43726 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 86 and 600 

[EPA–HQ–OAR–2021–0208; FRL 8469–02– 

OAR] 

RIN 2060–AV13 

Revised 2023 and Later Model Year 

Light-Duty Vehicle Greenhouse Gas 

Emissions Standards 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to revise the 

greenhouse gas (GHG) emissions 

standards for light-duty vehicles for 

2023 and later model years to make the 

standards more stringent. On January 

20, 2021, President Biden issued 

Executive Order 13990 ‘‘Protecting 

Public Health and the Environment and 

Restoring Science To Tackle the Climate 

Crisis’’ directing EPA to consider 

whether to propose suspending, 

revising, or rescinding the standards 

previously revised under the ‘‘The Safer 

Affordable Fuel-Efficient (SAFE) 

Vehicles Rule for Model Years 2021– 

2026 Passenger Cars and Light Trucks,’’ 

promulgated in April 2020. The SAFE 

rule significantly weakened the 

standards established in 2012, which in 

part set GHG standards for model years 

2021–25. EPA believes that in light of 

the significant contribution of light-duty 

vehicles to transportation sector GHG 

emissions, standards more stringent 

than those relaxed in the SAFE rule are 

appropriate under the Clean Air Act. 

EPA is proposing to revise the GHG 

standards to be more stringent than the 

SAFE rule standards in each model year 

from 2023 through 2026. EPA is also 

proposing to include several flexibilities 

to incentivize the production and sale of 

vehicles with zero and near-zero 

emissions technology to reduce 

compliance costs and to address the 

lead time of the proposed standards. In 

addition, EPA is proposing some 

technical amendments to clarify and 

streamline our regulations. Compliance 

with the proposed standards would be 

feasible at reasonable costs to 

manufacturers. The proposed revised 

standards would result in significant 

benefits for public health and welfare, 

primarily through substantial reductions 

in both GHG emissions and fuel 

consumption and associated fuel costs 

paid by drivers, and the benefits of the 

proposed standards would be far in 

excess of costs. 

DATES: 

Comments: Written comments must 

be received on or before September 27, 

2021. 

Public Hearing: EPA plans to hold a 

virtual public hearing on August 25, 

2021. An additional session may be held 

on August 26th if necessary to 

accommodate the number of testifiers 

that sign-up to testify. Please refer to the 

separate Federal Register notice issued 

by EPA for public hearing details. The 

hearing notice is available at https://

www.epa.gov/regulations-emissionsvehicles-and-engines/proposed-rulerevise-existing-national-ghg-emissions. 

ADDRESSES: You may send comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2021–0208, by any of the 

following methods: 

• Federal eRulemaking Portal: 

https://www.regulations.gov/ (our 

preferred method). Follow the online 

instructions for submitting comments. 

• Email: a-and-r-Docket@epa.gov. 

Include Docket ID No. EPA–HQ–OAR– 

2021–0208 in the subject line of the 

message. 

• Mail: U.S. Environmental 

Protection Agency, EPA Docket Center, 

OAR, Docket EPA–HQ–OAR–2021– 

0208, Mail Code 28221T, 1200 

Pennsylvania Avenue NW, Washington, 

DC 20460. 

• Hand Delivery or Courier (by 

scheduled appointment only): EPA 

Docket Center, WJC West Building, 

Room 3334, 1301 Constitution Avenue 

NW, Washington, DC 20004. The Docket 

Center’s hours of operations are 8:30 

a.m.–4:30 p.m., Monday–Friday (except 

Federal Holidays). 

Instructions: All submissions received 

must include the Docket ID No. EPA– 

HQ–OAR–2021–0208 for this 

rulemaking. Comments received may be 

posted without change to https://

www.regulations.gov/, including any 

personal information provided. For 

detailed instructions on sending 

comments and additional information 

on the rulemaking process, see the 

‘‘Public Participation’’ heading of the 

SUPPLEMENTARY INFORMATION section of 

this document. Out of an abundance of 

caution for members of the public and 

our staff, the EPA Docket Center and 

Reading Room are closed to the public, 

with limited exceptions, to reduce the 

risk of transmitting COVID–19. Our 

Docket Center staff will continue to 

provide remote customer service via 

email, phone, and webform. We 

encourage the public to submit 

comments via https://

www.regulations.gov/ or email, as there 

may be a delay in processing mail. Hand 

deliveries and couriers may be received 

by scheduled appointment only. For 

further information on EPA Docket 

Center services and the current status, 

please visit us online at https://

www.epa.gov/dockets. 

EPA plans to hold a virtual public 

hearing for this rulemaking. Please refer 

to the separate Federal Register notice 

issued by EPA for public hearing 

details. The hearing notice is available 

at https://www.epa.gov/regulationsemissions-vehicles-and-engines/ 

proposed-rule-revise-existing-nationalghg-emissions. 

FOR FURTHER INFORMATION CONTACT: Tad 

Wysor, Office of Transportation and Air 

Quality, Assessment and Standards 

Division (ASD), Environmental 

Protection Agency, 2000 Traverwood 

Drive, Ann Arbor, MI 48105; telephone 

number: (734) 214–4332; email address: 

wysor.tad@epa.gov. 

SUPPLEMENTARY INFORMATION: 

A. Public Participation 

Written Comments 

EPA will keep the comment period 

open until September 27, 2021. All 

information will be available for 

inspection at the EPA Air Docket No. 

EPA–HQ–OAR–2021–0208. Submit 

your comments, identified by Docket ID 

No. EPA–HQ–OAR–2021–0208, at 

https://www.regulations.gov (our 

preferred method), or the other methods 

identified in the ADDRESSES section. 

Once submitted, comments cannot be 

edited or removed from the docket. EPA 

may publish any comment received to 

its public docket. Do not submit to 

EPA’s docket at https://

www.regulations.gov any information 

you consider to be Confidential 

Business Information (CBI) or other 

information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. EPA will generally not consider 

comments or comment contents located 

outside of the primary submission (i.e., 

on the web, cloud, or other file sharing 

system). For additional submission 

methods, the full EPA public comment 

policy, information about CBI or 

multimedia submissions, and general 

guidance on making effective 

comments, please visit https://

www.epa.gov/dockets/commenting-epadockets. 

EPA is temporarily suspending its 

Docket Center and Reading Room for 

public visitors, with limited exceptions, 

to reduce the risk of transmitting 

COVID–19. Our Docket Center staff will 

continue to provide remote customer 


jbell on DSKJLSW7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43727 

service via email, phone, and webform. 

We encourage the public to submit 

comments via https://

www.regulations.gov/ as there may be a 

delay in processing mail. Hand 

deliveries or couriers will be received 

by scheduled appointment only. For 

further information and updates on EPA 

Docket Center services, please visit us 

online at https://www.epa.gov/dockets. 

EPA continues to carefully and 

continuously monitor information from 

the Centers for Disease Control and 

Prevention (CDC), local area health 

departments, and our Federal partners 

so that we can respond rapidly as 

conditions change regarding COVID–19. 

Virtual Public Hearing 

EPA plans to hold a virtual public 

hearing on August 25, 2021. An 

additional session will be held on 

August 26th if necessary, to 

accommodate the number of testifiers 

that sign-up to testify. Please refer to the 

separate Federal Register notice issued 

by EPA for public hearing details. The 

hearing notice is available at https://

www.epa.gov/regulations-emissionsvehicles-and-engines/proposed-rulerevise-existing-national-ghg-emissions. 

Please also refer to this website for any 

updates regarding the hearings. EPA 

does not intend to publish additional 

documents in the Federal Register 

announcing updates. 

B. Does this action apply to me? 

This action affects companies that 

manufacture or sell passenger 

automobiles (passenger cars) and nonpassenger automobiles (light trucks) as 

defined in 49 CFR part 523. Regulated 

categories and entities include: 

Category NAICS 

codes A Examples of potentially regulated entities 

Industry ........................................................ 336111 

336112 

Motor Vehicle Manufacturers. 

Industry ........................................................ 811111 

811112 

Commercial Importers of Vehicles and Vehicle Components. 

811198 

423110 

Industry ........................................................ 335312 

811198 

Alternative Fuel Vehicle Converters. 

A North American Industry Classification System (NAICS). 

This list is not intended to be 

exhaustive, but rather provides a guide 

regarding entities likely to be regulated 

by this action. To determine whether 

particular activities may be regulated by 

this action, you should carefully 

examine the regulations. You may direct 

questions regarding the applicability of 

this action to the person listed in FOR

FURTHER INFORMATION CONTACT. 

