from these fees are used to fund the com pliance and certification activities related to GHG regulation for this regulatory category . In addition to the certification process, other activities funded by certification fees include EPA
-***** E.O. 12866 Review**

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332 of 771 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 assess its compliance program associated with this proposal and assess the appropriate level of fees. We anticipate th at fees will be applied based on vehicle families, following the light
- dut y vehicle approach. (d ) Requirements f

or Conducting Aerodynamic Assessment Using Allowed Methods The requirements for conducting aerodynamic assessment using allowed methods 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 namic bin as dis cussed in the Section II. First, we are finalizing requirements for conducting each of the allowed aerod ynamic assessment methods. We will cite approved and published standards and practices, 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 would be required to provide information showing that the meet these requirements and attest to the acc uracy 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 aerod yn 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 aerody namic assessment method and adhere to the requirements for conducting aerodynamic assessment mentione d above. The annual submission may be based on coastdown testing conducted consistent with the enhanced protocol detailed in this rulemaking or with an approved alternative method. The coastdown testing must be conducted using the Enhance Protocol which u ses SAE J1263 and SAE J2263 as a basis, 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, enhanced coastdown. The basis for the adjustment factor is: Adjustment Factor = Cd in
- house

Cd coastdown***** E.O. 12866 Review**

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333 of 77 1 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 = Adjustment Factor x Cd in
- house m easured The specific requirements for the test article used in reference method testing using the coastdown procedures should meet the following requirements.

**Table V**  **- 2**  **Reference Method Test Vehicle Specif ications**  **53 ’**  **Air Rid** 

**e Dry**  **Va ns**  Len gth: 52 feet6 i nches Widt h: 102 in ches Hei ght: 102 in ches (162 inches

f rom gr oun

d) As sum edt

railer load /capa city: 45, 000 lbs
. Cap aci ty: 3800 cu bic fe et Su sp ens ion: Any (s ee “trailer r ide he igh t” below) Cor ner s: Ro unded 5 1/2"r

adius ± . 5" Bogi e: Ta

ndem ax le (st d)
. Se t to Ca li for nia positi on. Sk in: Gener ally sm ooth with flu shr

ivets Sc uff ba nd: Gener ally sm ooth,f lus h with si

des ( pr otr ud ing = 1 /8 i nch) Wheels: 22. 5 inches
. Double wide. St d mu d fl aps Doo rs : Swing door s Tr ail er Ti re s: Sma rtWa y - Ver if ie d tires ; Ro lling re si st

an ceo f <5. 1 kg

/ ton ba sedo n IS O 28580 ; Mo unted on st eel ri ms . 295/75R 22. 25 or 275/80R 22. 5 dual tir

es Tr act or Tir es : Ma

nuf acturer C er tif ied Ti re s Ti reCo ndition : Accumulated mileage of = 2, 175 miles as spe cif ied in SA E J1263 Tr ead depth of = 50%

a s sp eci fie d in SAE J 12 63 No si gn of

uneven we ar Not retre ad s Und er car riag e: Std landing gear , no storageboxes , no

tir e st or ag e Tes t Co nditions : 1. Tr actor

- tr ai ler gap: 45 i nches 2. Ki ng pi n setting: 36 inches ± .5 inches 3. Tr ailer

r ideh ei ght: set within tr ai le r height bo undary fr om gr ound 4. Mu d fl aps: Positioned immedi at el y fo llowing

whe els of

l ast axle 5. Fr ont

o f tr ai ler to Cent erl ine of

l and ing gear 1 05 ±2" 6. Rear axlec enter

linet o back of tr ai ler

1 44"± 2"***** E.O. 12866 Review**

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334 of 771 **Table V**  **- 3**  **Reference Method Test Track Condition Specifications**

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 discussed elsewhere in this proposal, the correct tractor
- trailer combination is not alway s present or tractor - onl y operation may occur, the maj ority of operation in the real world involves correctly matched tractor
- trailer combinations and we will attempt to reflect that here. Therefore, the following guidelines should be used when performing an aerody namic assessment:

• For a Class 7 and 8 tra ctor truck with a high roof, a standard box trailer must be used. The definitions of for standard trailer are further detailed in §1037.501(g). This ensures consistency

and continuity

in the aerody

namic 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 should also be conducted based on the tractor alone. Stand ardized 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 modifications 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 coastdown procedure according to the requirements in this f

inal action and supply

the following to the agency for approval:

 Facilit y information: name and location, description and/or background/history , equipment and capability , track and facility elevation, track grade and track size/length; Co as td own Tr ac k Spe ci fi ca ti on s Pa rame te r Ra ng e Coast down spe ed ra nge 70 mph t o 15 mph Aver ag e win d sp ee d at the test si te ( fo r ea ch ru n i n eac

h dir ec ti on ) < 10 mp h Maximum

wi nd spe ed (f or each ru n i n eac

h dir ec ti on ) <1 2.3 mph Aver ag e cr os s wi nd s peed (f o r ea ch ru n i n eac

h dir ec ti on a

t th e si te ) < 5 mph All va li d c oa st

down run s i

n one d ire ct

io n Wit

hi n 2 st an dard dev ia ti on s of t he ot he r v al id co ast do wn run s i n th atsa me di

rect ion Grad e of t he t es t tr ac k <. 02% or a cco un t for t he i mp ac t of g ra vit y as describ ed i n SAE J 22 63 Eq

ua ti on 6
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335 of 77 1  Test conditions fo r 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 y ear, applicable model engine family , tire t yp e and rolling resistanc e, test weight and driver name(s) and/or ID(s);

 Average Cd 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 error 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) except that article 5.2 that specifies a minimum Rey nolds number of 0.7 x 10 6 is not included and is superseded, for the purposes of this rulemaking, b y a minimum Reynolds number of 1.0 x 10 6 and, for reduced
- scale wind tunnel testing, a one
- eighth (1/8 th ) or larger scale model of a heav y - duty tractor and trailer must be used and of sufficient design to simulate airflow through the radiator inlet grill;.

 J1594, “VEHI CL E AERODYNAMICS TERMINOLOGY” (December 1994); and

 J2071, “AE RODYNAMIC 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. We are finalizing the provis ions that manufacturers that perform wind tunnel testingdo sobased 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 floor (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 y aw angle for the oncoming wind. The manufacturer is required to supply

the following:

 Facilit y information: name and location, description 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 straightenin g method, tunnel volume, surface area, average duct area, and circuit length;***** E.O. 12866 Review**

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336 of 771  Wind tunnel flow quality : temperature control and uniformity , airflow quality , minimum airflow velocity , flow uniformity , angularit y and stability , static pressure variation, turbulence 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

lay er slot, boundary

lay er elimination method and photos and diagrams of the test section;

 Fan section description: fan ty pe, diameter, power, maximum rotational speed, maximum top speed, support ty pe, mechanical drive, sectional total we ight

 Data acquisition and control (where applicable): acquisition ty pe, motor control, tunnel control, model balance, model pressure measurement, wheel drag balances, wing/bod y panel balances, and model exhaust simulation

 Moving ground plane or Rolling Ro ad (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 purpo se. (iii) CFD 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 coastdown 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. Therefore, the agencies are requiring that manufacturers use commercially
- available CFD software code with a turbulence model and Navier
- Stokes formula solver, where applicable. Further details and criteria for each t ype of commercially
- available CFD sof tware code follows immediately

and general criteria for all CFD anal ysis are subsequentl y described. For Navier
- Stokes based CFD code, manufacturers must perform an unstructured, time
- accurate anal ys is with a mesh grid size with total surface elements of b etween one hundred and twenty

million and one hundred and fifty million cells using hexagonal or poly hedral mesh cell shapes, a cell size of less than or equal to 1 mm on the vehicle surface, and a surrounding volume element size in millimeters extending to the outer***** E.O. 12866 Review**

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337 of 77 1 boundary of the volume as described b y the equation: integer of 2 to the power of n where n equals the distance away from the vehicle surface (e.g., the cell size at 0.1mm (n) away from the surface would be 1mm [2 to the power of 0.1mm equal s 1.07; the integer of 1.07 equals 1]). All Navier
- Stokes based CFD anal ys is should be performed with a turbulence model and mesh deformation (e.g., k
- epsilon (k
- ε), Rey nolds stress or a shear stress transport k
- omega (SST k
- ω) ) enabled with boundary lay er resolution of +/
- 95%. Finally , Navier
- Stokes based CFD anal ys is for the purposes of determining the Cd should be performed once result convergence is achieved. Manufacturers should demonstrate convergence b y suppl yi ng multiple, successive convergence values. For Lattice
- Boltzman based CFD code, the agencies propose that manufacturers perform an unstructured, time
- accurate anal ys is with a mesh grid size with total surface elements of between one hundred and twenty million and one hundred and fifty mil lion cells using using cubic volume elements and triangle and/or quadrilateral surface elements, a cell size of less than or equal to 1 mm on the vehicle surface, and a surrounding volume element size measured in millimeters and extending to the outer boundary of the volume as described b y the equation: integer of 2 to the power of n where n equals the distance away from the vehicle surface (e.g., the cell size at 0.1mm (n) away from the surface would be 1mm since 2 to the power of 0.1mm equals 1.07 and the integer of 1.07 equals 1). Finally , in general for CFD, all anal ys is 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 ration 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 coa stdown test procedures outlined in this regulation, open grill with representative back pressures based on data from the tractor model, and tires and ground plane in motion consistent with and simulating a vehicle moving in the forward direction of travel. Alternative Aerodynamic Method Comparison to the Coastdown Test Procedure Reference Method If a manufacturer uses any alternative aerody

namic method, the manufacturer would have to provide a comparison to the coastdown test procedure reference method. The 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 aerodynamic method and coastdown test procedure reference meth od must be conducted under similar test conditions and adhere to the criteria discussed above for each aerodynamic assessment method. This 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 y ears and for other models.***** E.O. 12866 Review**

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338 of 771 The comparison would occur on one mode l of the manufacturer’s highest sales volume, Class 8, high roof, sleeper cab family with a full aerod yn 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 su ch 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 condition s for each test result including but not limited to: test date and time, wind speed (if applicable), temperature, humidity , manufacturer and model, model y ear, applicable model engine family , tire t yp e and rolling resistance for actual model, model test we ight, equivalent vehicle test weight, actual and simulated or equivalent vehicle speed, Rey

nolds number (if applicable), y aw 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 ye ar , the manufacturer is required to perform this comparison every three y ears 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, sl eeper 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 ae rod ynamic 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, chang e 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 y ear and on any model that the manufacturer has 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 f amilies 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 cer tification application. Once the manufacturer has performed the coastdown test procedure or the comparison for an alternative aerodyn amic method, the aerod yn amic assessment method can be used to generate Cd values for all models the manufacturer plans to certify and introduce into commerce. For each model, the manufacturer would determine a predicted aerod ynamic drag (Cd times the frontal area, A). This reduces burden on the manufacturer to perform aerod ynamic assessment but provides data for all the mod els in***** E.O. 12866 Review**

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339 of 77 1 a manufacturer’s fleet. If a manufacturer has previously performed aerod yn amic assessment on the other models, the manufacturer may submit an experimental Cd in lieu of a predicted Cd. The aerod ynamic assessment data will be used in one of two ways : the manufacturer will input the values and data including the Cd times A into the agency ’s model and determine a GHG value/score or the agencies will use the manufacturer’s input data into the model and assign a GHG value/score. Since the agencies may

i nput the data into the model, manufacturers are required to provide the information from the coastdown test procedure, alternative aerodynamic method or the method comparison described above for annual certification. In addition, the manufacturer would su pply 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 disp lacement, transmission name and ty pe, number of axles, axle ratio, vehicle dimensions, including frontal area, predicted or measured coefficient of drag, assumptions used in developing the predicted or measured Cd, justification for carry
across of aerod yn amic assessment data, photos of the model line
- up, if available, and model applications and usage options. (e) Aerodynamic Validation and Compliance The agencies reserve the right to perform aerodyn amic validation of the manufacturers aerod ynamic 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 facility 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 t ools 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 th eir aerod yn amic assessment methods ranging from minor adjustments to method criteria to switching allowed aerodynamic assessment methods. **(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 - dut y 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 wide***** E.O. 12866 Review**

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340 of 771 variet y of information on vehicles. The variet y of information was believed to be necessary given that these vehicles had no previous compliance information for meeting fuel ef ficiency and emission standards and the agencies wanted to ensure that enough information was obtain to ensure sufficient compliance with the program. The agencies have since reviewed the level of detail required in the precertification reports and are in 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 mode l ye ars. Therefore, the agencies will delete 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 certificates of conformity to obtain earl y model estimates. Currently, the applications for certificates are not required to include the fuel consumption information required by NHTSA. Therefore, the agencies are adopting provisions in the final rule for manufacturers to provide emission and equivalent fuel consumption estimates in the manu facturer’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 y ear report submitted for heavy
- dut y pick tr ucks and vans. The final rule establishes a harmonized approach b y which manufacturers will submit applications through the EPA VERIFY database sy stem as the single point of entry

for all information required for this national program and both agencies w ill have access to the information. If by model y ear 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 agency ’s to carry out their earl y compliance activities. (b ) Final Reports The NPRM proposed for manufacturers participating in the ABT program to provide EOY and fin al 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 y ear. 276 Manufacturers not participating in the ABT prog ram 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 engines. 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 y ear. 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.

276 Corresponding to the compliance model year***** E.O. 12866 Review**

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341 of 77 1 In response to the NPRM, commenters recommended collecting additional data. One commenter requested collecting information to develop and refine test cycles that more accurately

reflect actual driving cycles for medium and heavy dut y trucks. Several other commenters ( ACEE, Eaton, CAL START, NRDC and UCS) recommended collecting advan ced 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. Many commenters argued against the burden placed upon the industry in meeting the agencies required reporting provisions. On e 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 year indicating that only estimated information should have to be pro vided. Commenters (Volvo and Navistar) generall y 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 year should be combined with the ABT report due 90 days after the same model ye ar. Commenters also requested that the exempted off
- road vehicle report be consolidated with the EOY report. Other concerns ra ised b y 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 simply the repo rting requirements for vehicle configurations in both the EOY and final reports commenting that the current proposal as outlined in the NPRM was extremely burdensome to vehicle manufacturers. The NPRM regulation states that the manufacturer must identify each distinguishable vehicle configuration in the vehicle family or sub
- family

and identification of FELs for each subfamily . The regulation calls for reporting of results and modeling inputs for each subfamily . The commeter believed that the burden of m eeting 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 vocation and tractor categories. This approach should reduce the num ber of vehicle families to an amount that is be suitable for reporting. Comments received from the BlueGren Alliance and ACEEE also requested the agencies should 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, the agencies will retain the NPRM proposal for EOY and final reports. However , the agencies will consolidate the reporting as requested by comments and will provide equivalent fuel consumption information for all reports submitted to EPA. The final rule establishes a harmonized approach b y which manufacturers will submit reports through the EPA VERIFY database 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 m odel y ear 2012, the agencies are not prepared to receive***** E.O. 12866 Review**

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342 of 771 information through the EPA VERIFY database system, 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 are requiring a submission dat e 90 day s after the calendar y ear. The agencies view the adopted requirements in the final rule for EOY and final reports will provide sufficient data requests to satisfy

these requests. The agencies also agree with Volvo concerns and have adopted a new reclassification for selecting vehicle families as described elsewhere in this Section. A summary of the required information in the final rule for EOY and final reports is as follows:

 Vehicle family

designation and averaging set.  Vehicle emissions and f uel consumption standards including any alternative standards used  Vehicle family

FELs.  Final production volumes  Certified test cycles  Useful life values for vehicle families  A credit plan identifying the manufacturers actual credit balances, credit flexib ilities, credit trades and a credit deficit plan if needed demonstrating how it plans to resolve any credit deficits that might occur for a model y ear within a period of up to three model y ears after that deficit has occurred  A plan describing the vehicle s 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 ye ar identifying the approaches used to determinate compliance and the production volumes (c) Additional Req uired Information Throughout the model y ear, manufacturers will be required to submit various submissions to the agencies to comply with various aspects of the rule. These requests have differing criteria for submission and approval. Table V
- 4 below provides a summary of the ty pes of submission, required submission dates and the EPA and NHTSA regulations that appl y. The agencies will review and grant an y requests c onsidering the timeliness of the submissions and the completeness of the requests.***** E.O. 12866 Review**

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343 of 77 1 **Table V**  **- 4**  **: Summary of Required Information for Compliance** Submission Applies to Required Submissions Date EPA Regulation Reference NHTSA

Regulation Reference Sm all business exemptions Vehicle 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 §535.8

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 its application for certificate of conformity §1037.150 §535.8

Voluntary Com pliance for NHTSA standards Vehicle manufacturers

seeking early compliance in mo del years 2014 to 2016 NHTSA must be notified before the manufacturer submits its application for certificate 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 its application for certificate of conformity §1037.150 §535.8

Off
- road exemption Manufacturers wanting to

exclude tractor from vehicle standards EPA must be notified before the manufacturer submits its application for certificate 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 its application for certificate of conformity §1037.150 §535.8

Exemption from EOY reports Manufactures with surplus

credits at the end of the mo del year 9 0
- days after the calendar year ends §1037.730 §535.8***** E.O. 12866 Review**

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344 of 771 

### 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 complete vehicle 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 heavy
- 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 t ires 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, cons isting 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 vo cational vehicles with conventional powertrains will focus on quantifying GHG benefits due to the use of LRR tires through GEM. (a ) Certification Process Vehicles will be divided into vehicle families for purposes of certification. As with Class 7 and 8 combi nation 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 below 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 pound s. 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 combination 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 assigned to them. Currently , there is no 5 th digit (industry sector) code for this class of vehicles and EPA will issue an updated to the current guidance e xplaining 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 regulatory

subcategories makes th is 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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345 of 77 1 Each vehicle famil y must demon strate compliance with emission standards using the GEM approach. GEM inputs for conventional (i.e. non
- hy brid) vocational vehicles primarily involves entering tire rolling resistance information. Additional provisions are available for certification of hyb rid vehicles or vehicles using unique technologies, which was 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 engineerin g evaluation demonstrating that the modeled configuration indeed reflects the worst - case configuration. If the vehicle famil y is divided into subfamilies, unique GEM results are required for at least one configuration per subfamil y. The agencies have rece ived comments from engine manufacturers, truck manufacturers, and h yb rid sy stem manufacturers raising concerns regarding the dut y cycle and the weighting factors proposed for evaluating transient applications. The agencies proposed three methods for evalu ating hy brid sy stem performance in an effort to generate credit which could be used to provide incentives to facilitate the introduction of advanced technology . In response to concerns broached b y engine manufacturers and hy brid s ys tem manufacturers regar ding the operation of vehicles most likely to be hy bridized in the near term, the proposed duty cycles considered for the proposal will continue to be used with this final action. The agencies proposed a transient duty cycle, a 55 mile
- per - hour steady

state cruise and a 65 mile
- per - hour steady 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 inapprop riate shift events. Additionally , the steady state cycles proposed by the agencies remain essentially unchanged. The modification being adopted with today ’s final action is to address the distribution of the emissions impact associated with each duty cyc 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 dut y 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 this rulemaking d ocket xxxx
- xxxx 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 brid technology . The testing provisions for the comparison in the A to B tes ting for complete vehicle or post
- transmission powerpack testing may be seen in 40 CFR 1037.xxx. The testing provisions for work
- specific pre
- transmission evaluation using an engine based approach may be seen in 40 CFR 1036
. xxx and 40 CFR 1065
. xxx. (b ) Demo nstrating Compliance With the Final Standards (i ) CO2 and Fuel Consumption Standards Model As stated above, the agencies are finalizing that demonstrating compliance with GHG and fuel consumption standards would primarily involve the use of LRR tires and quantifying the associated CO 2 and fuel consumption benefit. Similar to Class 7 and 8***** E.O. 12866 Review**

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346 of 771 combination tractors, this will be done using GEM. However, the input parameters entered b y the vehicle manufacturer would be limited to the properties of the tires. GE M 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 tes t weight of 16,000 pounds; 25,150 pounds for medium heav y - dut y vehicles; and heav y heav y - duty vocational vehicles will use a test weight of 67,000 pounds. The model would then be exercised over the HHDDT transient cy cle as well as 55 and 65 mph steady
- stat e cruise conditions. The results of each of the three tests would be weighted at 37%, 21%, and 42% for 65 mph, 55 mph, and transient tests, respectivel y. It may seem more expedient and just as accurate to require manufacturers use tires meeting certain in dustry 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 standard. 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

s eem 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. Should innovative technologies be considered that are currently beyond th e scope of the model, it would be necessary for the manufacturer to conduct A to B testing which reflects the improvement associated with the new technology . The test protocol to be used and the basis of this assessment will require a public vetting proce ss which mayinclude notice and comment. 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 aftermarket 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 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 em ission 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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347 of 77 1 and vans, the standards in this rule to address greenhouse gas emissions apply separatel y to engines and to vehicles. Since we will be applying both greenhouse gas standards and evaporative/refueling emission standards to vehicle manufacturers, we believ e it will be advantageous to have the regulations 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 h ave not finalized any changes to the evaporative 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 evaporative emission standards for methanol
- fueled compression
- ignition engine. The final regulations correct this by

appl yi ng the new standards to all fuels that are subject to standards.  We are finalizing provisio ns 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 any auxiliary engines ( and the corresponding fuel
- sy stem components). Incomplete 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 apply under our nonroad program as spec ified in 40 CFR part 1060.  We have removed the option for secondary vehicle manufacturers to use a larger fuel tank capacit y than is specified b y the certifying manufacturer without re
certifying the vehicle. Secondary vehicle manufacturers needing a greater fuel tank capacity

will need to either work 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 s ome 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 h ave also clarified how evaporative emission standards 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 stand ards 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 assessment for certifying these vehicles without changing the standards that appl y.***** E.O. 12866 Review**

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348 of 771 (c) Demonstrating Compliance With the Final Standards (i ) CO2 and Fuel Consumption Standards Model As stated above, the agencies are finalizing th at demonstrating compliance with GHG and fuel consumption standards would primarily involve the use of LRR tires and quantifying the associated CO 2 and fuel consumption benefit. Similar to Class 7 and 8 combination tractors, this will be done using GEM. H owever, the input parameters entered b y the vehicle manufacturer would be limited to the properties of the tires. 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 - duty vocational vehicles will use a test weight of 67,000 pounds. The model would then be exercised over the HHDDT transient cy cle as well as 55 and 65 mph steady
- state cruise conditions. The results of each of the three tests would be weighted at 37%, 21%, and 42% for 65 mph, 55 mph, and transient tests , respectivel y. It may seem more expedient and just as accurate to require manufacturers 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 range s of coefficients of rolling resistance to provide a means for comparison to the standard. However, we believe that as technology advances, other aspects of vocational vehicles may warrant inclusion in future rulemakings. For this reason, we remain commi tted 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 there fore we believe this is the best approach. Should innovative technologies be considered that are currently beyond the scope of the model, it would be necessary for the manufacturer to conduct A to B testing which reflects the improvement associated with the new technology . The test protocol to be used and the basis of this assessment will require a public vetting process which mayinclude notice and comment. In
- use Standards The category

of wear items primarily

relates to tires. It is expected that vehi cle 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 aftermarket prices of these tires will also decrease. Along with decreasing tire pri ces, 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 package reflects the continued use of LRR tires through the life of t he vehicle.***** E.O. 12866 Review**

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349 of 77 1 (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 mu st 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 and vans, the standards in this rule to address greenhouse gas emissions apply separatel y to engines and to vehicles. Since we will be ap plyingboth greenhouse gas standards and evaporative/refueling emission standards to vehicle manufacturers, we believe it will be advantageous to have the regulations related to their certification requirements written together as much as possible. EPA re gards these final changes as discrete, minimal, and for the most part clarifications to the existing standards. We have not finalized any changes to the evaporative or refueling emission standards, but we have come across several provisions that warrant c larification or correction:

 When adopting the most recent evaporative emission change we did not carry through the changes to the regulatory text applying evaporative emission standards for methanol
- fueled compression
- ignition engine. The final regulations correct this by

appl yi ng 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 dire ctly addressed in the highway regulation. The final approach requires testing complete vehicles with any auxiliary engines (and the corresponding fuel
- sy stem components). Incomplete vehicles must be tested without the auxiliary engines, but any such engi nes and the corresponding fuel
- sy stem components will need to meet the standards that apply 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 capacit y than i s specified by the certifying manufacturer without re
certifying the vehicle. Secondary vehicle manufacturers needing a greater fuel tank capacity

will need to either work with the certifying manufacturer to include the larger tank, or go through the effo rt 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 leane r description of evaporative emission families that does not reference sealing methods for carburetors or air cleaners. We have also clarified how evaporative emission standards affect engine manufacturers and are finalizing more descriptive provisions re lated to certifying vehicles above 26,000 pounds GVWR using engineering analy sis.***** E.O. 12866 Review**

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350 of 771  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 assessment for certifying these vehicles without changing the standards that appl y. **(2) Final Labelin**  **g Provisions** It is crucial that a means exist for allowing field inspectors to identify whether a vehicle is certified, and if so, whether it is in the certified configuration. As with engines 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), regulatory subcategory, date of manufacture, compliance statement, FEL , and emission control sy stem identifiers. Sin ce LRR tires are expected 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. In addition, if an y other emission related components are pr esent, such as hy brid powertrains, key

components will also need to be specified on the label. L ike the engine label, this will need to be permanentl y 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 i dentification number and date of production can be found on the vehicle. **(3) Other Certification Issues**  Warranty As with other heav y - duty engine and vehicle regulatory categories, vocational vehicle chassis manufacturers would be required to warrant their prod uct to be free from defects that would adversely affect emissions. This warranty also covers the failure of emission related components for the warranty period of the vehicle. For vocational vehicles, this primarily

applies to tires. Manufacturers of cha ssis 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 tires 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.***** E.O. 12866 Review**

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351 of 77 1 As with Class 7 and 8 combination tractors, all warranty documentation would be submitted to EPA at the time of certifi cation. 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 agency 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 segment. In a ddition to the certification process, other activities 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 assess its compliance program associated with this proposal 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 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 service 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 emis sion 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 engine. However, if such mainten ance 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 receive the required maintenance i n - use or manufacturers may

provide the maintenance at no charge to the user. 

