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EO12866_GHG+Fuel Eff Stds for Med - Heavy- Duty Engines+Vehicles 2060 - AP61 FRM Response to OMB _2011 062 8 without 12 .docx Below is a summary of interagency comments received during EO 12866 and EO 13563 review of the draft final rule establishing GHG emissions standards and fuel efficiency standards for medium and heavy duty trucks ; for consideration and subject to further po licy review. Agency responses are provided for each comment. 

### Table of Contents 1) Probabilistic Uncertainty Analysis ................................ ................................ ............................ 3 2) Estimates of costs and benefits ................................ ................................ ................................ .... 4 3) Annualized Estimates of Costs and Benefits using Model Year 2014 - 2018 analysis .......... 6 4) Averaging, Banking, and Trading Provisions ................................ ................................ .......... 6 5) Upstream emissions. ................................ ................................ ................................ .................. 9 6) Advanced Technology Credits ................................ ................................ ................................ .. 9 7) Accuracy of Analysis of Alternatives ................................ ................................ ....................... 9 8) Analysis of Alternatives for Subcategories ................................ ................................ ............ 11 9) Accounting for Uncertainty in Analysis of the Alternatives ................................ ................ 12 10) Tables in the RIA ................................ ................................ ................................ .................. 13 11) No - Action Option ................................ ................................ ................................ ................. 13 12) Baselines ................................ ................................ ................................ ............................... 13 13) Market Effects ................................ ................................ ................................ ...................... 14 14) Fuel Savin gs ................................ ................................ ................................ .......................... 14 15) RPE and Learning curve ................................ ................................ ................................ ...... 15 16) Retreading of Tires ................................ ................................ ................................ ............... 15 17) Time value associated with reduced refueling ................................ ................................ ... 15 18) GDP Analysis ................................ ................................ ................................ ....................... 16 19) Market Failure ................................ ................................ ................................ ...................... 16 20) Baseline ................................ ................................ ................................ ................................ .. 16 21) Fleet Make - up ................................ ................................ ................................ ....................... 17 22) Tire data ................................ ................................ ................................ ................................ 18 23) Benefits of Alternatives ................................ ................................ ................................ ....... 19***** E.O. 12866 Review**
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24) Public Comments ................................ ................................ ................................ .................. 20 25) Learning ................................ ................................ ................................ ................................ 21 26) Employment ................................ ................................ ................................ .......................... 21 27) Market Failure ................................ ................................ ................................ ...................... 21 28) Incentives ................................ ................................ ................................ .............................. 22 29) NRC Assessment ................................ ................................ ................................ .................. 22 30) Citations ................................ ................................ ................................ ................................ 22 31) Impacts ................................ ................................ ................................ ................................ .. 23 32) Footnote ................................ ................................ ................................ ................................ . 23 33) Oil Production ................................ ................................ ................................ ........................ 23 34) NO X and PM Text ................................ ................................ ................................ ................ 24 35) Capacity ................................ ................................ ................................ ................................ . 24 36) High Roof & Mid Roof Sleepers ................................ ................................ ......................... 25 37) EISA ................................ ................................ ................................ ................................ ...... 25 38) Tire Safety ................................ ................................ ................................ ............................. 26 39) VSL ................................ ................................ ................................ ................................ ........ 27 40) Tire Tread Comment ................................ ................................ ................................ ............ 27 41) Tire Market Comment ................................ ................................ ................................ .......... 28 42) Test Variability ................................ ................................ ................................ ..................... 29 43) Innovative Credit Submissions ................................ ................................ ............................ 29 44) Final Reports ................................ ................................ ................................ ......................... 30 45) Testing Fees ................................ ................................ ................................ .......................... 31 46) Typo 1 ................................ ................................ ................................ ................................ .... 31 47) Typo 2 ................................ ................................ ................................ ................................ .... 31 48) Typo 3 ................................ ................................ ................................ ................................ .... 31 49) Typo 4 ................................ ................................ ................................ ................................ .... 31 50) Typo 5 ................................ ................................ ................................ ................................ .... 31 51) Typo 6 ................................ ................................ ................................ ................................ .... 32 52) Job Creation ................................ ................................ ................................ .......................... 32 53) SBA Declaration ................................ ................................ ................................ ................... 32 54) Small Entities and Sales ................................ ................................ ................................ ....... 33 55) Delay of Sales ................................ ................................ ................................ ....................... 34 56) Human Factor ................................ ................................ ................................ ....................... 35 57) Timing of In - Use ................................ ................................ ................................ .................. 35***** E.O. 12866 Review**
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58) RV’s ................................ ................................ ................................ ................................ ....... 36 59) California ................................ ................................ ................................ .............................. 36 60) Trailer Program ................................ ................................ ................................ ..................... 36 61) Timing of Future Rules ................................ ................................ ................................ ........ 36 62) Pi ckup Standards ................................ ................................ ................................ .................. 37 63) Net Benefits ................................ ................................ ................................ .......................... 37 64) Credit Deficits ................................ ................................ ................................ ....................... 37 65) FFV’s ................................ ................................ ................................ ................................ ..... 38 66) DOE PEF ................................ ................................ ................................ ............................... 38 67) NGV’s ................................ ................................ ................................ ................................ ... 39 68) Early Credits ................................ ................................ ................................ ......................... 39 69) Multiplier ................................ ................................ ................................ .............................. 39 70) Non - Tailpipe EV Emissions ................................ ................................ ................................ 39 71) Tailpipe and Upstream Edits ................................ ................................ ............................... 40 72) Tailpipe 1 ................................ ................................ ................................ .............................. 41 73) Tailpipe 2 ................................ ................................ ................................ .............................. 41 74) Tailpipe 3 ................................ ................................ ................................ .............................. 41 75) Tailpipe 4 ................................ ................................ ................................ .............................. 42 76) FFV Weighting ................................ ................................ ................................ ..................... 42 77) Tailpipe 5 ................................ ................................ ................................ .............................. 42 78) Tailpipe 6 ................................ ................................ ................................ .............................. 42 79) Upstream from EV’s ................................ ................................ ................................ ............ 43 80) Tailpipe 7 ................................ ................................ ................................ .............................. 44 81) Climate Context ................................ ................................ ................................ .................... 45 82) Hybrids ................................ ................................ ................................ ................................ .. 46 83) Acceptable Uncertainty ................................ ................................ ................................ ........ 46 84) Frontal Area ................................ ................................ ................................ .......................... 47 

## 1) **Pr obabilistic**  **Unc ertainty Anal**  **ysis** OMB Circular A - 4 states, “For major rules involving annual economic effects of $1 billion or more, you should present a formal quantitative analysis of the relevant uncertainties about benefits and costs. In other words, you should try to provide some estimate of the probability distribution of regulatory benefits and costs. In summarizing the probability distributions, you should provide some estimates of the central tendency (e.g., mean and median) along with any other***** E.O. 12866 Review**
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information you think will be useful such as ranges, variances, specified low - end and high- end percentile estimates, and other characteristics of the dis tribution.” The RIA does not include a formal probabilistic uncertainty analysis. Please provide this analysis. **Response:** EPA continues to work toward developing a comprehensive strategy for characterizing the aggregate impact of uncertainty in key elements of its analy ses. For example, it has taken many ye ars to develop the uncertainty characterization for criteria pollutant impacts (monte carlo ranges of uncertainty , alternative mortality endpoints, etc., all of which is present in the co pollutant analy sis for the FRM). For the final HD GHG action , however, many of the analy ses have been developed relatively recentl y and conducted using a tremendous amount of staff and budget resources. To the best of our ability at this time, we have identified the uncertain aspects of these analy ses and have worked to quantify them when/if possible (e.g., sensitivity ranges associated with quantified and monetized GHG impacts). EPA will continue to work to refine these uncertainty

anal ys es in the future as time and resources permi t. We have added the following text to the beginning of Section VIII of the preamble: “Where possible, we identify the uncertain aspects of these economic impacts and attempt to quantify them when/if possible (e.g., sensitivity ranges associated with quantified and monetized GHG impacts; probabilistic uncertainty associated with non - GHG health benefits). For some impacts, however, there is a lack of adequate information to inform a probabilistic assessment of uncertainty. EPA continu es to work toward developing a comprehensive strategy for characterizing the aggregate impact of uncertainty in key elements of its analy ses and we will continue to work to refine these uncertainty anal yses in the future as time and resources permit.” 

## 2) **Esti mates of costs and benefits**  Several reviewers had concerns about the timeline used to estimate the rule’s costs and benefits. Costs and benefits of model year 2014 to 2018 standards have been estimated for every year from 2012 to 2050 as if the 2018 standards remain in place for model years through 2050. This results in the aggregate estimates of costs and benefits being largely driven by long - term values (i.e., beyond 2020) associated with the impacts of the standards on trucks manufactured decades in the future. However, both costs and benefits are measured against a baseline fuel economy associated with MY 2010 vehicles that is assumed to remain constant through 2050. The selection of a constant baseline is problematic for estimating long - term costs and b enefits, particularly given assumptions about declining technology costs and increasing fuel prices. For example, if historical trends in fuel economy improvements continue into the future, there should be a point at which, even in the baseline, vehicles w ould exceed the standards proposed here. In such a case, the standards would become non-binding, and, beyond that point in time, the program would neither impose costs nor produce benefits . More generally, given that the question at hand relates to the merits of standards for MY 2014 to MY 2018, and the standards will almost certainly be revisited in response to new information in future years, the results of analysis of these standards shoul d not be driven, as they currently are, by estimates of the standards’ effects on trucks manufactured decades into the future.***** E.O. 12866 Review**
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In light of the above, commenters suggest that EPA and NHSTA re - evaluate the approach taken to presenting estimates of costs and benefits, and shift the focus of this analysis to the near- and medium - term costs and benefits of the rule. Commenters recommend that agencies estimate costs and benefits for only MY 2014 to MY 2018 trucks, over their estimated useful lifetimes. Presumably, this would not require new analysis, but rather simply altering what is drawn from the existing analysis to present in the preamble and RIA. This rule’s primary direct effect will be on the emissions and fuel economy of MY2014 to MY2018 vehicles, and the standards can be adjusted for subsequent model years. Consequently, as a matter of good regulatory analysis, commenters recommend that the agencies focus their analysis of the rule’s costs and benefits on its implications for MY2014 - 2018 vehicles alone. Given that most of the trucks contributing to the 2030 - 2050 net benefit results will presumably be post - 2018 model year trucks, a discussion of the rule’s overall net benefits from 2030 onward seems to be an unnecessary distraction. Commenters note that the agencies selected the standards based on their implications for MY2014 - MY2018 trucks, not based on the implications of the standards if they were to remain in place through 2050. The regulatory analysis should therefore reflect this focus. **Respo nse:**  We do present the recommended anal ys is and refer to it as our “Model Year” anal ys is in contrast to our “Calendar Year” analy sis which presents annual costs and benefits for the calendar ye ars 2012 - 2050 (and assumes that the 2018 standards remain in place in perpetuity) . EPA believes that there are two key reasons for presenting the calendar year anal ys is. First, it is necessary to review the total impact the rule has on climate change and ambient air quality . Second, the 2018 standards will , in fa ct, remain in place in perpetuity unless and until amended , so it is accurate and reasonable to estimate costs and benefits for model ye ars beyond 2018. It is for the s e reason s that EPA routinely uses this methodology

in assessing rules’ costs and benefit s, e.g. the light duty vehicle GHG rule. While it is possible that future improvements to fuel consumption would be made absent the rule, this cannot be known today . If such improvements were to occur absent the rule, then the society would still incur th e costs of those improvements and realize the benefits of those improvements. In that case, the costs and benefits would not be attributable to the rule, but would instead be attributable to the marketplace. However, EPA and NHTSA cannot ensure that the marketplace will impose those costs on itself even knowing the benefits that could be realized. We discuss this issue in the introductory portion of preamble Section VIII. The comment also suggests, we believe, that the analy tical results of future stand ards should not be driven b y estimates of the current standards’ effects. We disagree. In fact, they should without question be driven by them. The comment states further that the agencies focus on near term costs and benefits and suggests estimating costs and benefits for 2014MY to 2018MY trucks over their useful lifetimes. We have presented exactl y that anal ys is in Section VIII.L of the preamble along with our anal ys is which presents annual costs and benefits for the calendar ye ars 2012 - 2050.***** E.O. 12866 Review**
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## 3) **Annualized Estimat es of Costs and Benefits using Model**  **Ye ar 2014**  **- 2018 anal**  **ysis** Commenters also recommend that agencies include summary tables of annualized costs and benefits using 3 and 7% discount rates using model year 2014 - 2018 analysis. Please include these tables in the summary of the Preamble and the RIA. **Response:** We now have such a table in the Executive Summary of the RIA and can also include the annualized costs in the preamble as well. 