Table of Contents 

I. Executive Summary 

A. Purpose of This Proposed Rule and 

Legal Authority 

1. Proposal for Near-Term Standards 

Through Model Year 2026 

2. Why does EPA believe the proposed 

standards are appropriate under the 

CAA? 

3. Future Longer-Term Action to Further 

Reduce Light-Duty Vehicle Emissions in 

2027 and Beyond 

B. Summary of Proposed Light-Duty 

Vehicle GHG Program 

1. Proposed Revised GHG Emissions 

Standards 

2. Proposed Compliance Incentives and 

Flexibilities 

C. Analytical Support for the Proposed 

Revised Standards 

1. Summary of Analyses for This Proposed 

Rule 

2. History of Similar Analyses 

D. Summary of Costs and Benefits of the 

Proposed Program 

E. How has EPA considered environmental 

justice in this proposal? 

F. Affordability and Equity 

G. What alternatives is EPA considering? 

1. Description of the Alternatives 

2. Summary of Costs and Benefits of the 

Alternatives 

3. Summary of the Proposal’s Costs and 

Benefits Compared to the Alternatives 

II. EPA Proposal for MY 2023–2026 LightDuty Vehicle GHG Standards 

A. Proposed Model Year 2023–2026 GHG 

Standards for Light-Duty Vehicles, LightDuty Trucks, and Medium Duty 

Passenger Vehicles 

1. What fleet-wide emissions levels 

correspond to the CO2 standards? 

2. What are the proposed CO2 attributebased standards? 

3. EPA’s Statutory Authority Under the 

CAA 

4. Averaging, Banking, and Trading 

Provisions for CO2 Standards 

5. Certification, Compliance, and 

Enforcement 

6. On-Board Diagnostics Program Updates 

7. Stakeholder Engagement 

8. How do EPA’s proposed standards relate 

to NHTSA’s CAFE proposal and to 

California’s GHG program? 

B. Additional Manufacturer Compliance 

Flexibilities 

1. Multiplier Incentives for Advanced 

Technology Vehicles 

2. Advanced Technology Incentives for 

Full-Size Pickups 

3. Off-Cycle Technology Credits 

4. Air Conditioning System Credits 

5. Natural Gas Vehicles Technical 

Correction 

C. What alternatives is EPA considering? 

III. Technical Assessment of the Proposed 

CO2 Standards 

A. What approach did EPA use in 

analyzing potential standards? 

B. Projected Compliance Costs and 

Technology Penetrations 

1. GHG Targets and Compliance Levels 

2. Projected Compliance Costs per Vehicle 

3. Technology Penetration Rates 

C. Are the proposed standards feasible? 

D. How did EPA consider the two 

alternatives in choosing the proposed 

program? 

IV. How would this proposal reduce GHG 

emissions and their associated effects? 

A. Impact on GHG Emissions 

B. Climate Change Impacts From GHG 

Emissions 

C. Global Climate Impacts and Benefits 

Associated With the Proposal’s GHG 

Emissions Reductions 

V. How would the proposal impact non-GHG 

emissions and their associated effects? 

A. Impact on Non-GHG Emissions 

B. Health and Environmental Effects 

Associated With Exposure to Non-GHG 

Pollutants Impacted by the Proposed 

Standards 

C. Air Quality Impacts of Non-GHG 

Pollutants 

VI. Basis for the Proposed GHG Standards 

Under CAA Section 202(a) 

A. Consideration of Technological 

Feasibility and Lead Time 

1. Technological Readiness of the Auto 

Industry in Meeting Revised GHG 

Standards 

2. Opportunities Provided Through Credits 

and Incentives Provisions 

B. Consideration of Vehicle Costs of 

Compliance 

C. Consideration of Impacts on Consumers 

D. Consideration of Emissions of GHGs and 

Other Air Pollutants 

E. Consideration of Energy, Safety and 

Other Factors 

F. Balancing of Factors Under CAA 202(a) 

VII. What are the estimated cost, economic, 

and other impacts of the proposal? 

A. Conceptual Framework for Evaluating 

Consumer Impacts 

B. Vehicle Sales Impacts 

C. Changes in Fuel Consumption 


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43728 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

1 86 FR 7037, January 25, 2021. 

2EPA’s model year emission standards also apply 

in subsequent model years, unless revised, e.g., MY 

2025 standards issued in the 2012 rule also applied 

to MY 2026 and beyond. 

3 77 FR 62624, October 15, 2012. 

4 Id. 

D. Greenhouse Gas Emission Reduction 

Benefits 

E. Non-Greenhouse Gas Health Impacts 

F. Energy Security Impacts 

G. Impacts of Additional Driving 

H. Safety Considerations in Establishing 

GHG Standards 

I. Summary of Costs and Benefits 

J. Impacts on Consumers of Vehicle Costs 

and Fuel Savings 

K. Employment Impacts 

L. Environmental Justice 

1. GHG Impacts 

2. Non-GHG Impacts 

M. Affordability and Equity Impacts 

VIII. Statutory and Executive Order Reviews 

A. Executive Order 12866: ‘‘Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review’’ 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132: ‘‘Federalism’’ 

F. Executive Order 13175: ‘‘Consultation 

and Coordination With Indian Tribal 

Governments’’ 

G. Executive Order 13045: ‘‘Protection of 

Children From Environmental Health 

Risks and Safety Risks’’ 

H. Executive Order 13211: ‘‘Energy Effects’’ 

I. National Technology Transfer and 

Advancement Act 

J. Executive Order 12898: ‘‘Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations’’ 

IX. Statutory Provisions and Legal Authority 

I. Executive Summary 

A. Purpose of This Proposed Rule and 

Legal Authority 

1. Proposal for Near-Term Standards 

Through Model Year 2026 

The Environmental Protection Agency 

(EPA) is proposing to revise existing 

national greenhouse gas (GHG) 

emissions standards for passenger cars 

and light trucks under section 202(a) of 

the Clean Air Act (CAA), 42 U.S.C. 

7521(a). Section 202(a) requires EPA to 

establish standards for emissions of air 

pollutants from new motor vehicles 

which, in the Administrator’s judgment, 

cause or contribute to air pollution 

which may reasonably be anticipated to 

endanger public health or welfare. 

This proposal also responds to 

Executive Order (E.O.) 13990, 

‘‘Protecting Public Health and the 

Environment and Restoring Science To 

Tackle the Climate Crisis’’ (Jan. 20, 

2021), which directs EPA to consider 

taking the action proposed in this 

notice: 1

‘‘[T]he head of the relevant agency, as 

appropriate and consistent with applicable 

law, shall consider publishing for notice and 

comment a proposed rule suspending, 

revising, or rescinding the agency action[s set 

forth below] within the time frame 

specified.’’ 

‘‘Establishing Ambitious, Job-Creating Fuel 

Economy Standards: . . . ‘The Safer 

Affordable Fuel-Efficient (SAFE) Vehicles 

Rule for Model Years 2021–2026 Passenger 

Cars and Light Trucks,’ 85 FR 24174 (April 

30, 2020), by July 2021. . . . In considering 

whether to propose suspending, revising, or 

rescinding the latter rule, the agency should 

consider the views of representatives from 

labor unions, States, and industry.’’ 

The proposed program would revise 

the light-duty vehicle GHG standards 

previously revised by the SAFE rule and 

would build upon earlier EPA actions 

and supporting analyses that established 

or maintained stringent light-duty 

vehicle GHG emissions standards. For 

example, in 2012, EPA issued a final 

rule establishing light-duty vehicle GHG 

standards for model years (MYs) 2017– 

2025,2 which were supported in 

analyses accounting for compliance 

costs, lead time and other relevant 

factors.3 That rule and its analyses also 

accounted for the development and 

availability of advanced GHG emissionreducing technologies for gasolinefueled vehicles, which demonstrated 

that the standards were appropriate 

under section 202(a) of the CAA.4 This 

proposed rule provides additional 

analysis that takes into consideration 

updated data and recent developments. 

