Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
Further Policy Review

1 Below is a summary of interagency comments received during EO 12866 review of the draft rule

“Revisions to Motor Vehicle Fuel Economy Label.” They are for your consideration and subject to further policy review.



### Draft Preamble Section II.B.4.a

a. Fuel Combustion/Electricity Generation GHG Issues

This section discusses how the agencies plan to address the issue of greenhouse gas
emissions associated with the use of motor vehi cles, in the context of a program specifically designed to provide cons umers with information that will be useful when purchasing a vehicle. The agencies’ approach takes into account (1) the limited amount of information that can be provided on a label, (2) the importance of simplicity, clarity, accuracy, and intelligibility on the label, (3) the fact that the law requires a great d eal of information to be presented on the label, and (4) the ability to provide the public with additional and comprehensive information in a consumer-friendly format on a website. 1 

### This discussion focuses on, but is not limited to, the advanced technology vehicles that use electricity from the grid to power vehicles, such as the electric vehicles and plug-in hybrids that are expe cted to enter the market in larger numbers in the coming years; the discussion also refers to the use of renewable fuels in gasoline-powered
vehicles.

As explained below, our proposed approach would limit the label to tailpipe-only emissions while providing much fuller information on a website. But we also identify, and seek comments on, alternative approaches, also designed to accommodate the relevant variables.

The agencies recognize that all automotive fuels have “lifecycle” GHG emissions associated with the production and distribution of the fuel used by the motor vehicle. Lifecycle GHG emissions are associated with gasoline, di esel, and other fuels such as natural gas, electricity, and renewable biofuels. For example, electricity is used to charge EV or PHEV batteries, and such electricity use produces greenhouse gas emissions. The agencies also recognize that tailpipe-only emissions provide important but incomplete information and that a significant number of consumers may want, or benefit from, access to information on the total GHG emissions associated with the operation of th eir vehicles. Electric vehicles do not have any tailpipe emissions since their motors do not burn fuel, but the electricity used to power such vehicles does produce GHG emissions, and consum ers might seek, or benefit from, a label that

1 On the relationship between summary disclosure, as on the label, and full disclosure, as on the website, see [OIRA guidance document].Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
Further Policy Review

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### allows for simple and accurate comparisons across vehicles. However, the agencies emphasize that developing such information, and providing it to consumers in a manner that is accurate and meaningful, raises a number of challenging issues.

It is true that in principle, a full lifec ycle evaluation could potentially include an evaluation of a comprehensive set of GHG and ener gy impacts associated with both the vehicle (extraction and processing of materials, energy us ed in assembly, distribu tion, use, and disposal, etc.), and the fuel (feedstock extraction, feedstoc k transport, fuel processing, fuel transport, indirect effects, etc.). And if a full or nearly full accounting could be provided in a clear and intelligible form, there would be advantages to providing it on the label to consumers. In practice, however, offering even the more limited accounting for GHG emissions from production and distribution of the fuel, including el ectricity, presents complex challenges. EPA currently does not measure fuel combustion/elect ricity generation GHG emissions in its vehicle testing—although on an average basis GHG emissions are a function of MPG or KwH per mile and thus could in principle be calculated (as has been done for fuel economy, the central metric on labels in the past). The agencies recognize that modeling can be performed to assist in estimating these emissions. But in developing fuel combustion/electricity generation GHG emissions values, modeling would need to be done carefully to avoid inaccuracy and consumer confusion, especially in light of variations across time and across regions. For example, GHG emissions from electricity generation will vary signi ficantly in the future, based on the different fuels used at generating stations -- perhaps by as much as an order of magnitude between coal and non-fossil feedstocks. The Energy Informati on Administration (EIA) provides estimates of the future electricity generation mix, so ther e may be some basis for estimating future GHG emissions based on current state and federal policie s, but these estimates will inevitably rest on some uncertain assumptions.