## 4) **Ave ra**  **ging, Banking , and T**  **rading Pro visions**  Regarding the a

veraging, banking, and trading provisions (Section IV. A of the preamble), EPA/NHTSA have increased the flexibility of these provisions relative to the proposed rule. However, the agencies are maintaining some restrictions on averaging and trading, specifi cally those between vehicle weight classes and between engine subcategories. In explaining their rationale for restricting averaging and trading between vehicle weight classes and engine subcategories, the agencies make two key arguments. The first of these two arguments is economic in nature (pp. 255

– 256): “a manufacturer that produces both engines and heavy- duty highway vehicles could mix credits across engine and vehicle categories to gain an advantage over competitors that are not integrated. Lim iting 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. Similarly, large volume manufacturers of engines could shift credits bet ween heavy heavy- duty diesel engines and light heavy- duty diesel engines to gain an advantage in one subcategory over other manufacturers that may not have multiple engine offerings over several regulatory engine subcategories.” **a)** Interagency commenters have concerns about this language on several levels, and raised concerns about similar language in early versions of the draft proposed rule before that language was rephrased to make clear that it reflected views of industry participants and not necessarily views of the USG. **Commenters request clarity on why the agencies are endorsing this view and request that agencies provide basis for this concern.**  **Commenters note that not all industry participants raised this concern. 4a**  **Response:** The two agencies h ave worked extensively with the regulated industry and other stakeholders in developing rules that deliver on the goals of the President’s May 21 announcement and the spirit of the letters of support sent by the regulated industry

before the proposal, and that adequatel y***** E.O. 12866 Review**
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address the public comments we received on the proposal. Key among the industry ’s concerns is that the program not inadvertentl y change the existing market structures that have grown through time to satisfy

the needs of the trucking indus try . The President of Cummins Engine Company , Tom Linebarger, made this very point during Cummins’ 12866 meeting with OMB on September 14, 2010. From the environmental NGOs, we have a longstanding concern that mobile source averaging, banking, and trading (ABT) programs that rel y on upfront estimates of lifetime emissions, rather than actual measured emissions in use, could lead industry actors with greater access to information than EPA and NHTSA to game the ABT program, accruing credits in segments where the actual emissions savings are smaller than EPA estimates and then using those credits in segments where the actual emissions are higher than EPA estimates. For both of these reasons, EPA has consistently required that ABT credits be used between lik e products in all of its mobile source programs , and NHTSA believes it is important to limit trading for this first regulatory

program . The final rule conforms to the ABT provisions for GHG heav y duty engine emissions to be consistent with the parallel ABT provisions for criteria pollutants with same weight engines treated as a single averaging set regardless of the vehicles in which they are installed. We have applied this same principle with respect to combination tractors and vocational vehicles: treati ng like weight classes as an averaging set. The agencies also note that no commenter offered an explanation of why the restrictions on this ABT program should differ from the parallel ABT program respecting criteria pollutants . In response to these inter - agency comments we are adding text to the preamble to make clear our intent to re - evaluate the averaging sets in the follow - up rulemaking: "As part of the planned follow - up rulemaking, the agencies intend to re - evaluate the appropriateness of the ABT averaging sets and credit use restrictions we are adopting here for the HD GHG and fuel consumption programs." **b)** Further, the agencies’ concern about not creating “a competitive advantage due solely to the regulatory structure” could actually argue strongly against limiting trading as the agencies have proposed. Specifically, relative to allowing more flexibility, limiting averaging and trading necessarily increases the cost of compliance for certain high - cost manufacturers within an “averaging set”. Therefore, by foreclosing averaging and trading across averaging sets, to the extent that there are particular manufacturers that are technology leaders in a particular averaging set, the proposed restrictions will effectively raise the compliance costs of those manuf

acturers’ rivals to a greater extent than would occur if broader trading were allowed. In turn, this will provide a greater, regulatory - induced competitive advantage to such manufacturers, and will adversely affect consumers too. **In light of this concern that the proposed approach could work at cross purposes with the agencies’ goal of**  **avoiding adverse effects on competition and consumer welfare, commenters recommend that the agencies give further consideration to the ultimate effe** **cts of their proposed restrictions on averaging and trading.**  **4b Response:**  This argument focuses on the benefits of unrestricted trading. However, the concern expressed***** E.O. 12866 Review**
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in the rules about the use of ABT to gain unfair competitive advantages is really focused on averaging and banking by companies with diverse product offerings, because, in fact, trading is almost never practiced in these highl y competitive markets. The commenters’ concern that restrictions on trading exacerbate competitive advantages miss es the fact that technology leaders avoid trading not because of ABT restrictions, but because they quite sensibly

choose not to help their competitors. In fact, it is important to note that there are no trading restrictions per se, onl y restrictions on what vehicle/engine types that credits may be used for. To remove these restrictions so that a company may sell credits it earned from one engine/vehicle category (to a non - competitor) for use in another category , would not lower compliance costs for the c redit seller’s rivals as indicated by the commenters, only

for the non - competitor who buy s the credits. By doing so, the original credit owner gains not only through fair proceeds from the credit sale, but also through unfair leveraging of an advantage o ver an y of his own competitors who sell into both markets. **c)** The second argument that the agencies make to support their position is that: “[trading/averaging] credits between averaging sets of engines would be problematic because of the differences in regul atory useful lives. The agencies want to avoid having credits from longer useful life categories flood shorter useful life categories, adversely impacting compliance with the final CO 2 and fuel consumption standards in the shorter useful life category.” (p. 256) **Can the agencies clarify why this concern about trading of credits associated with different regulatory useful lives could not be addressed by**  **simply incorporating information on regulatory useful life in determining how man y**  **credits are awarded for each regulated engine or vehicle type? 4c**  **Response:** It is not differences in regulatory useful life that make the creation of averaging sets necessary , and in fact EPA has provided for credit transfer between categories with differing regulatory useful lives in other programs. This paragraph is meant to point out the problem caused b y assuming parity

for credits earned and used in widely diverging applications, given especiall y that both activities, credit generation and credit re demption, are necessarily carried out before the actual engines and vehicles involved ever enter the field, and are not corrected later based on their real world experience. To perform such corrective adjustments in credit balances would add uncertainty

and burden for manufacturers to the point of making ABT programs useless. In lieu of extensive real world tracking, averaging sets provide a reasonable amount of confidence that ty pical engines or vehicles within each set have roughl y the same real world e xperience in the things that matter for lifetime emissions -- actual operating life, load cycles, maintenance, etc. -- such that actuall y measuring those real world parameters is not necessary . However, the farther outside an averaging set one goes, the more likely it is that these key parameters will diverge greatl y, creating uncertainty and opening the possibility of gaming by

an y m anufacturers wishing to take advantage of these divergences. We agree that clarification is needed and have revised this paragraph in the preamble to reflect the text below:***** E.O. 12866 Review**
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“[trading/averaging] credits between averaging sets of engines would be problematic because of the diversity of applications that the broad s pectrum of HD engines go into. This diversity creates large differences in the real world conditions that impact lifetime emissions -- such as actual operating life, load cycles, and maintenance practices. In lieu of conducting extensive and burdensome r eal world tracking of these parameters, along with corrective measures to provide some assurance of parity

between credits earned and credits redeemed, averaging sets provide a reasonable amount of confidence that typical engines within each set have compa rable enough real world experience to make such follow - up activity unnecessary . differences in regulatory useful lives. The agencies want to avoid having credits from longer useful life categories flood shorter useful life categories, adversely impacting compliance with the final CO 2 and fuel consumption standards in the shorter useful life category. ” 

## 5) **Upstream emissions.** Commenter notes that if the objective of the rule is to reduce national GHG emissions as the agencies claim in this Preamble and RIA, then commenters strongl y recommend that future EVs or other related electric technologies etc be responsible for the national average GHG emissions from electric power generation. Please revise rule and discussion accordingly . **Response:** Upstream emissions from electricity generation are not of central relevance to this rulemaking due to the negligible amount of electric vehicles expected in this sector during this phase. The agencies believe it is appropriate for the rule to regulate direct vehicle exhaus t emissions, rather than account for upstream emissions as a basis for the standards. 

## 6) **Advan ce**  **d T**

**echnology Cr edits**  Both for its direct implications in this rule and for its precedential implications, commenters would appreciate additional clarity from the agencies regarding how they settled on the chosen crediting multiplier and limits on credit use for advanced technology credits. **Response:** The 1.5x credit multiplier the agencies intend to finalize is the same value the agencies sought public comment on in the proposal and is the value most commonly supported by comment er s for the final rule . EPA has used a 1.5x and a 2x multiplier in past rulemakings to encourage earl y introductions of new technologies such as diesel particulate filters in the heavy- duty 2007 engine regulations. In this case, the agencies judged multipliers less than 1.5x as too low to encourage additional sales of advanced technologies and larger multipliers as having the potential to undermine the environmental goals of the regulation. 

## 7) **Accuracy of Anal** **ysis of Alternati ve**  **s** Regarding the analysis of alternatives, the agencies have partially responded to previous interagency comments during proposed rule phase and have added to the RIA and preamble***** E.O. 12866 Review**
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tables that summarize the monetized net benefits of each alternative for the lifetime of MY2014 - 2018 vehicles (Tables 6 - 22 and 6 - 23 on pages 6 - 16 and 6 - 17 of the RIA, and tables IX 4 and IX - 5 in the preamble). Commenters are pleased that the agencies have added this information. However, commenters are concerned that the numbers presented may not have been calculated correctly, given some puzzling results contained in those tables. In particular, one table presents results with monetized net benefits calculated at a 3% discount rate while the other table uses a 7% discount rate. In comparing the two tables, and focusing only on the first two lines of results for truck program costs and fuel saving s, it can be seen that the change from a 3% discount rate to a 7% discount rate reduces monetized program costs by about 60%, whereas monetized fuel savings decline by only about 30%. This result is counterintuitive, given that the program costs for MY2014 - 2018 trucks will be almost entirely near- term capital costs whose monetized NPV should not be significantly affected by a change in discount rate. On the other hand, fuel savings accrue over a longer timeframe and so should be more (not less) affected by the choice of discount rate. The numbers also appear to be inconsistent with similar estimates for only the preferred alternative that appear in preamble tables VIII - 34 and VIII - 35. **Commenters recommend that the agencies check the data underlying tables 6 -**  **22 and 6 -**  **23 of the RIA (IX** **- 4 and IX**  **- 5 of the preamble), and provide the interagency reviewers**  **with updated, corrected versions. If possible, please provide more detailed data underlying**  **the table to ensure that the numbers are accurate.**  **Response:** The agencies have revised the tables that include the analysis of the alternatives. **Monetized Net Benefits Associated with Each Alternative Relative to Alternative 1 for Lifetime of 2014 through** 

**2018 Model Year Vehicles (**  **3% discount rate, Million 200**  **9 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 - $8,800 - $21,500+c - $38,000+c Fuel Savings (pre - tax) $0 $47,100 $50,100 $63,800 $79,100 Energy Security Impacts (price shock) $0 $2,500 $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 Im

pacts c N/A N/A N/A N/A N/A Reduced CO2 Emissions at Each Assumed SCC Value a,b 5% (avg SCC) $0 $1,200 $1,200 $1,600 $1,900 3% (avg SCC) $0 $5,200 $5,800 $7,200 $9,000 2.5% (avg SCC) $0 $8,500 $9,600 $11,900 $14,700 3% (95th percentile) $0 $15,500 $17,500 $22,200 $27,400 Monetized Net Benefits at E ach Assumed SCC Value a,b 5% ( avg SCC) $0 $44,000 $44,100 $46,200+c $46,300+c 3% (avg SCC) $0 $48,000 $48,700 $51,800+c $53,400+c***** E.O. 12866 Review**
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STRINGENT ALT.3

PREFERRED ALT.4 MORE

STRINGENT ALT.5 MAX

TECHNOLOGY 2.5% (avg SCC) $0 $51,300 $52,500 $56,500+c $59,100+c 3% (95th percentile) $0 $58,300 $60,400 $66,800+c $71,800+c **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 Cost s d $0 - $5,900 - $8,800 - $21,500+c - $38,000+c Fuel Savings (pre - tax) $0 $32,200 $34,300 $43,700 $53,900 Energy Security Impacts (price shock) $0 $1,800 $1,800 $2,300 $2,900 Accidents, Congestion, Noise $0 - $1,000 - $1,100 - $1,100 - $1,100 Refueling Savings $0 $200 $200 $500 $500 Non - CO 2 GHG Im

pacts and Non - GHG Im

pacts c N/A N/A N/A N/A N/A Reduced CO2 Emissions at Each Assumed SCC Value a,b 5% (avg SCC) $0 $1,200 $1,200 $1,600 $1,900 3% (avg SCC) $0 $5,200 $5,800 $7,200 $9,000 2.5% (avg SCC) $0 $8,500 $9,600 $11,900 $14,700 3% (95th percentile) $0 $15,500 $17,500 $22,200 $27,400 Monetized Net Benefits at E ach Assumed SCC Value a,b 5% (avg SCC) $0 $28,500 $27,600 $25,500+c $20,100+c 3% (avg SCC) $0 $32,500 $32,200 $31,100+c $27,200+c 2.5% ( avg SCC) $0 $35,800 $36,000 $35,800+c $32,900+c 3% (95th percentile) $0 $42,800 $43,900 $46,100+c $45,600+c 