### 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 t o the greenhouse gas 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 defe ating 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 certified configuration. EPA proposes to apply

§86.1854

– 12 to heav y - duty vehicles and engines; this codifies the prohibited acts spelled out in the statute. Although it is not legally necessary***** E.O. 12866 Review**

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352 of 771 to repeat what is in the CAA, EPA believes that including this language in the regulations provides clarit y and improves the ease of use and completeness of the regulations. Since this change merely

codifies provisions that already apply , there is no burden associated with the change. **(2) Regulatory Amend**  **ments Related to Heavy -**  **Duty Engine Certification** We are finalizing the adoption of the new engine
- based greenhouse gas standards in 40 CFR part 1036 and the new vehicle
- based standards in 40 CFR part 1037. We are finalizing to continue to rely on 40 CFR parts 85 and 86 for conventional certification and compliance provision s related to criteria pollutants, but the final regulations include a variet y of amendments that would affect the provisions that apply with respect to criteria pollutants. We are not intending to change the stringency of, or otherwise substantively chang e any

existing standards. 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 vehicle 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 through 1074. We intend eventuall y to capture all the regulatory requirements rel ated 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 organized, 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 engine
- 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 solicitcomment on the substance of these existing rules, and is not finalizing amending, reconsideration of, or otherwise re
- examining 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 alread y commonly

done; howeve r, 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 §10 36.825 spell out several detailed provisions related to keeping records and submitting information to us.***** E.O. 12866 Review**

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353 of 77 1  We wrote the greenhouse gas regulations to divide heav y - dut y engines 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 (s uch 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 pr ogram that is as effective for imported engines as for domesticall y produced engines. We have alread y adopted these same provisions for several t ypes of nonroad engines.

 §1036.210 specifies a process b y which manufacturers are able to get preliminary

appr oval for EPA decisions for questions that require lead time for preparing an application for certification. This might involve, for example, preparing a plan for durability 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 finalizing the exemption and recall provisions as written in 40 CFR part 1068 instead of the comparable provisions in 40 CFR part 85. Thi s involves only

minor changes relative to current practice. We are aware that it may be appropriate to move several additional provisions in 40 CFR parts 85 and 86 to subchapter U. For example, highway engine manufacturers may find it preferable to use th e same parameters specified for defining nonroad engine families for certifying highway engines. To the extent that the nonroad provisions would apply appropriately

for highway

engines, we and the manufacturers would benefit from a consistent approach to certifying both t ypes of engines in a way that does not compromise the degree of emission control achieved under the existing standards. Another area of particular interest is defect reporting. Existing regulations require manufacturers to report defects to EPA whenever the same defect occurs at least 25 times. This approach can be somewhat onerous for manufacturers making high
- volume products. For example, for an engine model with annual sales above 25,000, this represents a defect rate of less than 0.1 percent. In contrast, the approach to defect reporting in §1068.501 accommodates the high sales volumes associated with highway engines, basing requirements on a percentage of defective products, rather than setting a fixed number for all engine families. This flexibility is paired with the explicit direction***** E.O. 12866 Review**

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354 of 771 for the manufacturer to actively monitor warrant y claims, customer complaints, and other sources of information to e valuate and track potential defects. We believe this aligns both with the manufacturers’ interest in producing quality products and EPA’s interest in addressing an y quality

concerns that arise from the need to repair in
- use engines and vehicles. **(3) Test Proc**  **edures For Measuring Emissions From 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 procedures 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 heavy
- 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 inst ead 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 procedures, and other practices. We are fin alizing 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 engine
- 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 procedures in part 1065, we are confident that m any 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 rel y on a combination of regulatory provision s, 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 proposal to capture this range of materi al, 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 carefully controlled vehicle operation such that emission meas urements are accurate and repeatable. We request comment on the range of final requirements related to designing, building, and operating***** E.O. 12866 Review**

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355 of 77 1 chassis dy

namometers. For example, we believe that the final verification and calibration procedures in part 1066, s ubpart B, for diameter, speed, torque, acceleration, base inertia, friction loss, and other parameters are all necessary to ensure proper dynam ometer operation. It may

be that some of these checks are redundant, or could be achieved with different procedures. There may also be additional checks needed to remove possibilities for inadequate accuracy

or precision. The procedures are written with the understanding that heav y - dut y highway manufacturers have, and need to have, single
- roll electric d yn 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 alread y 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 vehicle being tested and for the level of stringency represented b y the corresponding emission standards. Drafting a full set of test specifications h ighlights 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 wri tten 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 SIunits. In an y case, dy namometers are produced with the c apability 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 c ases 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 ch anges from our current approach. A fundamental obstacle toward using SI units is the fact that some dut y cycles are specified based on speeds in miles per hour. To address this, it would be appropriate 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 nearest 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 valu e that is specified without a decimal place. Similarly , the Cruise cycles for heavy
- dut y vehicles could be specified as 24.5±0.5 m/s (54.8±1.1 mph) and 29.0±0.5 m/s (64.9±1.1 mph).***** E.O. 12866 Review**

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356 of 771 (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). (c) Additional Required Information Table V
- 5 below provides a summary of the t ypes of requests, required application submission dates and the EPA and NHTSA regulations that apply
.

–***** E.O. 12866 Review**

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357 of 77 1 **Table V**  **- 5**  **: Summary of Required Information for Compliance** Submission Applies to Required Submissions Date EPA Regulation Reference NHTSA

Regulation Reference Sm all business exemptions Vehicle or engine

manufacturers meeting the Sm all 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 §535.8

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 su

bm its it applications for certificates of conformity §1037.150 §535.8

Model year 2014 N 2 O standards. Manufacturers 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 emissions of CO 2 , CH 4 , and N 2 O End of December prior to model year §1037.150 §535.8
Off
- road exemption Manufacturers 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



### 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.***** E.O. 12866 Review**

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358 of 771 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 no n compliance with its own regulations. NPRM at 74280. EMA, Volvo, the Truck Renting and Leasing Association (TRALA), and Navistar nevertheless commented that a dual enforcement scheme with separate NHTSA and EPA penalties could result in duplicative pen alties, as manufacturers could be assessed penalties twice for the same violation. The possibility

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 the re is overlapping jurisdiction, such as where the federal government and a state government have jurisdiction. The issue of multiple or sequential prosecutions may be addressed as a matter of administrative policy and discretion. 277 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 enforcement action under another. NHTSA will address the concern about

277 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 housekeeping p rovision,” 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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359 of 77 1 multiple enforcement actions both when considering initiating an action and when stating its penalty

demand. Before initiating an action, NHTSA will check with EPA to see if EPA has filed an action. If EPA has f iled an action, NHTSA ordinaril y will not file an action. There are two exceptions. The first is if the EPA action has become bogged down by the manufacturer and NHTSA faces a statute of limitations. The second is if, for whatever reason, the EPA action did not result in the pay ment of what NHTSA views as appropriate penalties to the Treasury . If a manufacturer has paid a penalty in an EPA action, and NHTSA decides to pursue an action, in that action, NHTSA will offset the pay ment to the Treasury

in an EPA action from NHTSA’s penalt y demand. NHTSA believes that the above description adequately describes the process by which civil penalties may be assessed by

both agencies. Therefore, for the final rule, penalties will be based on the gravity of the viol ation, the size of the violator’s business, the violator’s history

of compliance with applicable fuel consumption standards, the actual fuel consumption performance related to the applicable standard, the estimated cost to comply

with the regulation and ap plicable standard, and the quantity of vehicles or engines not compl yi ng. 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 would 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
- Com pliant Regulatory Category = (CAA Limit) x (production volume within the regulatory category) EPA has occasionally

in the past c onducted rulemakings to provide for nonconformance penalties
-- monetary penalties that allow a manufacturer to sell engines or vehicles that do not meet an emissions standard. Nonconformance penalties are authorized for heav y - duty engines and vehicles und er section 206(g) of the CAA. Three basic criteria have been established by rulemaking for determining the eligibility of emissions standards for nonconformance penalties in any given model y ear: (1) the emissions standard in question must become more dif ficult 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 du e 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 standards.***** E.O. 12866 Review**

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360 of 771 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 techn ologies, there are a number of flexibilities and alternative standards built into the proposal. However, we do request comment regarding this assessment and on whether or not it would be appropriate for EPA and NHTSA to initiate rulemaking activity to set nonconformance penalties for the final standards, subject to their respective statutory authorities. Should nonconformance penalties be warranted, the benefits of establishing them would be threefold: (1) the EPA and NHTSA programs would continue to be e quivalent, allowing manufacturers to sell the same vehicles and engines to satisfy both programs, (2) competitiveness in the affected HD sector would be maintained, preserving jobs and consumer choices, and (3) nonconformance penalties would be set through a transparent public process, involving notice and public hearing. (1) NHTSA’s Penalt y 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 p ay the penalt y proposed in the notice 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 Administrato r. Inthe event of a timely appeal, 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 proc edures 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 violat e 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 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 a dministrative proceeding must be an adjudication, determined on the record after the opportunity for an agency

hearing,***** E.O. 12866 Review**

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361 of 77 1 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, agencies 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. 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 belie ves that formal procedures are neither 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 th e regulations and, if not, (2) the 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 emissions 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. The re likel y will not be wide ranging 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 penalt y. 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 rea soned to withstand judicial review, 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 lev el 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 opp ortunity to be heard at the administrative level. Of course, if a party files an appeal with the NHTSA Administrator, the Hearing Officer’s decision and order at that juncture shall no longer be final agency

action. NHTSA has considered the specificatio ns 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 be 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***** E.O. 12866 Review**

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362 of 771 referred for the assessment of civil penalties, the Hearing Officer will have no duties related to the light
- duty

fu el 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 concern. Parties, of course, cannot conf

er 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 Sta tes 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 regulato ry

text. 

## VI. **How Wi**  **ll 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 official mobile source emissions inventory mo del named Motor Vehicle Emissions Simulator (MOVES2010) 278 , to estimate emission and fuel consumption impacts of these final rules. MOVES has capability to take in user inputs to modify

default data to better estimate emissions for different scenarios, such as different regulatory

alternatives, state implementat ion plans (SIPs), geographic locations, vehicle activity , and microscale projects. The agencies performed multiple MOVES runs to establish reference case and 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 model output was required to ensure proper results. The agencies ran MOVES for non
- GHGs, CO 2 , CH 4 , and N 2 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 greenh ouse gas benefits estimation, and climate impacts anal ys is. The agencies also used MOVES to estimate emissions and fuel consumption impacts for the other alternatives considered and described in Section IX.

278 MOVES homepage: http://www.epa.gov/otaq/models/moves/inde x.htm . Version MOVES2010 w as used for emissions impacts analysis for this rule. Current version as of September 14, 2010 is an updated version named MOVES2010a, available directly from the MOVES homepage. To replicate results from this rule, MOVES2010 m ust be used.***** E.O. 12866 Review**

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363 of 77 1 

### B. **MOVES Analysis (1)**  **Inputs and Assumptions** The anal ys i s 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 run updates Since MOVES2010a vehicle sales and activity data were developed from AEO2009, EPA first updated these data using sales and activity estimates from AEO2011. . MOVES2010a defaults were used for all other parameters to estimate the reference case emissions invent ories. (b ) Control Run Updates EPA developed additional user input data for MOVES runs to estimate control case inventories. To account for improvements of engine and vehicle efficiency , EPA developed several user inputs to run the control case in MOVES. A s 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 emissions 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 combined weight) expected from the final rules to develop road load input for the control case. The fuel suppl y update used in the reference case was used in the control case. Details of all the MOVES runs, input data tables, and post
- processing 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 int o MOVES for estimating control case emissions inventories. **Table VI**  **- 1**  **: Estim ated Reductions in Engine CO**  **2 Emission Rates**  **279** GVWR Class Fuel Model Years 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%

279 Section II 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 aver age, the reduction from the industry average projected in this program would be reduced.***** E.O. 12866 Review**

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36 4 of 771 **Table VI**  **- 2**  **: Estim ated 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 REDUCTION (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 loa d reduction components, but total vehicle CO 2 reductions. These estimated reductions are described in Table VI
- 3
. **Table VI**  **- 3**  **: Estim ated Total Vehicle CO**  **2 Reductions for HD Pickup Trucks and Vans**  GVWR Class Fuel Model y ear 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%***** E.O. 12866 Review**

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365 of 77 1 

### 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 distribution) sources, and fuel consumption reductions from more efficient vehicles. Increased vehicle efficiency and reduced vehicle fuel consumption will also reduce GHG emissi ons from upstream sources. The following subsections summarize the GHG emissions and fuel consumption reductions expected from these final rules. **(1) Downstream (Tailpipe)**  Consistent with the proposal, EPA used MOVES to estimate downstream GHG inventories fro m these final rules. We expect reductions in CO 2 from all heav y - dut y vehicle categories. 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 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 tracto rs. After accounting for these differences, EPA expects methane emissions 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 hydro carbons is significantly less for APUs than for diesel engines equipped with diesel particulate filters. Overall, downstream GHG emissions will be reduced significantly , and is described in the following subsections. For CO 2 and fuel consumption, the t otal energy consumption “pollutant” was run in MOVES rather than CO 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 E10 280 and 138,451 kJ/gallon for diesel. 281 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 y ear 2014 through 2018 heavy
- 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 inap propriate or insufficient for estimating downstream emissions impacts of this program.

280 Renewable Fuels Standards assumptions of 115,000 BTU/gallon gasoline (E0) and 76,330 BTU/gallon ethanol (E100) w eighted 90% and 10%, respectively, and converted to kJ at 1.055 kJ/BTU. 281 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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366 of 771 **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 27 2.7 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 23 2,146 60 2030 62 5,729 355 2050 90 8,428 531 **(2) Upstream (Fuel Production and Distribution)**  Using the same approach as used in the NPRM, the upstream GHG emission reductions associated with the production and distribution of fuel were projected using emission factors from DOE’s “Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation” (GREET1.8) model, with some modifications consistent with the MY 2012
- 2016 L ight
- Duty

Vehicle rulemaking. More information regarding these modifications can be found in the RIA Chapter 5. These estimates inc lude both international and domestic emission reductions, since reductions in 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 GH G 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 12.4 1.9 0.06 14.3 2050 16.4 2.5 0.08 19.0***** E.O. 12866 Review**

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367 of 77 1 **(3) HFC Emissions**  Based on projected HFC emission reductions due to the final AC leakage standards, EPA estimates the HFC reductions to be 122,338 metric tons of CO 2 eq in 2018, 436,483 metric tons of CO 2 eq emissions in 2030 and 596,396 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 29 2030 77 2050 109


### 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 th e global atmosphere regardless of emission origin, and 2) their effects on climate are long lasting. GHG emissions come mainly from the combustion of fossil fuels (coal, oil, and gas), with additional contributions from the clearing of forests and agricultural activities. Transportation activities, in aggregate, are the second largest contributor to total U.S. GHG emissions (27 percent) despite a decline in emissions from this sector during 2008. 282 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) 283 for EPA’s Endangerment and Cause or Contribute Findings Under the Clean Air Act (74 FR 66496, December 15, 2 009). Below is the Executive Summary of the TSD which provides technical support 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 base d 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

282 U.S. EPA (2010) Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990

–2007. EPA
- 430
- R
- 10
- 006, Washington, DC. 283 See Endangerment TSD, Note 1 0 above.***** E.O. 12866 Review**

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368 of 771 was updated and revised based on expert technical review and public comment 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. 284 In May 2010, the NRC published its comprehensive assessment, “Advancing the Science of Climate Change.” 285 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 alread y affecting

— a broad range of human and natural systems.” Furthermore, the NRC stated that this conclusion is 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 knowledge 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 inde pendent and critical inquiry

of the state of climate change science, separate and apart from the previous IPCC and USGCRP assessments. The NRC assessment is a clear affirmation that the scientific underpinnings of the Administrator’s Endangerment Finding are robust, credible, and appropriately characterized by

EPA. **(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 emissions were 7,150 teragrams 286 of CO 2 equivalent287 (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 (27%) and industry (19%).

284 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 section 1(b), specifically, Table 1.1 of the TSD Docket: EPA
- HQ
- OAR
- 2 009
- 0171
- 11645. 285 National Research Council (NRC) (2010). Advancing the Science of Climate Change. National Academy Press. Washington, DC. 286 One teragram (Tg) = 1 million metric tons. 1 metric ton = 1,000 kilograms = 1.102 short tons = 2,205 pounds. 287 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 Nations Fram ew ork Convention on Climate Change (UNFCCC) reporting pr ocedures, the U.S. quantifies GHG emissions using the 100
- year timeframe values for GWPs established in the IPCC Second Assessment Report.***** E.O. 12866 Review**

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369 of 77 1 T ransportation sources under section 202(a) 288 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 section 202(a) made up 4.3% of total global GHG emissions in 2005, 289 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 worl d’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. The scope of this final action focuses on GHG emissions under section 202(a) f

rom 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 concentratio n of CH 4 has increased by 149% since 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 i ndustrial 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. **(2) Observed Effects Associated With Global Elevated Concentrations of**  **GHGs** Greenhouse gases, at current (and projected) 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 atmospheric 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 forcin g, 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

288 Source categories under Section 202(a) of the CAA are a subset of source categories considered in the transportatio n 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. 289 More recent emission data are available for the United States and other ind ividual 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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370 of 771 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 increase 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. W arming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level. Global mean surface temperatures have rise n by 1.3 ± 0.32  F (0.74°C ± 0.18  C) over the last 100 y ears. 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 y ears. Both the IPCC 290 and the CCSP reports attributed recent North American warming to elevated GHG concentrations. In the CCSP (2008) report, 291 the authors find that for North America, “more than half of this w arming [for the period 1951
- 2006] is likely the result of human
caused 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 Stat es, 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 amo unt, 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 y ears with the rate of rise reaching a maximum (over 2 millimeters [mm] per year) in a band along the U.S. east coast runnin g east - northeast
. 290 Hegerl, G.C. et al. (2007) Understanding and Attributing Climate Change. 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 Kingdo m and New York, NY, USA. 291 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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371 of 77 1 Satellite data since 1979 show that annual average 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. Widespre ad 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 shows 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 emis sions of GHGs from human activities is difficult, especially for precipitation. 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 calcificati on 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 with Continued Increases in**  **Elevated GHG C oncentrations**  Most future scenarios that assume no explicit GHG mitigation actions (beyond those alread y enacted) project increasing global GHG emissions over the century , with climbing GHG concentrations. Carbon dioxide is expected to remain the dominant anthropogenic GHG over the course of the 21 st century . The radiative 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 past century . According to climate model simulations summarized by the IPCC, 292 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 warming (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).