It is true that the EPA has undertaken extensive lifecycle modeling of biofuels for the Renewable Fuel Standard rulemaking in response to the requirements of the Energy Independence and Security Act. But that assessment was done in the context of the particular mix of biofuels required nationally in 2022 by the Act, with a series of assumptions and estimates that may not be accurate either today or in 2022.

One overriding issue is whether the agencies could reasonably provide a single, national value for GHG emissions from electricity generation or could provide instead different values customized for various regions of the country. 2 

### A single, national value would have the advantage of simplicity, and it could be identifi ed with appropriate caveats. For individual

2 See http://www.eia.doe.gov/energyexplained/index.cfm?page=electricity_in_the_united_states for an overview of the national U.S. electric power industry net generation by fuel type.Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
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### owners, however, a single national value would generally not be accurate, and the individual would need access to additional information, such as regional values, to evaluate the impact of a specific vehicle. 3 

### (It is true that similar caveats apply to other information provided on the label, such as cost savings based on representative fuel prices and miles travelled.) In addition, the agencies would have to decide (1) whether to us e average or marginal (i.e., reflecting the fact that increased vehicle demand might change the overall mix of electricity sources) GHG emissions factors, and (2) if the marginal approach is used, whether to assume all nighttime charging or a mix of daytime and nighttime chargi ng. Another major consideration is whether to base electricity generation GHG emissions values on today's electricity markets or on projected changes in electricity markets that might occur by 2020 or some other year (note that vehicles produced in the next few years will remain in the fleet for 15 or 20 years or more).

Some states have already passed legislati on that could require major changes in how electricity is produced in those states in th e future, and Congress has considered landmark legislation as well. It is clear that the question of how electricity will be produced in the future is a very fluid issue. As a result of the Energy Independence and Security Act biofuel mandates, the agencies expect the amount of biofuel in the transportation fuel market to increase significantly over time, and the contribution of feed stocks to change over that time as well. Information that addresses lifecycle emissions of biofuels would need to take these considerations into account.

Currently, the agencies believe that all of these complex factors can be best addressed by providing a great deal of relevant information on a website, which can go into great depth and be changed and updated as appropriate. Unfortunately, we do not now have a full lifecycle analysis or fuel combustion/electricity generation analys is from which to draw for labeling purposes across the full range of vehicles and fuels. Th e data reported to EPA on emissions from fuel production vary across fuel types and is much more detailed for gasoline production. At the present time, it would be difficult to represen t emissions from energy generation on a national label in a way that is both useful and accurate for consumers, given regional variations, how generation within regions is dispatched, and access to green power purchases.

Therefore, EPA and NHTSA are proposing that the label should limit itself to tailpipe only emissions (clearly identified as such) and include a more complete discussion on energy generation and lifecycle analysis on the webpage at th is time. We believe that this approach will prove sufficiently informative to consumers. It also allows us the opportunity to provide a fuller
discussion of GHG emissions associated with en ergy generation for alternative vehicles, as well as emissions from fuel production (gasoline and biofuels). For example, a website could provide calculator tools that could reflect regional vari ations in the GHG emissions associated with

3 Regional values could be provided on a web site. EPA has a website ( http://www.epa.gov/cleanenergy/energy-and-you/how-clean.html ) on which consumers can enter their zip code and find out what fuel mix is used to produce the electricity they use.Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
Further Policy Review

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### electricity generation as well as use national aver ages. A website could also provide information on the projected fuel lifecycle impacts associated with biofuels. The website could be updated over time as the mix of electricity fuel sources and biofuels changes. This approach could help
the consumer understand over the lifetime of th eir vehicles how their electricity generation emissions impacts might be changing.

The agencies acknowledge that many more consumers will look at the label than at the website, and that there is a risk that to some consumers, the proposed label, limited to tailpipe emissions, might not provide accurate information. In particular, a “0” figure for GHG emissions might prove confusing to some consumers. While accurate and more complete information will be provided on the website, putting 0 grams CO2/mile on the label may lead some consumers to misperceive that driving their EV does not co ntribute to GHG emissions. The agencies also acknowledge that if accurate and sufficiently complete information could be provided on the label in a simple and intelligible way, there woul d be significant advantag es in attempting to do

so.