Auto manufacturers are currently 

implementing an increasing array of 

advanced gasoline vehicle GHG 

emission-reducing technologies at a 

rapid pace throughout their vehicle 

fleets. Vehicle electrification 

technologies are also advancing rapidly, 

as battery costs have continued to 

decline, and automakers have 

announced an increasing diversity and 

volume of zero-emission vehicle 

models. Meanwhile, in 2019, several 

auto manufacturers voluntarily entered 

into agreements with the State of 

California to comply with GHG 

emission reduction targets through MY 

2026 across their national vehicle fleets 

(the ‘‘California Framework 

Agreements’’) that are more stringent 

than the EPA standards as revised by 

the SAFE rule. These developments 

further support EPA’s decision to 

reconsider and propose revising the 

existing EPA standards to be more 

stringent, particularly in light of factors 

indicating that more stringent near-term 

standards are feasible at reasonable cost 

and would achieve significantly greater 

GHG emissions reductions and public 

health and welfare benefits than the 

existing program. In developing this 

proposal, EPA has conducted outreach 

with a wide range of interested 

stakeholders, including labor unions, 

States, and industry as provided in E.O. 

13990, and we will continue to engage 

with these and other stakeholders as 

part of our regulatory development 

process. 

This proposal is limited to MYs 2023– 

2026, given lead time considerations 

under the CAA, which is consistent 

with E.O. 13990’s direction to review 

the SAFE rule standards. We have 

designed the proposed program based 

on our assessment that the proposed 

standards are reasonable and 

appropriate and will achieve a 

significant level of GHG reductions for 

MYs 2023–2026 vehicles, with the 

expectation that a future, longer-term 

program for MYs 2027 and later will 

build upon these near-term standards. 

EPA has set previous light-duty 

vehicle GHG emission standards in joint 

rulemakings where NHTSA also 

established CAFE standards. EPA has 

concluded that it is not necessary at this 

time for this EPA proposal to be done 

in a joint action with NHTSA. EPA has 

coordinated with NHTSA, both on a 

bilateral level as well as through the 

interagency review of the EPA proposal 

led by the Office of Management and 

Budget. 

2. Why does EPA believe the proposed 

standards are appropriate under the 

CAA? 

EPA is proposing to revise GHG 

emissions standards for passenger cars 

and light trucks under its authority in 

section 202(a) of the CAA. Section 

202(a) requires EPA to establish 

standards for emissions of pollutants 

from new motor vehicles which, in the 

Administrator’s judgment, cause or 

contribute to air pollution which may 

reasonably be anticipated to endanger 

public health or welfare. Standards 

under section 202(a) take effect ‘‘after 

such period as the Administrator finds 

necessary to permit the development 

and application of the requisite 

technology, giving appropriate 

consideration to the cost of compliance 

within such period.’’ Thus, in 

establishing or revising section 202(a) 

standards designed to reduce air 

pollution that endangers public health 

and welfare, EPA also must consider 

issues of technological feasibility, 

compliance cost, and lead time. EPA 

also may consider other factors and in 

previous light-duty vehicle GHG 

standards rulemakings has considered 

the impacts of potential GHG standards 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43729 

5See, e.g., Encino Motorcars, LLC v. Navarro, 136 

S. Ct. 2117, 2125 (2016); FCC v. Fox Television 

Stations, Inc., 556 U.S. 502, 515 (2009). 

6 Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990–2019 (EPA–430–R–21–005, 

published April 2021). 

7 7 Ibid. 

8 74 FR 66496, December 15, 2009; 81 FR 54422, 

August 15, 2016. 

on the auto industry, fuel savings by 

consumers, oil conservation, energy 

security and other energy impacts, as 

well as other relevant considerations 

such as safety. 

As we describe in greater detail 

below, EPA has carefully considered the 

technological feasibility and cost of the 

proposed standards and the available 

lead time for manufacturers to comply 

with them, including existing and 

proposed flexibilities designed to 

facilitate compliance during the MYs 

2023–2026 timeframe. Based on our 

analysis, we believe that the proposed 

standards, combined with proposed 

flexibilities that address lead time 

considerations resulting from 

relaxations in standards revised in the 

SAFE rule, are appropriate and justified 

under section 202(a) of the CAA. Our 

updated analysis for this proposal, as 

well as our earlier analyses of similar 

standards, supports the conclusion that 

the proposed standards are 

technologically feasible for the model 

years covered (MYs 2023–2026) and that 

the costs of compliance for 

manufacturers would be reasonable. The 

proposed standards would result in 

greater reductions in GHG emissions, as 

well as reductions in emissions of some 

criteria pollutants and air toxics, 

resulting in significant benefits for 

public health and welfare. We also show 

that the proposal would result in 

reduced vehicle operating costs for 

consumers and that the benefits of the 

proposed program would significantly 

exceed the costs. 

EPA has significantly updated its 

analysis for this rule. As discussed 

further below, we have updated a 

number of key inputs, such as, for 

example, certain technology costs and 

penetrations, to ensure they are up to 

date. Notably, the results of this updated 

analysis are generally in agreement with 

prior analyses, including those 

conducted for the SAFE rule. In 

particular, the costs that have been 

estimated for manufacturers to meet 

standards of a similar stringency to the 

proposed standards have been roughly 

consistent since EPA first estimated 

them in 2012. That is, although 

manufacturers have less lead time 

before these standards would be 

implemented than with previous 

rulemakings, the significant progress 

that has been made in implementing 

advanced gasoline technologies in the 

fleet (as well as advances in electric and 

hybrid vehicle technology) since 2012 

means the proposed standards can be 

achieved at roughly the same cost as 

previous estimates, and additional lead 

time is unnecessary. 

When considering similar cost 

estimates in the SAFE rule, EPA 

identified some factors, primarily costs 

to manufacturers and upfront costs to 

consumers, as favoring reductions in 

stringency of the then-existing 

standards, and other factors, such as 

reduced emissions that endanger public 

health and welfare and reduced 

operating costs for consumers, as 

favoring increased stringency (or a 

lower degree of reduced stringency). In 

balancing these factors in the SAFE rule, 

EPA placed greater weight on the former 

factors, and thereby decided to make 

EPA’s GHG standards significantly less 

stringent. But the purpose of adopting 

standards under CAA section 202 is to 

address air pollution that may 

reasonably be anticipated to endanger 

public health and welfare. Indeed, 

reducing air pollution has traditionally 

been the focus of such standards. EPA 

has reconsidered how costs, lead time 

and other factors were weighed in the 

SAFE rule and is reaching a different 

conclusion as to the appropriate 

stringency of GHG standards. In light of 

the statutory purpose of section 202, the 

Administrator is placing greater weight 

on the emission reductions and 

resulting public health and welfare 

benefits, as well as the savings in 

vehicle operating costs for consumers, 

and proposing significantly more 

stringent standards for MYs 2023–2026 

compared to the standards established 

by the SAFE rule. As discussed in 

Section III.A, the proposed standards 

take into consideration both the updated 

analysis for this rule and past EPA 

analyses conducted for similar GHG 

standards. We are revising decisions 

made in the SAFE final rule in 

accordance with Supreme Court 

decisions affirming that agencies are 

free to reconsider and revise their prior 

decisions where they provide a 

reasonable explanation for their revised 

decisions.5 In this rulemaking, the 

agency is changing its 2020 position and 

restoring its previous approach by 

proposing to find, in light of the 

statutory purposes of the Clean Air Act 

and in particular of section 202(a), that 

it is more appropriate to place greater 

weight on the magnitude and benefits of 

reducing emissions that endanger public 

health and welfare, while continuing to 

consider compliance costs, lead time 

and other relevant factors. 

3. Future Longer-Term Action To 

Further Reduce Light-Duty Vehicle 

Emissions in 2027 and Beyond 

Addressing the climate crisis will 

require substantial reductions in GHG 

emissions from the transportation 

sector. The transportation sector is the 

largest U.S. source of GHG emissions, 

representing 29 percent of total GHG 

emissions.6 Within the transportation 

sector, light-duty vehicles are the largest 

contributor, at 58 percent, and thus 

comprise 17 percent of total U.S. GHG 

emissions.7 GHG emissions have 

significant impacts on public health and 

welfare as evidenced by the welldocumented scientific record and as set 

forth in EPA’s Endangerment and Cause 

or Contribute Findings under Section 

202(a) of the CAA.8 Additionally, major 

scientific assessments continue to be 

released that further advance our 

understanding of the climate system and 

the impacts that GHGs have on public 

health and welfare both for current and 

future generations, as discussed in 

Section IV.B, making it clear that 

continued emission reductions in the 

light-duty vehicle sector are needed 

beyond the model years covered by the 

standards proposed today. 