## 8) **Anal ysi**  **s of Alternati ve**  **s for Subcat**  **egories** A lso regarding the analysis of alternatives, while tables 6 - 22 and 6 - 23 (once corrected) will allow for a comparison of the monetized net benefits of an overall alternative in aggregate across all model years, the tables present aggregate information on the entire set of regulatory subcategories (e.g., vehicle weight classes) and for all model year s included in the rulemaking. However, the RIA does not currently present net benefit calculations for the alternatives with respect to individual subcategories or model years, which would allow reviewers to establish that the selected regulatory alternative was the one that maximizes net benefits for each subcategory (e.g., pickups and vans, vocational vehicles, and combination tractors) and model year. During review of the proposed rule, agencies requested that this information be added to the RIA, given that the agencies have flexibility with respect to the choice of standards for each model year and for each regulatory subcategory. **Commenters request that the agencies provide versions of Tables 6 -**  **22 and 6 -**  **23 for each subcategory and model year (2014**  **- 201**  **8).******* E.O. 12866 Review**
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**Response:** The agencies have presented the net benefits by alternative as the sum of 2014 through 2018 model years. We can add tables reflecting the individual model years for each alternative, such as the table below which represents Alternative 2 at 3% discount rate. However, the agencies are not able to apportion some of the cost/benefit categories to specific categories. For example, there is sufficient overlap of engines used in all three categories that it is difficult to separate out the benef its. The agencies believe that the presentation that is already included in the RIA (see page 6 - 14 and 6 - 15) and preamble (see page 496) which reflects the CO 2 emissions reductions, oil savings, and costs by subcategory in 2030 and 2050 provide s the ability for reviewers to analyze the different alternatives relative to each subcategory. **Estimated Societal Impacts of Alternative 2 of the Heavy -**  **duty Program (Millions of 2009 dollars; 3% discount rate)**  MONETIZED VALUES 2014MY 2015MY 2016MY 2017MY 2018MY SUM Costs Truck Program Costs - $1,100 - $1,000 - $1,100 - $1,200 - $1,500 - $5,900 Benefits Pre - tax Fuel Savings $8,800 $7,800 $7,600 $10,800 $12,100 $47,100 Energy Security $500 $400 $400 $600 $600 $2,500 Accidents, Congestion, Noise - $300 - $300 - $300 - $200 - $300 - $1,400 Refueling $100 $100 $100 $100 $100 $500 Reduced CO 2 emissions 5% (avg SCC) $200 $200 $200 $300 $300 $1,200 3% (avg SCC) $1,000 $900 $800 $1,200 $1,300 $5,200 2.5% (avg SCC) $1,600 $1,400 $1,400 $1,900 $2,200 $8,500 3% (95th percentile) $2,900 $2,600 $2,500 $3,500 $4,000 $15,500 Net Benefits 5% (avg SCC) $8,200 $7,200 $6,900 $10,400 $11,300 $44,000 3% (avg SCC) $9,000 $7,900 $7,500 $11,300 $12,300 $48,000 2.5% (avg SCC) $9,600 $8,400 $8,100 $12,000 $13,200 $51,300 3% (95th percentile) $10,900 $9,600 $9,200 $13,600 $15,000 $58,300 

## 9) **Accounting for Uncertainty in Anal ysi**  **s of the Alt ernati** **ve s**  The agencies note that, whereas Alternatives 2 and 3 (the preferred alternative) are believed to be achievable in the proposed timeframe, Alternative 4 (the next most stringent alternative) could have far higher costs because agencies “do not believe that these technologies can be developed and introduced in the timeframe of this rulemaking.” Effectively, the agencies are arguing that there is a “knee” in the cost curve and that they have chosen the stringency just to the left of that knee. Commenters request agencies to provide a full probabilistic uncertainty analysis. In addition, to the extent that the agencies believe that a knee in the cost curve exists just beyond the preferred alternative, as they have suggested, commenters suggest that the agencies at least***** E.O. 12866 Review**
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provide some discussion of the implications of cost uncertainty for the expected value of its preferred alternative, versus Alternative 2, the less stringent alternative. Specificall y, if the exact location of the knee in the cost curve is unknown, then the expected cost of the preferred alternative (Alternative 3), taking into account this uncertainty , could be considerabl y higher than the most likely cost, as forecasted b y the agencies. By contrast, as Alternative 2 is further to the left from that knee, this cost uncertainty will have less of an effect on the expected cost of Alternative 2, relative to its most likely cost as projected by

the agencies. This has important implications for not only the net benefits of Alternative 3, but also for the relative merits of Alternatives 2 and 3. Commenters would appreciate the agencies’ views on the implications of cost uncertainty for the expected cost of, and their choice of, th e preferred alternative, given the apparent knee in the cost curve just beyond Alternative 3. Further, commenters recommend that the agencies include a discussion of the implications of cost uncertainty, in light of this knee in the cost curve, in the preamble and RIA . **Response:** In regard to the comment on probabilistic uncertainty , please see the response to Comment 1) . 

## 10) **Ta bles in the RIA**  The text in preamble section IX, p. 491, incorrectly references Table 2.35 in the RIA. The correct table is 2.36 in the RIA. Several table references in the text in Chapter 2 of the RIA are incorrectly numbered. **Response:** The cross reference has been fixe d. 

## 11) **No -**  **Action Option** The RIA defines the No - Action Option as an alternative. The presentation would be clearer (and more accurate) if this discussion was framed as a discussion of the choice of baseline for analysis. This might be particularly true given that the section discusses two alternative baselines. If the exposition followed this format, it would facilitate later analysis of the alternatives considered in comparison with these baselines. Commenters hence suggest removing lines for Alternative 1 (and 1a) from Tables 6 - 19 through 6 - 23. **Response:** Please note the response to #12 included below. 

## 12) **Baselines** Commenters recommend that the costs and emissions for the proposal and the alternatives be presented relative to each of the baselines. Commenters recommend that the agencies analyze the costs and benefits of the AEO 2011 Baseline as well. Please include these in the RIA and preamble. Commenters recommend that the costs and emissions for the proposal and the alternatives be presented relative to each of the baselines. Commenters recommend that the agencies anal yz e the costs and benefits of the AEO 2011 Baseline as well. Please include these in the RIA and***** E.O. 12866 Review**
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preamble. **Response:** Response under development. 

## 13) **Mark et Effects**  Commenters recommend a fuller explanation of why agencies cannot rely upon market effects to solve this problem when fuel savings of the program are estimated to be five times the cost of the program. **Response:** The Preamble discusses this issue in Section VIII. A. As noted there, i t is not understood why private markets have not adopted these fuel - saving technologies. Comments on the rule did not provide evidence on expected effects. A search of the economics literature found no articles exploring this issue. Our primary evidence is anecdotal. We hear that truck drivers are often hesitant to adopt new fue l - saving technologies, in part because they have been sold “snake oil” in the past. SmartWay has found that its partners do experience improved fleet fuel efficiency . It is possible that the improvements predicted in this rule might eventually occur in the absence of the rule, but, given what appears to be the inherent conservatism of the industry , those changes are likely not to occur very

soon. The agencies added the same discussion to RIA in Chapter 9.2. 

## 14) **Fuel Sa vings**  Commenters recommend that the agencies include fuel savings in the benefits category throughout the entire Preamble and RIA tables and discussion. Please make this change. **Response:** Fuel savings are presented in an identical way to the fuel savings in the proposal for the HD GHG rule. EPA continues to believe that fuel savings should be presented as negative costs of the program (or positive savings of the program). This approach is consistent with past OMB guidance where our rules have impacted operating costs. OMB has directed EPA to consider operating costs as costs of our rules and to include those in $/ton calculations. This is what we have done whether those operating costs are positive (i.e., increase operating costs) or negative (decrease operating costs). For this action, f uel use affects operating costs, though, in this case, for the better. That said , the agen cies list Fuel Savings separately in the preamble and RIA summary tables (preamble overview and RIA executive summary) to clearl y present the monetized value due to fuel savings. Furthermore, in Sections VIII. L and VIII.M of the preamble, the agencies pre sent a summary of cost and benefits based on two different “regulating perspectives.” In Section VIII.L, the perspective is presented where the primary motivations of the HD National Program are improved energy

security and GHG emissions reductions in the United States , to reduce the impact of climate change. From that perspective, the benefits of the program are the external***** E.O. 12866 Review**
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effects, and the net effects on truck owners and operators are the costs. Fuel savings are therefore treated as negativ e costs fro m this perspective. In Section VIII.M, however, the perspective is presented where the purpose of a program to regulate fuel efficiency

is primarily

to save fuel . 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 are counted as benefits that occur over the lifetime of the vehicle as it consumes less fuel, rather than as negative costs experienced either at the time of p urchase or over the lifetime of the vehicle . 

## 15) **RPE and Learning curv e**  Please discuss the rationale for deviating from the NAS recommendation on RPE. Also, please provide evidence for the time learning curve used in the analysis. Given that the regulation doesn’t appear to be very technology forcing, please provide evidence for taking 2 learning curve discounts, which serves to lower the cost of the rule and is in total is a more aggressive learning curve then the age ncies have used in the past. Please clearly present the costs with and without learning discounts (probably in a tabular form would be the best). Also, how were the fixed costs spread over the relevant trucks/trailers? **Response:** We have made clear our preference for using indirect cost markups (I CM) rather than the RPE for estimating indirect costs associated with our rules (see discussion beginning on page 2 - 3 of RIA Chapter 2) . We do not believe it is appropriate to use an identical markup factor for all technologies, especially

one that incorporates indirect cost elements that should not change due to a regulatory

action. For example, retiree healthcare should not increase because the cost of building vehicles in some future ye ar increases due to a n ew regulation. We do agree with the NAS position that return on capital (or income) should be included in the markups and have done so for the final rule. As regards time learning, we have restructured our discussion of learning impacts to make clear that there is but one type of learning, learning b y doing which occurs with increasing production of parts (see page 2 - 9 of RIA Chapter 2) . We now point to whether a part, or technology , should be considered to be on the steep or flatter portion of the learn ing curve rather than referring to “volume” and “time” learning which lead many to believe we were suggesting two separate learning effects. 

## 16) **Re tr**  **eading of Tir**  **es** How does this NPRM affect the retreading of tires? Is there any weather - related safety concern with reduced tire rolling resistance? **Response:** The HD program does not intend to impact the retreading of tires. One tire supplier suggested that tire life could be impacted if a tire maker chooses to reduce tread depth as a shortcut to reduce rolling resistance. This approach would affect tire life. However, agencies believe tire manufacturers that knowingl y reduce overall tire life will be adversel y impacted in sales as tire life is a critical component to this vehicle segment. The agencies conducted a winter tire***** E.O. 12866 Review**
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traction test program and found no statistical relation between winter traction and rolling resistance. In addition to the winter traction and rolling resistance tests, NHTSA intends to conduct addition, performance based, testing later this year to further understand the effects of tire performance in varying weather conditions (e.g. wet weather). 

## 17) **Time va lue associated with r**  **educed r efueling**  How many refills in the baseline? What is the assumed time saved per refill? **Response:** We have not calculated a baseline number of refills or a control case number of refills. Instead, we have calculated a reduced amount of time spent refilling. We have done this based on the reduced number of gallons expected to be consumed (including the increased gallons due to rebound), the typical fill rate of pumps used to fill the three truck categories (fill rates are higher for pumps used to fill tractors), and the typical pay rate of a driver. This gives gallons divided by gallons/minute multiplied by $/hour (with conversion from minutes to hours) to give dollars saved. 

## 18) **GDP Anal ysis**  Many commenters request that agencies r emove reference to the GDP analysis (memo to docket on “economy - wide modeling”) from the Preamble and the RIA . **Response:** The presentation of the analy sis is consistent with the presentation made at proposal and in the final LD 2012 - 2016 rule. EPA see s no reason to change the approach previously decided for this anal ys is. 

## 19) **Mark et F**  **ailur e**  The RIA does not include a market failure discussion. Without this discussion, the agency has no compelling reason to characterize private fuel savings that accrue to firms as social benefit. **Response:** As in the p roposal, the primary discussion of market failures is in the Preamble. It would not be difficult to duplicate it in the RIA, but it would add nothing to the existing discussion. 

## 20) **Baseline**

 Commenters request a better understanding of how SmartWay is projected to affect the baseline? The current discussion states that SmartWay has “saved 1.5 billion gallons of diesel fuel as well as $3.6 billion in fuel costs” (p. 1 - 34).  What is the baseline fuel consumption assumed?  What is the fleet make - up assumed?  Commenter recommends that the “No action” alternative be moved to the baseline discussion.***** E.O. 12866 Review**
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**Response:**  SmartWay fuel consumption is based upon activity data submitted to EPA by SmartWay partners. Since SmartWay trucking fleets help comprise the national fleet, we did not factor these fleets’ fuel use independently of the baseline fuel use.  The baseline fuel use was developed using the MOVES2010a default emission rates.  The baseline fleet make - up was based pri marily on the defaults in MOVES, which categorizes vehicle typ es by their use, these vehicle ty pes are represented by

combination tractors, single unit tractors, refuse trucks, motor homes, transit buses, intercity buses, school buses, and light commercial trucks. EPA updated the defaults using relative sales and activity

growth projections from AEO2011. For HD pickups and vans, the agency updated sales projections for model years 2011 through 2018 using forecasts purchased from CSM Worldwide for the light - duty greenhouse gas rule.  The agencies respectfully disagree with the recommendation to move the “No Action” alternative to the baseline discussion in RIA Chapter 1. The agencies believe that it is appropriate to discuss the No Action Alternative along with the other alternatives in RIA Chapters 5 and 6. 

