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

– Do Not Cite, Quote or Release During Review ***



# EPA and NHTSA **Responses to Interagency Comments on H**  **DV Phase 2 NPRM Preamble Received on June**  **4 , 2015**  Summary	of	Interagency	Working	Comments	on	Draft	Language	under	EO	12866	and	EO	13563

Interagency	Review.		Subject	to	Further	Policy	Review. **Interagency	Comments	on	U.S. Environmental	Protection	Agency	(EPA)	and	National**  **Highway	Traffic	Safety	Administrat ion	(NHTSA)	draft	proposed	rule	titled,	“Greenhouse	Gas**  **Emissions	and	Fuel	Efficiency	Standards	for	Medium -**  **and	Heavy -**  **Duty	Engines	and	Vehicles -**  **Phase	2.”		RIN	2060 -**  **AS16;	RIN	2127 -**  **AL52** Agencies	Responses :		Below	each	comment,	the	agencies	have	provided	r esponse. **General**  Is EPA assuming 100% deployment of the technologies from the Heavy Duty Phase 1 rule? Suggest that the agency take comment on the level of Phase 1 penetration as it does not appear that this has yet to be achieved in the market.  Response : As part of our baselines assumptions in assessing Phase 2, the agencies are assuming compliance with the performance

- based standards of Phase 1. However, we have revised some of our specific technology projections from Phase 1, based on the actual mix o f technologies manufacturers are using to comply with Phase 1 today. Examples include greater use of aerodynamic features than we projected in Phase 1 and lesser use of tamper

- proof vehicle speed limiters. In the NPRM we do already request this same info rmation on the same technologies

— just in the context of Phase 2.

 Suggest that EPA take comment on how representative the powertrain calibrations are that are used in GEM that would allow manufacturers the use this data instead of steady state fuel maps .  Response : This request for comment is already in Section II of the Preamble; especially in our requests for comment on the following: the proposed transient adjustment factor (1.05x for ARB Transient Drive Cycle

), the powertrain test option, and the alternate engine mapping test procedure.

 Pg 99 has some language on idle reduction. The commenter requests that the agencies include exemptions for manlifts and cranes. If an automatic engine shutdown is installed, idle reduction rules could potentially lead to safety issues for larger boom equipment as they require the engine to drive the hydraulic system and thus be able to move and raise/lower the manlift and crane.  Response : There is no mandate for idle shutdown in Phase 2. Phase 1 and Phase 2 are bo th performance

- based standards, so manufacturers will have a number of compliant technology paths available to them, including paths that do not include idle reduction strategies.

 Pg 51 discusses low rolling resistance tires. The commenter requests an exemption for vehicles that operate primarily off road (such as equipment on Rights of Way (ROW)). The commenting agency hashad issues in the past with EPA noise limitations due to some of the additions that were installed on

equipment to allow them to operate off road.  Response : Phase 1 and Phase 2 both have exemptions for off road vehicles in the regulations .
 For federal agency off road vehicle fleets, the ambiguity in the documents due to lack of specifics, especially for technology that isn’t commercial ly available yet, is concerning as the commenter does not know where any of this equipment would be placed on the vehicles. The commenting agency has vehicle travel height issues even today, and if aerodynamic or other components are added in response to this rule that reduce road clearance under the vehicle, it will have an negative impact due to potential damage to these systems and subsequent breakdown of off road use vehicles.  Response : Phase 1 and Phase 2 both have off road vehicle exemptions in the regulations. For vocational vehicles the agencies only regulate the chassis in Phase 1 and in Phase 2; therefore, in setting the proposed standards the agencies did not assume any aerodynamic improvements for these vehicles , and hence did not assume any additional aerodynamic technologies for any of these vehicles.

 The commenter i s concerned that more systems on these trucks means more training for our technician s and more maintenance for the systems in already tight budgets . As we serve the public, thi s will result in higher operational costs for our rate payers.  Response : These costs are included in the agencies’ Indirect Cost Multipliers (ICMs).

 Expansion of alternative fuel requirements with no commercial infrastructure could result in the agency having to put in place more alternative fuel infrastructure adding to our costs (i.e. our customers' cost) for both the facilities as well as their maintenance, n ot to mention the potential environmental impacts.  Response : In setting the final Phase 1 and proposed Phase 2 standards, the agencies assumed no shift in the relative fractions of different fuels used in the heavy

- duty marketplace. Any expansion of alternative fuel use would be voluntary and not a mandatory outcome of the proposed Phase 2 stan dards. **Payback Periods** The commenter requests the agencies to consider these technologies that would likely o ffer deeper savings although with higher paybacks.  VTO tractor