292 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.***** E.O. 12866 Review**

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372 of 771 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 l ikel 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 d ecreases are likel y in most subtropical latitudes and the southwestern 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 adverse 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 by I PCC 293 to rise between 7.1 and 23 inches (18 and 59 centimeter [cm]), relative to around 1990, in the absence of increased d yn 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 processes increase with incre ases 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

293 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 York, NY, USA.***** E.O. 12866 Review**

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373 of 77 1 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 level, which would occur over a time period of centuries to millennia. The CCSP 294 reports that climate change has the potential to accentuate the disparities alread y evident in the American health care s ys tem, as many of the expected health effects are likel y to fall disproportionatel y on the poor, the elderly , the disabled, and the uninsured. The IPCC 295 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 pro jected 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 reduction 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 increase regional ozone pollutio n, with associated risks in respiratory

illnesses and premature death. In addition to human health effects, tropospheric ozone has significant adverse effects on crop yi elds, pasture and forest growth, and species composition. The directional effect of c limate 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 already 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 296 concludes that, with increased CO 2 and temperature, the life cycle of grain and oilseed crops will likely progress more rapidly . But, as temperature rises, these

294 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 R esearch. [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. 295 Field, C.B. et al. (2007) North America. In: Climate Change 2007: Impacts, Adaptation and Vulnera bility. 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 and New York, NY, USA. 296 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,***** E.O. 12866 Review**

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374 of 771 crops will increasingl y begin to experience failure, especiall y if climate variability increases and precipitation lessens or becomes more variable. Furthermo re, 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 production during the summer sea son 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 A laska, 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 increase photosy

nthesis for fore sts, 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 c arbon 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 in crease 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, other 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 variability

and future clim ate change. 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 practice s 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 , nav igation, 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. 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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375 of 77 1 Higher 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 repla ced 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 biological production of mari ne 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 environmental change and environme ntal 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 flooding, sea level rise and s torm 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 grow ing 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 century , 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 broken ecological connections will alter ecos ys tem structure, function, and services. **(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 qualit y are projected in the Northeast, 297 Southeast, 298 Southwest, 299 and Midwest. 300 Projected

297 Northeast includes West Virginia, Maryland, Delaware, Pennsylvania, New Jersey, Ne w York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and Maine. 298 Southeast includes Kentucky, Virginia, Arkansas, Tennessee, North Carolina, South Carolina, southeast Texas, Louisiana, Mississippi, Alabama, Georgia, and Florida. 299 Southwest includes Cali fornia, Nevada, Utah, western Colorado, Arizona, New Mexico (except the extreme eastern section), and southwest Texas. 300 The Midw est includes Minnesota, Wisconsin, Michigan, Iowa, Illinois, Indiana, Ohio, and Missouri.***** E.O. 12866 Review**

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376 of 771 climate change would continue to cause loss of sea ice, glacier retreat, permafrost thawing, and coastal erosion in Alaska. Reduced s nowpack, earlier spring snowmelt, and increased likelihood of seasonal summer droughts are projected in the Northeast, Northwest, 301 and Alaska. More severe, sustained droughts and water scarcit y are projected in the Southeast, Great Plains, 302 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, flo oding, 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. Climate change impacts in cer tain regions of the world may exacerbate problems that raise humanitarian, trade, and national security issues for the United States. The IPCC 303 identifies the most vulnerable world regions as the Arctic, because of the effects of high rates of projected w arming 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 rise and increased storm sur ge; 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 multiplier with regard to nat ional security issues.
301 The Northw est includes Washington, Idaho, w estern Montana, and Oregon. 302 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 303 Parry, M.L. et al. (20 07) 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 de r Linden, and C.E. Hanson (eds.)], Cambridge University Press, Cambridge, United Kingdom, pp. 23 S 78.***** E.O. 12866 Review**

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377 of 77 1 

### 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 304 the reductions in CO 2 and other GHGs associated with this rulemakin g 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 projected climate change, they are quantifiable, directionally consistent, and will contribute to reducing the risks associated with climate change. 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 approximatel y 0.017
- 0.040 cm by 2100, based on a range of climate sensitivities. The anal ys is also demonstrates that ocean pH will increase by 0.0003 pH units by

2100 relat ive to the reference case. **(1) Estimated Projected Reductions in Atmospheric CO**  **2 Concentration,**  **Glob al 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 305 coupled with the Model for the Assessment of Greenhouse Gas Induced Climate Change (MAGICC, version 5.3v2). 306 GCAM was
304 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 th e effects of this rulemaking’s greenhouse gas emissions reductions on global mean temperature and sea level. Please refer to Chapter 8.4 of the RIA for additional information. 305 GCAM is a long
- term , global integrated assessment model of energy, economy, a griculture and land use, that 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 cli mate change. GCAM begins with 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, an d economic developments that in 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. 306 Wigley, T.M.L. 2008. MAGICC 5. 3.v2 User Manual. UCAR

– Climate and Global Dynamics Division, Boulder, Colorado. http://www.cgd.ucar.edu/cas/wigley/magicc/***** E.O. 12866 Review**

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378 of 771 used to create the globally and temporall y consistent set of cli mate relevant variables required for running MAGI CC. MAGI CC was then used to estimate the projected change in these variables over time. Given the magnitude of the estimated emissions reductions associated with this action, a simple climate 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 Assessments of the IP CC. 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 scenario 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 gases 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 transportation fuel consumption from the GCAM reference scenario. Road transport fuel consumption past 2050 d oes not change significantly and thus emissions reductions remain relatively constant from 2050 through 2100. Specific details about the GCAM reference case scenario can be found in Chapter 8.4 of the RIA that accompanies this preamble. MAGI CC calculate s 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 stratosphe ric water vapor. Changes in CH 4 , NOx, 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 di rect effect of sulfate particles and the indirect effects related to cloud interactions. However, MAGICC does not calculate the effect of changes in concentrations 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 PM2.5 emissions and precursors (besides SO 2 ) which are presented in the RIA Chapter 5 were not included in the calculations in th is 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 o zone can have 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 i n an anal ys is of the final standards at this time.***** E.O. 12866 Review**

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379 of 77 1 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 cal culate 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 the preferred approach of this action was subtracted from an existing Global Change Assessment 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 m ost current IPCC range of climate sensitivities, from 1.5°C to 6.0°C. 307 This range reflects the uncertaint y for equilibrium climate sensitivity

for how much global mean temperature would rise if the concentration of carbon dioxide in the atmosphere were to double. The 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. 308 Details about this modeling anal ys is can be found in the RIA Chapte r 8.4. The results of this modeling, summarized in Table VI
- 8 , show small, but quantifiable, reductions in atmospheric CO 2 concentrations, projected global mean temp erature 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 by 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 absorption 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.

307 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/ 308 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.***** E.O. 12866 Review**

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380 of 771 **Table VI**  **- 8**  **: Impact of GHG Emissions Reductions on Projected Changes in Global Clim**  **ate Associated with the Final Rulem**  **aking (Based on a range of clim ate sensitivities 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
- 0.0017 to
- 0.0042 Sea Level Rise cm 2100
- 0.017 to
- 0.040 Ocean pH pH units 2100 0.0003 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 uncertaint y range does not include the effects of uncertaint y in future emissions. It should also be noted that the calculations 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. 309 Further discussion of EPA’s modeling anal ys is is found in the RIA, Chapter 8. EPA used the Program CO2SYS, 310 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 p rogram to calculate ocean pH as a function of atmospheric CO 2 concentrations, among other specified input conditions. Based on the projected atmospheric CO 2 concentration reductions resulting from this action, the program calculates an increase in ocean pH of 0.0003 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 indicates 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 modeling anal ys is associated with ocean pH i s 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 cli mate change on centennial time scales. Reductions in emissions in the near
- term are important in determining long
- term climate stabilization and

309 National Research Council, 2011. Climate Stabilization Targets: Emissions, Concentrations, and Im pacts over Decades to Millenia. Washington, DC: National Academies Pres s. 310 Lewis, E., and D. W. R. Wallace. 1998. Program Developed for CO 2 System Calculations. ORNL/CDIAC
- 105. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tennessee.***** E.O. 12866 Review**

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381 of 77 1 associated impacts experienced not just over the next decades but in the coming centuries and millennia. 311 Tho ugh 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 (though 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 available science. EPA’s modeling results show rep eatable, consistent reductions relative to the reference case in changes of CO 2 concentration, temperature, sea
- level rise, and ocean pH over the next century
.

311 National Research Council (NRC) (2010). Climate Stabilization Targets. Committee on Stabilization Targets for Atmospheric Greenhouse Gas Concentrations; Board on Atmospheric Sciences and Climate, Division of Earth and Life Sciences, National Academy Press. Washington, DC.***** E.O. 12866 Review**

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382 of 771 

## 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 getting 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. **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
- 10,083
- 4,430
- 3,367
- 1,394 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 Year Benzene 1,3
- butadiene Formaldeh yd e Acetaldeh yd e Acrolein 2018
- 12
- 0.6
- 12
- 1
- 0.2 2030
- 20
- 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 w as necessary to estimate the fraction of fuel savings attributable to domestic finished 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 diesel 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 de velopment of the emission factors used in this anal ys is can be found in RIA Chapter 5.***** E.O. 12866 Review**

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383 of 77 1 **(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 for this is the improvements in road load (aerod ynamics and tire rolling resistance) under the program. Another reason is that emissions from certain pollutants (e.g., SO 2 ) are propo rtional to fuel consumption. For vehicle ty pes not affected by

road load improvements, non
- GHG emissions may

increase very

slightl y due to VMT rebound. EPA also anticipates the use of APUs in combination tractors for GHG reduction purposes during extende d idling. These units exhibit different non
- GHG emissions characteristics compared to the on
- road engines they

would replace during extended idling. EPA used MOVES to determine non - GHG emissions inventories for baseline and control cases. Further inform ation about the MOVES anal ysis is available in Section VI and RIA Chapter 5. The improvements in road load, use of APUs, and VMT rebound were included in the MOVES runs and post
- processing. Tab le 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
- roa d engines, the projected widespread use of APUs leads to higher PM 2.5 . Table VI I
- 4 summarizes the downstream air toxics impacts of this program. **Tab le**  **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
- 107,273
- 12,956
- 25,629 808 2030
- 235,400
- 25,516
- 52,242 1,760 2050
- 326,975
- 35,147
- 72,099 2,456 Note: a Positive number means emissions would increase from baseline to control case. PM 2.5 from tire wear and brake w ear is included.

**Table VII**  **- 4**  **: Overall Estim ated 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***** E.O. 12866 Review**

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384 of 771 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 negat ed b y upstream PM 2.5 reductions, though our calculations show a slight net increase in 2030 and 2050. 312 **Table VII**  **- 5**  **: Overall Estim ated Total Impacts (Upstream Plus Downstream** **) on Criteria Pollutants Results a**  **re 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 % 2018
- 113,748
- 6.2
- 14,721
- 5.6
- 27,846
- 1.0
- 163
- 0.2 2030
- 245,482
- 21.0
- 29,945
- 16.0
- 55,610
- 2.1 366 1.1 2050
- 341,218
- 23.7
- 41,526
- 18.3
- 76,883
- 2.2 457 1.1

**Table VII**  **- 6**  **: Overall Estim ated Total Impacts (Upstream Plus Downstream** **) Impacts on Air Toxics** 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
- 360
- 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 sev eral orders of magnitude in size. Since 1987, 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 Quality 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 purp oses of regulating the coarse fraction of PM 10 (referred to as thoracic coarse particles or coarse
- fraction particles; generally including particles
312 Although the net impact 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 emis sions changes are included in the air quality modeling is discussed in Section VII.D of this preamble and in Chapter 8 of the RIA.***** E.O. 12866 Review**

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385 of 77 1 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 aerod ynamic 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, meteorology , and source category . Thus, PM 2.5 may include a complex mixture of different pollutants including sulfates, nitrates, organic compounds, ele mental 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 detail in EPA’s Integrated Science Assessment for Particulate Matter (I SA). 313 Further discussion of health effects associated with PM can also be found in the RIA for this final action. The ISA summarizes ev idence 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 h ospital 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 obs tructive pulmonary disease and respiratory

infections. 314 The I SA notes that long
- 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 redu ced lung function growth, increased respiratory s ymptoms, and asthma development. 315 The I SA concludes that the currentl y available scientific evidence from epidemiologic, controlled human exposure, and toxicological studies supports a causal association be tween 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 evidence is suggestive of a causal association for reproductive and developmental effects and cancer, mutagenicity , and genotoxicity and long
- term exposure to PM 2.5 . 316 For PM 10
- 2.5 , the I SA concludes that the curre nt evidence is suggestive of a causal relationship between short
- term exposures and cardiovascular effects, such as hospitalization for ischemic heart disease. There is also suggestive evidence of a causal

313 U.S. EPA (2009) Integrated Science Assessment for Particulate Matter (Final Report). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R
- 08/139F, Docket EPA
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- 0162. 314 See U.S. EPA, 2009 Final PM ISA, Note 313 , at Section 2.3.1.1. 315 See U.S. EPA 2 009 Final PM ISA, Note 313 , at page 2
- 12, Sections 7.3.1.1 and 7.3.2.1. 316 See U.S. EPA 2009 Final PM ISA, Note 313 , at Section 2.3.2.***** E.O. 12866 Review**

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386 of 771 relationship between short
- term PM 10
- 2.5 exposure and mortality and respiratory

effects. Data are inadequate to draw conclusions regarding the health effects associated with long
- term exposure to PM 10
- 2.5 . 317 For ultrafine particles, the I SA concludes that there is suggestive evidence of a causal relationship between short
- term exposures and cardiovascular effects, such as 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 resp iratory

effects. Data are inadequate to draw conclusions regarding the health effects associated with long
- term exposure to ultrafine particles. 318 **(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. These 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 c onsumer and commercial products, industrial facilities, and smaller area sources. The science of ozone formation, transport, and accumulation is complex. Ground
- level ozone is produced and destroy ed in a cyclical set of chemical reactions, many of which are sensitive to temperature and sunlight. When 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 d ocumented and are assessed in EPA’s 2006 Air Quality

Criteria Document and 2007 Staff Paper. 319 , 320 People who are more susceptible to effects associated with exposure to ozone can include children, the elderl y, and individuals with respiratory disease such a s asthma. Those with greater exposures to ozone, 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 discom fort. Ozone can reduce lung function and cause pulmonary

inflammation in healthy

individuals. Ozone can also aggravate

317 See U.S. EPA 2009 Final PM ISA, Note 313 , at Section 2.3.4, Table 2
- 6. 318 See U.S. EPA 2009 Final PM ISA, Note 313 , at Section 2.3.5, Table 2
- 6. 319 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
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- 0162. 320 U.S. EPA. (2007). Review of the National Ambient Air Quality Standards for Ozone: Policy Assessme nt of Scientific and Technical Information, OAQPS Staff Paper. EPA
- 452/R
- 07
- 003. Washington, DC, U.S. EPA. Docket EPA
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387 of 77 1 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 individuals 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
- accidental 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 ozone - related premature mortality published by

NRC, 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 mortality should be included in estimates of the health benefits of reducing ozone expos ure. 321 Animal toxicological evidence indicates 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 obse rved in controlled human exposure studies and 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 hospit alizations 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 ) i s 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 conta ining sulfur (e.g., coal or oil derived), extracting 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 health 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. 322 The EPA has concluded that the findings of epidemiologic, controlled human exposure, and animal toxicological studies provide evidence that is sufficient to infer a l ikely causal relationship between respiratory

321 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits from Controlling Ozo ne Air Pollution . The National Academies Press: Washington, D.C. Docket EPA
HQ
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- 0162 322 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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388 of 771 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. The 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 increas e 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 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 re sponsiveness could have important clinical 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 experimenta l data sets form a plausible, consistent, 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 sup porting a causal relationship is somewhat 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 visi ts 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. 323 SO 2 has long b een known to cause adverse respiratory

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 bronchoco nstriction 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 evaluation 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 S O 2 and mortality
. **(4) Carbon Monoxide**  In formation on the health effects of CO can be found in the EPA Integrated Science Assessment (I SA) for Carbon Monoxide. 324 The I SA concludes that ambient
323 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
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- 0162. 324 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. Available at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686 . Docket EPA
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389 of 77 1 concentrations of CO are associated with a number of adverse health effects. 325 This section provides a summary of the health effects associated with exposure to ambient concentrations of CO. 326 Human clinical studies of subjects with coronary artery disease show a decrease in the time to onset of exercise
- induced angina (c hest 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 coro nary 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. The 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 con cludes 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 and 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 toxicolog ical studies 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 devel opmental effects 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 numbe r of epidemiologic 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 f rom those of 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

325 The ISA evaluates the health evidence associated with different health effects, assigning one of five “weight of evidence” determinations: causal relationship, l ikely 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 these levels of evidence, please refer to Section 1.6 of the ISA. 326 Persona l exposure includes contributions from many sources, and in many different environments. Total personal exposure to CO includes both ambient and nonambient components; and both components may contribute to adverse health effects.***** E.O. 12866 Review**

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390 of 771 preliminary

evidence of altered pulmonary va scular remodeling 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 exp osure and respiratory morbidit y. 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
- t erm exposure 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 vehicle 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.” 327 These compounds include, but are not limited to, benzene, 1,3
- butadiene, formaldehyde, acetaldeh yde, acrolein, diesel particulate matter and exhaust organic gases, polycyclic organi c 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. 328 (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

327 U. S. EPA. 2002 Nation al
- Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata12002/risksum.html Docket EPA
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- 0162 328 U.S. EPA 2009. National
- Scale Air Toxics Assessment for 2002. http://www.epa.gov/ttn/atw /nata2002/ Docket EPA
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391 of 77 1 (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. The lifetime for some of the compounds present in diesel exhaust ranges from hours to day s. 329 (i ) Diesel Exhaust: Potential Cancer Effects In EPA’s 2002 Diesel Health Assessment Document (Diesel HAD), 330 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 variet y 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 variet y of diesel exhaust
- exposed occupations. 331 , 332 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
329 U.S. EPA (2 002). 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/n cea/cfm/recordisplay.cfm?deid=29060 . Docket EPA
- HQ
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- 0162 330 See U.S. EPA (2002) Diesel HAD, Note 329 , at pp. 1
- 1, 1
- 2. 331 Bhatia, R., Lopipero, P., Smith, A. (1998). Diesel exposure and lung cancer. Epidemiology, 9(1) , 84
- 91. Docket EPA
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- 0162 332 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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392 of 771 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 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. 333 , 334 , 335 , 336 The RfC is 5 μg/m 3 for diesel exhaust as measured b y diesel particulate matter. This 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 al l 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 ey e, nose, and throat, respiratory sy mptoms (cough and phlegm), and neuroph ys iological sy mptoms such as headache, lightheadedness, nausea, vomiting, and numbness or tingling of the extremities.” 337 (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 noncancer and premature mortality

effects of PM 2.5 as a whole.

333 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
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- 0162 334 Heinrich, U., Fuhst, R., Rittinghausen, S., et al. (1995). Chronic inhalation exposure of Wistar rats and two different strains of mice to diesel engine exhaust, carbon black, and titanium di oxide. Inhal Toxicol, 7, 553
- 556. Docket EPA
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- 0162 335 Mauderly, J.L., Jones, R.K., Griffith, W.C., et al. (1987). Diesel exhaust is a pulmonary carcinogen in rats exposed chronically by inhalation. Fundam. Appl. Toxicol., 9, 208
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- 0162 336 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
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- 0 162 337 See U.S. EPA (2002), Diesel HAD at Note 329 , at p. 9
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393 of 77 1 (iv) Diesel Exhaust PM Exposures Exposure of people to diesel exhaust depends on their various activities, the time spent in those acti vities, the locations where these activities occur, and the levels of diesel 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 emission 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, fo r 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 Regions 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 concentrated in a small area. Studies near roadway s with high truck traffic indicate higher concentrations of components of diesel PM than other locations. 338 , 339 , 340 High ambient particle concentrations have also been reported near trucking terminals, truck stops, and bus garages. 341 , 342 , 343 Additional discussion of exposure and health effects associated with traffic is included below in Section VII. B. (5) (j)
.

338 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
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- 0162 339 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
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- 0162 340 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
- 1549. Docket EPA
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- 0162 341 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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- 0162 342 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
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- 0162 343 Ramachandran, 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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394 of 771 (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 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. 344 , 345 , 346 EPA states in its IRI S database that data indicate a causal relationship between benzene exposure and acute l y mphocy 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 characterized benzene as a known human carcinogen. 347 , 348 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. 349 , 350 The most sensitive noncancer effect observed in humans, based on current data, is the depression of the absolute ly mphocy te count in blood. 351 , 352 In addition, recent work, including studies sponsored b y the Health Effects Institute (HEI), provides evidence that biochemical responses are occurring at lower levels of benzene exposure than previously

known. 353 , 354 , 355 , 356 EPA’s IRI S program has not y et evaluated these new data.

344 U.S. EPA. 2000. Integrated Risk Information System File for Benzene. This material is available electronically at http://www.epa.gov/iris/subst/0276.htm. Docket EPA
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- 0162. 345 International Agency for Research on Cancer. 1982. Monographs on the evaluation of carcinogenic risk of chemical s to humans, Volume 29. Some industrial chemicals and dyestuffs, World Health Organization, Lyo n, France, p. 345
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- 0162 346 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, V.A. 1992. Synergistic action of the benzene metab olite hydroquinone on myelopoietic stimulating activity of granulocyte/macrophage colony
stimulating factor in vitro, Proc. Natl. Acad. Sci. 89:3691
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- 0162. 347 See IARC, Note 345 , above. 348 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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- 0162 349 Aksoy, M. (1989). Hematotoxicity and carcinogenicity of benzene. Environ. Health Perspect. 82: 193
- 197. Docket EPA
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- 0162. 350 Goldstein, B.D. (1988). Benzene toxicity. Occupational medicine. State of the Art Reviews. 3: 541
- 554. Docket EPA
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- 0 162. 351 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
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- 0162. 352 U.S. EPA (2002) Toxicological Revie w of Benzene (Noncancer Effects). 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/0276.htm. Docket EPA
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- 0162. 353 Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.; Melikian, A.; Eastmond, D.; Rappaport, S.; Li, 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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395 of 77 1 (c) 1,3
-Butadiene EPA has ch aracterized 1,3
- butadiene as carcinogenic to humans by inhalation. 357 , 358 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. 359 , 360 There are numerous studies consistent ly 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 evidence strongly suggests that the carci nogenic 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 humans from which to draw conclusions about sensitive subpopulations. 1,3
- butadiene 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 in a lifetime bioassay of female mice. 361 (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. 362 EPA is currentl y reviewing recently published epidemiological data. For instance, research conducted b y the National Cancer Institute found an increased risk of nasophary ngeal

354 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
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- 0162. 355 Lan, Qing, Zhang, L., Li, G. , Verm eulen, R., et al. (2004) Hematotoxically in Workers Exposed to Low Levels of Benzene. Science 306: 1774
- 1776. Docket EPA
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- 0162. 356 Turtletaub, K.W. and Mani, C. (2003) Benzene metabolism in rodents at doses relevant to human exposure from Urban Air. Research Reports Health Effect Inst. Report No.113. Docket EPA
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- 0162. 357 U.S. EPA (2002) Health Assessment of 1,3
- Butadiene. Office of Research and Development, National Center for Environmental Assessment, Washington Office, Washingt on, 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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- 0162. 358 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/iris/subst/0139.htm. Docket EPA
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- 0162 359 International Agency for Research on Cancer (199 9) Monographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 71, Re
- 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 360 U.S. Department of Health and Human Services (2005) National Toxicology Program 11th Report on Carcinogens available at: ntp.niehs.nih.gov/index.cfm?objectid=32BA9724
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- 0162 361 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
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- 0162. 362 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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396 of 771 cancer and l ymphohematopoietic malignancies such as leukemia among workers exposed to formaldeh yde. 363 , 364 In an anal ys is of the ly mphohematopoietic cancer mortality from an extended follow
- up of these workers, the National Cancer Institute confirmed an association between ly

mphohematopoietic cancer risk and peak exposures. 365 A recent National Institute of Occupational Safet y and Health study of garment workers also found increased risk of death due to leukemia among workers exposed to formaldehyde. 366 Extended follow
- up of a cohort of British chemical workers did not find evidence of an increase in nasophary

ngeal or ly

mphohematopoietic cancers, but a continuing statisticall y significant excess in lung cancers was reported. 367 Recentl y, the IARC re
- classified formaldeh yde as a human carcinogen (Group 1). 368 Formaldeh yd e exposure also cau ses a range of noncancer health effects, including irritation of the ey es (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 s uch as metaplasia and loss of cilia. Animal studies suggest 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 asthm a – particularly in the young. 369 , 370 (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,