## 21) **Fleet Make -**  **up** Will this rule and standards established affect the fleet make - up? If so, how does this affect the benefit and cost estimates?

o NAS Report makes three findings regarding fleet make - up:  Finding 6 - 12. Standards that differentially affect the capital and operating costs of individual vehicle classes can cause purchase of vehicles that are not optimized for particular operating conditions. The complexity of truck use and the variability of duty cycles increase the probability of these unintended consequences.  Finding 6 - 16. Some fuel efficiency improving technologies will add weight to vehicles and push those vehicles over federal threshold weights, thereby triggering new operational conditions and affecting, in turn, vehicle purchase decisions. More research is needed to assess the significance of this potential impact.  Finding 6 - 17. Some fuel efficiency improving technologies will reduce cargo capacity for trucks that are currently “weighed- out” and will therefore force additional trucks on the road. More research is needed to assess the significance of this potential impact. **Response:** As discussed in Section VIII.F.1 of the preamble (page 444 of the preamble) , 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 types. Furthermore, even if a small amount of shifting does o ccur, any resulting GHG impacts are likely to be negligible because any vehicle class that sees an uptick in sales is also being***** E.O. 12866 Review**
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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. The agencies do not anticipate an increase in weight of the heavy- duty vehicles due to the rulemaking. The agencies structured the program to avoid unintended consequences of adding weight. For example, the agencies created a new combination tractor category, called vocational tractors, for the explicit reason to avoid the unintended consequence of requiring the addition of aerodynamic fairings and extra weight on these tractors (see page 55 of the preamble) . The other ty pes of combination tractors already contain aerody namic fairings and the rule is simply driving more aerodynamic designs of these features. 

## 22) **Tir e**  **data 22a**  Commenter requests reference to discussion or including new discussion on the differenc e between rolling resistance vs. traction, and how this rule will affect both. **22a Response:**  See response to # 40) . **22b** Commenter requests that the agencies provide basis (e.g., citation, etc.) for the following: i. Baseline tires are assumed to have RRc=7.8 (steer) and 8.2 (drive) for combination tractors and RRc=9.0 for vocational vehicle. (Table 2 - 1) **22b Response:**  Reference for the rolling resistance values are derived from the EPA Smartway data for Class 7 - 8 long - haul vehicles and the results from the independent, EPA - conducted tire testing. However, the tire testing data did result in revised standards for the vocational vehicles of 7.7 RRc. The final report for this testing should be issued in the next two weeks . This is reflected in the following table in the Preamble (latest v ersion):

**Table 22**  **- 1**  **: GEM Inputs for Final Vocational Vehicle Standards**

2014 MY 2017 MY Engine 2014 MY 7Lfor LHD/MHD and 15Lfor HHD Trucks 2017 MY 7Lfor LHD/MHD and 15Lfor HHD Trucks Tire Rolling Resistance (kg/metric ton) 7.7 7.7 **22c** Commenter requests that the agencies provide basis (e.g., citation, etc.) for the following: ii. The cost estimate of $7 (e.g., $1.75/tire) for Class 2b trucks and $10 (e.g., $2.5/tire) per Class 3 trucks/vans (p. 2 - 21). **22c Response:**  The estimate is based on the MY 2012 - 2016 light - duty rule , which based the estimate on the***** E.O. 12866 Review**
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2006 NRC/NAS tire study (reference 24 of RIA Ch2). On page 120 at the very end of the page is an estimate of $1/tire. In the MY 2012 - 2016 light - duty rule, we estimated $5/vehicle (4 tires plus 1 spare, which is somewhat conservative because it's likel y the spare isn't LRR). That value has been adjusted to 2009 dollars to result in a value of $5.30/vehicle. For th is action , we have used that $ 5 value for Class 2b and have multiplied by 1.5 for Class 3 (or $8/vehicle, 1.5 simply to adjust to use of 6 tires due to dual rears). With low complexity markups, these values become $7 and $10 per vehicle. The NAS 2010 report is inconsistent in its est imates of tire costs. On page 7 - 26 it state s an estimate of $2 - 5 per tire based on the $1 NRC value noted above and a belief that more costs will be required to avoid compromises to stopping distance. Our CBI discussions with tire makers have suggested th at won't be an issue. On page 7 - 30 NAS 2010 suggest s a cost of $10 per tire. **22 d**  Commenter requests that the agencies provide basis (e.g., citation, etc.) for the following: iii. EPA and NHTSA project a cost of $68 ($2009$) for low rolling resistance steer tires (2 per truck) for both Class 7 and 8 tractor including a low complexity ICM of 1.18. For low rolling resistance tires, the agencies estimate truck -based costs of $63 (2009$) and $126 (2009$) for Class 7 and 8 tractors, respectively, including a low com

plexity of ICM of 1.18. (p. 2 - 51) What is the length of time for these cost estimates? Yearly? **22d Response:**  The costs were derived from the I CF cost study cited in the RIA. The costs reflect the 2014MY cost in 2009 dollars. The costs represent the incremental cost of the tires. The costs for the tires in each model ye ar are included in Table 2 - 36 in Chapter 2 of the RIA. **22 e**  Commenter requests that the agencies provide basis (e.g., citation, etc.) for the following: iv. Please explain the retread cost savings of $1600 to $2000 per tractor. (p. 2 - 54) **22e Response:**  Based on information from industry , we estimate d the cost of a new retreaded tire between $150 and $200, compared to a new tire which costs ty pically around $400. Since retreads are not ty pi call y used on the steer axle position, this represents a savings of $1,600 to $2,000 per tractor. 

## 23) **Benefits of Alt** **ernati ve**  **s** It looks like Alternative 4 (20% more stringent than preferred alternative) maximizes net benefits. During the EPA/NHTSA briefing, the agencies explained that this Alternative is based on a bench - scale technology that is not commercially available. Given this technology constraint, commenters suggest that the agency provide an assessment of likelihood of fuel savings instead of the currently provided point estimate. Same comment applies to the most stringent alternative. Also, are the estimates provided incremental in nature? **Response:******* E.O. 12866 Review**
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We understand the desire to provide a clearer explanation of why the agencies have not chosen the more stringent alternatives, but we do not have a clear basis for projecting a likelihood of fuel savings for the identified technologies short of saying we b elieve it is effectively zero. We do have strong confidence in our estimates of the efficacy of the identified technologies (advanced Rankine cycle waste heat recovery systems and hybrid powertrains), and we are confident that these technologies will be r eady for use post 2018 (see page 493 of the preamble) . Hence, our analysis is more binary in nature. Prior to 2018, we simply don’t believe the technologies can be in the market in any volume (zero volume for Rankine waste heat recovery, less than 1% vol ume for hybrid powertrains). Hence our conclusion that more stringent standards would be infeasible prior to that year. In essence, we are saying there is near zero likelihood of achieving the standards envisioned in the more stringent alternatives in the years 2014 - 2018. Rather than present those cases with zero incremental reductions, we think it is better to show the potential for those technologies in the future and to recognize the reasons that the alternatives are not viable for 2014 - 2018. In th is way, the alternatives help to highlight that we expect there remains the possibility of larger net benefit maximizing reductions in the future. The agencies intend to take up the question of future standards beyond those being finalized in this rule in the near future. 

## 24) **Public Comments** Please provide summary of all public comments to this rule. The Preamble does not include this and it must be part of the Preamble, not as a separate document as stated in Preamble. Please provide this full summary of comm ents. **Response:** Case law has held that “With regard to responding to public comments, it is settled that “the agency [is not required] to discuss every item of fact or opinion included in the submissions made to it in informal rulemaking.” Automotive Parts &Accessories Ass'n v. Boyd, 407 F.2d 330, 338 (D.C.Cir.1968) ; cf. Simpson v. Young, 854 F.2d 1429, 1435 (D.C.Cir.1988) ( “[t]he agency need onl y state the main reasons for its decision and indicate it has considered the most important objec tions”). Instead, the agency's response to public comments need onl y “enable us to see what major issues of policy were ventilated ... and why the agency

reacted to them as it did.” Automotive Parts, 407 F.2d at 335. Indeed, the agency need not respo nd at all to comments that are “purel y speculative and do not disclose the factual or policy basis on which they

rest.” Home Box Office, 567 F.2d at 35 n. 58 .” Public Citizen v. FAA, 988 F.2d 186, 197 (DC Cir 1993) Further, while E.O. 12866 requires agencies to seek the views of regulated entities and other affected stakeholders, it contains no express requirement that agencies respond in final rule preambles to every

single comment. For EPA’s purposes, Section 307(d)(6)(B) of the CAA also states that “the promulgated rule shall also be accompanied by a response to each of the significant comments, criticism, and new d ata.” Even if this language were construed to appl y to preambles, it wouldn’t require a summary of each comment to be in the preamble. However, the APA does require agencies to respond to significant issues raised by the comments. The agencies have made substantial efforts to ensure that the preamble summarizes all significant comments and responds to them appropriatel y and sufficiently. An y comments***** E.O. 12866 Review**
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not summarized and addressed in the preamble (and all the ones that are) are excerpted and responded to in the separate Response to Comments document which is being created as a part of the Administrative Record for this final rule. 

## 25) **Learning** How does learning affect the total cost estimate? What is the projected cost without any learning? **Response:** The agencies provided the requested analysis to OMB last week. 

## 26) **Emplo yment**  Interagency commenters suggest that the agencies remove the employment impacts discussion from the Preamble and the RIA. The discussion does not seem to add any value, and because it is speculative, commenters suggest it be removed. **Response:** The Presidential Memorandum Regarding Fuel Efficiency Standards states that the program should “seek. . . [to ] enhance job creation in the United States.” Though the anal ys is is not quantitative, and thus cannot identify net emplo ym ent impacts in the economy , identifying the direction of likel y employment effects in the most directly affected sectors can provide policymakers with information on those affected positively and negativel y b y the policy. We will consider specific revisions or line edits to the analy sis that commenters or OMB might provide. 

## 27) **Mark et F**  **ailur e**  **Mark et F**  **ailur e**  **discussion fr om Preamble curre**  **ntl y stat**  **es:** “It is often asserted that there are cost- effective fuel - saving technologies that truck companies are not taking advantage of. This is commonly known as the “energy gap” or “energy paradox.” ” The energy paradox is more broad than just for truck companies, so commenters recommend that the agencies phrase this as: “It is often asserted that there are cost- effective fuel - saving technologies that markets do not take advantage of. This is commonly known as the “energy gap” or “energy paradox.” Or,

“ It is often asserted that there are cost- effective fuel - saving technologies that consumers fail to recognize, or that producers fail to incorporate into their products
. This is commonly known as the “en ergy gap” or “energy paradox.”***** E.O. 12866 Review**
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**Response:** We agree with the comment and adopted the first of the two suggestions. 

## 28) **Incenti ve**  **s** Has EPA considered creating an incentive program so that consumers fully internalize the benefits of investing in fuel saving technology? **Response:** The SmartWay program provides a nonfinancial incentive

– the ability to advertise as a SmartWay

partner

– as a way

to encourage participation in the program and improved fuel efficiency for those participants. As discussed in the rule documents, we consider SmartWay to complement the rule efforts: for instance, SmartWay can assist with logistics and driver training, two areas not covered b y the rule. In centives oriented toward externalities, such as a tax on greenhouse gas emissions, are beyond the scope of this rulemaking. Consumers already have incentives to internalize the private benefits of fuel - saving technology : the reduced fuel expenditures net of technology costs. Why

truck purchasers do not adopt all the cost - effective technology is, as discussed in P reamble Section VIII.A., a puzzle. 

## 29) **NR C Assessment**  Commenter recommends deleting the following sentence on page 368 of the Preamble “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. Commenters request this deletion becusae NAS did not review underpinnings and do not mention these. **Response:** We will delete this sentence because the previous sentence already addresses the main point. 

## 30) **C itations**  C ommenters request the agencies to provide full citations of the discussion found from page 369 through 376. There are no citations provided and it is very unclear whether this language is pulled verbatim from a particular document or if i t is original agency text. Unless they are direct quotes, citations are always needed for all statements of scientific facts. **Response:** As stated in the introduction to Section D, “ The source document for the section below is the Technical Support Document (TSD) 1 for EPA’s Endangerment and Cause or Contribute Findings Under the Clean Air Act (74 FR 66496, December 15, 2009). Below is the Executive***** E.O. 12866 Review**
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Summary of the TSD which provides technical support for the endangerment and cause or contribute anal ys es concerning GHG emissions under section 202(a) of the CAA . ” The entire section starting at “ (1) Observed Trends in Greenhouse Gas Emissions and Conce ntrations ” is nearl y a verbatim quote of the TSD. Our recommended action is no change, but we would be willing to consider adding in a more explicit note that the section comes from the TSD if OMB requests it. 

## 31) **Impacts** Commenter requests that the next to last sentence on page 373 read: “Thus, the potential impacts of climate change raise potential environmental justice issues, depending on direction of potential impact.” **Response:** As noted in the above comment, the language in this section comes from the TSD. In the absence of a factual error or necessary clarification, we would prefer to leave the language as a verbatim quote. 

## 32) **Fo otnote**  Commenter recommends deletion of footnote 3 on page 5 because it is not necessary fo r rulemaking at hand. **Response:** The footnote is removed. 