- trailer economic models assume a payback curve with a 1

- 2 year preferred payback (~84% of owners at 2 years or less). At 3 years, the adoption rate falls to 22%. However, the commenter’s models do not assume the forcing function of the regulation, instead relying solely on market forces.  Response : For the Final Rule we will consider this information, along with other relevant information we receive during the proposal’s comment period. For reference Preamble Section X.1.1 and Draft RIA Chapter 11.1.1 discuss the agencies’ considerations for the two baselines used for the analyses.
 For trailers, the ownership period is likely much longer. However, the trailers often are not owned by the same company that purchases/leases the tractor and pays the fuel bill. And again, the agency analysis has focused solely on market forces without the overlay of regulation.  Response : We project the market forces in our baselines, but we do assume additional technology would be installed to comply with the proposed standards, as well as for Alternatives 2, 4, and 5. We believe we have already accounted for the time of ownership and mil es travelled (

VMT ) of trailers in our analysis. For vocational vehicles, a six

- year payback may make economic sense because of the longer

ownership periods. However, this is a longer period than typical financial planning horizons, particularly for busin esses that operate with slim margins.  Response : For the Final Rule we will consider this information, along with other relevant information we receive during the proposal’s comment period. **Certification and Compliance Comments**  **Data.** Regulations and impact assessments are best supported by sound data and analysis. The age of the Vehicle Inventory and Use Survey (VIUS) data is well known, and there is the general belief that the market has changed considerably since the last survey (13 years ago). The re are additional issues with VIUS relating to sampling, selection, and the reliability of self

- reported data. It is not completely transparent how the forecasts were set beyond use of the MOVES model and DOT CAFE model. It was not clear how second purcha sers of vehicles were considered. Additionally, it is not clear what plans there are for in

- use confirmation of regulatory impacts, if any. Assuming VIUS survey updates are not available going forward, the commenter recommends that the agencies clarify the methodology used for sampling, forecasts, and whether pursuing some type of in

- use data collection or survey would have any practical utility.  Response : The agencies agree and have attempted to rely on the VIUS as little as possible. Basing the analysi s on current vehicle offerings and using updated forecasts of sales volumes and fleet mix have mitigated the impact of the VIUS’ age .  Response : MOVES uses the VIUS, in some part, for calculating various allocation factors including the distribution of vehicles by fuel type, source use type, regulatory class, and age as well as annual miles traveled over the lifetime of a vehicle. However, EPA does not use the VI US for national estimates of total vehicle populations and activity in MOVES. This data is taken from FHWA’s annual Highway Statistics report. Please refer to the HD phase 2 docket for MOVES documentation on fleet and activity data sources.  Response : All of the vehicles in the analysis are considered throughout the entirety of their useful lives, regardless of how many times they have been resold or which generation user is consuming fuel and emitting CO2.  Response : For Phase 1 EPA and NHTSA have been ind ependently testing vehicles, aerodynamics, tires, and engines to verify that manufacturers have been complying with the Phase 1 standards, and we intend to continue our in

- use compliance testing for Phase 2. For Phase 2 we also propose that manufacturers periodically conduct chassis dyno testing and submit that information to the agencies so that the agencies can monitor that the trends we expect to see via GEM are occurring at the full vehicle testing level.  Response : The agencies used the AEO 2014 refer ence case to validate baseline VMT for HD pickups and vans. The agencies will continue to seek additional data sources to validate vehicle usage assumptions until the next VIUS is released.

 **GEM.** The improved features and flexibility of t he GEM model are evident, yet the commenter note s that the usefulness of the tool is limited to technologists and suggests the agencies make it more layman friendly. The commenter notes that for customer guidance, the OEM simulation tools for specifying trucks for first

- purchasers will remain more accessible, detailed and accurate for real

world analysis than GEM. For buyers of used trucks, an online, user

- friendly truck simulation is not currently available.  Response : As described in Chapter 2 of the Preamble, GEM is a p urpose - built program for vehicle certification. There are commercial vehicle and engine simulation software packagesfor research and design purposes , and there are OEM

- supplied software packages for vehicle “spec’

- ing”. GEM is not intended to supplement or compete with these kinds of commercial software packages .
 **Transparency/on -**  **line tool (based on GEM).** We agree that analysis tools for trucking companies are very useful. However, it is not likely that GEM could form the basis of these tools. As a simulation model, it seems as the new version of GEM will require a lot of testing / analysis for the OEMs to get the required inputs. Users who are closer to the market would want something much simpler based on actual product offerings (like FuelEconomy.gov) but with pre

- loaded usage profiles. A significant step for truck operators achieving optimized fuel efficiency is getting the vehicle specified right for the intended job (engine, transmission, axle, etc). This step normally happens at the vehicle dealer.  Response : As described in Chapter 2 of the Preamble, GEM is a purpose

- built program for vehicle certification. There are commercial vehicle and engine simulation software packages for research and design purposes , and there are OEM

- supplied software packages for vehi cle “spec’

- ing”. GEM is not intended to supplement or compete with these kinds of commercial software packages. **Engine Targets and Test Procedures**  **Conversion factors.** It would be preferred to include conversions between various parameters such as g/hp

- h CO2 to efficiency or Brake Specific Fuel Consumption (BSFC).  Response : All requisite conversion factors are either specified in the proposed regulations or they are built into GEM and specified in the GEM user guide and GEM open source code, which will be available upon NPRM signature.