363 Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; Haye s, 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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- 0162. 364 Hauptmann, 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
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- 0162. 365 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. Docket EPA
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- 0162. 366 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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- 0162. 367 Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended follow
- up of a cohort of British chemical workers e xposed to formaldehyde. J National Cancer Inst. 95:1608
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- 0162. 368 International Agency for Research on Cancer. 2006. Formaldehyde, 2
- Butoxyethanol and 1
- tert Butoxypropan
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- ol. Volume 88. (in preparation), World Health Organization, Lyon, France. Docket EPA
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- 0162 369 Agency for Toxic Substances and Disease Registry (ATSDR). 1999. Toxicological profile for Form aldehyde. Atlanta, GA: U.S. Department of Health and Human Services, Public Health Service. http://www.atsdr.cdc.gov/toxprofiles/tp111.html Docket EPA
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- 0162. 370 WHO (2002) Concise International Chemical Assessment Document 40: Formaldehyde. Published under the joint sponsorship of the United Nations Environment Progra mme, 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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397 of 77 1 and intravenous routes. 371 Acetaldeh yd e is reaso nably anticipated to be a human carcinogen b y the U.S. DHHS in the 11 th Report on Carcinogens and is classified as possibly carcinogenic to humans (Group 2B) by the IARC. 372 , 373 EPA is currently conducting a reassessment of cancer risk from inhalation exposur e to acetaldehyde. The primary

noncancer effects of exposure to acetaldehyde vapors include irritation of the ey es, skin, and respiratory tract. 374 In short
- term (4 week) rat studies, degeneration of olfactory epithelium was observed at various concentratio n levels of acetaldeh yde exposure. 375 , 376 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) an d bronchoconstriction upon acetaldeh yde inhalation. 377 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 respiratory 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 eye and nasal mucosal sensory re actions within minutes of exposure. 378 These data and additional studies regarding acute effects of human exposure to acrolein are summarized in EPA’s 2003 IRI S Human Health Assessment for acrolein. 379 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 . 380 Lesions to the lungs and upper respiratory tract of
371 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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- 0162. 372 U.S. Department of Health and Human S ervices National Toxicology Program 11th Report on Carcinogens available at: ntp.niehs.nih.gov/index.cfm?objectid=32BA9724
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- 0162. 373 International Agency for Research on Cancer. 1999. Re
- evaluation of some o rganic 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 374 See Integrated Risk Information System File of Acetaldehyde, Note 371 , above. 375 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 r ats. J. Appl. Toxicol. 6: 331
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- 0162 376 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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- 0162. 377 My ou , S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, T. 1993. Aerosolized acetaldehyde induces histamine
- mediated bronchoconstriction in asthmatics. Am. Rev. Respir.Dis. 148(4 Pt 1): 940
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- 0162 378 U.S. EPA (U.S. Environmental Protec tion Agency). (2003) Toxicological review of acrolein in support of summary information on Integrated Risk Information System (IRIS) National Center for Environmental Assessment, Washington, DC. EPA/635/R
- 03/003. p. 10. Available online at: http://www.epa.gov/ncea/iris/toxreviews/0364tr.pdf . Docket EPA
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398 of 771 rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein. 381 Acute exposure effects in animal studies report bronchial hy per - responsiveness. 382 In a recent stud y, the acute r espiratory irritant effects of exposure to 1.1 ppm acrolein were more pronounced in mice with allergic airway disease by

comparison to non
- diseased mice which also showed decreases in respiratory rate. 383 Based on these animal data and demonstration of simi lar effects in humans (e.g., reduction in respiratory rate), individuals with compromised respiratory 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 determined because the available data were inadequate. No information was available on the carcinogenic effects of acrolein in humans and the animal data provided in adequate evidence of carcinogenicit y. 384 The IARC determined in 1995 that acrolein was not classifiable as to its carcinogenicit y in humans. 385 (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 ma

jor 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. 386 387 Animal s tudies have reported respiratory tract tumors from inhalation exposure to benzo[a]py

rene and alimentary

tract and liver 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

381 Integrated Ris k Information System File of Acrolein. Office of Research and Development, National Center for Environmental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/subst/0364.htm Docket EPA
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- 0162. 382 See U.S. 2003 Toxicological review of acrolein, Note 378 , at p. 15. 383 Morris JB, Symanowicz PT, Olsen JE, et al. 2003. Immediate sensory nerve
- mediat ed respiratory responses to irritants in healthy and allergic airway - diseased mice. J Appl Physiol 94(4):1563
- 1571. Docket EPA
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- 0162. 384 U.S. EPA. 2003. Integrated Risk Information System File of Acrolein. Research and Development, National Cent er for Environmental Assessment, Washington, DC. This material is available at http://www.epa.gov/iris/subst/0364.htm Docket EPA
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- 0162. 385 International Agency for Research on Cancer. 1995. Mo nographs on the evaluation of carcinogenic risk of chemicals to humans, Volume 63. Dry cleaning, some chlorinated solvents and other industrial chemicals, World Health Organization, Lyon, France. Docket EPA
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- 0162 386 Agency for Toxic Substances an d 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?i d=122&tid=25. 387 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 . Docket EPA
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399 of 77 1 indeno[1,2,3
- cd]py

rene) as Group B2, probable human carcinogens. 388 Recent studies have found that maternal exposures to PAHs in a population of pregnant women were associated with several adverse bir th outcomes, including low birth weight and reduced length at birth, as well as impaired cognitive development in preschool children (3 ye ars of age). 389 , 390 EPA has not y et evaluated these recent studies. (h ) Naphthalene Naphthalene is found in small quantities i n 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 ex ternal review draft of a reassessment of the inhalation carcinogenicity of naphthalene based on a number of recent animal carcinogenicity studies. 391 The draft reassessment completed external peer review. 392 Based on external peer review comments received, a dditional analy ses 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 "rea sonabl 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. 393 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. 394 Naphthalene also causes a number of chronic non
- cancer effects in animals, including abnormal cell changes and growth in respiratory and nasal tissues. 395

388 U.S. EPA (1997). Integrated Risk Information System File of indeno(1,2,3
- cd)pyrene. Research and Development, National Center for Environmental Assessment, Washingto n, DC. This material is available electronically at http://www.epa.gov/ncea/iris/subst/0457.htm. 389 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. 390 Perera , F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Tang, D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; Camann, D.; Kinney, P. (2006) Effect of prenatal exposure to airborne polycyclic aromatic hydrocarbons on neur odevelopment in the first 3 years of life among inner
- city children. Environ Health Perspect 114: 1287
- 1292. 391 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. 392 Oak Ridge Institute for S cience and Education. (2004). External Peer Review for the IRIS Reassessment of the Inhalation Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=84403 Docket EPA
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- 0162. 393 National Toxicology Pro gram (NTP). (2004). 11th Report on Carcinogens. Public Health Service, U.S. Department of Health and Human Services, Research Triangle Park, NC. Available from: http://ntp
server.niehs.nih.gov . Docket EPA
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- 0162. 394 International Agency for Research on Cancer. (2002). Monographs on the Evaluation of the Carcinogenic Risk of Chemicals for Humans. Vol. 82. Lyon, France. Docket EPA
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- 0162. 395 U. S. EPA. 1998. Toxicological Revie w of N aphthalene, 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 D ocket EPA
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400 of 771 (i ) Other Air Toxics In addition to the compounds described above, other compounds in gaseous hydrocarbon and PM emissions from heavy
- dut y vehicles will be affected by this final action. Mobile source air toxic compounds that would potentially be impacted inclu de ethylbenzene, propionaldehyde, toluene, and xylene. Information regarding the health effects of these compounds can be found in EPA’s IRI S database. 396 (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 indi vidual criteria pollutants or air toxics, this section discusses 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 re levant 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. 397 Numerous sources on roads contribute to elevated roadside concentrations, including exhaust and evaporative 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
- volat ile organic compounds and chemical components of particulate 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 cer tain adverse health effects. The Health Effects Institute published a report on the health effects of traffic
related air pollution. 398 Itconcluded that evidence is “sufficient to infer the presence of a causal association” between traffic exposure and ex acerbation 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 studie s by Salam et al. (2008) reaches similar conclusions. 399 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 f or causal associations with respiratory health
396 U.S. EPA Integrated Risk Information System (IRIS) database is available at: www.epa.gov/iris 397 Zho u, Y.; Levy, J.I. (2007) Factors influencing the spatial extent of mobile source air pollution impacts: a m eta - analysis. BMC Public Health 7: 89. doi:10.1186/1471
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- 0162. 398 HEI Panel on the Health Effects of Air Pollut ion. (2010) Traffic
- 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. 399 Salam, M.T.; Islam, 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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401 of 77 1 care utilization, adult
- onset asthma, chronic obstructive pulmonary disease sy

mptoms, and allergy . A review b y Holguin (2008) notes that the effects of traffic on asthma may be modified by

nutrition status, m edication use, and genetic factors. 400 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 changes in heart rh ythm, 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 “consistent evidence” linking traffic
- related pollution and adverse cardiovascular health outcomes. 401 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 between childhood cancer and traffic
- related air pollutants is weak, but noted the inability to draw firm conclusions based on limited evidence. 402 There is a large population in the United States living in c lose 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. 403 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 American 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 evidence 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
400 Holguin, F. (2008) Traffic, outdoor air pollution, and asthma. Immunol Aller gy Clinics North Am 28: 577
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- 0162. 401 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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- 0162. 402 Raaschou
-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 403 U.S. Census Bureau (2008) American Housing Survey for the United States in 2007. Series H
- 150 (National Data), Table 1A
- 7. [Accessed at http://www.census.gov/hhes/www/housing/ahs/ahs07/ahs07.html on January 22, 2009] Docket EPA
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402 of 771 was less than half that of owner
- occupants ($28,921/$59,8 86). Numerous studies in individual urban areas report higher levels of traffic
- related air pollutants in areas with high minority

or poor populations. 404 , 405 , 406 Students may

also be exposed in situations where schools are located near major roads. In a stud y of nine metropolitan 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. 407 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. 408 , 409 , 410 There is some inconsistency in the evidence, which may be due to different local development patterns and measures of traffic and geographic scale used in the studies. 407 

### C. **Environmental Effects of Non -**  **GHG Pollutants** In this section we discuss some of the environmental 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, including 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. 411 Visibility impairment is caused by light scattering and absorption by suspended

404 Lena, T.S.; Ochieng, V.; Carter, M.; 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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- 0162 405 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 406 Forkenbrock, D.J. and L.A. Schweitzer, Environmental Justice and Transportation Investment Policy
. Iowa City: University of Iowa, 1997. Docket EPA
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- 0162 407 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 E nviron Plan Mgmt Docket EPA
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- 0162 408 Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.; Ostro, B. (2004) Proximity of California public schools to busy roads. Environ Health Perspect 112: 61
- 66. Docket EPA
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- 0162 409 Houston, 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
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- 0162 410 Wu, Y.; Batterman, S. (2006) Proximity of schools in Detroit, Michigan to auto mo bile and truck traffic. J Exposure Sci Environ Epidemiol 16: 457
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- 0162 411 National Research Council, 1993. Protecting Visibility in National Parks and Wilderness Areas. National Academy of Sciences Committee on Haze in Natio nal Parks and Wilderness Areas. National***** E.O. 12866 Review**

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403 of 77 1 particles and gases. Visibility is important because it has direct significance to people’s enjoy ment of daily

activ ities 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 natura l 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 2009 PM I SA. 412 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 effectivenes s 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 Program. **(2) Plant and Ecosystem Effects of Ozone**  Elevated ozone levels contribute to environmental effe cts, 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 concentration 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 damage 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 addition, 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, resulting in other, more subtle plant and ecos 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 lo ss or reduction in associated ecos ys tem goods and services. Lastly , visible ozone injury to leaves can result Academy Press, Washington, DC. Docket EPA
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- 0162. This book can be view ed on the National Academy Press Website at http://www.nap.edu/books/0309048443/html/ 412 See U.S. EPA 2009 Final PM ISA, Note 313
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404 of 771 in a loss of aesthetic value in areas of special scenic significance like national parks and wilderness areas. The final 2006 Ozone Air Quality Criteria Document presents more detailed information on ozone effects on vegetation and ecos ys tems. **(3) Atmospheric Deposition**  Wet and dry

deposition of ambient particulate 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 ecosy stems. The chemical form of the compounds deposited depends on a variet y of factors includin g 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 deposition has been identified as a key component of the environmental and human health hazard posed by several pollutants including mercury , dioxin and PCBs. 413 Adv erse 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 t o both nutrient and toxic inputs. Adverse effects to human health and welfare can occur from the addition of excess nitrogen via atmospheric deposition. The nitrogen
nutrient enrichment contributes to toxic algae blooms and zones of depleted ox ygen, whic h can lead to fish kills, frequentl y in coastal waters. Deposition of heavy metals or other toxics may

lead to the human ingestion of contaminated fish, impairment of drinking water, damage to the marine ecology , and limits 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. 414 , 415 , 416 , 417 , 418 Atmospheric deposition of nitrogen and sulfur contributes to acidification, altering biogeoch emistry

and affecting animal and plant life in terrestrial and aquatic ecos ys tems across the United States. The sensitivity of terrestrial and aquatic ecos ys tems

413 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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- 0162. 414 U.S. EPA (2004) National Coastal Condition Report II. Office of Research and Development/ Office of Water. EPA
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- 0162. 415 Gao, Y., E.D. Nelson, M.P. Field, et al. 2002. Charac terization of atmospheric trace elements on PM2.5 particulate matter over the New York
-New Jersey harbor estuary. Atmos. Environ. 36: 1077
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- 0162. 416 Kim , G., N. Hussain, J.R. Scudlark, and T.M. Church. 2000. Factors influenci ng the atmospheric depositional fluxes of stable Pb, 210Pb, and 7Be into Chesapeake Bay. J. Atmos. Chem. 36: 65
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- 0162. 417 Lu, R., R.P. Turco, K. Stolzenbach, et al. 2003. Dry deposition of airborne trace metals on the Los Ange les Basin and adjacent coastal waters. J. Geophys. Res. 108(D2, 4074): AAC 11
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- 0162. 418 Marvin, C.H., M.N. Charlton, E.J. Reiner, et al. 2002. Surficial sediment contamination in Lakes Erie and Ontario: A comparative an alysis. J. Great Lakes Res. 28(3): 437
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405 of 77 1 to acidification from nitrogen and sulfur deposition is predominantly governed by geology
. P rolonged 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 biota and affects the abundance and nutritional value of preferred pre y species, threatening biodiversity and ecos ys tem function. Over time, acidifying deposition also removes essential nutrients from forest soils, depleting the capacity of soils to neutralize future acid loadings and negatively affecting forest sustainabil ity
. Major effects include a decline in sensitive forest tree species, such as red spruce ( Picea rubens ) 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 biogeochemical cycling. In aquatic s ys tems increased nitrogen can alter species assemblages and cause eutrophication. In terrestrial sy stems nitrogen loa ding can lead to loss of nitrogen sensitive lichen species, decreased biodiversit y of grasslands, meadows and other sensitive habitats, and increased potential for invasive species. For a broader explanation of the topics treated here, refer to the descri ption in Section 7.1.2 of the RIA. Adverse impacts on soil chemistry and plant life have been observed for areas heavily influenced by

atmospheric deposition of nutrients, metals and acid species, resulting in species shifts, loss of biodiversity , forest d ecline 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 culturall 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 accelerating the corrosion of metals, by degrading paints, and by deteriorating building materials such as concrete and limestone. Particles contribute to the se effects because of their electrol yt ic, h ygroscopic, and acidic properties, and their ability to adsorb corrosive gases (principall y sulfur dioxide). **(4) Environmental Effects of Air Toxics**  Emissions from producing, transporting and combusting fuel contrib ute to ambient levels of pollutants that contribute to adverse effects on vegetation. Volatile organic compounds, some of which are considered air toxics, have long been suspected to play a role in vegetation damage. 419 Inlaboratory experiments, a wide range of tolerance to VOCs has been observed. 420 Decreases in harvested seed pod weight have been

419 U.S. EPA. 1991. Effects of organic chemicals in the atmosphere on terrestrial plants. EPA/600/3
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- 0162. 420 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
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406 of 771 reported for the more sensitive plants, and some studies have reported effects on seed germination, flowering and fruit ripening. Effects of individual VOCs or their role in conjunction with other stressors (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 producti on, leaf water content and photosy

nthetic efficiency

were reported for some plant species. 421 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 oxid es. 422 , 423 , 424 The impacts of VOCs on plant reproduction 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 of 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 projections for 2030, with respect to ambient PM 2.5 , ozone, selected air toxics, visibility levels and nitrogen and sulfur deposition. The results 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 o f improvements to previous versions of the model. 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 27, 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 proposed to reconsider th e 2008 ozone NAAQS to ensure that they are requisite to protect public health with an ample margin of safety , and requisite to

421 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
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- L. 2000. Epicuticular wax of Norw ay sp ruce needles as indicator of traffic pollutant deposition. Water, Air, and Soil Pollut. 121:327
- 337. Docket EPA
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- 0162. 423 Ugrekhelidze D, F Korte, G Kvesitadze. 1997. Uptake and transformation of benzene and toluene by plant leaves. Ecotox. Envi ron. Safety 37:24
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- 0162. 424 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
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407 of 77 1 protect public welfare (75 FR 2938, January 19, 2010). EPA intends to complete the reconsideration by

July 31, 2011. If, as a r esult of the reconsideration, EPA promulgates different ozone standards, the new 2011 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, 201 1 there are 44 areas designated as nonattainment for the 1997 8
- hour ozone NAAQS, comprising 242 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 oz one NAAQS 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 would be based on three years of air quality data from later years. Also, the county numbers in this row

include only the counties with monitors vi olating 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 areas 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 2011 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 y ears from designation, depending on the area’s classification.***** E.O. 12866 Review**

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408 of 771 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 counties with a population of over 30 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 work to ensure 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 projected tailpipe reductions in NO X and projected u pstream 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 values 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 Matter**  (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 with 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 int o 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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409 of 77 1 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 emission 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 ai r 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 35 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 standards. These areas, although not violat ing the standards, will also benefit from 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 mode led counties will see decreases of less than 0.01 μg/m 3 in 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 re fineries 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 in 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 pro

jected 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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410 of 771 **(3) Air Toxics**  (a ) Current Levels The majority

of Americans continue to be exposed to ambient co ncentrations of air toxics at levels which have the potential to cause adverse health effects. 425 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 engage, as discusse d in detail in U.S. EPA’s most recent Mobile Source Air Toxics Rule. 426 According to the National Air Toxic Assessment (NATA) for 2005, 427 mobile sources were responsible for 43 percent of outdoor toxic emissions and over 50 percent of the cancer risk and non cancer 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 average ambient conce ntrations 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 nitrog en 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 y ears although many areas continue to be negativel y impacted by depositio n. Deposition of inorganic nitrogen and sulfur species routinely measured in the U.S. between 2005 and 2007 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) averag ed over three years. 428 The data show that reductions were more substantial for sulfur compounds than for nitrogen compounds. These numbers are generated b y the U.S.

425 U.S. Environmental Protection Agency (2007). Control of Hazardous Air Pollutants from Mobile Sources; Final Rule. 72 FR 8434, February 26, 2007. 426 U.S. Environmental Protection Agency (2007). Control of Hazardous Air Pollutants from Mobile Sources; Final Rule. 72 FR 8434, February 26, 2007. Docket EPA
- HQ
- OAR
- 2009
- 0472
- 0271, 0271.1 and 0271.2 427 U. S. EPA. (2009) 2002 National
- Scale Air Toxics Assessment. http://www.epa.gov/ttn/atw/nata2002/. Docket EPA
- HQ
- OAR
- 2009
- 0472
- 11321 428 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
- HQ
- OAR
- 2010
- 0162. Updated data available online at: http://cfpub.epa.gov/eroe/index.cfm? fuseac tion=detail.viewInd&ch=46&subtop=341&lv=list.listByChapter &r=201744***** E.O. 12866 Review**

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411 of 77 1 national monitoring network and they likel y underestimate nitrogen deposition because neither ammonia nor organic nitrogen is measured. In the eastern U.S., where data are most abundant, total sulfur deposition decreased by about 44% between 1990 and 2007, while total nitrogen deposition decreased b y 25% over the same time frame. 429 (b ) Projecte d 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 by

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 less than 0.5% to increases of less than 0.5%. For a m ap 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) , millions 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 , visibility 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 138 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. 430 The results also indicate that the majority of the modeled mandatory

class 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

429 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
- HQ
- OAR
- 2 009
- 0472
- 11298. Updated data available online at: http://cfpub.epa.gov/eroe/index.cfm? fuseaction=detail.viewInd&ch=46&subtop=341&lv=list.listByChapter &r=201744 430 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 person 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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412 of 771 standards and a few mandatory class I federal areas will see visibility decreases. The 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. **What ar e the**  **Agencies’ Estim**  **ated Cost, Economic, and**  **Other Impacts of the Final Pr ogram?**  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 final 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 consist 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 asso ciated 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
- effectiven ess of the standards, or the cost per ton of emissions reduced. 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 the absenc e of the change, 431 the price increase measures the loss to the buyer. 432

431 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 differen ce between them 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.***** E.O. 12866 Review**

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413 of 77 1 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 efficien cy would have to lead to other changes in the vehicles that buy ers 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

addition al 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 th e agencies did not provide any 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 different 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 fact 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 $1.5 to $8.6 billion in 2030, depending on the value used for the social cost of carbon. These benefits are summarized below in Table VIII
- 25. The costs of the program in 2030 are estimated to be approximately $2.7 billion for new engine and truck technology

less $20.9 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
- 24. The present value of the total monetized benefits (excluding fuel savings) under the program are expected to range from $25.8 bill ion to $158.4 billion with a 3% discount rate; with a 7% discount rate, the total monetized benefits are expected to range from $16.1 billion to $148.7 billion. These values, summarized in Table VIII
- 25, depend on the value used for the social cost of car bon. The present value of costs of the program for new engine and truck technology , in Table VIII
- 24, are expected to be $57 billion using a 3% discount rate, and $29.5 billion with a 7% discount rate, less fuel savings (calculated using pre
- tax fuel pric es) of $380 billion with a 3% discount rate, and $168.6 billion with a 7% discount rate. Total net present benefits (in Table VIII
- 26) are thus expected to range from $348.8 billion to $481.4 billion with a 3% discount rate, and $155.2 billion to $287.8 b illion with a 7% discount rate. The estimates developed here are measured against a baseline fuel efficiency associated with MY 2010 vehicles. The agencies also considered an alternate baseline associated with AEO 2011 projections, which is further discus sed in Section IX. All calculations presented in Section VIII use the constant 2010 vehicle baseline. The extent

432 Indeed, it is likely to be an overestimate of the loss to the buyer, because the buyer 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 would choose one of those options onl y if the alternative 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 the vehicle less desirable to buyers.***** E.O. 12866 Review**

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414 of 771 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 wwere 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 savings could be attributed to market forces, not the rules. As a baseline for estim ates 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 vehicles. 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 comments were received on this issue (?). One comment cites the EPA draft RIA as noti ng 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 improvement. EPA has undertaken an analy sis of the econom y - wide impacts of the final heavy
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. 433 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 improvements and how trucking operations would respond to increases in higher vehic le 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 summarized 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 fuel s. 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 will consume more petroleum
- based fuels than is socially optimal. Externali ties 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 ext ernalities are b y themselves enough to justify the costs of imposing fuel efficiency standards. For some discount rates and some projected social costs of carbon, however, the reductions in these external costs are less than the

433 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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415 of 77 1 costs of new fuel saving t echnologies needed to meet the standards. (See Tables 9
- 18 and 9
- 19 in the RIA.) Nevertheless, this regulation reduces trucking companies’ fuel costs; according to our estimates, these savings in fuel costs are by themselves sufficient to pay for the techn ologies 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 co sts 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 technolog ies that truck companies are not taking advantage of. This is commonly known as the “energy

gap” or “energy paradox.” Standard economic theory suggests that in normall y functioning competitive markets, interactions between vehicle buyers and producers wo uld lead producers to incorporate all cost
- effective technology into the vehicles that they offer, without government intervention. Unlike in the light
- dut y vehicle market, the vast majority of vehicles in the medium
- and heav y - duty truck market are purch ased and operated b y businesses with narrow profit margins, and for which fuel costs represent a substantial operating expense. Even in the presence of uncertaint y and imperfect information

– conditions that hold to some degree in every market

– we gener ally

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 r ules would be due exclusively to reducing the economic costs of externalities resulting from fuel production and consumption. However, as discussed below in Section VIII.E, the agencies have estimated that the application of fuel
- saving technologies in re sponse to the final standards would, on average, yield private returns to truck owners of 140% to 420% (see Table VIII
- 21 below). The agencies have also estimated that the application of these technologies would be significantl y lower in the absence of th e final standards ( i.e. , under the “no action” regulatory

alternative), meaning that truck buy ers and operators ignore opportunities to make investments in higher fuel efficiency that appear to offer significant cost savings. As discussed in the NPRM, ther e 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, external ities, 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 participants col lectivel y do not minimize costs; or the engineering estimates of fuel savings and costs for these technologies might overstate their benefits or understate their costs in real
- world applications. 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 numerous truck market participants. The***** E.O. 12866 Review**