## 33) **Oil Pr**  **oduction** Commenter requests evidence for the claim on page 9 that “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.” **Response:** The agencies revised the text in the preamble to read as follows: “The agencies recognize that potential national and energy security risks exist due to the possibility

of tension over oil supplies. Much of the world’s oil and gas supplies are located in countries facing social, economic, and demographic challenges , thus making them even more vulnerable to the potential local instability . For example, i n 2010 just over 40% of worl d oil supply

came from OPEC nations, and this share is not expected to decline in the AEO 2011 projections through 203 0. Approximately 28% of global supply is from Persian Gulf countries alone. As another measure of concentration, of the 137 countries/pri ncipalities that export either crude oil or refined petroleum product s , the top 12***** E.O. 12866 Review**
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have recentl y accounted for over 55% of exports. 2 Eight of these countries are members of OPEC, and a 9 th is Russia. 3 In a market where even a 1 - 2% suppl y loss raises pric es noticeabl y, and where a 10% supply loss could lead to a significant price shock, this regional concentration is of concern. Historically , the countries of the Middl e East have been the source of eight of the ten major world oil disruptions 4 , with the 9 th originating in Venezuela, an OPEC member . ” 34) 

## NO **X** 

## and PM T**ex t**  page 13. Commenter requests clarity from agencies on why the following section is included in the Preamble. Please provide clarity on the relevance of these benefits to the rulemaking under current review: “As a result of these programs, new vehicles meeting current emission standards will emit 98% less NOX and 99% less PM than new trucks 20 years ago. The resulting emission reductions provide significant public health and welfare benefits. The most recent EPA regulations which were fully phased - in in 2010, the monetized health and welfare benefits alone are projected to be greater than $70 billion in 2030

– benefits far exceeding compliance costs and not including the unmonetized benefits resul ting from reductions in air toxics and ozone precursors (66 FR 5002, January 18, 2001).” **Response:** The preamble section containing this text provides a broad overview of the actions the agencies took prior to this rulemaking that provide either context or the underpinnings of the test procedures and vehicle technology baselines leading to this regulation. Past EPA regulations of criteria emissions including NO X and PM have had a significant impact on heavy- duty truck designs and directl y relate to the bas eline CO2 and fuel efficiency performance of these vehicles. A number of commenters raise the 2007/10 emission standards in the context of the CO 2 and fuel consumption levels that can be achieved through this regulation. In the context of those comments , we think it is valuable to highlight the cost, benefits and efficacy of the 2007/10 emission standards in this section. 

## 35) **Capacity** Are tons in g/ton - mile measured (and tested) at vehicle max capacity? **Response:** No, they are not measured or tested at maximum capacity. The combination tractors are evaluated at the payloads and total weights noted on page 95, Table II - 10 (as shown below). These values were derived from the U.S. Federal Highway Administration Tru ck Payload Equivalent Factors.

2 Based on data from the CIA, combining various recent years, https://www.cia.gov/library/publication s/the - wo rld - factbook/rankorder/2176rank.html .

3 The other three are Norway, Canada, and the EU, an exporter of product. 4 IEA 2011 “IEA Response System for Oil Supply Emergencies.”***** E.O. 12866 Review**
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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 As noted on page 151, 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 Heavy- Duty trucks, 11,200 pounds for Medium Heavy- Duty trucks, and 15,000 pounds for Heavy Heavy- Duty trucks. These valu es were also derived from the U.S. Federal Highway Administration Truck Payload Equivalent Factors. 

## 36) **High R oof**  **& Mid R oof**  **Sleepers** Page 23 table 1 - 2. Why is the high roof sleeper cab standard lower than the mid - roof? **Response:** The mid roof tractor is paire d with a tanker trailer which has poor aerodyn amics relative to a box trailer and therefore increases the baseline fuel consumption of mid roof tractors. The low roof tractor has a flat bed trailer and smaller frontal area so it has lower fuel consumption than a mid roof tractor . The high roof tractor has a box trailer so the aerodyn amics of the combination tractor - trailer are better relative to a mid roof tractor paired with a tanker trailer . 

## 37) **EISA** Is maximum feasible the only condition in EISA or are the re other conditions to be met in setting standards? **Response:** EI SA/EPCA states that the Secretary of Transportation “ 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, and shall adopt and implement appropriate test methods, measurement metrics, fuel econom y standards, and compliance and enforcement protocols that are appropriate, cost ef fective, and technologically feasible for commercial medium - and heav y - duty on - highway vehicles and work trucks.” 49 USC 32902(k)(2). Thus, “maximum feasible improvement” is the statutory standard that the fuel efficiency program must meet. The various components of a maximum feasible program must also be appropriate, cost - effective, and technologically feasible. Therefore, NHTSA interprets ‘maximum feasible” to be the main criteria for this program, and appropriateness, cost effectiveness, and technolo gical feasibility to be sub - criteria to be met when creating maximum***** E.O. 12866 Review**
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feasible standards. With respect to the setting of standards for light - duty vehicles, EPCA/EPCA “gives NHTSA discretion to decide how to balance the statutory factors

– as long as NHTS A’s balancing does not undermine the fundamental purpose of EPCA: energy conservation.” See Center for Biological Diversity v. National Highway Traffic Safety Admin ., 538 F.3d 1172, 1194 (9th Cir. 2008) at 1195. Where Congress has not directly spoken to a potential issue related to such a balancing, NHTSA’s interpretation must be a “reasonable accommodation of conflicting policies... committed to the agency ’s care b y the statute.” Id . (discussing consideration of consumer demand) (internal citations omitte d). NHTSA recognizes that the statutory factors in 32902(k)(2), such as maximum feasibility and cost - effectiveness, may not alway s be aligned . In the context of the agency’s light - duty vehicle authority , it was determined that Congress delegated the proc ess for setting the maximum feasible standards to NHTSA with broad guidelines concerning the factors that the agency must consider. Id. (emphasis in original). We believe that the same conclusion should be drawn about the statutory provisions governing the agency ’s setting of standards for heav y- duty vehicles. Those provisions prescribe statutory factors commensurate to, and equall y broad as, those prescribed for light - duty . Thus, NHTSA believes that it is firmly

within the agency ’s discretion to weigh and balance the factors laid out in 32902(k). As detailed in Section III of the Preamble, NHTSA has considered the appropriateness, cost effectiveness, and technological feasibility for each regulatory

category of the standards in designing a program to achieve the maximum feasible fuel efficiency improvement. It believes that each of those criteria is met. 

## 38) **Tir e Safety**  It is not clear from Preamble what comments were received on safety impacts from tire rolling resistance assessment. Please summarize comments on this topic. **Response:** Regarding whether LRR tires should be applied to certain types of vocational vehicles, the agencies received many comments from stakeholders, such as Daimler Trucks North America, Fire Apparatus Manufacturers Association (FAMA), International Association of Fire Chiefs, National Ready Mix, National Solid Wastes Management Association (NSWMA), Spartan Motors, National Automobile Dealers Association, among others. There were comments regarding applicability

of low rolling resi stance 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. Many of these commenters focused particularl y on the whethe r LRR tires would compromise the capability of emergency

vehicles. The independent tire test data discussed in the final rule preamble indicate the rolling resistance targets for on - road vocational vehicles can be met with tires that are currently available (and therefore recognized as safe) for many vehicle typ es and applications. As part of the final rule, the agencies provided provisions to allow for exemption of specific off - road capable vocational vehicles from the fuel efficiency and greenhouse gas standards. Included in the exemption***** E.O. 12866 Review**
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criteria are provisions for vehicles equipp ed with specific tire types which would fitted to a vehicle to meet extreme demands, including those designed for off - road capability . In addition, NHTSA plans to conduct additional performance - focused testing (beyond rolling resistance) as part of FMVSS r

ule development for medium - and heav y- duty trucks. This testing is targeted for completion toward the end of this year. The agencies will review this performance data when available in concert with any subsequent proposed rulemakings regarding fuel consump tion and GHG standards for medium and heav y- duty vehicles. The agencies are not aware of any definitive work on weather - related effects on low rolling resistance commercial truck tires. Tire manufacturers have already introduced low rolling resistance ste er and drive tires for commercial trucks that perform well. Studies of passenger vehicle tires have found no evidence of weather - related safety concerns for low rolling resistance tire models. (TRB special report 285, p. 4 - 5, p. 79 - 88). By changing the c ompounds used in making the tire, the rolling resistance of light vehicle tires can be reduced while maintaining traction and tread - life. We believe the same will be true for heav y truck tires. 

## 39) **VS L**  P age 88 regarding vehicle speed limiters. Are there any s afety benefits or time costs from vehicle speed limiters? **Response:** In response to a petition from the American Trucking Association, NHTSA is currentl y estimating the safety impacts of speed limiters, and is the process of finalizing an anal ys is of the s afety benefits for the upcoming safe ty rule on VSLs. The agencies deferred adding statements in the HD final rule because it believed that discussions on any safety impacts would be better suited for the upcoming safety rule. However, the agencies will a dd language in the next versions of the preamble to clarify this issue. There are time costs associated with vehicle speed limiters such as the additional time required to move goods, or the loss of productivity , but at the same time there are fuel savi ngs attained b y driving at lower speeds at which engines are tuned to optimally perform. Even though, the elasticity between speed reduction and productivity loss has not been well defined in industry , the agencies anticipate that the incurred time cost w ill not outweigh the potential gains in fuel savings that will be achieved. The agencies base this position on a Canadian assessment of speed limiters that concluded the fuel savings due to the lower operating speeds outweigh any productivity

losses. Further, the general consensus among the OEMs is that a one percent decrease in speed might lower productivity by approximately

0.2 percent. Nonetheless, to offset any potential disbenfits associated with this technology , the agencies are finalizing the proposal in the final rule deferring the mandatory use of VSLs which directl y addresses concerns such as how to set a realistic application rate that avoids unintended consequences. 

## 40) **Tir e T**  **re ad Comment**  The agencies don’t seem to have responded to this point in the Preamble on page 124. Please***** E.O. 12866 Review**
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provide response to this comment: “That supplier also indicated that a correlation of a 20 percent reduction in rolling resistance achieved through tread depth redu ction 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 ‘safety’ related tradeoffs, such as traction (braking and handling) and tread wear when applying low rolling resistance technologies, tire suppliers consistently

responded that they

would not produce a tire that compromises safety when fitted in its proper application.” **Response:** The agencies have revised the preamble text as follows to specificall y ref erence the intent to gain a further, independent, science - based understanding of rolling resistance and traction correlation versus that received strictly from comments and discussion with tire suppliers: “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. As follow - up to this final rule, and in support for development of a separate F MVSS rule, NHTSA plans to conduct additional performance - focused testing (beyond rolling resistance) for medium - and heavy- duty trucks. This testing is targeted for completion toward the end of this year. The agencies will review this performance data when available in concert with any subsequent proposed rulemakings regarding fuel consumption and GHG standards for medium - and heav y- duty vehicles.” There are many way s to reduce rolling resistance. Reducing tread depth is one method, but not a method that would be chosen by any knowledgeable purchaser. We are not aware of any definitive work on weather - related effects on low rolling resistance commercial truck tires. Tire manufacturers have already introduced low rolling resistance steer and drive tires f or commercial trucks that perform well. Studies of passenger vehicle tires have found no evidence of weather related safety concerns for low rolling resistance tire models. (TRB special report 285, p. 4 - 5, p. 79 - 88). By

changing the compounds used in making the tire, the rolling resistance of light vehicle tires can be reduced while maintaining traction and tread - life. We believe the same will be true for heav y truck tires. 41) 

## Tir **e Mark et Comment**  Commenters recommend that the agencies either delete this sec tion on page 327 or provide basis for this claim. Itseems to indicate that market works after regulation but not before. Is it because of in - use standards? What is the basis for this? Commenters recommend it be deleted: “We believe that as LRR tires bec ome 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 purchasi ng these tires. The inventory modeling in this final action reflects the continued use of LRR tires through the life of the vehicle.” **Response:** The primary

barrier to the introduction of more fuel efficient tire designs into the truck market is the upfront costs of tire development and upfront capital costs for new production machinery (e.g., new tire molds). Once manufacturers have sunk these c osts into new tire designs and***** E.O. 12866 Review**
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production facilities in order to meet our vehicle standards, there is little barrier for bringing these better products into the replacement tire market as well. The incremental cost for these tires is quite small and in so me cases may in fact be negative. In a meeting with one of the largest tire OEMs, we asked for an estimate of the production cost increase to reduce the rolling resistance of a particular tire. The response: if we can’t achieve a manufacturing cost reduction on a piece basis when we redesign a new tire, we aren’t doing our jobs right. We do not believe this to be these case in for all tires, reflecting that low rolling resistance tires are expected to use slightly more expensive rubber compounds, but we do believe the OEM in their general statement that once a decision is made to redesign a tire, opportunities exist to not only improve the performance compared to the tire being replaced but also to improve the manufacturing process to lower some aspects o f manufacturing costs. Our regulations will certainl y not remove the barrier to market represented b y upfront costs for designs and new capital, but it will effectivel y force OEMs to make these investments and, having done so, should lead to better tires not only

for new vehicles but in the replacement tire market as well. We will update the preamble to better explain our reasoning. 