This proposed action therefore serves 

as a critical building block for a 

comprehensive, multipollutant longerterm regulatory program implementing 

EPA’s statutory authority under the 

CAA. We are at a pivotal moment in the 

history of the light-duty transportation 

sector—a shift to zero-emission vehicle 

technologies is already underway, and it 

presents a strong potential for dramatic 

reductions in GHG and criteria pollutant 

emissions over the longer term. Major 

automakers as well as many global 

jurisdictions and U.S. states have 

announced plans to shift the light-duty 

fleet toward zero-emissions technology, 

as detailed below. EPA anticipates that 

the design of a future, longer-term 

program beyond 2026 will incorporate 

accelerating advances in zero-emission 

technologies. 

A proliferation of recent 

announcements from automakers 

signals a rapidly growing shift in 

investment away from internalcombustion technologies and toward 

high levels of electrification. These 

automaker announcements are 

supported by continued advances in 

automotive electrification technologies, 

and further driven by the need to 


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43730 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

9 General Motors, ‘‘General Motors, the Largest 

U.S. Automaker, Plans to be Carbon Neutral by 

2040,’’ Press Release, January 28, 2021. 10 Volvo Car Group, ‘‘Volvo Cars to be fully 

electric by 2030,’’ Press Release, March 2, 2021. 11 Volkswagen Newsroom, ‘‘Strategy update at 

Volkswagen: The transformation to electromobility 

was only the beginning,’’ March 5, 2021. Accessed 

June 15, 2021 at https://www.volkswagennewsroom.com/en/stories/strategy-update-atvolkswagen-the-transformation-to-electromobilitywas-only-the-beginning-6875. 12Honda News Room, ‘‘Summary of Honda 

Global CEO Inaugural Press Conference,’’ April 23, 

2021. Accessed June 15, 2021 at https://

global.honda/newsroom/news/2021/ 

c210423eng.html. 13Ford Motor Company, ‘‘Superior Value From 

EVs, Commercial Business, Connected Services is 

Strategic Focus of Today’s ‘Delivering Ford+’ 

Capital Markets Day,’’ Press Release, May 26, 2021. 14Stellantis, ‘‘World Environment Day 2021— 

Comparing Visions: Olivier Francois and Stefano 

Boeri, in Conversation to Rewrite the Future of 

Cities,’’ Press Release, June 4, 2021. 15Stellantis, ‘‘Stellantis Intensifies Electrification 

While Targeting Sustainable Double-Digit Adjusted 

Operating Income Margins in the Mid-Term,’’ Press 

Release, July 8, 2021. 16Mercedes-Benz, ‘‘Mercedes-Benz prepares to go 

all-electric,’’ Press Release, July 22, 2021. 17Environmental Defense Fund and M.J. Bradley 

& Associates, ‘‘Electric Vehicle Market Status— 

Update, Manufacturer Commitments to Future 

Electric Mobility in the U.S. and Worldwide,’’ April 

2021. 

18 International Council on Clean Transportation, 

‘‘The end of the road? An overview of combustionengine car phase-out announcements across 

Europe,’’ May 10, 2020. 

19Muratori et al., ‘‘The rise of electric vehicles— 

2020 status and future expectations,’’ Progress in 

Energy v3n2 (2021), March 25, 2021. Accessed July 

15, 2021 at https://iopscience.iop.org/article/ 

10.1088/2516–1083/abe0ad. 

20 Fueleconomy.gov, 2015 Fuel Economy Guide 

and 2021 Fuel Economy Guide. 

21Environmental Defense Fund and M.J. Bradley 

& Associates, ‘‘Electric Vehicle Market Status— 

Update, Manufacturer Commitments to Future 

Electric Mobility in the U.S. and Worldwide,’’ April 

2021. 

22 Department of Energy Vehicle Technologies 

Office, Transportation Analysis Fact of the Week 

#1186, ‘‘The National Average Cost of Fuel for an 

Electric Vehicle is about 60% Less than for a 

Gasoline Vehicle,’’ May 17, 2021. 

23 Department of Energy Vehicle Technologies 

Office, Transportation Analysis Fact of the Week 

#1190, ‘‘Battery-Electric Vehicles Have Lower 

Scheduled Maintenance Costs than Other LightDuty Vehicles,’’ June 14, 2021. 

24Consumer Reports, ‘‘Electric Cars 101: The 

Answers to All Your EV Questions,’’ November 5, 

2020. Accessed June 8, 2021 at https://

www.consumerreports.org/hybrids-evs/electric-cars101-the-answers-to-all-your-ev-questions/. 

25 Department of Energy Alternative Fuels Data 

Center, Electric Vehicle Charging Station Locations. 

Accessed on May 19, 2021 at https://

afdc.energy.gov/fuels/electricity_locations.html#/ 

find/nearest?fuel=ELEC. 

26State of California Office of the Governor, 

‘‘Governor Newsom Announces California Will 

Phase Out Gasoline-Powered Cars & Drastically 

Reduce Demand for Fossil Fuel in California’s Fight 

Against Climate Change,’’ Press Release, September 

23, 2020. 

27Commonwealth of Massachusetts, ‘‘Request for 

Comment on Clean Energy and Climate Plan for 

2030,’’ December 30, 2020. 

28New York State Senate, Senate Bill S2758, 

2021–2022 Legislative Session. January 25, 2021. 

29ZEV Alliance, ‘‘International ZEV Alliance 

Announcement,’’ Dec. 3, 2015. Accessed on July 16, 

2021 at http://www.zevalliance.org/internationalzev-alliance-announcement/. 

30 International Council on Clean Transportation, 

‘‘Update on the global transition to electric vehicles 

through 2019,’’ July 2020. 

31Reuters, ‘‘Canada to ban sale of new fuelpowered cars and light trucks from 2035,’’ June 29, 

2021. Accessed July 1, 2021 from https://

www.reuters.com/world/americas/canada-ban-salenew-fuel-powered-cars-light-trucks-2035-2021-06- 

29/. 

32 International Council on Clean Transportation, 

‘‘Growing momentum: Global overview of 

government targets for phasing out new internal 

combustion engine vehicles,’’ posted 11 November 

2020, accessed April 28, 2021 at https://theicct.org/ 

blog/staff/global-ice-phaseout-nov2020. 

compete in a global market as other 

countries implement aggressive zeroemission transportation policies. For 

example, in January 2021, General 

Motors announced plans to become 

carbon neutral by 2040, including an 

effort to shift its light-duty vehicles 

entirely to zero-emissions by 2035.9 In 

March 2021, Volvo announced plans to 

make only electric cars by 2030,10 and 

Volkswagen announced that it expects 

half of its U.S. sales will be all-electric 

by 2030.11 In April 2021, Honda 

announced a full electrification plan to 

take effect by 2040, with 40 percent of 

North American sales expected to be 

fully electric or fuel cell vehicles by 

2030, 80 percent by 2035 and 100 

percent by 2040.12 In May 2021, Ford 

announced that they expect 40 percent 

of their global sales will be all-electric 

by 2030.13 In June 2021, Fiat announced 

a move to all electric vehicles by 2030, 

and in July 2021 its parent corporation 

Stellantis announced an intensified 

focus on electrification across all of its 

brands.14 15 Also in July 2021, MercedesBenz announced that all of its new 

architectures would be electric-only 

from 2025, with plans to become ready 

to go all-electric by 2030 where 

possible.16

These announcements and others like 

them continue a pattern over the past 

several years of many manufacturers 

taking steps to aggressively pursue zeroemission technologies, introduce a wide 

range of zero-emission vehicle models, 

and reduce their reliance on the 

internal-combustion engine in various 

markets around the globe.17 18 These 

goals and investments have been 

coupled with a rapidly increasing 

availability of plug-in vehicle models in 

the U.S.19 For example, the number of 

all-electric vehicle (EV) and plug-in 

hybrid electric vehicle (PHEV) models 

available for sale in the U.S. more than 

doubled from about 24 in MY 2015 to 

about 60 in MY 2021, with offerings in 

a growing range of vehicle segments.20

Recent model announcements indicate 

that this number will increase to more 

than 80 models by MY 2023, with many 

more expected to reach production 

before the end of the decade.21 Many of 

the zero-emission vehicles already on 

the market today cost less to drive than 

conventional vehicles,22 23 offer 

improved performance and handling,24

and can be charged at a growing 

network of public chargers 25 as well as 

at home. 