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416 of 771 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 techno logies 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 effects on other vehicle attributes
-- did not elicit supporting information in the public comment s. 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 invited comment on these explanations, and on an y data or information that could be used to investigate the role of any or all of these five hy potheses in explaining this energy paradox as it applies specifically to trucks. Some 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 skep ticism about these technologies. The agencies also requested 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 followin g 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 ine xpensive fuel saving technologies is that there is inadequate or unreliable information available about the effectiveness of many fuel
- saving technologies for new vehicles. If reliable information on the effectiveness of many new technologies is absent, 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 par ticular technologies are cost
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417 of 77 1 while all firms benefit from the knowledge that would be gained from that experimentation. Similarly , if multiple firms must conduct the same tests to get the same information, costs could be reduced b y some form o f 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 m ore readily available information about their benefits. The agencies appreciate, however, that the diversity of truck uses, driving situations, and driver behavior willl lead to variation in the fuel savings that individual trucks or fleets experience fro m using specific technologies. One commenter noted that the SmartWay program targets semi
- truck owners and thus should have the largest impact on that sector, rather than vocational or medium
- duty trucks; however, that the gap between actual investment i n fuel efficiency and the agencies’ estimates of optimal investment are largest for the combination tractor. Some of the difference in magnitude is likely to be due to the higher vehicle miles traveled for semi
- trucks compared to medium
- duty and vocationa l vehicles: more driving means more fuel savings. Additionally , not even a majority of semi
- trucks are owned by participants in SmartWay; non
- participants are unlikely to get all the benefits of participants. Other explanations, noted below, are also li kely 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 yp othesis 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 truc k buy ers. This inadequate pay

back for users beyond the original owner may contribute to the short pay back period that new purchasers appear to expect. 434 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 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. 435 Some of this unwillingness to pay for fuel
- saving technology may be due to the extension of the information problems in the new 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,

434 See NAS 2010, Note 165 , at p. 188. 435 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 information

– 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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418 of 771 even objective sources such as logs of truck performance f or used vehicles may

not provide reliable information about the fuel efficiency that potential purchasers of used trucks will experience. A related possibility

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 seco ndary new use of the vehicle does not earn as many benefits from the technologies. One commenter asks whether the fuel
- saving technology is unvalued because it is unproven or overrated. In that case, the premium for fuel
- saving technology in the secondary m arket 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 mar ket may not be readil y available or reliable, however, buy ers 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, purc hasers 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 techn ologies, 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 short pay back periods required for new technologies in the new vehicle market. **(3) Split Incentives in the Me**  **dium -**  **and Heavy -**  **Duty Truck Industry** A third hy

pothesis explaining the energy paradox as applied to trucking involves split incentives. When markets work effectivel y, signals provided b y transactions in one market are quickl y transmitted to related markets and influence the decisions of buy ers 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 charact eristics to purchase, then those price signals may not be transmitted effectivel y, and incentives can be described as “split.” One place where such a split may occur is between the owners and operators of trucks. Because they

are generall y responsible fo r purchasing fuel, truck operators have strong incentives to economize on its use, and are thus likely to support the use of fuel
saving technology . However, the owners of trucks or trailers are often different from***** E.O. 12866 Review**

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419 of 77 1 operators, and may

be more concerned ab out their longevit y or maintenance costs than about their fuel efficiency , when purchasing vehicles. As a result, capital investments by truck owners may

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 would encourage owners to invest in fuel
- saving technology . However, if truck owners have more ability t o 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 employ ees who purchase trucks may have strong incentives to lower their 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. 436 Trailers affect the fuel efficiency of shipping, but trailer owners 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 d ifficult to achieve. **(4) Uncertainty About 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 for esight 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
- red

ucing 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 calc ulation of its pay

back period on such investments.

436 See NAS 2010, Note 165 , at p. 182.***** E.O. 12866 Review**

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420 of 771 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 irreversib le against an unknown stream of future fuel savings. 437 Notably , in this situation, requiring households to adopt technologies more quickly may make them worse off by

imposing additional risk on them. Greene et al (2009) also finds support for this explanat ion 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 buy e r can expect significant net benefits from purchasing a more fuel
- efficient car. 438 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 provide s them with the option to return it before those costs become too high. 439 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. This is because adopting such regulation requires purchasers to assume a greater level of risk than they would in it s 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 assur e 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 pressures can reduce risk av ersion: risk
- neutral companies can make higher average profits over time. Thus, significant risk aversion is unlikely to survive competitive pressures. **(5) Adjustment and Transactions Costs**  Another h ypothesis is that transactions costs of changing to new tec hnologies (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 sp ecific operations, before they

adopt it. One commenter expressed support for this argument. If a conservative approach to new technologies leads truck bu yers to adopt new technologies
437 Metcalf, G., and D. Rosenthal (1995). “The ‘New’ View of Investment Decisions and Public Policy Analysis: An Application to Green Lig hts and Cold Refrigerators,” Journal of Policy Analysis 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 Savings from Home Improvement Investments: Evidence from Monthly Billing Data.” The Review of Economics and Statistics 81(3): 516
- 528. 438 Greene, D., J. German, and M. Delucchi (2009). “Fuel Economy: The Case for Market Failure” in Reducing Climate Impacts in the Transportation Sector, Sperling, D., and J. Cannon, eds. Springer Science. 439 Dasgupta, S., S. Siddarth, and J. Silva
- Risso (2007). “To Lease or to Buy? A Structural Model of a Consumer’s Vehicle and C ontract Choice Decisions.” Journal of Marketing Research 44: 490

– 502.***** E.O. 12866 Review**

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421 of 77 1 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 benefits. In addition, there may

be costs associated with training drivers to realize the potential fuel savings enabled b y new technologies, or with accelerating fleet operators’ scheduled fleet turnover and replacement to hasten their acquisition of vehicles equipped with new fuel
- saving technologies. Here, again, there may be no market failure; requiring the widespread us e 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 t ypically 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 transactions costs associated with the new technologies, then regulation gives all new truck purchasers a level playing f ield, 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 a ppears to be cost
- effective fuel
- saving technology . The first suggestion is that tighter diesel emissions standards caused fuel efficiency for diesel trucks to decline in the past decade. Because engine manufacturers would have to invest heavil y (both fi nanciall y and with personnel) in emissions reduction technologies, they would not invest in fuel efficiency . The costs associated with the decline in fuel efficiency due to the emissions regulations were accounted for in that rulemaking. A second sugges tion 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 trucks confer status on their owners or operators, and if that status depends on easil y observable 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 additiona l money

on visible characteristics but may not manage to make themselves better off. In this case, regulation may improve welfare: by

increasing 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.***** E.O. 12866 Review**

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422 of 771 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 bu y add itional 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 technolog y. **(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 shor t 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, transactions 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 for 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 assist in the adoption of new cost
- saving technologies, but diffusion of new technologies can still be obstructed. Thos e who are willing to experiment with new technologies expect to find cost savings, but those may be difficult to prove. As noted above, because 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 trans port 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 alread y provided by SmartWay , nor the resources necessary to evaluate this information within the context of his or her own freight operation. It is unclear, as discussed above, whether some or many of the technologies would be adopted in the absen ce of the program. To the extent that they would have been adopted, the costs and the benefits attributed to those technologies may not in fact 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 technologies. As noted at the beginning of this section, the agencies seek comments on all these hy potheses as well as any

data that could inform our understanding of what appears to be slow adoption of cost
- effective fuel
- saving technologies in these industries.***** E.O. 12866 Review**

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423 of 77 1 

### B. **Costs Associated With the Final Program** In this section, the agencies present the estimated costs associated w ith 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 tru ck basis and on an annual total basis. The presentation here summarizes the best estimate by EPA and NHTSA staff as to the technology

mix expected to be employ ed for compliance. For details behind the cost estimates associated with individual technologi es, 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 Class 2b and 3 pickup trucks and vans, the agencies have used a methodology

consistent with that used for our recent light
- dut y joint rulemaking since most of the technologies expected fo r Class 2b and 3 pickup trucks and vans is consistent with that expected for the larger light
- dut y trucks. The cost estimates presented in the recent light
- dut y joint rulemaking were then scaled upward to account for the larger weight, towing capacity , an d work demands of the trucks in these heavier classes. For details on that scaling process and the resultant costs 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 es timates have been updated to 2009 dollars for this anal ys is while the heav y - dut y GHG emissions and fuel efficiency proposal was presented in 2008 dollars and the 2012
- 2016 MY light
- dut y joint rulemaking was presented in 2007 dollars. For the loose heav y - dut y gasoline engines, we have generally used engine
- related costs from the Class 2b and 3 pickup truck and van estimates since the loose heav y - dut y gasoline engines are essentially the same engines as those sold into the Class 2b and 3 pickup truck and van market. For heav y - dut y diesel engines, the agencies have estimated costs using a different methodology

than that employ ed in the recent light
- duty joint rulemaking. In the 2012
- 2016 MY light
- dut y joint rulemaking, the fixed costs were included in the hardware costs via an indirect cost multiplier. As such, the hardware costs presented in that anal ys is, and in 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 are 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 th e costs associated with the program. As noted above, all costs are presented in 2009 dollars.***** E.O. 12866 Review**

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424 of 771 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 y ears following implementation to shed light on the long term (2022 and later) cost impacts of the program. The year 2022 was chosen here consistent with the 2012
- 2016 MY light
- dut y joint rulemaking. That ye ar was considered long term in that analy sis 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 representing the short
- term. Sinc e man y of the costs used in this analysis are based on costs in the 2012
- 2016 MY light
- duty joint rulemaking anal ys is, consistency with that anal ys is seems appropriate. Some of the individual technology cost estimates are presented in brief in Section II I, 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 t rucks 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
- term (2014 through 2021) to account for differences in the levels of R&D, tooling, an d 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 agen cies 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 technolo gy . 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 mu ltiplicative 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 constant rather than decreasing ye ar - over - ye ar. This new approach, which responds to c riticisms 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 I CMs 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 indirect costs, please refer to the report that has been placed in the docket for this final action. 440 The agencies have also considered the impacts of manufacturer learning on the technology

cost estimates by

reflecting 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 portion 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

440 RTI International. Heavy
- duty Truck Retail Price Equivalent and Indirect Cost Multipliers. July 2010.***** E.O. 12866 Review**

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425 of 77 1 supports manufacturer learning 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 produ ction). The agencies use the terminology “steep” and “flat” portion of the curve to distinguish among newer technologies and more mature technologies, respectively , and how 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 2016 MY cost would be 20 percent lower than the 2014 and 2015 model y ear costs for a new te chnology

being implemented in 2014). 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 steep 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 y ears. Beyond 5 y ears of flat learning at 3 percent per year, 5 y ears 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 expect ed to be used because some of the expected technologies 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 consi dered 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 app lied the lower flat learning algorithm. For more 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 II I and detailed in Chapter 2 of the RIA are used 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 costs 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 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 mor e stringent in 2014 through 2018. Following 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 discern 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, decreas e each y ear except for the heavy
- dut y gasoline 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***** E.O. 12866 Review**

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426 of 771 2017 whe n the engines placed in sleeper cab tractors 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 cons tant for all classes. Regarding the long 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 re main essentially

constant thereafter.

**Table VIII**  **- 1**  **: Estimated Cost per Truck (2009 dollars)** HD Pickups & Vans Vocational Combination 2014 $232 $414 $6,019 2015 $302 $408 $5,871 2016 $591 $457 $5,677 2017 $885 $450 $6,413 2018 $1,473 $419 $6,215 2020 $1,392 $404 $6,004 2030 $1,384 $336 $5,075 2040 $1,384 $329 $5,075 2050 $1,384 $329 $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 four percent for a ty pical HD pickup truck or van, less than one percent for a ty pical vocational vehic le, 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 price s, 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 diffic ult 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 ne w truck prices. 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 y ears and the new test cell costs (to accommodate 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 to update existing equipment while the other 25 per cent 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 HHD engines and 3 of which are estimated to sell LHD***** E.O. 12866 Review**

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427 of 77 1 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). Est imating 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 Engineering Costs.” The certification and compliance program costs, fo r all engine and truck ty pes, 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 “Draft Supporting Statement for Information Collection Request” whi ch is contained in the docket for this final action. 441 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 V III
- 2 below as “Compliance Program” costs. **(2) Annual Costs 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 i ncreases 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. Those impacts are presented in Section VIII. E. Note also that the costs presented here represent costs estimate d 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 y ear trucks
- they do, in fact, appl y to all 2014 and later model ye ar trucks. We present more detail regarding the 2014
- 2018 model y ear trucks in Sections VIII.L and M, where we summarize all monetized costs and benefits.

441 “Draft Supporting Statement for Information Collection Request,” Control of G reenhouse Gas Emissions from New Motor Vehicles: Proposed Heavy
- Duty Engine and Vehicle Standards, EPA ICR Tracking Number 2394.01.***** E.O. 12866 Review**

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428 of 771 **Table VIII**  **- 2**  **: Annual Costs Associated with the Program ($Millions of 2009 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 $182 $233 $1,078 $170 $6.5 $1,670 2015 $221 $216 $922 $170 $2.3 $1,532 2016 $421 $233 $820 $170 $2.3 $1,647 2017 $627 $230 $951 $0 $2.3 $1,810 2018 $1,055 $222 $1,000 $0 $2.3 $2,280 2020 $1,066 $223 $1,001 $0 $2.3 $2,292 2030 $1,300 $234 $1,076 $0 $2.3 $2,612 2040 $1,450 $304 $1,372 $0 $2.3 $3,128 2050 $1,638 $383 $1,777 $0 $2.3 $3,800 NPV, 3% $24,155 $5,461 $24,487 $793 $52 $54,948 NPV, 7% $11,974 $2,889 $12,855 $724 $30 $28,473 

### C. **Indirect 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 t echnology 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 MY 2012
- 2016 rulemaking. Prior to developing the ICM methodology , EPA and NHTSA both applied a retail price equivalent (RPE) factor to estimate indirect costs. RPEs are estimat ed 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 equally 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 cost s 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 technologi es, man y 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 technologies may

reflect higher than average indirect costs, wi th the resulting ICM larger than the averaged RPE for the industry
.***** E.O. 12866 Review**

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429 of 77 1 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 means it is likely that the direct cost for some technologies w ithin 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 indirect costs for individual technologies. Rather, the I CM es timates 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 conducted separately and reported in an EPA memo. 442 Both these p anels 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. 443 The panels evaluated each element of the industry ’s RPE estimates and estimated the degree t o 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 experts and subsequently by reviewers for the International Journal of Production Economics. 444 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 est imate 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 for 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 of 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 whether it was most appropriate to use ICMs or RPEs. We receiv ed 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 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

442 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. 443 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. 444 The results of the RTI report were published in Alex Rogozhin, Michael Gallaher, Gloria 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
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430 of 771 RTIreport 445 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. 446 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 multiplicative factor (thereb y decreasing going forward as direct manufact uring 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 th e resultant technology costs and, we believe, more appropriately estimates costs over time. These changes to our I CMs and the methodology

are described in greater detail in Chapter 2 of the final RIA. 

### D. **Cost per Ton of Emissions Reductions** The agencies h ave 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 Sections VI and 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, 204 0, and 2050 using the annual vehicle compliance costs and emission reductions for each of those y ears. The value in 2050 represents the long
- term cost per ton of the emissions reduced. The agencies have also calculated the cost per metric ton of GHG emis sion 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 Section VIII.I. By including the fuel savings in the cost estimates, the cost per ton is generally less than $0 since the estimated v alue of fuel savings outweighs the program costs. The results for CO 2 eq costs per ton under the HD National Program across all regulated categories are shown in Table VIII
- 6
.

445 Rogozhin, Alex, Michael Gallaher, and Walter McManus. “Automobile Industry Retail Price Equivalent and Indirect Cost Multipl iers.” Report prepared for EPA by RTI International. EPA Report EPA
- 420
- R
- 09
- 003, February 2009. 446 Helfand, Gloria, and Sherwood, Todd. “Documentation of the Development of Indirect Cost Multipliers for Three Automotive Technologies.” Memorandum, Asses sm ent and Standards Division, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, August 2009.***** E.O. 12866 Review**

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431 of 77 1 **Table VIII**  **- 3**  **: Annual Cost per Metric Ton of CO 2**  **eq Reduced**
**– HD Pickup Trucks & Vans (2009**  **dollars)** Year Program Cost Fuel

Savings (post
- tax) CO 2 eq

Reduced Cost per Ton

(without Fuel Savings) Cost per T on

(with Fuel Savings) 2020 $1,100 $1,000 3 $330 $30 2030 $1,300 $3,300 10 $120
- $190 2040 $1,500 $4,700 14 $110
- $230 2050 $1,600 $5,900 16 $100
- $270

**Table VIII**  **- 4**  **: Annual Cost per Metric Ton of CO 2**  **eq Reduced** 
**– Vocational Vehicles (2009 dollars)**  **447** 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 $1,300 5 $40
- $240 2030 $200 $2,900 9 $20
- $290 2040 $300 $4,200 13 $20
- $310 2050 $400 $5,500 15 $30
- $340

**Table VIII**  **- 5**  **: Annual Cost per Metric Ton of CO 2**  **eq Reduced**
**– Combination Tractors (2009**  **dollars) 448**  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

447 The program costs, fuel savings, and CO 2 eq reductions of the engines installed in vocational vehicles are em bedded in the vehicle s tandards and analysis. 448 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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432 of 771 **Table VIII**  **- 6**  **: Annual Cost per Metric Ton of CO**  **2 eq Reduced** 
**– Final (2009 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 $2,300 $11,000 40 $60
- $220 2030 $2,600 $23,200 76 $30
- $270 2040 $3,100 $31,000 94 $30
- $300 2050 $3,800 $39,900 109 $30
- $330 

### 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 numb er 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 Reductions of the Program (Million gallons)** 

Year Gasoline Diesel 2014 1 479 2015 3 856 2016 15 1,186 2017 32 1,662 2018 60 2,146 2020 117 3,017 2030 355 5,729 2040 461 7,123 2050 531 8,248 **(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 discussed in Section VIII.I , EPA also recognizes that this regulation will lower the world***** E.O. 12866 Review**

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433 of 77 1 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 ag encies 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 average fuel price in that year, using the reference case taken from the AE O 2011. These estimates do not account for the significant uncertaint y in future fuel prices; the monetized fuel savings will be understated if actual fuel prices are higher (or overstated if fuel prices are lower) than estimated. AEO is a standard refe rence 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 post
- 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 Sections VIII.L and M, the overall benefits and costs of the rules 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 2009 dollars)**

Year Fuel Savings

(pre
- tax) Fuel Savings

(post
- tax) 2014 $1,200 $1,400 2015 $2,300 $2,600 2016 $3,300 $3,800 2017 $4,800 $5,600 2018 $6,500 $7,500 2020 $9,700 $11,000 2030 $20,900 $23,200 2040 $28,300 $31,000 2050 $36,900 $39,900 NPV, 3% $379,500 $419,900 NPV, 7% $168,400 $187,400 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 VII 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. Even in the presence of uncertaint y and imperfect information

– conditions that hold to some degree in every

market

– we generally

expect firms to be cost
- minimizing to***** E.O. 12866 Review**

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434 of 771 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, uncerta int 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 expected 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, and relative to the reference case vehicle) due to the addition of new GHG reducing technol ogy . This new technology will result in lower fuel consumption and, therefore, savings in fuel expenditures. But how many months or y ears 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, inclus ive 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 (reference case) for 2018 and later. This value represents the fuel savings expected under the p rogram 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 next 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 third y ear 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 $5,714 and at 7% discounting would be $4,035. Costs in this section, and summarized in Section VIII. L, are shown from the greenhouse gas perspective where fuel savings are treated as n egative 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 c osts. EPA prefers to account for all costs (positive and negative) directly 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 that show the cost and benefit 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***** E.O. 12866 Review**

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435 of 77 1 perspective, fuel savings are counted a s 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 Fed eral 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 F**  **uel 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
- $1,473
- $845
- $857 **2** 67 122 $617 $583
- $228
- $274 **3** 66 120 $600 $546 $372 $272 **4** 64 117 $570 $499 $942 $771 **5** 62 113 $544 $458 $1,486 $1,229 **6** 59 108 $507 $411 $1,992 $1,641 **7** 56 102 $474 $370 $2,466 $2,010 **Full Life** 894 1,617 $7,187 $5,507
- $1,473 $5,714 $4,035 Notes: a Fuel savings calculated using the AEO 2011 reference case fuel prices through 2035. Fuel prices beyond 2035 w ere extrapolated from an average growth rate for the years 2017 to 2035. Gasoline and diesel fuel prices have been weighted by gasoline and diese l 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 vehicles and combination tractors. These 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 li fetime fuel savings are estimated to be considerable with savings of $6,084 (3%) and $4,716 (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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436 of 771 **Table VIII**  **- 10**  **: Payba ck 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**  59 173 $769 $754
- $419 $350 $336 **2** 55 158 $698 $660 $1,048 $995 **3** 51 145 $633 $576 $1,681 $1,571 **4** 48 132 $568 $498 $2,250 $2,069 **5** 44 119 $511 $430 $2,760 $2,499 **6** 40 107 $447 $363 $3,208 $2,862 **7** 37 95 $398 $311 $3,605 $3,173 **Full Life** 642 1,587 $6,503 $5,135
- $419 $6,084 $4,716 Notes: a Fuel savings calculated using the AEO 2011 reference case fuel prices through 2035. Fuel prices beyond 2035 w ere extrapolated from an average growth rate for the years 2017 to 2035. Gasoline and diesel fuel prices have been weighte d by gasoline and diesel fuel reductions estimated for all 2018 MY heavy
- duty trucks during their lifetimes. b Gallons under the control case include gallons consumed during rebound driving. **Table VIII**  **- 11**  **: Payback Period for a 2018 Model Year Com**  **bination Tractor (2009$) Year of**  **Ownership Reduced Fuel Use** 

**(gallons) b**  **Fuel Savings a**  **Increased Cost**  **Cumulative Savings Gasoline**  **Diesel 3%**  **Discount 7%** 

**Discount 3%** 

**Discount 7%** 

**Discount 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 2011 reference case fuel prices through 2035. Fuel prices beyond 2035 w ere extrapolated from an average growth rate for the years 2017 to 2035. Gasoline and diesel fuel prices have been weighted by gasoline and diese l 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 y ear than the average would realize greater f uel savings than estimated here, and those that drive fewer miles per year would realize lesser savings. The same holds true for operators that keep their vehicles longer (i.e.,***** E.O. 12866 Review**

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437 of 77 1 more y ears) than average in that they would realize greater lifetime fuel sav ings than operators that keep their vehicles for fewer ye ars than average. Likewise, should fuel prices be higher than the AEO 2011 reference case, operators will realize greater fuel savings than estimated here while they would realize lesser fuel saving s 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 shippin g 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 effect has not been extensively

studied. Because the factors influencing the HD rebound effect are gen erall 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 HD sectors. One of the major differences between the HD rebound effect and the light
- dut y rebound effe ct 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. There fore, 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 Report449 , when cal culating the percentage change in trucking costs to determine the rebound effect, all changes in the operating costs should be considered. The cost of labor and fuel generall y constitute the top two shares of truck operating costs, depending on the price of petroleum, 450 , distance traveled, t ype of truck, and commodity. 451 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 relati ve 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 operating 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 outweighed future cost savings and total costs increased, shipping costs would rise, which would likely result in a decrease in truck VMT. In theory , other changes such as maintenance costs and insurance rates would also be taken