## 42) **Te st V** 

**ariability** Commenters request further clarity on what this means. Please elaborate from page 126 in Preamble: “The age ncies con cluded that although laboratory- to - laboratory and test machine - to - test machine measurement variability exists, the level observed is not excessive relative to the distribution of absolute measured RRC performance values and relative to the propose d standards. Based on this, the agencies concluded that the test protocol and the proposed standards are reasonable for this program.” **Response:** The text has been rewritten as follows: “The agencies also reviewed the RRC data from the tires that were tes ted at both the STLand Smithers laboratories to assess inter- laboratory and test machine variability. The agencies conducted statistical analysis of the data to gain better understanding of lab - to - lab correlation and developed an adjustment factor for data measured at each of the test labs. When applied, this correction factor showed that for 77 of the 80 tires tested, the difference between the original RRC and a value corrected RRC was 0.01 kg/metric ton. The values for the remaining three tires were 0 .03 kg/metric ton, 0.05 kg/metric ton and 0.07 kg/metric ton. Based on these results, the agencies believe the lab - to - lab variation for the STL and Smithers laboratories would have very small effect on measured RRC values. Further, in anal yz ing the data, the agencies considered both measurement variability and the value of the measurements relative to proposed standards. Based on these results , the agencies concluded that although laboratory- to - laboratory and test machine - to - test machine measurement varia bility exists, the level observed is not excessive relative to the distribution of absolute measured RRC 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. ” 

## 43) **Inno vati** **ve Credit Submissions**  Could EPA describe for the reviewer the process for reviewing and vetting manufacturers’***** E.O. 12866 Review**
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submissions for extra credit under the provision for “innovative technologies?” How will the agency make u se of public comment? Is there a threshold (in terms of potential GHG reductions) for awarding a manufacturer credit for developing an innovative technology? This approach, while seemingly well - intentioned, would appear to run the risk of requiring an extr emely large amount of manufacturer and EPA effort just to determine whether a new technological advance qualifies for credit under the program. Is there no simpler way to reward technological innovation? **Response:** The a gencies agree that the process could require significant effort to provide due diligence in making a determination regarding whether a technical approach is in fact valid and performs as expected. The public process is necessary as it helps to ensure a level playing field for all market participants should there be an aspect of the technology or testing method for which other manufacturers or stakeholders would have concerns. As an example, if a proposed test method inappropriately advantages one system design over another without accuratel y reflecting real - world performance, the public process would help to inform the review. 

## 44) **Final R eports**  In several subsections throughout Section V, the rule attempts to describe the requirements for final reports (pp. 298 - 299, 317 - 319, 340 - 342, 356). The reader found these sections confusing because they did not clearly state whether EPA has acceded to commenters’ requests to modify the requirements for final reports. Are manufacturers allowed to combine EOY and final reports? Or is the NPRM proposal left unchanged? Please describe the need for both of these reports, and how manufacturers are supposed to comply. Also, the subsection “Compliance Reports” and Table V - 5 on pp. 356 - 357 appears to be out of place. It could be moved to p. 351, just before Sectio n F on “General Regulatory Provisions.” **Response:** The agencies are adding clarification in the final rule to describe the intent for providing final reports as proposed in the NPRM. The NPRM proposed for manufacturers to provide two ty pes of year end reports; End - of - the - Y ear (EOY) reports and F inal R eports. The agencies are also adding a number of changes to the required content of the reports and to the timing of reports to simplify submissions as requested by commenters. This includes allowing all applicable parties required to submit, the option to provide a combined EOY report 90 day s after the end of the model year and creates a consolidate d format for which manufacturers can s ubmit one single report to satisfy

both agencies reporting requirements . Additionally , F inal Reports will be required 270 day s after the end of the model ye ar. These dates are consistent with the criteria pollutant program to avoid confusion. The two di stinct reports provide the agencies with a report on the fleet performance of the manufacturers and help the agencies to identify those manufacturers that may

have a credit deficit. The F inal R eport s allow manufacturers to opportunity

to reconcile any

dis crepancies or errors it may have detected in its initial EOY report. Consistent with the NPRM, the final rule will also allow m anufacturers that are in good***** E.O. 12866 Review**
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credit standing to request to not submit the EOY report, as long as it plans to submit the Final Report in a timely

manner. Also, the final report may be unchanged from the EOY report. 

## 45) **Te sting F**  **ees** What is EPA’s current thinking for when and how to update certification and compliance testing fees, given the additional demands as a result of this HD and MD trucks GHG rulemaking? **Response:** The Agency

is not modifyingits fees provisions in this final rule and is determining how to appropriatel y address this issue in the future

. 

## 46) **Ty po 1**  Page 281: In the first sentence of the paragraph that begins with, “Furthermore...” the verb is recommended to be “adopted.” **Response:** We changed to “are adopting” in section IV.B.3.b. 

## 47) **Ty po 2**  Page 316: The first sentence of the last paragraph could say, “EPA is requiring finalizing that engines...” **Response:** We deleted “finalizing” in section V.C.3.d. 

## 48) **Ty po 3**  Page 317: The second sentence of the fourth paragraph could say, “These alternative standards are defined as 65 percent below...” **Response:** We revised V.C.3.f. to be consistent with the heavy- duty engine re gs at §1036.620(a). “These alternate standards are defined as a certain percentage below a baseline value established from their corresponding 2011 model - ye ar products. For instance, the alternate emission standard for light and medium heav y- duty FTP - certified (vocational) engines is equal to 0.975 times the baseline value. ” 

## 49) **Ty po 4**  Page 341: The first sentence in the third paragraph could say, “One commenter (Volvo) reque sted that the agencies simply simplify the reporting...” **Response:** We changed to “simplify” at V.D.4.b. 

## 50) **Ty po 5**  Page 417: The first sentence of the third paragraph could say, “...however, that the gap***** E.O. 12866 Review**
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between actual investment in fuel efficiency...” **Response:** We deleted “that” in VIII.A.1. 

## 51) **Ty po 6**  Page 484: This sentence appears twice in the first paragraph: “The petroleum refinery industry employed about 65,000 people in the U.S. in 2009, the most recent year that employment estimates are available for this sector.” **Response:** We deleted duplicate text in VIII.N.1. 

## 52) **Job Cr eation**  Page 489: Commenter suggests removing: “Given job creation as a result of the $1.2 billion ($2009) in fuel savings...” **Response:** As we discuss earlier, we believe it is impo rtant to acknowledge potential job impacts from this regulation. This last sentence in the section provides a very measured summary of the preceding section tying all of the elements together. We think it is needed to conclude the section and is certain ly full y supported by the preceding text. 

## 53) **SBA Declaration** Commenter notes that the language in the preamble at p.34 (“Each 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.”) is inconsistent with the plain reading of the text of the rule (“Manufacturers meeting the small business criteria specified for “Gasoline Engine and Engine Parts Manufact

uring” or “Other Engine Equipment Manufacturers” in 13 CFR 121.201 are not subject to the greenhouse gas emission standards in § 1036.108. Qualifying manufacturers must notify the Designated Compliance Officer before importing or introducing into U.S. comm erce excluded engines. This notification must include a description of the manufacturer’s qualification as a small business under 13 CFR 121.201. You must label your excluded vehicles with the statement: “THIS ENGINE IS EXCLUDED UNDER 40 CFR 1037.150(c).” in order for this exclusion to be valid.”) or language in other places in the preamble. This seems not to be a “clarification” but a substantive change to the requirements. Interagency commenter recommends allowing the exemption to operate by notice. If formal determinations are to be required, commenters recommend that the agencies allow exemption by notice to operate while formal determination is pending, and the agencies commit to a timeframe for response and a process for appe al to SBA for a determination (since it is an SBA regulation being applied). In any case, interagency commenter believes that a single mention of this new requirement is not sufficient notice to small businesses, particularly given the number of other plac es in the preamble and the rule where the small business exemption is discussed without mentioning such a requirement. **Response:******* E.O. 12866 Review**
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The agencies will be adding consistent language to the next draft of the final rule’s preamble discussion and the regulatory t ext. The language will now indicate that only a letter of acknowledgement will be sent to exempted manufacturers meeting SBA’s qualification in 13 CFR 121.201 but that the agencies will reserve the right to review and challenge a small manufacturers quali fications for exemption. The agencies’ focus is on reducing any potential gaming that may

occur such as a large business selling their product through an exempted small business. 

## 54) **Small Entities and Sales**  Interagency commenter also has concerns about the indirect effects of this rule on small entities that purchase HD vehicles. Small businesses have asserted that the increase in the price of HD vehicles will lead to delays in purchasing replacement vehicles, which would reduce the expected benefits of GHG emission standards in any particular year. Logically, delay makes sense. Small entities will experience an increase in the immediate purchase price. If funded on credit, lenders do not necessarily increase credit availability based on future fuel savings. (The analogy is that a bank did not increase the amount it was willing to lend someone for a mortgage simply because the homeowner was going to buy a house close to the Metro or because the house had double - paned windows.) If self - financed, investments would be delayed if on a fixed budget for capital outlays. Only firms large enough to have a continuous capital investment cycle will be able to monetize the fuel savings and incorporate the fuel savings into their investment stream. In addition, firms that buy new and re - sell after a few years can monetize fuel savings through the sale price of the used vehicle. Firms that use the vehicle through its useful life don’t have that option. Since small firms cannot easily monetize future fuel savings, the increase d cost of HD vehicles should lead to a reduction in sales. Incorporating this reduction in sales into the analysis would reduce the projected benefits of the rule. This is a separate effect from the “rebound” effect. There is a further disincentive to purchase new vehicles if they have VSLs implemented or have other technologies installed that may limit the useful life or carrying load. However, the RIA asserts that there will be an increase in sales. What is the agencies’ basis and evidence for claim that rule will increase sales? **Response:** Pre - buying of new trucks to avoid the higher costs associated with regulation is more likely to occur with regulations, such as those reducing particulate matter, that provide no private benefits to truck owners. In this program, because of the expected private benefits, pre - buy is possible but less likely . The effect of the rule on truck sales depends on why truck buyers have not in the past adopted fuel - saving technology . As discussed in Preamble Section VIII.A., a number of hy potheses have been raised for this “efficiency gap,” and the effect of this rule on truck sales depends on the relative roles of these (and any other) h ypotheses. We do not have sufficient evidence to evaluate the relative roles of these hyp otheses in the truck purchase decisions, and thus make no claims about the direction of truck sales. Sales increase in the baseline, based on AEO2011 projections from EIA of increasing vehicle sales with increasing annual VMT due to economic growth. The RIA does not claim increases in sales due to the program. Instead, it maintains the baseline assumption of fleet sales. See response to #55 fo r more on the relationship of VMT to sales. The argument presented for reduced sales is a constrained capital market that does not take into account reduced fuel***** E.O. 12866 Review**
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expenditures. We expect this to be less of a problem in the commercial sector, where truck p urchasers can show lenders their expected returns from an investment, than in the consumer market, where consumers are judged based on income, not spending patterns. (Nevertheless, utilities often support consumer investments in double - paned windows, beca use of the energy savings that will result.) The investments in fuel savings in this rule have short pay back periods: about one year for a vocational vehicle or a combination tractor, about 3 ye ars for a heav y- duty pickup. Even if the resale market does not put much of a premium on improved fuel efficiency , the initial owner is likely to recoup the initial increase in purchase price before the vehicle goes on the resale market. An owner who keeps the vehicle for its useful lifetime is expected to recou p the technology

costs via the fuel savings, not the resale market. Vehicle speed limiters (VSL s) are not specifically required for compliance. As a result, a buyer of a truck with a VSLwill be expected to have taken into account the effects of the VSL on the vehicle resale price. The cost estimates for the technologies in the program take into account the costs needed to maintain carrying load and other vehicle attributes. If purchasers decide to buy trucks with reduced attributes to lower costs, inst ead of buyi ng full functionality with the costs estimated here, they

should also be expected to have considered the resale market in their decisions. 

## 55) **Dela y of**  **Sales** Commenter requests supporting analysis for increase in sales. What portion of the costs and benefits of this rule are driven by this increase in sales? Have the agencies responded to the assertion by independent truckers that fleet turnover will be delayed by this rule? If so, please provide specific page numbers? If not, commenter requests clarity on why it is missing. **Response:** The agencies’ anal ys is makes no projection of increases or decreases in vehicle sales due to the rule. A s noted in response to #54, sales increases are from AEO2011 projections from EIA of increasing vehicle sales with increasing annual VMT due to economic growth, and are included in the baseline. This annual increase in sales is reflected in both the baseline and control case anal ys es. This does highlight one inconsistency in the rule. EIA assumes that increasing VMT with economic growth is achieved through increases in the number of commercial trucks in operation. In the rule anal ys is, we have made a projection of VMT rebound due to the regulation but have not estimated the increase d vehicle sales necessary to all ow for the projected increase in VMT. Given hours of service regulations, it seems safe to assume that the additional VMT is done b y additional drivers. Unless the additional drivers are using the trucks in hot seat operations around the clock, it seems most likely that the additional VMT in the rebound anal ys is is met through additional truck sales. The agencies have not accounted for these additional truck sales in our anal ys is. As discussed in response to #54, pre - buy and purchase delay

are possible outcomes of the rule, but we expect them to be less likely than in rulemakings that limit criteria pollutants, because***** E.O. 12866 Review**
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there will be private benefits associated with fuel savings. 