At the same time, an increasing 

number of global jurisdictions and U.S. 

states plan to take actions to shift the 

light-duty fleet toward zero-emissions 

technology. In 2020, California 

announced an intention to require 

increasing volumes of zero-emission 

vehicles to meet the goal that, by 2035, 

all new light-duty vehicles sold in the 

state be zero-emission vehicles.26

Massachusetts 27 and New York 28 are 

also poised to adopt similar targets and 

requirements to take effect by 2035. 

Several other states may adopt similar 

provisions by 2050 as members of the 

International Zero-Emission Vehicle 

Alliance.29 Globally, at least 12 

countries, as well as numerous local 

jurisdictions, have announced similar 

goals to shift all new passenger car sales 

to zero-emission vehicles in the coming 

years, including Norway (2025); the 

Netherlands, Denmark, Iceland, Ireland, 

Sweden, and Slovenia (2030); Canada 

and the United Kingdom (2035); France 

and Spain (2040); and Costa Rica 

(2050).30 31 Together, these countries 

represent approximately 13 percent of 

the global market for passenger cars,32

in addition to that represented by the 

aforementioned U.S. states and other 

global jurisdictions. 

EPA recognizes that in addition to 

substantially reducing GHG emissions, a 

longer-term rulemaking could also 

address criteria pollutant and air toxics 

emissions from the new light-duty 

vehicle fleet—especially important 

considerations during the transition to 

zero-emission vehicles. EPA expects 

that a future longer-term rulemaking 

will take critical steps to continue the 

trajectory of transportation emission 

reductions needed to protect public 

health and welfare. Achieving this 

trajectory with the help of increased 

fleet penetration of zero-emission 

vehicles would bring with it other 

advantages as well, such as potentially 

large reductions in roadway pollution 

and noise in overburdened 

communities, and potentially support 

for the future development of vehicle-togrid services that could become a key 

enabler for increased utilization of 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43731 

33 Department of Energy Electricity Advisory 

Committee, ‘‘Enhancing Grid Resilience with 

Integrated Storage from Electric Vehicles: 

Recommendations for the U.S. Department of 

Energy,’’ June 25, 2018. 

34 ‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003, 

January 2021, p. 52. 

35Passenger cars include cars and smaller crossovers and SUVs, while the truck category includes 

larger cross-overs and SUVs, minivans, and pickup 

trucks. 

36Because compliance is based on the full range 

of vehicles in a manufacturer’s car and truck fleets, 

with lower-emitting vehicles compensating for 

higher-emitting vehicles, the emission levels of 

specific vehicles within the fleet are referred to as 

targets, rather than standards. 

variable renewable energy sources, such 

as wind and solar, across the grid.33

B. Summary of Proposed Light-Duty 

Vehicle GHG Program 

EPA is proposing revised GHG 

standards that would begin in MY 2023 

and increase in stringency year over 

year through MY 2026. EPA proposes to 

increase the stringency of the standards 

from the average roughly 1.5 percent 

year-over-year stringency increase of the 

relaxed SAFE standards to a nearly 10 

percent proposed stringency increase in 

MY 2023, followed by a nearly 5 percent 

proposed stringency increase in each 

MY from 2024 through 2026. EPA 

believes the 10 percent proposed 

increase in stringency in MY 2023 is 

appropriate given the technological 

investments industry has continued to 

make beyond what would be required to 

meet the SAFE rule revised standards, 

such as improvements being made in 

response to the California Framework 

Agreements, as well as the compliance 

flexibilities built into the program. Also, 

as discussed in Section I.G below, EPA 

requests comment on standards for MY 

2026 that would result in fleet average 

target levels that are in the range of 5– 

10 g/mile lower (i.e., more stringent) 

than the levels proposed. This request 

for comments is in keeping with the 

additional lead time available for this 

out-year compared to MYs 2023–2025, 

and because EPA may determine that it 

is appropriate, particularly in light of 

the accelerating transition to electrified 

vehicles, to require additional 

reductions in this time frame. The 

proposed standards would achieve 

significant GHG and other emission 

reductions and related public health 

and welfare benefits, while providing 

consumers with lower operating costs 

resulting from significant fuel savings. 

Our analysis described in this notice 

demonstrates that the proposed 

standards are appropriate under section 

202(a) of the CAA, considering costs, 

technological feasibility, available lead 

time, and other factors. The proposed 

trajectory of increasing stringency from 

MYs 2023 to 2026 takes into account the 

credit-based emissions averaging, 

banking and trading flexibilities of the 

current program as well as additional 

flexibility provisions that we are 

proposing to ease the transition to more 

stringent standards. EPA also took into 

account manufacturers’ ability to 

generate credits against the existing 

standards relaxed in the SAFE rule for 

MYs 2021 and 2022, which we are not 

proposing to revise. 

In our design and analyses of the 

proposed program and our overall 

updated assessment of feasibility, EPA 

also took into account the decade-long 

light-duty vehicle GHG emission 

reduction program in which the auto 

industry has introduced a wide lineup 

of ever more fuel-efficient, GHGreducing technologies. The 

technological achievements already 

developed and applied to vehicles 

within the current new vehicle fleet will 

enable the industry to achieve the 

proposed standards even without the 

development of new technologies 

beyond those already widely available. 

Furthermore, in light of the design cycle 

timing for vehicles, EPA has basis to 

expect that the vehicles that automakers 

will be selling during the first years of 

the proposed MY 2023–26 program 

were already designed before the less 

stringent SAFE standards were recently 

adopted. Further support that the 

technologies needed to meet the 

proposed standards do not need to be 

developed, but are already widely 

available and in use on vehicles, can be 

found in the fact that five vehicle 

manufacturers, representing about a 

third of U.S. auto sales, agreed in 2019 

with the State of California that their 

nationwide fleets would meet GHG 

emission reduction targets more 

stringent than the applicable EPA 

standards beginning in model year 2021. 

The fact that five automakers 

voluntarily entered into the California 

Framework Agreements also supports 

the feasibility of meeting standards at 

least as stringent as the emission 

reduction targets under the California 

Framework, which we describe in detail 

later in this preamble. We describe 

additional details of the proposal below 

and in later sections of the preamble as 

well as in the Draft Regulatory Impact 

Analysis (DRIA). We also describe and 

analyze both less stringent and more 

stringent alternatives, consistent with 

OMB Circular A–4. 

Although most automakers have 

launched ambitious plans to develop 

and produce increasing numbers of 

zero- and near-zero-emission vehicles, 

EPA recognizes that during the nearterm timeframe of the proposed 

standards through MY 2026, the new 

vehicle fleet likely will continue to 

consist primarily of gasoline-fueled 

vehicles. In this preamble and in the 

DRIA, we provide our analyses 

supporting our assessment that the 

proposed standards for MYs 2023 

through 2026 would be achievable 

primarily through the application of 

advanced gasoline vehicle technologies. 

We project that during the four-year 

ramping up of the stringency of the CO2

standards, the proposed standards could 

be met with gradually increasing sales 

of plug-in electric vehicles in the U.S., 

up to about 8 percent market share 

(including both electric vehicles (EVs) 

and plug-in hybrid electric vehicles 

(PHEVs)) by MY 2026. Given that EVs 

and PHEVs represented about 2 percent 

of the new vehicle market in MY 2019,34

this would represent a significant 

increase in penetration of these vehicles 

but one that we believe is reasonable 

given automaker announcements on 

increasing EV and PHEV production. 

We note later in this preamble in the 

discussion of the alternative levels of 

stringency that EPA is considering, that 

there may be the potential for higher 

levels of EV penetration by MY 2026, 

which could enable EPA to consider a 

more stringent standard for MY 2026. 

As described elsewhere in this 

preamble, we believe that, in 

conjunction with the proposed 

standards, the limited but focused 

incentives and flexibilities that we are 

proposing would support automakers’ 

acceleration of their introduction and 

sales of advanced technologies, 

including zero and near-zero-emission 

technologies. 

1. Proposed Revised GHG Emissions 

Standards 

i. Proposed Revised CO2 Targets 

As with EPA’s previous light-duty 

GHG programs, EPA is proposing 

footprint-based standards curves for 

both passenger cars and trucks. Each 

manufacturer would have a unique 

standard for the passenger cars category 

and another for the truck category 35 for 

each MY based on the sales-weighted 

footprint-based CO2 targets 36 of the 

vehicles produced in that MY. Figure 1 

shows EPA’s proposed standards, 

expressed as average fleetwide GHG 

emissions targets (cars and trucks 

combined), projected through MY 2026. 