449 See NAS Report, Note 165 450 American Transportation Research Institute, An Analysis of the Operational Costs of Trucking , December 2008 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0007). 451 Transport Canada, Operating Cost of Trucks, 2005. See http://www.tc.gc.ca/eng/policy/report
- acg operatingcost2005
- 2005
- e - 2
- 1727.htm , accessed on July 16, 2010 (Do cket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0006). See also ATRI, 2008.***** E.O. 12866 Review**

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438 of 771 into account, although information on these potential cost changes is extremely limited. In the proposal, we invited comments on the mo st 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 any comments on these assumptions. The following sections describe the factors affecting the rebound effect, different methodologies for estimating the rebound 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 “estimates 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 mo st appropriate estimates to use for the rebound effect. However, we did not receive an y new data or substantive comments. Therefore, for this final action, 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 R ebound 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 mile 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 oth er 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 smaller, 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 therefore 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 rese arch 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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439 of 77 1 requested comments. We did not receive an y substantive comments on the described methodologies. (i ) Agg regate Estimates The aggregate approximation approach quantifies the overall change in truck VMT as a result of a percentage change in freight rates. It is 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 o f the rebound effect, although these terms are sometimes used interchangeabl y in the literature. 452 Given these caveats, freight elasticit y estimates rel y on 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. 453 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. Anoth er challenge of estimating the rebound effect using freight elasticities is that these values appear to vary substantiall y based on the demand elasticit y measure (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
- val ue commodities. Although these factors explain some of the differences in estimates, much of the observed variation cannot be explained quantitatively . For example, a recent study that controlled for these variables onl y accounted for about half of the o bserved variation. 454 Another important variable influencing freight elasticity estimates is whether potential mode shifting is taken into account. Although the total demand for freight transport is generally

determined by

economic activity , there is o ften 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

452 Memo from Energy and Environmental Research Associates Regarding the Heavy Duty Rebound Effect, dated May 24, 2011. 453 Graham and Glaister, “Road Traffic Demand Elasticity Estimates: A Review,” Tr ansport Revie ws Volume 24, 3, pp. 261
- 274, 2004 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0005). 454 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.***** E.O. 12866 Review**

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440 of 771 of trucking. Aggregate estimates of cross
- price elasticities also vary widely , and there is no general consensus on the most appro priate value to use for anal yt ical purposes. The NAS report cites values ranging from 0.35 to 0.59. 455 Other reports provide significantly different cross
- price elasticities, ranging from 0.1 456 to 2.0. 457 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 economically 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 extensively
. (ii) Sector
- Specific Estimates Given the limited data available regarding the HD rebound effect, the aggregate approach greatly

simplifies many

of the a ssumptions 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 exp ected to more accuratel y reflect changes in the trucking market in response to the standards in this rule. 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 i n trucking prices described in the aggregate approach, the product
- specific demand elasticities 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 truc king 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 col lected. We did not receive any 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 fu el costs per mile). This ty pe of econometric model could be

455 See 2010 NAS Report, Note 165 . 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 Costs and Alternative Approaches Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0009). 456 Friedlaender, A. and Spady, R. (1980) A derived demand function for freight transportation, Revie w of Economics and Statisti cs, 62, pp. 432

–441 (Docket ID: EPA
- HQ
- OAR
- 2010
- 0162
- 0004). 457 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
- 2 010
- 0162
- 0010).***** E.O. 12866 Review**

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441 of 77 1 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 cos t and truck prices per mile from these standards. One of the challenges associated with an econometric 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. P art 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. 458 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 emissions reductions based on mode shifting, given existing limitations of infrastructure and other route characteristics in the United States. 459 This model connect s multiple road, rail, and waterway transportation networks and embeds activity
based calculations 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. 460 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 estimating 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. 461 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 mpg, with an additional cost of $22,930. Scenario 2 increased the average

458 Christidis and Leduc, “Longer and Heavier Vehicles for freight transport,” European Commission Joint Research Center’s Institute for Prospective Technology Studies, 2009. 459 Winebrake, James and James J. Corbet (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) 460 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). 461 Cambridge Systematics, Inc., 2009.***** E.O. 12866 Review**

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442 of 771 fuel econom y to 9.1 mpg, at an incremental cost of $71,630 per vehicle. The CSI examp les provided estimates using a range of own
- price elasticities (
- 0.5 to
- 1.5) and cross - price elasticities (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 rail 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 serve d, 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 exists 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, which 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 effects compared to the state data. 462 One

462 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. Specifically, 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 respec t to fuel cost per mile driven. (Fuel cost per mile driven 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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443 of 77 1 possible explanation for the difference in the estimates is that the nati onal rebound estimates are capturing some of the impacts of changes in economic activity. Historically , large increases in fuel prices are highly 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 prices increase (e.g., large oil producing states such as Texas and Alaska); therefore, the state data may be more ac curately 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 rebo und 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 estim ates, 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 est imates 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 o f this program, we have not taken into account an y 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. Furthermore, 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 nondurable 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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444 of 771 direction and m agnitude 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 thes e technologies and fuel savings, then these regulations would increase their net costs, because trucks would alread y include all the cost
- effective technologies. As a result, the rebound effect would actually be negative and truck VMT would decrease as a result 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 th at the 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 reduc tion 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 original 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 lower 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 theor eticall y 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 th e rebound 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 program 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 Shifting**  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 tr uck could be purchased b y a landscape company to pull a trailer carrying lawnmowers. The purchaser makes decisions based on man y attributes of the vehicle,***** E.O. 12866 Review**

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445 of 77 1 including the gross vehicle weight rating of the vehicle which in part determines the amount of fre ight or equipment that can be carried. If the final HD National 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, resu lting 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. 463 NHTSA and EPA qualitatively eva luated 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 vehic les; and within vocational vehicles. Li ght
- dut y pickup trucks, 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 20 12
- 2016 light
- dut y GHG and CAFE rule has 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 consumption 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 premium 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 incentiv e 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 re gulation. 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 li ghter pickups, this unintended consequence 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 cab 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 n ot believe that such an intended consequence 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 need to conduct their operations
-- an
463 See 2010 NAS Report , Note 165 , page 152.***** E.O. 12866 Review**

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446 of 771 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 cost of sleeper trucks is already higher than the cost of day cabs, y et the fleets that need this utility purchase them. 464 A day cab simply

cannot provide this utility . The need for this utility would not be changed ev en if the marginal costs to reduce greenhouse gas emissions from sleeper cabs exceed the marginal costs to reduce greenhouse gas emissions from day cabs. 465 A trucking fleet could decide to put its drivers in hotels in lieu of using sleeper berths, and swit ch to day cabs. However, this is unlikely 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 t o day cabs, they would be highl y unlikel y to purchase a day cab that was aerod ynamically 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 b e 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 som e 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 an y 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 additional 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 Clas s 8 tractors or regulate them as vocational 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 su bstituted for Class 8 tractors. Therefore, 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 which 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 voc ational vehicles is minimal. The cost of LRR tires on a per tire basis is the same for
464 A baseline tractor price of a new day cab is $89,500 versus $113,000 for a new sleeper cab based on information gathered b y 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
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- 0044. 465 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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447 of 77 1 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 ad ditional load carryi ng capabilit y of the additional axle will outweigh the additional cost for heavier vehicles. 466 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 purchaser 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 bein g regulated for fuel efficiency
. Therefore, 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 ope rate trucks could impact whether a consumer 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 fleet 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. 467 However, those regulations increa sed 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 patte rns, 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 e ngine durability over time. On the other 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 requ ire relativel y quick payback periods, on the order of two to three ye ars. 468 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 turnover are

466 The final rule projects the difference in costs between the HHD and MHD vocational vehicle technologies is approximately $30. 467 See NAS Report, Note 165 , pp. 150
- 151 468 See NAS Report, Note 165 , page 151.***** E.O. 12866 Review**

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448 of 771 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 i f 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 origina l vehicle market, but possibly in the resale market as well. Other market failures may leave open the possibility of some pre
- buy

or delay ed 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 incentives

— 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 - b uy or delay ed purchasing behavior. If these market failures prevent firms from fully internalizing fuel savings when deciding on vehicle purchases, then pre
- buy and delay ed purchase could occur and could result in a slight decrease in the GHG benefits of the regulation. Thus, whether pre
- buy

or delay ed 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 p revalent, the agencies are not projecting a change in fleet turnover characteristics 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 damages associated with an incremental increase in carbon emissions in a given y ear. It is intended to include (but is not limited to) changes i n net agricultural productivity , human health, property

damages from increased flood risk, and the value of ecos ys tem 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 final joint EPA/DOT rule to establish MY 2012
- 2016 light
duty vehicle GHG emission standards and CAFE standards; see that rule’s preamble for***** E.O. 12866 Review**

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449 of 77 1 discussion about application of the SCC. 469 The SCC Technical Support Document (SCC TSD) provides a complete discussion of the methods used to develop these SCC estimates. 470 The interagency

group selected four SCC values fo r use in regulatory anal yses, which we have applied in this analy sis: $5, $22, $36, and $67 per metric ton of CO 2 emissions in 2010, in 2009 dollars. 471 , 472 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 us e 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 climatic 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 ana ly 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 uncerta int y, speculation, and lack of information about (1) future emissions of greenhouse gases, (2) the effects of past and future emissions on the climate sy stem, (3)

469 See U.S. EPA 2010 LD GHG Rule, Note 6 , docket ID EPA
- HQ
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- 2009
- 0472
- 11424. 470 Docket ID EPA
- HQ
- OAR
- 2009
- 0472
- 114577, Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, Interagency 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 Protection 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 avail able at http://epa.gov/otaq/climate/regulations.htm 471 The interagency group decided that these estimates apply only to CO 2 emissions. Given that w arming 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). 472 The SCC estimates were converted 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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450 of 771 the impact of changes in climate on the phy sical and biological environment, and (4) the tran slation of these environmental impacts into economic damages. 473 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 ch ange, uncertaint y in the extrapolation of damages to high temperatures, 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 i nteragency 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 comments 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 y ears or at such time as substantially updated models become available, and to continue to support research in this area. The EPA Respo nse to Comments Document for the Joint Rulemaking discusses 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%. 474 These estimates are provided in Table V III
- 15
.

**Table VIII**  **- 14**  **: Social Cost of CO 2**  **, 2012**

**– 2050**  **a (in 2009 dollars)**  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

473 National Research Council (2009). Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use . National Academies Press. See docket ID EPA
- HQ
- OAR
- 2009
- 0472
- 11486. 474 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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451 of 77 1 Year Discount Rate and Statistic

5% Average 3% Average 2.5% Average 3% 95th Percentile **2030** $10.05 $33.75 $51.58 $103.06 **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 $140.37 Note: a The SCC values are dollar
- year and emissions
- year specific. **Table V**  **III -**  **15 : Monetized CO**  **2 Benefits of Vehicle Program**  **, CO 2**  **Em issions**  **a (Million 2009$)**  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 38.0 $266 $1,030 $1,634 $3,161 2030 73.7 $741 $2,489 $3,803 $7,599 2040 91.2 $1,194 $3,684 $5,489 $11,213 2050 104.9 $1,698 $4,856 $7,030 $14,730 Net Present Value b $9,129 $46,499 $78,763 $141,738 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) i s used to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail. 

### H. **Non -**  **GHG Health and Environmental Impacts** This section presents EPA’s anal ys is of the non
- GHG health and environmental impacts that can be expecte d to occur as a result of the HD National Program. GHG emissions are predominantly the b yproduct of fossil fuel combustion processes that also produce criteria and hazardous air pollutants. The vehicles that are subject to the standards are also signific ant sources of mobile source air pollution such as direct PM, NO X , VOCs and air toxics. The standards will affect exhaust emissions 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 eff ects. As many commenters noted, it is important to quantify the health and environmental impacts associated with the final rules because a failure to adequatel y consider these ancillary

co - pollutant impacts could lead to an incorrect assessment of***** E.O. 12866 Review**

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452 of 771 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. 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 y ear (MY) anal ys is of the program. 475 **(1) Quantified and Monetized No**  **n -**  **GHG Human Health Benefits of the 2030 Calendar Year Analysis**  This analy sis reflects the impact of the HD National Program in 2030 compared to a future
- ye ar reference scenario without the program in place. 476 Overall, we estimate that the final rules will lead to a net decrease in PM 2.5 - related health impacts. See 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 nati onal average PM 2.5 exposure results in a net decrease in adverse PM
- related human health impacts (the decrease in national population
- weighted annual average PM 2.5 is 0.004 μg/m 3 ). The air qualit y modeling also projects decreases in ozone concentrations i n many areas. While the ozone
- related impacts are relatively small, the decrease in population
weighted national average ozone exposure results in a net decrease in ozone
- related health impacts (population
- weighted maximum 8
- hour average ozone decreases by 0.0122 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. 477 , 478 These methods are described in more detail in the RIA that accompanies this action. Our benefits methods

475 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. 476 The future
- year reference scenario to which the rule impacts are compared to in this chapter 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. The alternative baseline assumes annual mpg projections, in the absence of the final rule, 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. 477 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 478 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***** E.O. 12866 Review**

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453 of 77 1 are also consistent with recent rulemaking anal ys es such as the final Transport Rule, 479 the final 2012
- 2016 MY Light
- Dut y Vehicle Rule, 480 and the fina l Portland Cement National Emissions Standards for Hazardous Air Pollutants (NESHAP) RIA. 481 To model the ozone and PM air quality impacts of this final action, we used the Community Multiscale Air Quality

(CMAQ) model (see Chapter 8.2.2 of the RIA that acc ompanies this preamble). The modeled ambient air quality data serves as an input to the Environmental Benefits Mapping and Anal ys is Program version 4.0 (BenMAP). 482 BenMAP is a computer program developed b y the U.S. EPA that integrates a number of the mode ling elements used in previous anal ys es (e.g., interpolation functions, population projections, health impact functions, valuation functions, analysis and pooling methods) to translate modeled air concentration estimates into health effects incidence estim ates 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 ba sed 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 approach to characterizing a best estimate of benefits. As is the nature of Regulatory

Impact Analy ses (RIAs), the a ssumptions and methods used to estimate air quality benefits evolve to reflect the agency ’s most current interpretation of the scientific and economic literature.

479 Final Feder al Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone. (75 FR XXXX, DATE). Expected to be published in June, 2011. 480 U.S. Environmental Protection Agency. (2010). Final Rulemaking to Establish Light

-Duty Vehicle Gree nhouse Gas Emission Standards and Corporate Average Fuel Economy Standards: Regulatory Impact Analysis , Assessment and Standards Division, Office of Transportation and Air Quality, EPA
- 420
- R
- 10
- 009, April 2010. Available on the internet: http://www.epa.go v/otaq/climate/regulations/420r10009.pdf 481 U.S. Environmental Protection 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/portlandcementfinalria.pdf >. EPA
- HQ
- OAR
- 2009
- 0472
- 0241 482 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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454 of 771 **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 Prem ature Ozone Mortality Function Reference Total Benefits (Millions, 2009$, 3% Discount Rate) b,c To tal Benefits (Millions, 2009$, 7% Discount Rate) b,c Multi
- city analyses Bell et al., 2004 Total: $110
- $200 PM: $67
- $160 Ozone: $42 Total: $100
- $190 PM: $60
- $140 Ozone: $42 Huang et al., 2005 Total: $120
- $220 PM: $67
- $160 Ozone: $56 Total: $120
- $200 PM: $60
- $140 Ozone: $56 Schwartz, 2005 Total: $130
- $220 PM: $67
- $160 Ozone: $63 Total: $120
- $210 PM: $60
- $140 Ozone: $63 Meta
- analyses Bell et al., 2005 Total: $200
- $290 PM: $67
- $160 Ozone: $130 Total: $190
- $270 PM: $60
- $140 Ozone: $130 Ito et al., 2005 Total: $240
- $330 PM: $67
- $160 Ozone: $170 Total: $230
- $320 PM: $60
- $140 Ozone: $170 Levy et al., 2005 Total: $250
- $340 PM: $67
- $160 Ozone: $180 Total: $240
- $330 PM: $60
- $140 Ozone: $180 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 st udy (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 welfare effects is provided in Table VIII
- 17. c Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA’s Guidelines for Preparing Economic Analyses and OMB Circular A
- 4. Results are rounded to two significant digits for ease of presentation and computation. T he 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 remain 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 im pact functions are not available or which do not provide 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. These are listed in Table VIII
- 17 . As a result, the health benefits quantified in this section are likely underestimates of the total benefits attributable to this final action.***** E.O. 12866 Review**

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455 of 77 1 **Table VIII**  **- 17**  **: Unquantified and Non -**  **Monetized Potential Effects**  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 terrestri al 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 f ertilization 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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456 of 771 Pollutant/Effects Effects Not Included in Analysis
- Changes in: HC/Toxics Welfare Direct toxic effects to animals

Bioaccumulati on 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 num ber 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 inc luding morphological changes and altered 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 i n 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 eff

ects of short term exposures. e May result 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 chan ges that result from this final action, 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 assessment. 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

comm ented in their review of the 1996 NATA that these tools were not yet read y 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. 483 While EPA has since improved these tools, there remain critical 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, 484 EPA conducted a case stud y anal ys is of the health effects 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 conclude d that “the challenges for assessing progress in health improvement as a result of reductions in emissions of hazardous air pollutants (HAPs) are daunting...due

483 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. 484 U.S. Environmental Protection 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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457 of 77 1 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.” 485 EPA continues to work to address these limitations; however, we did not have the methods and tools available for national
- scale application in time for the anal ys is of the final action. 486 EPA is also unaware of specific information identifying an y effects on listed endangered species from the small fluctuations in pollutant conce ntrations 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 Im pacts Table VIII
- 18 and Table VIII
- 19 present the annual PM 2.5 and ozone heal th impacts, respectivel y, in the 48 contiguous 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 American Cancer Society (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 and 17 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 and 23 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 to 18 fewer premature mortal ities.

485 U.S. Environmental Protectio n 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>. 486 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 Hazard ous Air Pollutants, which generated thoughtful discussion on approaches to estimating human health benefits from reductions in 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 associated materials.***** E.O. 12866 Review**

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458 of 771 **Table VIII**  **- 18**  **: Estimated PM 2.5**  **- Related Health Impacts**  **a** 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 (2

– 12) 17 (7

– 27) 0 (0

– 0) Chronic bronchitis (adult, age 26 and over) 9 (0

– 18) Non
- fatal myocardial infarction (adult, age 18 and over) 10 (2

– 17) Hospital admissions
- respiratory (all ages) c 2 (1

– 3) Hospital admissions
- cardiovascular (adults, age >18) d 4 (2

– 4) Emergency room visits for asthma (age 18 years and younger) 12 (6

– 17) Acute bronchitis, (children, age 8
- 12) 25 (0

– 55) Lower respiratory symptoms (children, age 7
- 14) 320 (130

– 510) Upper respiratory symptoms (asthmatic children, age 9
- 18) 240 (49

– 430) Asthma exacerbation (asthmatic children, age 6
- 18) 530 (1

– 1,500) Work loss days 1,900 (1,700

– 2,200) Minor restricted activity days (adults age 18
- 65) 11,000 (9,300

– 13,000) 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 et al., 2002) and the Six
- Cities Study (Lade n 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). 487
c Respiratory hospital admissions for PM include admi ssions for chronic obstructive pulmonary disease (COPD), pneumonia and asthma.

487 Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997. “The Relationship Between Selected Causes of Postneonata l 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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459 of 77 1 d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and heart failure.

**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 4 (2

– 6) 5 (2

– 8) 6 (2

– 9) 13 (7

– 18) 17 (11

– 23) 18 (13

– 23) Hospital admissions
- respiratory causes (adult, 65 and older)c 24 (3

– 44) Hospital admissions
- respiratory causes (children, under 2) 36 (19

– 53) Emergency room visit for asthma (all ages) 31 (0

– 81) Minor restricted activity days (adults, age 18
- 65) 49,000 (25,000

– 74,000) School absence days 20,000 (8,700

– 28,000 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 Table 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 2030 for the program, using the ACS and Six
- Cities PM mortality studies and the range of ozone***** E.O. 12866 Review**

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460 of 771 mortality assumptions, is betwee n $110 and $340 million, assuming a 3 percent discount rate, or between $100 and $330 million, assuming a 7 percent discount rate. **Table VIII**  **- 20**  **: Estimated Monetary Value of Changes in Incidence of Health and Welfare Effects in**  **2030 (Millions of 2009$) 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 $59 ($6.2
- $160) $53 ($5.6
- $140) Adult, age 25+
- Six
- Cities study (Laden et al., 2006) 3% discount rate 7% discount rate $150 ($20
- $380) $140 ($18
- $350) Infant Mortality, <1 year

– (Woodruff et al. 1997) $0.6 ($0
- $2.3) Chronic bronchitis (adults, 26 and over) $4.8 ($0.08
- $16) Non
- fatal acute myocardial infarctions 3% discount rate 7% discount rate $1.1 ($0.18
- $2.8) $0.86 ($0.13
- $2.1) Hospital admissions for respiratory causes $0.03 ($0.01
- $0.05) Hospital admissions for cardiovascular causes $0.07 ($0.02
- $0.12) Emergency room visits for asthma $0.005 ($0.002
- $0.007) Acute bronchitis (children, age 8

– 12) $0.01 ($0
- $0.03) Lower respiratory symptoms (children, 7

– 14) $0.007 ($0.002
- $0.013) Upper respiratory symptoms (asthma, 9

– 11) $0.008 ($0.002
- $0.018) Asthma exacerbations $0.03 ($0
- $0.09) Work loss days $0.31 ($0.26
- $0.36) Minor restricted
- activity days (MRADs) $0.77 ($0.45
- $1.1)***** E.O. 12866 Review**

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461 of 77 1 **Ozone -**  **related Health Effect** Premature Mortality, All ages

– Derived from Multi
- city analyses Bell et al., 2004 $37 ($4.9
- $93) Huang et al., 2005 $50

($6.8
- $130) Schwartz, 2005 $58

($7.5
- $150) Premature Mortality, All ages

– Derived from Meta
- analyses Bell et al., 2005 $120 ($18
- $300) It o et al., 2005 $170

($24
- $390) Levy et al., 2005 $180

($26
- $410) Hospital admissions
- respiratory causes (adult, 65 and older) $0.62 ($0.08
- $1.1) Hospital admissions
- respiratory causes (children, under 2) $0.38 ($0.20
- $0.57) Emergency room visit for asthma (all ages) $0.01 ($0
- $0.03) Minor restricted activity days (adults, age 18
- 65) $3.3 ($1.5
- $5.6) School absence days $1.9 ($0.83
- $2.6) 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 betw een 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 scientific 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, suc h 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 c an be quantified. These general uncertainties 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:***** E.O. 12866 Review**

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462 of 771  The exclusion of potentially significant and unquantified benefit categories (such as health, odor, and ecological benefits of reduction in air toxics, ozone, and PM );  Errors in measurement and projection 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 po llutant 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 pot ential future actions to limit emissions. As Table VIII
- 20 indicates, total benefits are driven primaril y b y the reduction in premature mortalities each y ear. Some key assumptions underlying the premature mortality estimates include the following, which may also contribute to uncertaint y:
 Inhalation of fine part icles 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 epidemiolog ical, 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 RIA.  All fine particles, regar dless 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 fr om 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 c oncentrations 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 several 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 prem ature deaths and that ozone
- related mortalit y should be included in estimates of the health benefits of reducing ozone exposure. 488 EPA has requested advice from the National Academ y of Sciences on how best to quantify uncertaint y in the relationship betwee n ozone exposure and premature mortality in the context of quantifying benefits.