## 56) **Human F actor**  Commenters request clarity on whether the effect of human drive rs has been incorporated into the expected benefits. Industry and the agencies readily acknowledges that the most effective fuel efficiency technology is driver training, and that a well - trained driver can be more fuel efficient than any one of the technol ogies alone. Presumably, that also means that a well trained driver will be able to use a vehicle in a way that negates the fuel economy benefits of this rule in favor of power, speed, or both. Similarly, if a choice of tires can improve fuel economy, repl acement with a different set of tires will reduce fuel economy. Do the agencies incorporate a human factor into their analysis? **Response:** The technologies that the agencies expect to be used to comply with the GHG emissions and fuel consumption standards will reduce the emissions and fuel consumption regardless of the type of driver. The technologies reduce the energy required to move the vehicle on the road or make the engines more efficient at burning fuel. The technologies do little to change how a dr iver behaves so we would not expect a shift in driver behavior, therefore, we have not incorporated a shift in quantification of the projected impacts of the rule. While the agencies encourage the exclusive use of LRR tires throughout the life of heavy 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. 

## 57) **Timing of In -**  **Use** Commenter suggests that the agencies clarify in the rule summary when these standards apply during the lifetime of HD vehicles. In other words, an explanati on that the EPA standards apply to both new and “in use” vehicles and how this works. Commenters recommend that agencies also clarity on pg. 50 (“What Vehicles Would be Affected?”) **Response:** The following text was added at the beginning of the “What Vehicles Would be Affected?” section: “In general, these standards will apply for model year 2014 and later engines and vehicles, although some are delayed until 2016 or 2017. They will apply

throughout the useful life engine or vehicle, just as exi sting criteria emission standards appl y throughout the useful life.”***** E.O. 12866 Review**
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## 58) **RV ’s**  Commenters recommend that Pg. 8 clarify that, while NHTSA’s standard will not cover RVs, EPA’s will cover them. **Response :**  Added language in section I. A. to clarify that EPA is regul ating RV’s. 

## 59) **California** When California is mentioned on pg. 9 - 10, it would be helpful to provide a quick explanation of the fact that California has unique authority to set emission standards. Also, if the agencies consulted with other states beside California, it may be worth mentioning this outreach here as well. **Response:** The agencies will add a note to the preamble regarding California’s authority. 

## 60) **Tr ailer Program**  Pg. 12

– This may be confusing: “While we are deferring action today on setting trailer s tandards, the agencies are committed to moving forward in a timely manner to create a complementary regulatory program for trailers.” To the extent possible, the agencies are recommended by commenters to clarify what is meant by moving forward on a complem entary regulatory program for trailers . **Response :**  We revised page 12 (I.A.) as follows: “While we are deferring action today on setting trailer standards, the agencies are committed to moving forward in a timel y manner to create a complementary regulatory program for trailers that would complement the current vehicle program .” 

## 61) **Timing of Future R ules**  Clarifying question: Do the agencies have a timeline in mind for setting standards for trailers? Will the industry and other stakeholders be surpris ed by what seems to be a commitment to set trailer standards before the next phase of the national HD program (pgs. 12 and 500)? **Response:** The agencies have not yet developed a complete rulemaking timeline for trailer regulations with a schedule for an NP RM or goal for an FRM. We do intend to begin our initial technical work and early stakeholder outreach soon after the completion of this rule. We do not expect stakeholders to be surprised by the language in this final rule. The NRPM was meant to functi on similar to an Advanced Notice making the stakeholder community aware of our interest and eliciting their early input. We believe it has served that function and that the stakeholder community is fully expecting the agencies to begin this work. We will also continue to engage with industry and other stakeholders on trailer strategies through our***** E.O. 12866 Review**
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SmartWay program. 

## 62) **Pick up Standards**  Pages 25 - 29 summarizing the standards for heavy - duty pickup trucks and vans do not include a chart or paragraph that lists the actual standards. For consistency with the sections that precede and follow on tractor trailers and vocational vehicles, commenter suggests adding this missing piece. **Response:** Unfortunately, the approach to standards being taken for heavy - duty pickups and vans does not lend itself to a more concise statement of the standards levels than what is already indicated in the figures and tables. This is because each manufacturer will have its own fleet average standar d in each model year, based on its mix of vehicles produced in the model year, and each vehicle in the fleet will have its own work factor that in turn contributes to forming the manufacturer’s unique fleet average standard. 

## 63) **Net Benefits** The summary of cos ts and benefits (pgs. 35 - 38) would benefit from greater up - front clarity about what is and is not included in the overall estimates of costs and benefits. Also, Table I - 4 could explain more clearly what is included in “benefits” (why is fuel savings not in cluded, for example). Table I - 4 is also confusing, because “net benefits” cannot be easily derived from the benefit and cost numbers listed within that column. **Response:** EPA originally had fuel savings included in the Program costs line item because EPA c onsiders fuel savings to be part of the costs (or savings) of a program. NHTSA has traditionally considered fuel savings to be a benefit rather than a cost (or savings). To help reduce confusion and to make clear the magnitude of the fuel savings, it has been agreed that fuel savings would be included in summary tables as a separate line item . The agencies will add text to provide greater up - front clarity about what is and is not included in the cost benefit summary tables (pp. 35 - 38 of the preamble). H owever, it is clear that in Table I - 4, fuel savings are presented as its own category and that, when combined with program costs and benefits, yields total net benefits which should be easy for readers to calculate from the information provided in the tabl e. Note also that subsequent tables in this section clearly indicate what is included in the cost and benefit categories. 

## 64) **Cr edit Deficits**  The summary section on “Program Flexibilities” (beginning on pg 38) does not clearly discuss the rule’s provisions th at would allow manufacturers to carry forward credit deficits (the flip side of banking) and would benefit from additional discussion. Please include this discussion .***** E.O. 12866 Review**
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**Response:** Stringency for the alternatives has been selected to allow a manufacturer, through the use of the credit and deficit carry - forward provisions that the agencies are also finalizing, to rely on the same product plans to satisfy either of these two alternativ es, and also EPA requirements. Under the provisions of the ABT program in this action EPA and NHTSA are allow ing manufacturers to carry forward credits and deficits for a set period of time. We contemplate allowing manufacturers of vehicles or engines to carry forward a deficit for up to three years when there is less lead time available. If a manufacturer cannot meet an applicable standard in a given model year, it may make up its shortfall by overcomplying in a subsequent year, called reconciling a cre dit deficit. NHTSA is also allowing manufacturers 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. 

## 65) **FFV’s** Pg. 115 - 1 16: Commenter suggests revising the explanation for the agency’s selected approach to account for FFVs. The current explanation that the light duty program’s 2012 - 2015approach is not appropriate because “the HD sector does not have the incentives mandated in EISA for light - duty FFVs, and so has not relied on the existence of such credits in devising compliance strategies for the early model years of this program” is not particularly powerful and is somewhat confusing. Commenters instead recommend that the agencies simply explain how the chosen accounting approach demonstrate s fuel use and associated GHG emissions is logical and benefits low - GHG fuels. **Response:** The cited draft preamble language, repeated from the NPRM, is intended to explain why the agencies are not taking the approach used in the light - duty vehicle rule. Judging by the public comments we received on this, it is a relevant issue for a number of stakeholders. We are adding further explanation to this section in response to this inter - agency comment. 

## 66) **DOE PEF** Clarifying questions: Pg. 116 explains that NHTSA will determine fuel consumption of dedicated alternative fuel vehicles using the DOE petroleum equivalency factor. How will EPA determine GHG emissions of dedicated alt fuel vehicle s? Why did NHTSA opt for using the PEF rather than methodology similar to the approach used for natural gas vehicles (deriving a fuel equivalency based on CO2 emissions)? Does the DOE - derived PEF include the 0.15 conversion factor incentive that the agenci es reject using for NGVs on pg. 264? **Response:** The text on Page 116 is from an earlier version of the preamble and was meant to be deleted. It should have been replaced with text explaining that NHTSA is not adopting a petroleum equivalency

method for de termining fuel consumption from alternative fuel vehicles, but rather is finalizing to calculate fuel consumption from C02 emissions as is described on page 264 of the preamble. We will correct the text so that it is consistent with the approach described on page 264 which rejects the 0.15 conversion factor.***** E.O. 12866 Review**
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## 67) **NG V’s**  Pg. 264. The discussion of NGVs (first full paragraph on pg. 264) includes a reference to FFVs, which seems to be a typo . **Response:** Agreed. Corrected. 

## 68) **Earl y Cr**  **edits** The description of early credits (beginning on pg. 265) touches a few times on the concerns about providing windfall credits to companies with low baseline emissions/consumption levels. Commenter suggests that the agencies explain more clearly and succinct ly here why the early credit program being finalized will not provide windfall credits . **Response:** Agreed. Clarifying language is being added to this section. 

## 69) **Multiplier** Clarifying question: Did the agencies do any analysis or rough calculations as the b asis for concluding that providing a 1.5 multiplier for early credits would generate enough additional early reductions (beyond BAU) to outweigh the loss of GHG/efficiency benefits that will be created by adding extra credits to the program? **Response:** Th e agencies did not perform an analysis as the basis for proposing the 1.5 multiplier. It was felt that using a 1.5 multiplier strikes a reasonable balance between the need to provide a meaningful incentive for manufacturers to make the investment in accel erating technology development work and the need to avoid significant over - crediting of these investments to the detriment of investments made later to meet the standards. Comments provided in response to the proposal reinforced the agencies’ belief that the 1.5 multiplier provides the appropriate balance. See also response to # 6) . 

## 70) **Non -** 

**Ta ilpipe EV Emissions**  Pg. 269 - 270

– On the issue of how electricity - related emissions of EVs should be treated, commenters strongly recommend that the agencies include non - tailpipe emissions for the purpose of setting standard and for compliance as well. At the very least , commenter believes it is important to preserve options for future rulemakings and to avoid the impression that EPA/NHTSA have already made up their minds about how non - tailpipe emissions should be treated going forward. While the last sentence in the paragrap h at the top of pg. 270 (“We also recognize that the ongoing EPA/NHTSA rulemaking...”) accomplishes this goal, the preceding sentence seems to go too far in signaling the agencies inclination to deal only with tailpipe emissions by referencing “consistency with past practice...whereby we treat all vehicles equally.”***** E.O. 12866 Review**
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Commenter suggest revising this sentence to avoid signaling that any other approach would not be viewed as treating all vehicles equally (and to clarify that counting EVs as 0 g/mile is to provi de an incentive for advanced technologies, which the agencies have said previously in the light duty context). **Response:** The relevant paragraph on p 269 is revised as follows: “ After considering these comments, we have decided to 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. The agencies recognize that the ongoing EPA/NHTS A 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 heav y - duty sector. ” 

## 71) **Ta ilpipe**  **and Upstr eam E**  **dits** Page 10 (and in RIA where appropriate): commenters provide suggested edits in red: “...As in the light- duty vehicle rule establishing CAFE and GHG standards for MYs 2012 - 2016 light- duty vehicles, EPA’s and NHTSA’s final standards for the heavy - duty sector are largely harmonized with one another due to the close and direct relationship between improving the fuel efficiency of these vehicles and reducing their CO 2 tailpipe emissions. For all vehicles that consume carbon-based fuels, the amount of CO 2 emitted from the tailpipe is essentially constant per gallon for a given type of fuel that is consumed. The 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 from the tailpipe into the air. The technologies available for improving fuel efficiency, and therefore for reducing both CO 2 emissions and fuel consumption, are one and the same. [1] Because of this close technical relationship, NHTSA and EPA have been able to rely on jointly- developed assumptions, analys es, and analytical conclusions to support the standards and other provisions that NHTSA and EPA are adopting under our separate legal authorities. The agencies 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 - duty sector. The agencies recognize that biofuels , such as biodiesel and ethanol, will play an important role in reducing the nation‘s dependence on foreign oil, thereby increasing domestic energy security. The agencies recognize that biofuels have unique GHG emission characteristics. When considered on a lifecycle basis (including both tailpipe and upstream emissions), the net GHG emission impact of individual biofuels can vary significantly from both petroleum - based fuels and from one biofuel to another. EPA‘s Renewable Fuel Standard program, as modifie d by EISA, examined these differences in lifecycle emissions in detail. For example, EPA found that with respect to aggregate lifecycle emissions including non - tailpipe GHG emissions (such as feedstock growth, transportation, fuel production, and land use) , lifecycle GHG emissions in 2022 for biodiesel from soy, using certain advanced production technologies, are about 50 percent less than diesel from oil. The agencies recognize that in***** E.O. 12866 Review**
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the case of biofuels, 

### ―upstream emissions include not only GHG emission s, but also any biological sequestration that takes place. For purposes of this discussion, the term



### ― upstream emissions, when considered in the case of biofuels, should be construed to encompass both GHG emissions and sequestration. The agencies note that to the extent future policy decisions involve upstream emissions, the agencies will need to consider not only upstream emissions from electricity production, but also the unique emission characteristics associated with biofuels...” **Response** : Revised paragraph in I.A. (p 10 of 6/1 OMB version) as follows: “ For all vehicles that consume carbon - based fuels, the amount of CO 2 exhaust emissions is essentially constant per gallon for a given type of fuel that is consumed. Th e 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 that truck emits directly into the air. ” Added clarifying statement in this same sectio n (I .A) as follows: “ This program is based on standards for direct exhaust emissions from engines and vehicles. In characterizing the overall emissions impacts and benefits of the program, emissions from upstream sources have been included . In this actio n, the agencies use the term upstream to include emissions from the production and distribution of fuel. A summary of upstream emissions is presented in Section VI .C of this preamble, and further details are available in Chapter 5 of the RIA. ” 

## 72) **Ta ilpipe 1**  Page 23: Table I - 2: Heavy - duty Combination Tractor EPA TAILPIPE - ONLY Emissions Standards (g CO 2/ton- mile) and NHTSA Fuel Consumption Standards (gal/1,000 ton - mile) **Response:** We don't see a need to use the term "tailpipe" throughout the document. Instead a clarifying statement has been added to Section I .A. 