For comparison, the figure also shows 

the corresponding targets for the SAFE 

final rulemaking (FRM) and the 2012 

FRM. The projected fleet targets for this 

proposed rule increase in stringency in 


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43732 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

MY 2023 by about 10 percent (from the 

existing SAFE rule standards in MY 

2022), followed by stringency increases 

thereafter of nearly 5 percent year over 

year from MY 2024 through MY 2026. 

Also, as discussed in Section I.G, EPA 

requests comment on standards for MY 

2026 that would result in fleet average 

target levels that are in the range of 

5–10 g/mile lower (i.e., more stringent) 

than the levels proposed. As with all 

EPA vehicle emissions standards, the 

proposed MY 2026 standards would 

then remain in place for all subsequent 

MYs, unless and until they are revised 

in a subsequent rulemaking. Table 1 

presents the estimates of EPA’s 

proposed standards presented in Figure 

1, again in terms of the projected overall 

industry fleetwide CO2-equivalent 

emission compliance target levels. The 

industry fleet-wide estimates in Table 1 

are projections based on modeling that 

EPA conducted for the proposed rule, 

taking into consideration projected fleet 

mix and footprints for each 

manufacturer’s fleet in each model year. 

Table 2 presents projected industry fleet 

average year-over-year percent 

reductions comparing the existing 

standards under the SAFE rule and the 

proposed revised standards. See Section 

II.A below for a full discussion of the 

proposed standards and presentations of 

the footprint standards curves. 

BILLING CODE 6560–50–P 

BILLING CODE 6560–50–C 

TABLE 1—PROJECTED INDUSTRY FLEET-WIDE CO2 COMPLIANCE TARGETS FOR MYS 2023–2026 

[grams/mi] 

2022 * 2023 2024 2025 2026 ** 

Cars ...................................................................................... 180 165 157 149 142 

Trucks .................................................................................. 260 232 221 210 199 

Combined Cars and Trucks ................................................. 220 199 189 180 171 

* SAFE rule targets included for reference. 

** EPA is also requesting comment on MY 2026 standards that would result in fleet average levels that are 5–10 g/mile more stringent than the 

levels shown. 

The combined car/truck CO2 targets are a function of assumed car/truck shares. For this illustration, we assume an approximately 50/50% 

split in MYs 2023–2026. See DRIA Chapter 2 for detail. 


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240 

230 

220 

210 

OJ 

E 

- 200 ~ 

0 "' 

u 

190 

180 

170 

2020 2021 

EPA requests comment on a 5 

to 10 g/mi greater stringency 

for the proposal in MY2026 

2022 2023 2024 

Model Year 

--2012 FRM 

••• SAFE FRM 

-Proposal 

2025 2026 2027 

Figure 1 EPA Proposed Industry Fleet-Wide COi Compliance Targets, Compared to 2012 and SAFE Rules, 

grams/mile, MYs 2021-2026 
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43733 

37See 75 FR 25324, May 7, 2010 and 77 FR 

62624, Oct. 15, 2012. 

TABLE 2—PROJECTED INDUSTRY FLEET AVERAGE TARGET YEAR-OVER-YEAR PERCENT REDUCTIONS

SAFE rule Proposal 

Cars 

% 

Trucks 

% 

Combined 

% 

Cars 

% 

Trucks 

% 

Combined 

% 

2023 ......................................................... 1.7 1.5 1.6 8.3 10.8 9.8 

2024 ......................................................... 1.1 1.2 1.2 4.8 4.7 4.7 

2025 ......................................................... 2.3 2.0 2.2 5.1 5.0 4.9 

2026 * ....................................................... 1.8 1.6 1.7 4.7 5.2 5.0 

* The percentages shown do not include EPA’s request for comments on MY 2026 standards that are 5–10 g/mile more stringent than 

proposed. 

2. Proposed Compliance Incentives and 

Flexibilities 

The existing GHG program 

established in the 2010 and 2012 rules 

included several key flexibilities, such 

as credit programs and technology 

incentives that are discussed further in 

this proposal where EPA is requesting 

comment or proposing modifications.37

These include: 

• Credit Averaging, Banking, and 

Trading (ABT) including credit carryforward, credit carry-back, 

transferring credits between a 

manufacturer’s car and truck fleets, 

and credit trading between 

manufacturers (MY 2012 and later) 

• Off-cycle credits for GHG emissions 

reductions not captured on the test 

procedures used for fleet average 

compliance with the footprint-based 

standards (MY 2012 and later) 

• Air conditioning credits for system 

efficiency improvements and reduced 

refrigerant leakage or use of low 

global warming potential refrigerants 

(MY 2012 and later) 

• Multiplier incentives for advanced 

technology vehicles including electric 

vehicles, fuel cell vehicles, plug-in 

hybrids (ending after MY 2021) 

• Multiplier incentives for natural gas 

fueled vehicles (MY 2021–2026) 

• Full-size pick-up incentives for 

hybridization or performance 

improvements equivalent to 

hybridization (ending after MY 2021) 

EPA is proposing a targeted set of 

extended or additional compliance 

flexibilities and incentives that we 

believe are appropriate given the 

stringency and lead time of the 

proposed standards. We are proposing 

four types of flexibilities/incentives, in 

addition to flexibilities/incentives that 

already will be available for these MYs 

under EPA’s existing regulations: (1) A 

limited extension of carry-forward 

credits generated in MYs 2016 through 

2020; (2) an extension of the advanced 

technology vehicle multiplier credits for 

MYs 2022 through 2025 with a 

cumulative credit cap; (3) restoration of 

the 2012 rule’s full-size pickup truck 

incentives for strong hybrids or similar 

performance-based credit for MYs 2022 

through 2025 (provisions which were 

removed in the SAFE rule); and (4) an 

increase of the off-cycle credits menu 

cap from 10 g/mile to 15 g/mile. EPA is 

also proposing to remove the multiplier 

incentives for natural gas fueled 

vehicles for MYs 2023–2026. We 

summarize these proposals below and 

provide details in Sections II.B and II.C 

below. 

The GHG program includes existing 

provisions initially established in the 

2010 rule, which set the MY 2012–2016 

GHG standards, for how credits may be 

used within the program. These 

averaging, banking, and trading (ABT) 

provisions include credit carry-forward, 

credit carry-back (also called deficit 

carry-forward), credit transfers (within a 

manufacturer), and credit trading 

(across manufacturers). These ABT 

provisions define how credits may be 

used and are integral to the program. 

The current program limits credit carryforward to 5 years. EPA is proposing a 

limited extension of credit carryforward for credits generated in MYs 

2016 through 2020. The proposal would 

change the credit carry-forward time 

limitation for MY 2016 credits from five 

to seven years and the carry-forward 

limit for MYs 2017–2020 from 5 to 6 

years, as shown in Table 3 below. 

TABLE 3—EPA PROPOSED EXTENSION OF CREDIT CARRY-FORWARD PROVISIONS

MY credits are banked 

MYs credits are valid under EPA’s proposed extension 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 

2016 ................................................. ............ x x x x x + + ............ ............ ............

2017 ................................................. ............ ............ x x x x x + ............ ............ ............

2018 ................................................. ............ ............ ............ x x x x x + ............ ............

2019 ................................................. ............ ............ ............ ............ x x x x x + ............

2020 ................................................. ............ ............ ............ ............ ............ x x x x x + 

2021 ................................................. ............ ............ ............ ............ ............ ............ x x x x x 

x = Current program. + = Proposed additional years. 

The existing GHG program also 

includes temporary incentives through 

MY 2021 that encourage the use of 

advanced technologies such as electric, 

hybrid, and fuel cell vehicles, as well as 

incentives for full-size pickups using 

strong hybridization or technologies 

providing similar emissions reductions 

to hybrid technology. The full-size 

pickup incentives originally were 

available through MY 2025, but the 

SAFE rule removed these incentives for 

MYs 2022 through 2025. When EPA 

established these incentives in the 2012 

rule, EPA recognized that they would 

reduce the effective stringency of the 

standards, but believed that it was 

worthwhile to have a limited near-term 


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43734 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

38See Tables III–2 and III–3, 77 FR 62772, 

October 15, 2012. 