 **Undervalued Combustion.** Combustion optimization is reported as one of the smaller contributors to improved fuel consumption, even at the end of the rule period (2027). Overall, the language seems to short

- sell how essential combustion optimization is as an efficiency multiplier and in achieving criteria emissions requirements. Also this section does not adequately emphasize increasing cylinder pressures and Brake Mean Effective Pressure (BMEP) to achieve higher engine e fficiency. There is no mention of materials improvements or thermal management that is likely required to achieve higher engine efficiency. There is a notable absence of discussion of novel engine configurations or kinetic

- dominated combustion modes (HCC I, RCCI, etc).  Response : The agencies request that the commenter submit technical information and/or data to support these statements so that the agencies could consider revising our analysis for the final rule.  Response : The agencies did not include technologies in the feasibility analysis that are in very early stages of development and do not appear likely to be in production by 2027. For example, at the current level of development it is not clear that HCCI and RCCI technologies will be commercially available before 2027. The agencies will insert the following text into RIA 2: "Some technologies were evaluated but not included in the agencies’ technical feasibility analysis for the Phase 2 regulation since the agencies do not anticipate these technologies will be commercially available by 2027. For example, alternative combustion processes such as homogeneous charge compression ignition (HCCI), premixed charge compression ignition (PCCI), low

- temperature combustion (LTI), and reactivity controll ed compression ignition (RCCI) technologies were not included in the feasibility analysis for Phase 2. While these technologies show good indicated thermal efficiency, fuel savings over the entire range of engine operation is still a major challenge . Atthe current level of development it is not clear that the technologies will be in commercial production by 2027. This, however, does not preclude the use of the technologies for compliance should manufacturers develop and commercialize alternative combus tion or other approaches."

 **Undervalued Turbochargers.** The section understates importance of devices with higher efficiency and higher boost capability. The SwRI modelling showed that a 5% improvement in turbocharger efficiency would yield about 2% fuel consumption reduction. It is not clear why this was not addressed, noting that this is not the same or redundant with turbocompounding.  Response : The agencies concluded from research conducted by SwRI that there is limited application potential for improved turbocharger efficiency combined with turbocompounding. Since a combination of turbocompound and improved turbo efficiency would be effective for a narrow segment of the tractor market, the agencies did not assume broad application of the combination of technologies for compliance

 Response : We will insert the following language in RIA chapter 2: “Improved turbocharger efficiency when combined with turbocompounding was shown in the SwRI study to reduce fuel consumption while maintaining criteria emiss ions limits. Findings show that there is limited scope for improved turbocharger efficiency on engines which do not use turbocompound, because an increase in turbocharger efficiency would result in reduced or eliminated EGR flow which in turn would cause the engine to exceed NOx emissions requirements.” **“Alternative” Fuel Considerations**  **Natural gas engines.** Natural gas engines will have the same engine GHG standard as diesel engines with which they compete. Since the OEMs can now add their own engine map to GEM, we presume (but is not clear) that this includes natural gas engines so the certification can be the same as for diesel and gasolin e powered trucks, and noting that there was no natural gas engine map in Phase 1 GEM. However, we did not see this spelled out in the Notice of Proposed Rulemaking (NOPR).  Response : Vehicle manufacturers are required to generate and use an engine fuel map for GEM, regardless of the fuel used. This is unambiguous in the proposed regulations . **Gasoline -**  **fueled HD option.** Since these regulations cover vehicles out to at least 2027, the commenter recommends that the Agencies consider the emergence of high

- efficiency gasoline

fueled, but diesel

- platform engines that would be economically attractive to operators. These would essentially be gasoline versions of today’s natural gas HD engines with low

- cost Three

-Way Catalyst (TWC) aftertreatment and low

- cost f uel. Fuels with higher octane are also a potential enabler of this approach. Gasoline compression

- ignition is a longer term alternative gasoline

- fueled option.  Response : The agencies request that the commenter submit technical information and/or data to support these statements so that the agencies could consider revising our analysis for the final rule .