At this point in time, however, any such effort could well produce undue confusion. A label that clearly and conspicuously limits itself to tailpipe emissions appears to be the best available way to combine accuracy and disclosure, so long as fuller information is available on the website. The agencies believe that even though many consumer s will not visit the website, it will be used by many groups and organizations, and as a result, the information that it provides will be made available and used in the marketplace. We seek comment on our current view that the web is the better place, compared to the label, to address the complex issues associated with
emissions associated with elect ricity generation and lifecycle emissions more generally.

The agencies also believe that the proposed approach is consistent with the Energy Policy and Conservation Act (EPCA), as amended by the Energy Independence and Security Act (EISA) of 2007, which states that NHTSA must re quire vehicles to be labeled with information “reflecting an automobile’s performance ... [with respect to] greenhouse gas ... emissions ... of the automobile.” 4 

### NHTSA believes that a reasonable interp retation of this provision is that only GHG emissions directly from the vehicle itself ar e required for the label. Those would be the direct “automobile’s performance” with respect to “greenhouse gas emissions.” NHTSA believes that it would also be reasonable to interpret the statutory language such that the required label information on GHG emissions would include information on the fuel combustion/electricity generation GH G emissions associated with el ectricity or other fuels used by the vehicle, insofar as these GHG emissions are directly related to the automobile’s GHG performance.

4 49 U.S.C. 32908(g)(1)(A)(i). 49 U.S.C.32908(g)(1)(A)(ii) also refers to GHG “emissions of automobiles,” and further requires a designation of automobiles “with the lowest greenhouse gas emissions over the useful life of the vehicles.”Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
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### We invite comment on the proposed approach. For example, we encourage commenters to be as specific as possible with any recommendations on how to address fuel combustion/electricity generation GHG emissions on the website. If information on these emissions is to be provided on a website, exactly what information? The agencies specifically invite comment on how to address fuel combustion emissions associated with the electricity used to power the advanced technology vehicles st arting to enter commerce, electric vehicle, and plug-in hybrid vehicles. The agencies al so invite comment on how to address full GHG emissions from biofuels on a website. Should emissions be identified specifically for the emissions associated with the combustion of fuel to produce electricity? Should such emissions be determined on a regional or a national basis? Should these emissions be provided as a relative comparison to a gasoline or diesel fuel, the current predominant fuels?

For the convenience of commenters, we have prepared the table below as an illustrative example of one simplified way that some lifecyc le emissions information could be accounted for on a website, based on certain assumptions. 5 

### Consistent with the discussion above, it is important to emphasize that the tailpipe + lifecycle values in the table below are based on 2005 national average electricity GHG emissions, and coul d be very different for certain regions of the country today and for the nation in the future if there are major changes in the mix of methods used to generate electricity or in the GHG emissions associated with its generation.

Proposal--TailpipeOnly Tailpipe + Lifecycle

Vehicle CO2/mile CO2/mile

EV 0 197

PHEV 1 89 210

PHEV 2PHEV 2 133 217

Toyota Prius HEV 178 224

Honda Civic HEV 212 266

5 The key assumptions underlying the illustrative numbers in the right-hand column are that:EV and PHEVs all assumed to use 200 W att-hours per mile when operating on electricity over the EPA test and a ssuming a 30% range (43% electricity consumption) shortfall from test to road.

 PHEV 1 assumed to operate on electricity 50% of the time.

 PHEV 2 assumed to operate on electricity 25% of the time.

 Uses 2005 nationwide average value of 0.642 grams of GHG per Watt-hour at powerplant (adjusted to include GHG emissions from feedstock extraction, transportation, and processing as well) from MY2012-2016 light-duty vehicle GHG final rule (75 Federal Register 25437).

 Assumes typical 7% electricity grid transmission losses.