39 77 FR 62812, October 15, 2012. 

loss of emissions reduction benefits to 

increase the potential for far greater 

emissions reduction and technology 

diffusion benefits in the longer term.38

EPA believed that the temporary 

regulatory incentives would help bring 

low emission technologies to market 

more quickly than in the absence of 

incentives.39 With these same goals in 

mind for this program, EPA is proposing 

multiplier incentives from MY 2022 

though MY 2025 with a cap on 

multiplier credits and to reinstate the 

full-size pickup incentives removed 

from the program by the SAFE rule. 

These proposed incentives are intended 

as a temporary measure supporting the 

transition to zero-emission vehicles and 

to provide additional flexibility in 

meeting the MY 2023–2026 proposed 

standards, as further discussed in 

Section II.B.1. 

EPA is also proposing to remove the 

extended multiplier incentives added by 

the SAFE rule from the GHG program 

after MY 2022. EPA is proposing to end 

multipliers for NGVs in this manner 

because NGVs are not a near-zero 

emissions technology and EPA believes 

multipliers are no longer necessary or 

appropriate for these vehicles. Any NGV 

multiplier credits generated in MY 2022 

would be included under the proposed 

multiplier cap. 

The current program also includes 

credits for real-world emissions 

reductions not reflected on the test 

cycles used for measuring CO2

emissions for compliance with the fleet 

average standards. There are credits for 

using technologies that reduce GHG 

emissions that aren’t captured on EPA 

tests (‘‘off-cycle’’ technologies) and 

improvements to air conditioning 

systems that increase efficiency and 

reduce refrigerant leakage. These credit 

opportunities do not sunset under the 

existing regulations, remaining a part of 

the program through MY 2026 and 

beyond unless the program is changed 

by regulatory action. EPA is proposing 

to modify an aspect of the off-cycle 

credits program to provide additional 

opportunities for manufacturers to 

generate credits by increasing the predefined menu credit cap from 10 to 15 

g/mile. EPA is also proposing to modify 

some of the regulatory definitions that 

are used to determine whether a 

technology is eligible for the menu 

credits. EPA is not proposing changes to 

the air conditioning credits elements of 

the program. 

C. Analytical Support for the Proposed 

Revised Standards 

1. Summary of Analyses for This 

Proposed Rule 

All of EPA’s analyses of the national 

light-duty vehicle GHG program over 

the past decade have been built on the 

same overall framework and produce 

the same types of results. Section III.A 

below explains this common EPA 

framework in more detail. In summary, 

it includes the following primary 

elements: 

i. Analyzing Issues of Feasibility, Costs, 

and Lead Time 

As with our earlier analyses, EPA 

used a model to simulate the decision 

process of auto manufacturers in 

choosing among the emission reduction 

technologies available to incorporate in 

vehicles across their fleets. The models 

take into account both the projected 

costs of established and newer 

technologies and the relative ability of 

each of these technologies to reduce 

GHG emissions. This process identifies 

potential pathways for manufacturers to 

comply with a given set of GHG 

standards. EPA then estimates projected 

average and total costs for 

manufacturers to produce these vehicles 

to meet the standards under evaluation 

during the model years covered by the 

analysis. 

In addition to projecting the 

technological capabilities of the 

industry and estimating compliance 

costs for each of the four affected model 

years (MYs 2023–2026), EPA has 

considered the role of the averaging, 

banking, and trading system that has 

been available and extensively used by 

the industry since the beginning of the 

light-duty vehicle GHG program in 

model year 2012. Our analysis of the 

current and anticipated near-future 

usage of the GHG credit mechanisms 

(III.B.2 below) reinforces the trends we 

identified in our other analyses showing 

widespread technological advancement 

in the industry at reasonable per-vehicle 

costs. Together, these analyses support 

EPA’s conclusion under section 202(a) 

of the CAA that technologically feasible 

pathways are available at reasonable 

costs for automakers to comply with the 

proposed standards during each of the 

four model years. We discuss these 

analyses and their results further in 

Section III below. 

ii. Analyzing the Projected Impacts of 

the Proposed Program 

We also estimate the GHG and nonGHG emission impacts (tailpipe and 

upstream) of the proposed standards. 

EPA then builds on the estimated 

changes in emissions and fuel 

consumption to calculate expected net 

economic impacts from these changes. 

Key economic inputs include: The 

social costs of GHGs; measures of health 

impacts from changes in criteria 

pollutant emissions; a value for the 

vehicle miles traveled ‘‘rebound effect;’’ 

estimates of energy security impacts of 

changes in fuel consumption; and costs 

associated with crashes, noise, and 

congestion from additional rebound 

driving. 

Our overall analytical approach 

generates key results for the following 

metrics: Incremental costs per vehicle 

(industry-wide averages and by 

manufacturer); total vehicle technology 

costs for the auto industry; GHG 

emissions reductions and criteria 

pollutant emissions reductions; 

penetration of key GHG-reducing 

technologies across the fleet; consumer 

fuel savings; oil reductions; and net 

societal costs and benefits. We discuss 

these analyses in Sections III, IV, V, and 

VII below as well as in the DRIA. 

2. History of Similar Analyses 

At several points during the past 

decade, EPA has performed detailed 

analyses to evaluate the technological 

feasibility, as well as to project program 

costs and benefits, of the national lightduty vehicle GHG emissions control 

program. Although the purposes of 

these analyses varied, and EPA used 

somewhat different modeling 

approaches and tools, in each case these 

analyses included assessments of the 

program in the later years of the 

standards, i.e., MYs 2022 through 2025 

or 2026. As we describe in more detail 

in Chapter 1 of the DRIA, EPA 

performed similar analyses in support of 

the 2011 proposal and 2012 final rule 

establishing the original MY 2017–2025 

light-duty vehicle GHG standards; in 

2016–January 2017 in support of the 

Midterm Evaluation process and 

Determination concerning the MY 

2022–2025 standards; and in 2018 

during the development of the SAFE 

proposed rule. 

It is notable that, although each 

analysis is based on projections from the 

then-available fleet data forward to 

model years 2025 or 2026, the results of 

each of these earlier analyses, as well as 

the updated analysis we have performed 

for our proposed standards, have all 

produced very similar results in several 

key metrics. For example, the estimated 

projected cost to manufacturers to 

implement similar standards in 2025– 

2026 has remained fairly consistent 

since 2012. Thus, while we believe the 

updated analysis presented in the DRIA 

provides strong support for the 


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feasibility and appropriateness of the 

proposed program, the consistent results 

from the earlier analyses further 

reinforce the robustness of our 

conclusions. 

D. Summary of Costs and Benefits of the 

Proposed Program 

EPA estimates that this proposal 

would result in significant present-value 

net benefits of $86 billion to $140 

billion (annualized net benefits of $4.2 

billion to $7.3 billion)—that is, the total 

benefits far exceed the total costs of the 

program. Table 4 below summarizes 

EPA’s estimates of total discounted 

costs, fuel savings, and benefits. The 

results presented here project the 

monetized environmental and economic 

impacts associated with the proposed 

standards during each calendar year 

through 2050. The proposal also would 

have significant benefits for consumers, 

as the fuel savings for American drivers 

would total $120 to $250 billion through 

2050. With these fuel savings, 

consumers would benefit from reduced 

operating costs over the vehicle lifetime. 

The benefits include climate-related 

economic benefits from reducing 

emissions of GHGs that contribute to 

climate change, reductions in energy 

security externalities caused by U.S. 

petroleum consumption and imports, 

the value of certain particulate matterrelated health benefits (including 

premature mortality), the value of 

additional driving attributed to the 

rebound effect, and the value of reduced 

refueling time needed to fill a more fuelefficient vehicle. The analysis also 

includes estimates of economic impacts 

stemming from additional vehicle use, 

such as the economic damages caused 

by crashes, congestion, and noise (from 

increased rebound driving). See the 

DRIA for more information regarding 

these estimates. 

TABLE 4—MONETIZED DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS OF THE PROPOSED PROGRAM FOR CALENDAR

YEARS THROUGH 2050 

[Billions of 2018 dollars] abcde

Present value Annualized value 

3% 

Discount rate 

7% 

Discount rate 

3% 

Discount rate 

7% 

Discount rate 

Costs ........................................................................................ $240 $150 $12 $12 

Fuel Savings ............................................................................ 250 120 13 9.9 

Benefits .................................................................................... 130 110 6.9 6.3 

Net Benefits ............................................................................. 140 86 7.3 4.2 

Notes: 

aValues rounded to two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and benefits included in the analysis (2021–2050) and discounted back to year 2021. b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate but the Agency does not have 

a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC–GHG 

estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated using 

discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions (SC–GHGs at 5, 3, and 2.5 percent) is used to 

calculate the present and annualized values of climate benefits for internal consistency, while all other costs and benefits are discounted at either 

3% or 7%. d Net benefits reflect the fuel savings plus benefits minus costs. 

e Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

A second way to present the net 

benefits of the proposal is using a 

vehicle MY lifetime basis. Table 5 and 

Table 6 summarize EPA’s estimates of 

total discounted costs, fuel savings, and 

benefits through the full lifetime of 

vehicles projected to be sold in MYs 

2023–2026. The estimated results 

presented here project the monetized 

environmental and economic impacts 

associated with the proposed standards. 