## 73) **Ta ilpipe 2**  Page 23:“...EPA’s engine - based CO 2 standards for tailpipe emissions 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 heavy - duty engines...” **Response:** We don't see a need to use the term "tai lpipe" throughout the document. Instead a clarifying statement has been added to Section I .A. 

## 74) **Ta ilpipe 3**  Page 50:“...technologies that would reduce CO 2 tailpipe emissions and fuel consumption and that are judged to be feasible and appropriate for these ve hicles and engines through the 2018 model year...”***** E.O. 12866 Review**
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**Response:** We don't see a need to use the term "tailpipe" throughout the document. Instead a clarifying statement has been added to Section I .A. 

## 75) **Ta ilpipe 4**  Page 63: Table II - 1, replace “CO2 grams” with Ta ilpipe CO2 grams” **Response:** We don't see a need to use the term "tailpipe" throughout the document. Instead a clarifying statement has been added to Section I .A. 

## 76) **FFV W**

**eighting** Page 114: “... FFVs, and so has not relied on the existence of such credits in devising compliance strategies for the early model years of this program. See 74 FR at 49531. In fact, manufacturers have not in the past produced FFV heavy - duty vehicles. On the other hand, we did seek comment on how to properly recognize the impact of the use of alternative fuels, and E85 in particular, in HD pickups and vans, including the proper accounting for alternative fuel use in FFVs in the real world. [2] See 75 FR at 74198. FFV p erformance will be determined in the same way as for light - duty vehicles, with a 50 - 50 weighting of alternative and conventional fuel test results through MY 2015, and a manufacturer- determined weighting based on estimated fuel use over the useful life of the vehicle after MY 2015 (defaulting to an assumption of 100 percent conventional fuel use). See 75 FR at 25339. For dedicated alternative fueled vehicles, NHTSA will require that vehicles be tested with the alternative fuel, and a petroleum equivalent fu el consumption level be calculated based on the Petroleum Equivalency Factor (PEF) that is determined by the Department of Energy. **Response:** The agencies have revised the preamble text to more accuratel y reflect the light - duty approach being followed for HD FFVs: “ FFV performance will be determined in the same way as for light - duty vehicles, with a 50 - 50 weighting of alternative and conventional fuel test results through MY 2015, and an EPA - or manufacturer - determined weighting based on real world use of the alternative fuel after MY 2015 (defaulting to an assumption of 100 percent conventional fuel use). ” 

## 77) **Ta ilpipe 5**  Page 128: Table II - 14, replace CO2 emissions with Tailpipe CO2 emissions. **Response:** We don't see a need to use the term "tailpipe" throughout the document. Instead a clarifying statement has been added to Section I .A. 

## 78) **Ta ilpipe 6**  Page 202: Table III - 6, replace “CO2 grams” with Tailpipe CO2 grams”***** E.O. 12866 Review**
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**Response:** We don't see a need to use the term "tailpipe" throughout the document. Instead a clarifying statement has been added to Section I .A. 

## 79) **Upstream from EV’s** Page 269 - 270: “...The proposal also solicited comment on the handling of upstream GHG emissions. Some commenters argued that EPA should maintain its traditional focus in mobile source rulemakings on vehicle tailpipe emissions and leave the consideration of GHG emissions from upstream fuel production and distribution-related sources such as refineries and powerplants to EPA regulatory programs 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 maintain consistency with past practice for setting vehicle emissions standards under Clean Air Act section 202(a)(1), whereby we treat all vehicles equally, 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 followon rulemaking for the heavy duty sector. The agencies 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 rel evant to the planned follow - on rulemaking for the heavy - duty sector. The agencies recognize that biofuels, such as biodiesel and ethanol, will play an important role in reducing the nation‘s dependence on foreign oil, thereby increasing domestic energy security. The agencies recognize that biofuels have unique GHG emission characteristics. When considered on a lifecycle basis (including both tailpipe and upstream emissions), the net GHG emission impact of individual biofuels can vary significantly from both petroleum - based fuels and from one biofuel to another. EPA‘s Renewable Fuel Standard program, as modified by EISA, examined these differences in lifecycle emissions in detail. For example, EPA found that with respect to aggregate lifecycle emissions including non- tailpipe GHG emissions (such as feedstock growth, transportation, fuel production, and land use), lifecycle GHG emissions in 2022 for biodiesel from soy, using certain advanced production technologies, are about 50 percent less than diesel from oil. The agencies recognize that in the case of biofuels, 

### ―upstream emissions include not only GHG emissions, but also any biological sequestration that takes place. For purposes of this discussion, the term



### ― upstream emissions, when considered in the case of biofuels, should be construed to encompass both GHG emissions and sequestration. The agencies note that to the extent future policy decisions involve upstream emissions, the agencies will need to consider not only upstream emissions from electricity production, but also the unique emission characteristics associated with biofuels. ” **Response:******* E.O. 12866 Review**
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Preamble Section IV.B.2.a on p 269 is revised as follows: “ After considering these comments, we have decided to 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. The agencies 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 heav y - duty sector. ” The agencies also agree to insert the sugges ted edits in RIA Chapter 5, Section 5.3.3, as follows: **5.3.3 Calculation of Upstream Emissions** “The term “upstream emissions ” refers to air pollutant emissions generated from all crude oil extraction, transport, refining, and finished fuel transport, sto rage, and distribution; this includes all stages prior to the final filling of vehicle fuel tanks at retail service stations. The details of the assumptions, data sources, and calculations that were used to estimate the emission impacts presented here can be found in the Technical Support Document and the docket memo, “Calculation of Upstream Emissions for the GHG Vehicle Rule”, initially created for use in the Li ght - Duty Greenhouse Gas rulemaking. The agencies recognize the unique GHG emission characteristics associated with biofuels, and specificall y that in the context of biofuels, “upstream emissions ” include not only GHG emissions, but also any net biological sequestration that takes place. When considered on a lifecycle basis (including both tailpipe and upstream emissions), the net GHG emission impact of individual biofuels can vary significantl y from both petroleum - based fuels and from one biofuel to another. EPA’s Renewable Fuel Standard program, as modified by EISA, examined these differences in lifecycle emissions in detail. For example, EPA found that with respect to aggregate lifecycle emissions including non - tailpipe GHG emissions (such as feedstock growth, transportation, fuel production, and land use), lifecycle GHG emissions in 2022 for bi odiesel from soy , using certain advanced production technologies, are about 50 percent less than diesel from petroleum. The agencies note that to the extent future policy decisions involve upstream emissions, the agencies will need to consider the unique emission characteri stics associated with biofuels. More broadly , the agencies recognize that biofuels, including biodiesel, will play an import ant role in reducing the nation’s dependence on foreign oil, thereby increasing domestic energy security. ” 

## 80) **Ta ilpipe 7**  Page 357: “...All electric vehicles are deemed to have zero tailpipe emissions of CO 2 , CH 4 , and N 2 O...” **Response:** Revised Table V - 5 in Section V.F.4.c. as follows: “ All electric vehicles are deemed to have zero exhaust emissions of CO2, CH4, and N2O ”***** E.O. 12866 Review**
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## 81) **Climate Context** In summarizing the quantified climate change impacts of the rule on page 377, commenter suggests that the agencies provide context about how the HD program addresses climate change. **Response:** We have already included some context in the preamble:

 "The anal ys is projects that the preferred alternative of this program will reduce atmospheric concentrations of CO2, global climate warming and sea level rise relative to the reference case. Although the projected reductions and i mprovements 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. "

 "The projected reductions are small relative to the cha nge 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 expect ed from the program in the context of global emissions. "

 "As a substantial portion of CO2 emitted into the atmosphere is not removed by natural processes for millennia, each unit of CO2 not emitted into the atmosphere avoids essentially

permanent climate change on centennial time scales. Reductions in emissions in the near - term are important in determining long - term climate stabilization and associated impacts experienced not just over the next decades but in the coming centuries and millennia.[1] Though the magnitude of the avoided climate change projected here is small in comparison to the total projected changes, these reductions represent a reduction in the adverse risks associated with climate change (though these risks were not formall y estimated f

or 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 repeatable, consistent reductions relative to the reference case in changes of CO2 concentration, temperature, sea - level rise, and ocean pH over the next century ." However, we can make some of these points even more clear. We suggest changing the first paragraph to read: "The anal ys is projects that the preferred alternative of this program will reduce atmospheric concentrations of CO2, 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***** E.O. 12866 Review**
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projected climate change, they are quantifiable, directionall y consistent, and will contribute to reducing the risks associated with climate change. Climate change is a global phenomenon and EPA recognizes that this one national action alone will not prevent it : EPA notes this would be true for any given GHG mitigation action when taken alone. EPA also notes that a substantial portion of CO2 emitted into the atmosphere is not removed b y natural processes for millenni a, and therefore each unit of CO2 not emitted into the atmosphere due to this rule avoids essentiall y permanent climate change on centennial time scales ” 

## 82) **Hybrids** Page 1 - 39. The document incorrectly describes Plug - in Hybrids as “The third type of HD hybrid vehicle is a ‘plug - in’”. Hybrids can be electric or hydraulic as correctly mentioned. PHEVs simply mean that the battery can be recharged from a plug. They are in fact electric hybrids. New DRIA Chapter 1.8 text: The third type of HD hybrid design is a ‘p lug - in’ which operates on the same principle as the electric hybrid only adds the capability to recharge the hybrid battery using an external power source. These trucks can use electric power for auxiliary system power and operations and can have range - ext ended batteries as they can switch propulsive power to the diesel engine when the battery runs low. Typical applications for this type of vehicle include utility (powering the grid), small pickup and delivery trucks, and shuttle buses. Interagency commenter notes that this section has been removed from the DRIA, and the Table of Contents needs to be modified to reflect this. The draft final Regulation (pg 237) has not been changed to reflect agency response. **Response:** The agencies wil l update the RIA table of contents to reflect the latest RIA. The agencies will revise the text on page 237 such that it reads: “ The industry is currently developing many variations of hybrid powertrain systems. ” 

## 83) **Acce ptable Uncertainty**  Page 3 - 9, last paragraph. Commenter recommends that agencies include text to clarify that Acceptable uncertainty refers to the reduction in coastdown uncertainty that yielded a drag coefficient with approximately 5% standard error. Commenter notes that “ac hieve and acceptable” should be “achieve acceptable” **Response:** We agree and thank you for the correction. The additional text clarifying the intent has been added to the Regulatory Impact Analysis in section 3.2.2.1.3.***** E.O. 12866 Review**
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## 84) **Front al Ar**  **ea** Commenters recommend that agencies include the following clarification in RIA: For subsequent testing conducted off - site, the following methods were used to develop the frontal area.

 SAE J2263 analysis process requires the vehicle frontal area be measured for each tested configuration.  The process of measurement evolved through three phases for this program. Early HD vehicles were photographed in a parking lot and analyzed using a grid overlay method.  In an attempt to improve the process and results, LHD vehicles were phot ographed in front of a “green screen” with a high resolution digital camera with a long telephoto lens.  Finally, all additional HD vehicles were photographed against this green screen backdrop, inside of the shop with studio lighting and the camera placeme nt outside in an open field on adjacent. (all subsequent vehicles were measured using this method)  Photogrammetric computer software was used for the measurements for vehicles photographed using the “green screen method.”  The contractor sought to largely c omply with the methods described in EPA advisory Circular No. 73. Measurement of the frontal area of a tractor can be considered to be fairly accurate because it is based upon simple measurement of tractor geometry. More specifically, the area is comprise d of a series of length measurements of a static object (i.e. a tractor). However, the most important aspect of accurate Cd comparison is the consistent use of standard area. This importance arises from the fact that the area is used to convert the measure d drag forces to a normalized Cd and then used by the simulation to convert the Cd back to the drag force experienced by the vehicle. For comparisons of frontal areas, accuracy is dependent upon a clear, detailed protocol for which measurements to take. Examples can include which components to include (e.g., fender mirrors), factors that affect the ride height (e.g., tire inflation), and whether it is based upon the tractor’s geometry or a combination of the tractor and trailer geometry (in instances where the trailer may extend slightly beyond the dimensions of the tractor). **Response:** We agree and thank you for the clarification. The recommended text, along with additional clarifying text will be added to the RIA. Additionally, regulatory requirements will be clarified.