 Uses 2250 grams GHG per gallon of gasoline. Comment [A1]: Suggest the first three list the vehicle, as others do, since not all EVs and PHEVs perform equallySummary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
Further Policy Review

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### Honda Insight HEV 217 273

Ford Fusion HEV 228 287

In general, for purposes of providing information on the web, the agencies invite comment on the appropriate metrics to use and the specific suggestions for content and format, if appropriate. The agencies also request comment on which web resources it should prioritize for development that would provide the most useful information to consumers.

With respect to the label itself, the agencies are also requesting comment on alternative options for the label for EVs, PHEVs, and FFVs th at is under serious consideration, similar to a co-proposal. Under one version of this alternative, the EV label would continue to reflect the "0" CO2g/mile number currently displayed on the co-proposed labels (Figures III-2, III-10), but the label would be modified by adding either a symbol or an asterisk and explanatory text which states, "The only C02 emissions are from electrici ty generation." Likewise, the agencies would modify the co-proposed PHEV labels (Figures III-3 , III-6, III-1, III-12) inserting either a symbol or asterisk next to the current CO2g/mile number displayed with the foll owing explanatory text, “Does not include CO2 from electricity generation.” In addition, under this alternative, FFV labels (for FFV vehicles only) would continue to reflect the gasoline only CO2g/mile number currently displayed on the co-proposed labels (Fig ures III-8 and III-14), but the label (for FFVs only) would be modified by adding either a symbol or an asterisk and explanatory text which might state, “The CO2 emissions listed here are from fossil fuel combustion only. They do not reflect the use of renewable biofuels. (See owner’s manual for more information on the renewable nature and environmental benefits of using alternative fuels. Information also available at website www.fueleconomy.gov) .”

This alternative might provide more accuracy and clarity for purchasers by more explicitly indicating that the CO2 emissions from generation of electricity are not reflected in the CO2 numbers on the label. The agencies request comment on this alternative option.

Another version of this alternative would be to use not a “0,’ but only a symbol or asterisk for EVs and PHEVs, alongside an explan atory text saying, “The only CO2 emissions are from electricity generation.” The agencies invite comment on whether such an approach would be superior to the proposed approach in terms of combining accuracy and intelligibility.

In addition, the agencies invite comment on the feasibility and usefulness of an alternative approach that would include emissions from electricity generation or fuel combustion on the label as well as on the website. A label including the fuel combustion and electricity generation emissions could be based on national average assumptions, similar to the nationalSummary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. Subject to
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### averages used to calculate fuel costs for electric vehicles (12 cents per KW hour), fuel price on the label ($2.80), and the number of miles travelle d per vehicle per year (15,000). For electricity generation, the agencies would make assumptions about the overall impact on electric car recharging on the grid mix, which would include making assumptions about the time-of-day distribution of recharging and the subsequent im pacts on the base and peak load electricity generation. Under this approach, the label could have an asterisk noting that the approximation is based on current national average emission rates from electricity generation, and that a forecast of future fuel combustion/electricity generation GHG emissions (and possibly other data associated with the particular circumstances of recharging of the vehicle’s batteries) can be found on the website. The label could also note that the fuel production and distribution emissions are based on a national average (as is th e case with gasoline and electricity prices and vehicle usage used the generate label information).

This alternative approach may have advantages for consumers who, for whatever reason, choose not to visit the website, or are unable at the point of sale to obtain more precise information regarding their particular circumst ances. In view of the foregoing discussion, however, identifying the many assumptions the agencies would need to make to conduct such an analysis, we believe that this alternative would ha ve to overcome several serious difficulties. We ask for comment on whether and how each of the challenges outlined above for consideration for a website could be addressed if considered for a label.

The agencies also recognize that not all EV s are created equal – some will require much more energy per mile traveled than others, and using a single value of zero grams of CO 2 

### per mile may not sufficiently inform consumers about the divergent emissions impacts of different EVs,. Over time, the agencies note that we will cont inue to provide detaile d information about the lifecycle GHG impacts of different vehicles on the website, and will continue to consider whether and how GHG labeling could move closer to a full lifecycle basis.