488 National Research Council (NRC), 2008. Estimating Mortality Risk Reduction and Economic Benefits from Controlling Ozone Air Pollut ion. The National Academies Press: Washington, D.C.***** E.O. 12866 Review**

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463 of 77 1 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 standard s 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 benefits based on our interpretati on 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 methodolog y 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. 489 , 490 This anal ys is incorporates this work to the extent possible. **(2) Non**  **- 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 y ear in wh ich 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 analysis 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 ye ar 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 y ear (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).

489 National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air Pollution Regulations. The National Academies Press: Washington, D.C. 490 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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464 of 771 

### I. **Energy Security Impacts** The HD National Program i s designed to reduce fuel consumption and GHG emissions in medium and heav y - dut y (HD) vehicles, which will result in improved fuel efficiency and, in turn, help to reduce U.S. petroleum imports. A reduction of U.S. 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 reduction s 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 p ercent of total U.S. imports of all goods and services. 491 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 approximate ly 37 percent of petroleum from imports and 55 percent of consumption from petroleum in the transportation sector in 1975. 492 Itis clear that petroleum imports have a significant impact on the U.S. econom y. Requiring lower GHG vehicle technology and fuel e fficient 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 de tailed 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 Outlook (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. imports of refined fuel, while the remai ning 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. 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 gallons. 493 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 below. These estimates assume that the fuel efficiency

of HD vehicles remains constant in the baseline.
491 Source: U.S. Bureau of Economic Analysis, U.S. International Transactions Accounts Data, as shown on June 24, 2009. 492 Source: U.S. Department of Energy, Annual Energy Revie w 2008, Report No. DOE/EIA
- 0384(2008), Tables 5.1 and 5.13c, June 26, 2009. 493 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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465 of 77 1 **Table VIII**  **- 21**  **: U.S. Oil Import Reductions from the HD National Program** **for Selected Years (M**  **illions of Barrels per Day, mmbd)** Year mmbd 2020 0.204 2030 0.397 2040 0.495 2050 0.573 **(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 e stimates provided below are based upon a methodology

developed in a peer
- reviewed stud y 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. 494 , 495 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 Organization 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 p remiums by

incorporating the most recent available AEO 2011 Earl y Release oil price forecasts and market trends. Energy security premiums for the y ears 2020, 2030, 2040, and 2050 are presented in Table VIII
- 22 , as well as a breakdown of the components of the energy securit y

494 Leiby, Paul N., "Estimating the Energy Security Benefits of Reduced U.S. Oil Imports" Oak Ridge National Laboratory, ORNL/TM
- 2007/028, Final Report, 2008. (Docket EPA
- HQ
- OAR
- 2010
- 0162) 495 The ORNL study “The Energy S ecurity Benefits of Reduced Oil Use, 2006
- 2015," completed in March 2008, is an update v ersion of the approach used for estimating the energy security benefits of U.S. oil im port reductions developed in an ORNL 1997 Report by Leiby, Paul N., Donald W. Jone s, T. Randall Curlee, and Russell Lee, entitled “Oil Imports: An Assessment of Benefits and Costs." (Docket EPA
- HQ
OAR
- 2010
- 0162)***** E.O. 12866 Review**

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466 of 771 premiums for each of these y ears. 496 The components of the energy security premiums and their values are discussed in detail in Chapter 9.4 of the RIA.

**Table VIII**  **- 22**  **: Energy Security Prem ium**  **s in Selected Years (2009$/Barrel)** Year (range) Mono psony 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) 2035 $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. How ever, 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 the world oil price as the U.S. decreases its consumption of imported oil. Although there is clearly a benefit to the U.S. when considered from a domestic perspective, the decrease in price due to decreased demand in the U.S. also represents a loss to other countries. Given the redistributive nature of this monopsony effect from a global perspective, it is excluded in the energy security benefits calculations for 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, does not have offsetting impacts outside of the U.S., and, thus, is included in the energy securit y benefits estimated for this program . To summarize, the agencies have included only the macroeconomic disruption portion of the energy securit y benefits to estimate the monetary value of the total energy

securit y benefits of this program. Several commenters commented on the agencies’ ener gy securit y anal ys is of this program. One commenter 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, bo mbings, and other terrorist
related activities that have occurred through time. As outlined above, the agencies view energy securit y in very s pecific terms, as the reduction of both financial and strategic risks caused b y 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

496 AEO 2011 forecasts energy market trends and values only to 2035. The energy security premium estimates post
- 2035 w ere assum ed to be the 2035 estimate.***** E.O. 12866 Review**

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467 of 77 1 nation’s energy

securit y. The agencies did not examine whether reducing U.S. oil imports would make the U.S. “safer” from terroris ts. 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 its 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 benefit in this section of the Preamble. The total 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 $504 2030 $1,144 2040 $1,494 2050 $1,730 

### J. **Other Impacts (1)**  **Noise, Congestion and Accidents** In creased 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 operating expenses, increased costs associated with traffic acc idents, 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 added driving associated with the rebound effect. 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 drivin g due to the rebound effect. 497 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

497 These estimates were developed by FHWA for use in its 1997 Federal Highway Cost Allocation Study; see http://www.fhwa.dot.gov/policy/hcas/final/index.htm (last accessed July 21, 2010).***** E.O. 12866 Review**

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468 of 771 caused b y various types 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 2012
- 16 MY L ight
- Dut y GHG final rule. The agencies continue to find them appropriate for this analy sis 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, alread y 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 due 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 travelled from the positive rebound effect to yield the estimated cost increases resulting from increased congestion, accidents, 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 Cost s per Mile (2009$)**  External Costs Pickup truck and

vans ($/VMT) Vocational

vehicles ($/VMT) Combination

tractors ($/VMT) Congestion $0.049 $0.111 $0.108 Accidents $0.027 $0.019 $0.022 Noise $0.001 $0.009 $0.020 In aggregate, the increased costs due to noise, accidents, and congestion from the additional truck driving are presented in Table VIII
- 25 : .***** E.O. 12866 Review**

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469 of 77 1 **Table VIII**  **- 25**  **: Accident, Noise, and Congestion Costs (Millions, 2009$)** Year Class 2b&3 Vocational Combination 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 reduce the frequency with which drivers t ypicall y refuel their vehicles; it thus extends the upper limit of the range they can travel before requiring refueling. Alternativel y, if purchasers and manufacturers respond to improved fuel efficie ncy 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 tru ck 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 fa ilures 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 redu ction 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 less 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 spent 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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470 of 771 estimated at the hourl y rate recommended for truck operators ($22.36 in 2009 dollars) in DOT guidance for valuing time savings. 498 The refueling savings include the increased fuel cons umption resulting from additional mileage associated with the rebound effect. However, the estimate of the rebound effect does not account for an y reduction in net operating costs from lower refueling time. As discussed earlier, the rebound effect should be a measure of the change in VMT with respect to the net change in overall operating costs. Ideally , changes in refueling time would factor into this calculation, although the effect is expected to be minor because refueling time savings are small relati ve to the value of reduced fuel expenditures. The details of this calculation are discussed in the RIA Chapter 9.3.2. The savings associated with reduced refueling time for a truck of each typ e throughout its lifetime are shown in Table VIII
- 26 . The aggregate savings associated with reduced refueling time are shown in Table VIII
- 27 for vehicles sold in 2014 through 2050. **Table VIII**  **- 26**  **: Lifetime Refueling Savings for a 2018 MY Truck of Each Type (2009$)**

Pickup Trucks and Vans Vocational Vehicles Combination Tractor 3% Discount Rate $31 $37 $341 7% Discount Rate $19 $24 $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 $1.6 $8.0 $9.8 2015 $0.5 $3.0 $14.3 $17.7 2016 $1.3 $4.3 $19.6 $25.2 2017 $2.7 $7.0 $26.7 $36.4 2018 $5.2 $9.5 $33.8 $48.4 2020 $10.5 $14.0 $46.2 $70.6 2030 $32.6 $28.2 $82.9 $143.8 2040 $43.4 $38.2 $100.5 $182.1 2050 $50.1 $44.9 $116.1 $211.1 NPV, 3% $541 $512 $1,467 $2,520 NPV, 7% $231 $230 $685 $1,146

498 U.S. Department of Transportation, “Re vised 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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471 of 77 1 

### 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 effic iency and CO 2 emissions is through increased 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 MYs 20 14
- 2016 medium and heav y - dut y vehicle fuel 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 possi bly

cover all the variations in the manufacturers’ 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 MYs 2014
- 2016 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 voluntary 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 he av y - dut y (MD/HD) vehicles between MY 2014 and MY 2016. We will examine the potential impact on MD/HD vehicle weights for MYs 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 1 973 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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472 of 771 proposed requirements among the targeted F, G, H, J and Lload range tires. 499 To address these problems, the H and J load range tires could potentially use improved rubber comp ounds, 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 bec ome 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 a ffecting 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 required levels. Three
- axle 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, including 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, while 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, depending on which disc or drum brakes are used for comparison. The improved brakes may add a small amount of weight to the affected vehicles for MYs 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 y ear in the United States. Based on preliminary results from the agency ’s cost/weight teardown studies of motor coach seats, 500 NHTSA estimates that the weight 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, rein forcing the floor, walls or other areas of the motor
499 “Preliminary Regulatory Impact Analysis, FMVSS No. 119, New Pneum atic Tires for Motor Vehicles with a GVWR of More Than 4,536 kg (10,000 pounds), June 2010. 500 Cost and Weight Analysis of Two Motorcoach Seating Systems: One With and One Without Three
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473 of 77 1 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 the 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 Stabil ity Control Systems (ESC) for Medium

- and Heavy

-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 stabil ity

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 t o 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 these vehicles b y NHTSA. FMVSS No. 105, Hydraulic and electric brake sy stems, 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 having 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 pressure 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 summarizes estimates made by NHTSA regarding the weight added by the above 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

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474 of 771 **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 stan dards, 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 MY 2012
- 2016 final rule 501 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 would expect that reducing the weight of medium
- dut y trucks similarly would, if an y

thing, 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 recognize that it is important to conduct further study and research into the interac tion 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 th e final HD vehicle rule. 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 efficiency and GHG standards have unforeseen safety consequences. The American Chemistry Counc il stated in comments to the agencies that plastics and plastic composite materials provide a new way

to lighten vehicles while maintaining passenger safety. They added that properties of plastics including strength to weight ratio, energy absorption, and
501 “Final Regulatory Impact Analysis, Corporate Average Fuel Economy for MY 2012
- MY 2016 Passenger Cars and Light Trucks”, NHTSA, March 2010, (Docket No. NHTSA
- 2009
- 0059
- 0344.1).***** E.O. 12866 Review**

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475 of 77 1 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 integrit y requir ements 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 motivat ions 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 perspective 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 y ears. 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. 502 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 producin g and consuming fuel. Note that fuel savings shown here 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, 2009$ )**  **a** 2020 2030 2040 2050 NPV, Years 2012
- 2050, 3% Discount Rate NPV, Years

2012
- 2050, 7% Discount Rate Technology Costs $2,300 $2,600 $3,1000 $3,800 $54,900 $28,500 Fuel Savings (pre
- tax)
- $9,700
- $20,900
- $28,300
- $36,900
- $379,500
- $168,400 Monetized Annual Costs
- $7,400
- $18,300
- $25,200
- $33,100
- $324,600
- $139,900 Note: a Technology costs and fuel savings for separate truck segments can be found in Section VIII.B.1.

502 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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476 of 771 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 cal endar years 2012
- 2050 using both 3 percent and 7 percent discount rates. The table shows the benefits of reduced CO 2 emissions

— 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 incomplete way in which the integrated assessment models capture catastrophic and non
- catastrophic impacts, their incomplete treatment of ada ptation and technological change, uncertainty in the extrapolation of damages to high temperatures, and assumptions regarding 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 (Millions, 2009$)** 

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 $9,100 $9,100 3% (avg SCC) $1,000 $2,500 $3,700 $4,900 $46,500 $46,500 2.5% (avg SCC) $1,600 $3,800 $5,500 $7,000 $78,800 $78,800 3% (95th percentile) $3,200 $7,600 $11,200 $14,700 $141,700 $141,700 Energy Securit y Impacts (price shock) $500 $1,100 $1,500 $1,700 $20,000 $8,900 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 $200 $200 $200 $2,100 $700 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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477 of 77 1 2020 2030 2040 2050 NPV, Years 2012
- 2050, 3% Discount Rate a NPV, Years

2012
- 2050, 7% Discount Rate a Total Annual Benefits at each assumed SCC value b 5% (avg SCC) $700 $1,700 $2,500 $3,200 $25,800 $16,100 3% (avg SCC) $1,400 $3,500 $5,000 $6,400 $63,200 $53,500 2.5% (avg SCC) $2,000 $4,800 $6,800 $8,500 $95,500 $85,800 3% (95 th percentile) $3,600 $8,600 $12,500 $16,200 $158,400 $148,700 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 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
- $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 purposes 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 emiss ion 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 w elfare impacts (related to PM 2.5 and ozone exp osure) range betw een $110 and $340 million in 2030, 2040, and 2050. $200 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 exclu de the value of changes in non
- CO 2 GHG emissions expected under this program (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. 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 us ing both 3 percent and 7 percent discount rates. 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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4 78 of 771 **Table VIII**  **- 31**  **: Monetized Net Benefits Associated with the Final Program (Millions, 2009$)** 

2020 2030 2040 2050 NPV, 3% a NPV, 7% a Total Annual Costs b Total Annual Costs - $7,400
- $18,300
- $25,200
- $33,100
- $324,600
- $139,900 Total Annual Benefits at each assumed SCC value c 5% (avg SCC) $700 $1,700 $2,500 $3,200 $25,800 $16,100 3% (avg SCC) $1,400 $3,500 $5,000 $6,400 $63,200 $53,500 2.5% (avg SCC) $2,000 $4,800 $6,800 $8,500 $95,500 $85,800 3% (95th percentile) $3,600 $8,600 $12,500 $16,200 $158,400 $148,700 Monetized Net Benefits at each assumed SCC value c 5% (avg SCC) $8,100 $20,000 $27,700 $36,300 $350,400 $156,000 3% (avg SCC) $8,800 $21,800 $30,200 $39,500 $387,800 $193,400 2.5% (avg SCC) $9,400 $23,100 $32,000 $41,600 $420,100 $225,700 3% (95th percentile) $11,000 $26,900 $37,700 $49,300 $483,000 $288,600 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 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 2014 through 2018 model ye ar trucks. In contrast to the calendar ye ar anal ys is presented above in Table VIII
- 29 through Table VIII
- 31 , the model y ear lifetime anal ys is below shows the impacts of the final program on vehicles produced during each of the model y ears 2014 through 2018 over the course of their expected lifetimes. The net societal benefits over the full lifetimes of vehicles produced during each of the five model y ears from 2014 through 2018 are shown in Table VIII
- 32 and Table VIII
- 33 at both 3 percent and 7 percent discount rates, respectively
.***** E.O. 12866 Review**

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479 of 77 1 **Table VIII**  **- 32**  **: Monetized Costs, Benefits, and Net Benefits Associated with the L ifetimes of 2014**  **-**

**2018 Model Year Trucks (Millions, 2009$; 3% Discount Rate)** 2014 MY 2015

MY 2016

MY 2017

MY 2018

MY Sum Technology
- $1,700
- $1,500
- $1,600
- $1,800
- $2,300
- $8,900 Fuel Savings (pre
- tax) $9,500 $8,400 $8,200 $11,600 $13,100 $50,800 Energy Securit y Impacts (price shock) $500 $400 $400 $600 $700 $2,600 Accidents, Congestion, Noise
- $300
- $300
- $300
- $300
- $300
- $1,500 Refueling Savings $100 $100 $100 $100 $100 $500 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 $1,000 $900 $1,300 $1,500 $5,800 2.5% (avg SCC) $1,800 $1,600 $1,500 $2,200 $2,500 $9,600 3% (95th percentile) $3,300 $2,900 $2,800 $4,000 $4,500 $17,500 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $8,300 $7,300 $7,000 $10,500 $11,600 $44,700 3% (avg SCC) $9,200 $8,100 $7,700 $11,500 $12,800 $49,300 2.5% (avg SCC) $9,900 $8,700 $8,300 $12,400 $13,800 $53,100 3% (95th percentile) $11,400 $10,000 $9,600 $14,200 $15,800 $61,000 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 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 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.***** E.O. 12866 Review**

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480 of 771 **Table VIII**  **- 33**  **: Monetized Costs, Benefits, and Net Benefits Associated with the Lifetimes of 2014 -** 

**2018 Model Year Trucks (Millions, 2009$; 7% Discount Rate)**

2014 MY 2015

MY 2016 MY 2017

MY 2018

MY Sum Technology
- $1,700
- $1,500
- $1,600
- $1,800
- $2,300
- $8,900 Fuel Savings (pre
- tax) $7,000 $6,000 $5,700 $7,700 $8,400 $34,800 Energy Securit y Impacts (price shock) $400 $300 $300 $400 $400 $1,800 Accidents, Congestion, Noise
- $300
- $200
- $200
- $200
- $200
- $1,100 Refueling Savings $0 $0 $0 $100 $100 $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 $1,000 $900 $1,300 $1,500 $5,800 2.5% (avg SCC) $1,800 $1,600 $1,500 $2,200 $2,500 $9,600 3% (95th percentile) $3,300 $2,900 $2,800 $4,000 $4,500 $17,500 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $5,600 $4,800 $4,400 $6,500 $6,700 $28,000 3% (avg SCC) $6,500 $5,600 $5,100 $7,500 $7,900 $32,600 2.5% (avg SCC) $7,200 $6,200 $5,700 $8,400 $8,900 $36,400 3% (95th percentile) $8,700 $7,500 $7,000 $10,200 $10,900 $44,300 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 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 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 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. 

### M. **Summary of Costs and Benefits from 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 will be counted as benefits th at 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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481 of 77 1 VIII
- 35 (these 2 below) show the same model ye ar estimates as those provided above in Tables VIII
- 27 and VIII
- 28 (the same ones above in L ), but with the categories relabeled to illustrate the fuel efficiency perspective. **Table VIII**  **- 34**  **: Monetized Costs, Benefits, and Net Benefits Associated with the Lifetimes of 2014 -** 

**2018 Model Year Trucks (Millions, 2009$; 3% Discount Rate)**

2014 MY 2015

MY 2016

MY 2017

MY 2018

MY Sum Technology

Costs
- $1,700
- $1,500
- $1,600
- $1,800
- $2,300
- $8,900 Benefits Fuel Savings (pre
- tax) $9,500 $8,400 $8,200 $11,600 $13,100 $50,800 Energy Securit y Impacts (price shock) $500 $400 $400 $600 $700 $2,600 Accidents, Congestion, Noise - $300
- $300
- $300
- $300
- $300
- $1,500 Refueling Savings $100 $100 $100 $100 $100 $500 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 $1,000 $900 $1,300 $1,500 $5,800 2.5% (avg SCC) $1,800 $1,600 $1,500 $2,200 $2,500 $9,600 3% (95th percentile) $3,300 $2,900 $2,800 $4,000 $4,500 $17,500 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $8,300 $7,300 $7,000 $10,500 $11,600 $44,700 3% (avg SCC) $9,200 $8,100 $7,700 $11,500 $12,800 $49,300 2.5% (avg SCC) $9,900 $8,700 $8,300 $12,400 $13,800 $53,100 3% (95th percentile) $11,400 $10,000 $9,600 $14,200 $15,800 $61,000 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 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 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.***** E.O. 12866 Review**

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482 of 771 **Table VIII**  **- 35**  **: Monetized Costs, Benefits, and Net Benefits Associated with the Lifetimes of 2014 -** 

**2018 Model Year Trucks (Millions, 2009$; 7% Discount Rate)**

2014 MY 2015

MY 2016

MY 2017

MY 2018

MY Sum Technology

Costs
- $1,700
- $1,500
- $1,600
- $1,800
- $2,300
- $8,900 Benefits Fuel Savings (pre
- tax) $7,000 $6,000 $5,700 $7,700 $8,400 $34,800 Energy Securit y Impacts (price shock) $400 $300 $300 $400 $400 $1,800 Accidents, Congestion, Noise - $300
- $200
- $200
- $200
- $200
- $1,100 Refueling Savings $0 $0 $0 $100 $100 $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 $1,000 $900 $1,300 $1,500 $5,800 2.5% (avg SCC) $1,800 $1,600 $1,500 $2,200 $2,500 $9,600 3% (95th percentile) $3,300 $2,900 $2,800 $4,000 $4,500 $17,500 Monetized Net Benefits at each assumed SCC value a, b 5% (avg SCC) $5,600 $4,800 $4,400 $6,500 $6,700 $28,000 3% (avg SCC) $6,500 $5,600 $5,100 $7,500 $7,900 $32,600 2.5% (avg SCC) $7,200 $6,200 $5,700 $8,400 $8,900 $36,400 3% (95th percentile) $8,700 $7,500 $7,000 $10,200 $10,900 $44,300 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 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 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 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 ) w ere 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 13563, “Improving Regulation and Regulatory***** E.O. 12866 Review**

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483 of 77 1 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, 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 i mpact on net overall U.S. employment ; instead, labor would primarily be shifted from one sector 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 oth er activities in the economy
. 503 In this situation, any effects on net employ ment are likel y 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 regi ons 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 504 point out that net positive employ ment effects are possible in the near term when the econom y is at less than full employ ment due to the potential hiring of idle labor res ources 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 magnitude of the effect on employ ment could vary

over time, region, and sector, and positive effects on employment in so me 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 broa der 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 , industrie s 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. 505 Although heav y - 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 503 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. 504 Ibid. 505 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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484 of 771 discussed in Chapter 5 of this RIA, this rulemaking is predicted to reduce the amount of fuel these vehicles use, and thus affec t the petroleum refinery industry . The petroleum refinery industry employed about 65,000 people in the U.S. in 2009, the most recent y ear that employ

ment estimates are available for this sector. 506 Although heav y - duty vehicles (HD) account for approximatel y 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 petrol eum refinery industry . The petroleum refinery industry employ ed about 65,000 people in the U.S. in 2009, the most recent ye ar that employ ment estimates are available for this sector. 507 Finall y, since the net reduction in cost associated with th e s e rule s i s 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 t o 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 for 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 to help them consolidate their lead ership 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 efficiency in HD vehicles. 508 The study

pred icts 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 themselves have not ye t been peer reviewe d. 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 unemploy ed 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. 509 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 510 identify

three separate way s employ ment levels may

change in the regulated industry in response to a n ew (or more stringent) regulation. First, higher production costs due to the regulation will lead to higher market prices; higher prices in turn reduce

506 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 (N AICS 3363). 507 U.S. Census Bureau, 2009 Annual Survey of Manufactures, Published December 3, 2010. 508 Union of Concerned Scientists and CalStart, Delivering Jobs: The Economic Costs and Benefits of Im proving Fuel Economy of Heavy Duty Vehicles, July, 2010. http://www.ucsusa.org/deliveringjobs
. 509 Berck, Peter, and Sandra Hoffman. “Assessing the Employment Impacts of Environmental and Natural Resource Policy.” Environmental and Resource Economics 22 (2002): 133
- 156. 510 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
- 436.***** E.O. 12866 Review**

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485 of 77 1 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., more/less labor is required per dol lar of output) (“factor
- shift effect”). The “demand effect” is expected to 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 effect 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 effects 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 a l. 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 meeting the standards set in these rules. The effects of these rules are also likely to h ave 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 that 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 savings; oil refineries due to reduced demand for petroleum
- based fuels; and the final r etail 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 impacts on employ ment in these industries. The effects of the HD rule on net U.S. empl oy 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 economy

these sector
- specific impacts will be mostly offset by employment changes elsewhere in the ec onom y and would not be expected to result in a net change in jobs. However, in an economy 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.***** E.O. 12866 Review**

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486 of 771 The demand effect depends on the effects of this rulemaking on HD vehicle sales. If vehicle sales increase, then mor e people will be required to assemble trucks and their components. If vehicle sales decrease, employ ment associated with these activities will decrease. The effects of this rulemaking on HD vehicle sales depend on the perceived desirability

of the new ve hicles. On one hand, this rulemaking will increase vehicle costs; by itself, this effect would reduce vehicle sales. On the other hand, this rulemaking will reduce the fuel costs of operating the vehicle; by itself, this effect would increase vehicle sal es, especiall y i f potential buy ers have an expectation of higher fuel prices. The agencies have not made an estimate of the potential change in vehicle sales. 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 be 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 VI II.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 buye rs to install all cost
effective fuel
- saving te chnology , but the agencies find that they have not. Section VIII.A discusses various h ypotheses that have been suggested to explain this phenomenon. Some of the explanations suggest that vehicle manufacturers and bu ye 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 j obs. As stated by Tom Linebarger (President and Chief Operatin g Officer of Cummins ) and Fred Krupp (President of the Environmental Defense Fund), "Finally , 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." 511 One commenter raised the iss ue 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 above, the effects of this rulemaking on HD vehicle sales depend on the desirability

of the new vehic les. 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 tec hnologies 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
511 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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487 of 77 1 those that replace features of a conventional truck. “Added on” feat ures require additional labor to install the technologies on trucks, thus clearl y increasing labor demand (the “cost effect”). For “replacement” technologies, the predicted impact on labor demand from regulation depends on the change in the amount of labo r used to install one ty pe of technology

compared to another. In man y cases, the new technologies are predicted to be more complex than the existing technologies and are therefore likely to require additional labor installation inputs. However, most of th e technologies that are expected to be used to meet these standards are replacement technologies, therefore overall changes in the labor intensity are expected 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 require 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 additional labor needed to install more complex technologies. For the truck and engine manufacturin g 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 effect may have a slightly

positive effect on employ ment in this sector. (b ) Motor Vehicle Parts Man ufacturing Sector Some vehicle parts are made in
- house and would be included directly in the regulated sector; alternatively , some are made by independent suppliers 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) Trans port 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 these 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 freight via trucks becomes cheaper than shipping b y other modes (e.g., rail or barge), then employ m ent 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 employment in the transport and shipping sectors.***** E.O. 12866 Review**

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488 of 771 (d ) F uel 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. 512 Expected fuel consumption reductions b y fuel t yp e, and b y heav y - 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 y ear, using the Reference Case from the AEO 2011. In 2014, the pre
- tax fuel savings is $1.2 billion (2009$). While these figures represent 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. 513 Because this sector is ve ry 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 firms 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 to trucking firms are likely to be passed along as lower transportation costs that, in turn, could resul t 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 sector s 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 from 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 expenditures. 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
512 North American Industry Classification System (NAICS) Code 32411. 513 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 . im

ports of refined fuel, while the remaining 50 percent is expected to be reflected in reduced dom estic 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. dom estic 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. (NAICS 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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489 of 77 1 take the money

as profit, to the extent that these owners 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 through 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 regulate d 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 quantification. 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 sectors. Reduced fuel production implies less employ ment in the fuel provision sectors. Finall y, any n et 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 expected then to increase employ ment through their expenditures
. Given the job creation as a result of th e $1.2B (2009$) in fuel savings in 2014 and the possible employ ment increases in the manufacturing and parts sectors, we find it highl y unlikely that there would be significant net job losses related to this policy
. 

## IX. **Analysis of the Alternati** **ves** 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 s tandards 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 fewer or potentiall y 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 subset 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 comments received.***** E.O. 12866 Review**

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490 of 771 

### 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 requ irements 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 technologic ally 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 relevant 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. The 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 alternative is presented in order for NHTSA to comply with National Environmental Policy Act (NEPA) and to provide an analy

tical baseline against which to compare environmental impacts of the other regulatory

alternatives. 514 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 rule is based on the assumpti on 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 vehicles. The agencies re cognize that there is substantial uncertaint y 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 historic data regarding tren ds in this sector. Therefore, in this final rule 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 Energy Outlook (AEO). For this alte rnative baseline, the agencies analyzed the new truck fuel economy
514 NEPA requires agencies to consider a “no action” alternative in their NEPA analyses and to compare the effects of not taking action with the effects 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 anal ysis 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 CF R 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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491 of 77 1 projections for the Light Commercial Trucks, along with the Medium
- and Heav y - Duty Freight Vehicles developed in AEO 2011. 515 The agencies converted the fuel econom y improvements into CO 2 em issions 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 performance absent regulation. Th is 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. A EO 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 of vehicles; however, the agencie s 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 to make an estimate of the cost o f 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 th e 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 consumption associated with vehicle hot eling). 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 c ase, 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 pref erred 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 2.35 in RIA Chapter 2 for a list of all of the technol ogies, their cost and relative effectiveness. The

515 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/ . S ee Supplemental Tables 7, 63, and 68.***** E.O. 12866 Review**

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492 of 771 resulting Alternative 2 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 removal of the Advanced Sm artWay

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 be 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, which cuts the average vehicle and engine GHG emissions and fuel consumption reduction by approximately

2 percent for these vehicles
. 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 engines, 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 this final rule. 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 im provement 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 re search phase and will not be developed full y for new engine production in the timeframe of this first regulatory action. In other cases, the agencies concluded that the manufacturing capacity for technologies such as advanced battery

sy stems for heav y - dut y hybrid drivetrains could not be expanded quickly

enough to allow for significant vehicle production volume in the timeframe of this rule.***** E.O. 12866 Review**

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493 of 77 1 **(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 similar goals as for Alternative 2. Specificall y, we wanted an alternative that would reflect an incremental improvement over the pref erred alternative based on adding the next most cost effective technology in each of the categories. In general, we thought these were the technologies most likely

to be attempted by

manufacturers if a more stringent standard were established. However, a s discussed above and in the feasibility discussion in Section III, we are not finalizing Alternative 4 because we do not believe that these technologies can be developed and introduced in the timeframe 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 these technologies (for exampl e, building new factories in the next few y ears). 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 Ra nkine waste heat recovery

s ys tems and 100 percent application of advanced aerody namic 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 co mbination tractors. The agencies do not believe that either 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. 516 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 2010 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 gasol ine HD pickup truck standards should 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 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 i n heavy
- duty truck applications with an

516 TIAX. 2009. Page 4
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494 of 771 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 gasoline direct injection DOHC with dual cam phasing, discrete valve lift, and twin turbochargers is estimated to be $1,743. 517 The vocational vehicle standard would be based on the addition hy brid powertrains to 6 percent of the ve hicles. 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 truc ks, and refuse haulers. 518 **(5) Alternative 5: Maximum Technology Penetration plus Trailers**  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 emissions 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), plus the application of additional hy brid powertrains to the pick up trucks, vans, vocational vehicles, and tractors. In addition, the agencies applied aerod yn 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 y ear. The agencies do not believe that it is possible to achieve h ybrid technology penetration rates at or even near these levels in the timeframe of this rulemaking. However, we believe it is useful to consider what a future standard based on the use of such advanced technologies could achieve. As with Alternative 4, we include a +c in our cost estimates for this alternative to reflect additional costs not estimated b y the agencies. The agencies assumed that a hybrid powertrain would provide a 32 percent reduction in CO 2 emissions and fuel 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. 519 The agencies are projecting a cost of $9,000 per vehicle for the HD pickup trucks and vans with an effectiveness of 18 percent, again based on the NAS report. 520 Lastly, the effectiveness of h yb rid powertrains installed in tractors was assumed to be 10 percent at a cost of $25,000 based on the NAS report. 521 The combination tractor technology package for Alternative 5 includes the preferred alter

native technologies, waste heat recovery and Advanced SmartWay aerod ynamic package used in Alternative 4, application of h ybrid powertrains discussed

517 See RIA Chapter 2, Table 2.35. 518 NAS Report. Page 146. 519 NAS Report. Page 146. 520 NAS Report. Pa ge 146. 521 NAS Report. Page 146.***** E.O. 12866 Review**

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495 of 77 1 above, in addition to a regulation for commercial trailers pulled b y combination tractors. The agencies a ssumed a box trailer program would mirror the SmartWay program and include tire and aerod yn amic requirements. The agencies added low rolling resistance tires to all commercial trailers, which are assumed to have 15 percent lower rolling resistance than th e baseline trailer tire and is equivalent to the target value required by SmartWay . The aerod yn amics of the box trailers were assumed to improve the coefficient of drag for the combination tractor
- trailer by 10 percent through the application of technolog ies such as trailer skirts and gap reducers. 522 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 poss ible to achieve technology penetration rates at or even near these levels in the timeframe 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 Alternative 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 i s based on the ICF cost estimate. 523 The agencies applied the aerodynamic improvement 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 agencies 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
. **Table IX**  **- 1**  **: Annual CO 2**  **and Oil Reductions Relative to Alternative 1 in 2030 and 2050** DOWNSTREAM CO 2 OIL REDUCTIONS

522 The Cd improvement of 10 percent for trailer improvement s w as derived from the TIAX report, Table 4
- 26 on page 4
- 50. 523 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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496 of 771 REDUCT IONS (MMT) (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 89 6.1 8.8

Tractors 45 63 4.4 6.2 HD Pickup Trucks 8 13 0.9 1.3 Vocational Vehicles 8 12 0.8 1.2 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 $1,732 $2,536

Tractors $743 $1,227***** E.O. 12866 Review**

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497 of 77 1 TECHNOLOGY COSTS (20 09$ MILLIONS) HD Pickup Trucks $817 $1,029 Vocational Vehicles $173 $281 Alt. 3 Preferred

– Total $2,610 $3,798

Tractors $1,076 $1,777 HD Pickup Trucks $1,300 $1,638 Vocational Vehicles $234 $383 Alt. 4 More Stringent

– Total $5,611+c $7,506+c Tractors $1,953+c $3,225+c HD Pickup Trucks $1,824+c $2,298+c Vocational Vehicles $1,834+c $1,983+c Alt. 5 Max Technology

– Total $18,308 +c $27,816 +c Tractors $2,747 +c $4,292 +c HD Pickup Trucks $6,051+c $7,623 +c Vocational Vehicles $9,510 +c $15,901 +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 PM2.5 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%***** E.O. 12866 Review**

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498 of 771 **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
- $8,900
- $21,800+c - $38,000+c Fuel Savings (pre
- tax) $0 $45,000 $50,800 $63,800 $79,100 Reduced CO 2 Emissions at Each Assumed SCC Value a,b 5% (avg SCC) $0 $700 $700 $900 $1,200 3% (avg SCC) $0 $2,200 $2,500 $3,000 $4,000 2.5% (avg SCC) $0 $3,400 $3,800 $4,600 $6,100 3% (95th percentile) $0 $6,700 $7,600 $9,200 $12,200 Energy Security Impacts (price shock) $0 $2,400 $2,600 $3,400 $4,200 Accidents, Congestion, Noise $0
- $1,400
- $1,500
- $1,600
- $1,600 Refueling Savings $0 $500 $500 $500 $700 Non
- CO 2 GHG Im

pacts 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 $18,100 $19,800 $21,700 +c $18,400 +c 3% (avg SCC) $0 $19,600 $21,600 $23,800 +c $21,200 +c 2.5% (avg SCC) $0 $20,800 $22,900 $25,400 +c $23,300 +c 3% (95th percentile) $0 $24,100 $26,700 $30,000 +c $29,400 +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.***** E.O. 12866 Review**

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499 of 77 1 **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 $2,700 $3,900 $7,500+c $27,800 +c Fuel Savings (pre
- tax) $0
- $32,600
- $37,100
- $45,000
- $61,000 Reduced CO 2 Emissions at Each Assumed SCC Value a,b 5% (avg SCC) $0 $1,500 $1,700 $2,100 $2,800 3% (avg SCC) $0 $4,300 $4,900 $5,900 $8,000 2.5% (avg SCC) $0 $6,200 $7,000 $8,500 $11,600 3% (95th percentile) $0 $12,900 $14,700 $17,900 $24,200 Energy Security Impacts (price shock) $0 $1,600 $1,800 $2,200 $3,000 Accidents, Congestion, Noise $0
- $600
- $600
- $700
- $700 Refueling Savings $0 $200 $200 $300 $400 Non
- CO 2 GHG Im

pacts 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 $32,600 $36,300 $41,400+c $38,700 +c 3% (avg SCC) $0 $35,400 $39,500 $45,200+c $43,900 +c 2.5% (avg SCC) $0 $37,300 $41,600 $47,800+c $47,500 +c 3% (95th percentile) $0 $44,000 $49,300 $57,200+c $60,100 +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 mo netized 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. 

### 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 bull dozers. 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 box trailers come in***** E.O. 12866 Review**

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500 of 771 many different lengths ranging from 2 8 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. NHT SA 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 regu lating 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 procedure s. 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 comm ents 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 trailer regulations. One commenter recognized that there ar e 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 additi on, they stated that time is needed to develop sufficient research into the area. None of the commenters that supported trailer regulation in this action addressed the complexities of the trailer industry , nor a method to measure trailer aerodyn amic impro vements. In the NPRM, the agencies discussed relativel y 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 will develop the necessary test p rocedures in order to propose standards for trailers and will go through a full notice and comment rulemaking process to set those standards. The agencies intend to begin a rulemaking process to regulate trailers in the near future and will work with all interest stakeholders as we begin that process. Until that time, EPA will continue to rely on the SmartWay

Transport Partnership Program to encourage the development and use of technologies to reduce fuel consumption and CO 2 emissions from trailers. 

## X. **Publi c Participation**  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 No vember 18, 2010. The public was invited to submit written comments on the proposal during the formal comment period, which end **e** d on January 31, 2011. The agencies received over 41,000 comments
- over 3,000 of them unique
- from industry , environmental organizations, states, and individuals. **A** detailed summary and response to these comments can be found in the Summary and Analy sis of Comments document in the docket (Docket ID EPA

–HQ

– OAR

–2010

– 0162, or NHTSA
- 2010
- 0079).***** E.O. 12866 Review**

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501 of 77 1 

## XI **. Statutory and Executive Order Review**  **s (1)**  **Executive Order 12866: Regulatory Planning and Review** 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 econo my of $100 million or more. Accordingl y, the agencies submitted 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. NHTSA is also subject to Executive Order 13563 (76 FR 3821, January 21, 2011) and the Department of Transportation’s Regulatory Policies and Procedures . These final rules are also significant within the meaning of the DOT Regulatory Policies and Procedures. Executive Order 12866 additionall y requires 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. **(2) National Environmental Policy Act**  [FORTHCOMING]
**(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 information collection requirements are not enforceable until OMB approves them. The agencies propose to collect information to ensure compliance with the provisions in these rules. This includes a variet y of testing, reporting and recordkeeping requirements for vehicle manufacturers. Section 208(a) of the CAA requires that ve hicle 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 collected whenever a manufacturer applies for a certificate of conformity
. Under section 206 of the CAA (42***** E.O. 12866 Review**

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502 of 771 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 manufacturers 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 XI
- 1 : ). This 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 XI**  **- 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 Collecti on 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 numbers for EPA’s regulations are listed in 40 C FR 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 requirements contained in this final action. **(4) Regu**  **latory 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 s tatute 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 governmental jurisdictions. For purposes of ass essing 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 city, count y, town, school district or sp ecial 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 Potentially Affected Small Entities The agencies have not conducted an Initial Regulatory Flexibility

Anal ys is for this action because we are certifying that these rules would not have a significant economic impact on a substantial number of small entities. The agencies are deferring standards for manu facturers 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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503 of 77 1 these entities, and the short lead time to develop these rules, , 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 heav y - duty engines and vehicles: chassis manufacturers, combination tractor manufacturers, and alternative fuel engine converters. Based on a preliminary

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 heav y - duty chassis manufacturers. Notably , several of thes e manufacturers produce vehicles in more than just one regulatory category (HD pickup trucks/vans, combination tractors, or vocational vehicles (i.e. heavy
- dut y chassis manufacturers)). Based on the ty pes of vehicles they

manufacture, these companies, how ever, would be subject 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 program, there cl ose to 60 divisions with these companies that will be subject to the final regulations. Of these, about 15 entities fit the SBA criteria of a small business. There are approximately

three engine converters, two tractor manufacturers, and ten heavy
- dut y c hassis manufacturers in the heav y - dut y engine and vehicle market that are small businesses. (No major heavy
- duty engine manufacturers, heav y - dut y chassis manufacturers, or tractor manufacturers meet the small
- entity criteria as defined by SBA). The agenci es 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 ensure that the agencies are aware of which companies are being 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 s mall 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 pollutant motor vehicle emissions regulations. Small engine entities are currentl y cov ered 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 declaration to the agencies will 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 completing and submitting a small entity declaration to gain deferral from the final GHG and fuel consumption standards will 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 complet ed under the Paperwork Reduction Act. Additional information can be found in the Paperwork Reduction Act***** E.O. 12866 Review**

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504 of 771 discussion in Section XI . (3) Paperwork Reduction Act . B ased on this, the agencies are certifying that the rules will 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), Pub. 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 final rules with “Federal mandates” that may result in expenditures to State, local, and tribal g overnments, in the aggregate, or to the private sector, of $100 million or more in an y 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 reasona

ble number of regulatory

alternatives and adopt the least costly , most cost - effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they

are inconsistent with applicable law. Moreo ver, 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 potentiall y affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA and NHTSA regulations with significant Federal intergovernmental mandates, and informing, educating, and advising 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 rules impo se no enforceable duty on an y State, local or tribal governments. The agencies have determined that these rules contain no regulatory requirements that might significantl y or uniquely affect small governments. The agencies have determined that these rule s contain a Federal mandate that may result in expenditures of $100 or more for the private sector in any one y ear. The agencies believe that the program represents the least costl y, most cost - effective approach to achieve the statutory requirements of th e rules. 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 program 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 are 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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505 of 77 1 (2012 through 2050). The distribution of each monetized economic impact over time can be viewed in the RIA that accompanies these rules. Present values represent the total amount that a stream of monetized costs/benefits/net benefits that occur over time are worth now (in y ear 2009 dollar terms for this anal ys is), accounting for the time value of money by discounting future values using either a 3 or 7 percent 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 aver ages (in present value terms) 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 annualized 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 substant ially

from the time varyingstream of cost/benefit/net benefit values that occur in an y gi ven y ear (e.g., the streams of costs represented b y $0.4B and $0.7B in Table XI
- 3 below average $1.5B from 2014 through 2018 and are zero from 2019
- 2050). **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 2009 dollars)**  Costs Benefits Net Benefits Lifetime Present Value c,d

– 3% Discount Rate $ 8
. 9 $58.4 $49 Annualized Value c,e

– 3% Discount Rate $0.4 $2. 6 $2.2 Lifetime Present Value c,d

– 7% Discount Rate $ 8.9 $4 2 $3 3 Annualized Value c,e

– 7% Discount Rate $0.7 $3.1 $2.4 Notes: 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 intera gency 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 o f SCC for internal consistency. Refer to Section VIII.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 mo netized economic impact over time can be viewed in the 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), discount ing future values to the present. e The 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.***** E.O. 12866 Review**

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506 of 771 **(6) Executive Order 13132 (Fed**  **eralism)** 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 vario us levels of government, 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 apply

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 fro m adopting or enforcing 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 trucks 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 considered 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. Mercury 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 being established in this rulemaking. **(7) Executive**  **Order 13175 (Consultation and Coordination with Indian Tribal Governments)**  These final rules 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 costs 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 Chil**  **dren 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 safety 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 C ause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean***** E.O. 12866 Review**

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507 of 77 1 Air Act, which can be found in the public docket for these rules. 524 A summary of the anal ys is is presented below. With respect to GHG emissions, the effects of climate chang e observed to date and projected to occur in the future include the increased likelihood of more frequent and 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 pro jected global mean surface 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 is 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 directional 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 growin g seasons. PM emissions from 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 Ord**  **er 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 significant 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 fue l savings, these rules encourage 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 12(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

524 See Endangerment TSD, Note 10, above.***** E.O. 12866 Review**

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508 of 771 when the agencies decide not to use available and applicable voluntary consensus standards. For CO 2 , N 2 O, and CH 4 emissions and fuel consumption fro m 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 for criteria pollutants. This will minimize the amount of testing done by manufacturers, since manufacturers are already requi red to run these tests. 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 fo r the California Air Resources Board. This will minimize the amount of testing done b y manufacturers, since manufacturers are already required to run these tests. For CO 2 emissions and fuel consumption from heavy
- duty combination tractors and vocational v ehicles, the agencies will collect data through the use of a simulation model instead of a full
- vehicle chassis dy namometer testing. This will minimize the amount of testing done by manufacturers. EPA’s compliance assessment tool is based upon well
- estab lished 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
. 525 Therefore, the EPA’s compliance asse ssment tool satisfies the description of a consensus. For the evaluation of tire rolling resistance input to the model, EPA is finalizing to use the I SO 28580 test, a voluntary

consensus methodology . EPA is adopting several alternatives for the evaluatio n of aerod yn amics which allows the industry to continue to use their own evaluation tools because EPA does not know of a single consensus standard available for heav y - dut y truck aerod ynamic evaluation. For air conditioning standards, EPA is finalizing a co nsensus 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, February 16, 1994) establishes federal executive policy

on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted b y law, to make environmental justice part of their mission by

identifying and addressing, as appr opriate, 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 these final rules will not have disproportionately high and adverse human health or environmental effects on minority or low
- income populations because they increase the level of environmental protection for all affected populations without having an y dis proportionately high and adverse human health or environmental effects on any population, including any minorit y
525 ICCT. ICCT Evaluation of Vehicle Simul ation Tools. 2009.***** E.O. 12866 Review**

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509 of 77 1 or low
- income population. The reductions in CO 2 and other GHGs associated with the standards will affect climate change projections, and EPA h as estimated reductions in projected global mean surface temperatures (Section VI). Within communities experiencing climate change, certain parts of the population may be especially vulnerable; these include the poor, the elderly , those already in poor he alth, the disabled, those living alone, and/or indigenous populations dependent on one or a few resources. 526 In addition, the U.S. Climate Change Science Program stated as one of its conclusions: “The United States is certainly capable of adapting to the c ollective 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.” 527 Therefore, these specific sub
- populations may receive benefits from reductions in GHGs. For non
- GHG co
- pollutants such as ozone, PM 2.5 , and toxics, 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 Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory

Enforcement Fairness Act of 1996, generall y p rovides that before a rule may take effect, the agency

promulgating the rule must submit a rule report, which includes a cop y of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule 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 in the Federal Register. A Major rule cannot take effect until 60 day s after it is published in the Federal Register. This action is a “major rule” as defined by 5 U.S.C. 804( 2). This rule will be effective **[Insert date 60 days after publication in the Federal Register],** sixty day s after date o f publication in the **Federal Register**
. 

## XII. **Statutory Pr ovisions and Legal**  **Authority A.**  **EPA** Statutory authorit 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 endanger 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.

526 See Endangerment TSD, Note 10, above. 527 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. Wilbanks, (Authors)]. U.S. Environmental Protection Agency, Washington, DC, USA.***** E.O. 12866 Review**

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510 of 771 

### 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 m edium
- and heav y - dut y on - highway

vehicles and work trucks, to include appropriate test methods, measurement metrics, standards, and compliance and enforcement protocols that are appropriate, cost
- effective and technologically feasible) of the Energy

Indepe ndence 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 Parts 1036 and 1037 Administrative practice and procedure, Air pollution control, Confidential bu siness information, Environmental protection, Incorporation by reference, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Warranties. 40 CFR Parts 1065 and 1066 Administrative practice and procedure, Air pollution control, Rep orting 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 re cordkeeping requirements, Warranties. 49 CFR Parts 523, 534, and 535 Fuel economy