Note that standards continue at their 

MY2026 levels beyond MY2026 in any 

scenario. At both a 3% and 7% discount 

rate all model years show substantial 

fuel savings and net benefits. 

TABLE 5—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE PROPOSED MYS 2023–2026 GHG 

STANDARDS, 3% DISCOUNT RATE

[For vehicles produced in MY 2023–2026]abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Present values 

2023 ................................................................................................................. $4.8 $3.6 $1.9 $0.68 

2024 ................................................................................................................. 5.9 7 3.6 4.7 

2025 ................................................................................................................. 6.7 8.6 4.4 6.2 

2026 ................................................................................................................. 8.1 13 7.2 12 

Sum .......................................................................................................... 26 33 17 24 


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TABLE 5—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE PROPOSED MYS 2023–2026 GHG 

STANDARDS, 3% DISCOUNT RATE—Continued 

[For vehicles produced in MY 2023–2026]abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Annualized values 

2023 ................................................................................................................. 0.21 0.16 0.08 0.029 

2024 ................................................................................................................. 0.26 0.3 0.16 0.2 

2025 ................................................................................................................. 0.29 0.37 0.19 0.27 

2026 ................................................................................................................. 0.35 0.58 0.31 0.54 

Sum .......................................................................................................... 1.1 1.4 0.74 1 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 3% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

TABLE 6—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE PROPOSED MYS 2023–2026 GHG 

STANDARDS, 7% DISCOUNT RATE

[For vehicles produced in MY 2023–2026]abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Present values 

2023 ................................................................................................................. $4.4 $2.6 $1.7 ¥$0.14 

2024 ................................................................................................................. 5.5 4.7 3.3 2.4 

2025 ................................................................................................................. 6.1 5.5 3.9 3.4 

2026 ................................................................................................................. 7.3 8.2 6.2 7.2 

Sum .......................................................................................................... 23 21 15 13 

Annualized values 

2023 ................................................................................................................. 0.33 0.19 0.085 ¥0.053 

2024 ................................................................................................................. 0.41 0.35 0.16 0.1 

2025 ................................................................................................................. 0.45 0.41 0.19 0.15 

2026 ................................................................................................................. 0.55 0.62 0.31 0.38 

Sum .......................................................................................................... 1.7 1.6 0.75 0.58 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 7% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

E. How has EPA considered 

environmental justice in this proposal? 

Executive Orders 12898 (59 FR 7629, 

February 16, 1994) and 14008 (86 FR 

7619, February 1, 2021) direct federal 

agencies, to the greatest extent 

practicable and permitted by law, to 

make achieving environmental justice 

(EJ) part of their mission by identifying 

and addressing, as appropriate, 

disproportionately high and adverse 

human health or environmental effects 

of their programs, policies, and 

activities on minority populations and 

low-income populations in the United 

States. Chapter 8.3 discusses the 

potential environmental justice 

concerns associated with this proposal. 

EPA defines environmental justice as 

the fair treatment and meaningful 


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40 ‘‘Technical Guidance for Assessing 

Environmental Justice in Regulatory Analysis.’’ 

Epa.gov, Environmental Protection Agency, https:// 

www.epa.gov/sites/production/files/2016-06/ 

documents/ejtg_5_6_16_v5.1.pdf. (June 2016). 

involvement of all people regardless of 

race, color, national origin, or income 

with respect to the development, 

implementation, and enforcement of 

environmental laws, regulations, and 

policies. Executive Order 14008 also 

calls on federal agencies to make 

achieving environmental justice part of 

their missions ‘‘by developing programs, 

policies, and activities to address the 

disproportionately high and adverse 

human health, environmental, climaterelated and other cumulative impacts on 

disadvantaged communities, as well as 

the accompanying economic challenges 

of such impacts.’’ It declares a policy 

‘‘to secure environmental justice and 

spur economic opportunity for 

disadvantaged communities that have 

been historically marginalized and 

overburdened by pollution and underinvestment in housing, transportation, 

water and wastewater infrastructure and 

health care.’’ Under Executive Order 

13563 (76 FR 3821), federal agencies 

may consider equity, human dignity, 

fairness, and distributional 

considerations, where appropriate and 

permitted by law. 

EPA’s 2016 ‘‘Technical Guidance for 

Assessing Environmental Justice in 

Regulatory Analysis’’ provides 

recommendations on conducting the 

highest quality analysis feasible, 

recognizing that data limitations, time 

and resource constraints, and analytic 

challenges will vary by media and 

regulatory context. 40

EPA’s mobile source regulatory 

program has historically reduced 

significant amounts of both GHG and 

non-GHG pollutants to the benefit of all 

U.S. residents, including populations 

that live near roads and in communities 

with EJ concerns. EJ concerns may arise 

in the context of this rulemaking in two 

key areas. 

First, minority populations and lowincome populations may be especially 

vulnerable to the impacts of climate 

change. As discussed in Section IV.C, 

this proposed rulemaking would 

mitigate the impacts of climate change 

by achieving significant GHG emission 

reductions, which would benefit 

populations that may be especially 

vulnerable to various forms of damages 

associated with climate change. 

Second, in addition to significant 

climate-change benefits, the proposed 

standards would also impact non-GHG 

emissions. As discussed in Section 

VII.L.2, numerous studies have found 

that environmental hazards such as air 

pollution are more prevalent in areas 

where minority populations and lowincome populations represent a higher 

fraction of the population compared 

with the general population. There is 

substantial evidence, for example, that 

people who live or attend school near 

major roadways are more likely to be of 

a racial minority, Hispanic ethnicity, 

and/or low socioeconomic status (see 

Section VII.L.2). 

We expect this proposed rule would 

result in both small reductions and 

small increases of non-GHG emissions. 

These effects could potentially impact 

communities with EJ concerns, though 

not necessarily immediately and not 

equally in all locations. For this 

proposal, the air quality information 

needed to perform a quantified analysis 

of the distribution of such impacts was 

not available. We therefore recommend 

caution when interpreting these broad, 

qualitative observations. 

We note that EPA intends to develop 

a future rule to control emissions of 

GHGs as well as criteria and air toxic 

pollutants from light-duty vehicles for 

MYs beyond 2026. We are considering 

how to project air quality impacts from 

the changes in non-GHG emissions for 

that future rulemaking (see Section V.C). 

F. Affordability and Equity 

In addition to considering 

environmental justice impacts, we have 

examined the effects of the proposed 

standards on affordability of vehicles 

and transportation services for lowincome households in Section VII.L of 

this Preamble and Chapter 8.4 of the 

DRIA. As with the effects of the 

proposed standards on vehicle sales 

discussed in Section VII.B, the effects of 

the proposed standards on affordability 

and equity depend in part on two 

countervailing effects: The increase in 

the up-front costs of new vehicles 

subject to more stringent standards, and 

the decrease in operating costs from 

reduced fuel consumption over time. 

The increase in up-front new vehicle 

costs has the potential to increase the 

prices of used vehicles, to make credit 

more difficult to obtain, and to make the 

least expensive new vehicles less 

desirable compared to used vehicles. 

The reduction in operating costs over 

time has the potential to mitigate or 

reverse all these effects. Lower operating 

costs on their own increase mobility 

(see DRIA Chapter 3.1 for a discussion 

of rebound driving). 

While social equity involves issues 

beyond income and affordability, 

including race, ethnicity, gender, gender 

identification, and residential location, 

the potential effects of the proposed 

standards on lower-income households 

are of great importance for social equity 

and reflect these contrasting forces. The 

overall effects on vehicle ownership, 

including for lower-income households, 

depend heavily on the role of fuel 

consumption in vehicle sales decisions, 

as discussed in Section VII.M. At the 

same time, lower-income households 

own fewer vehicles per household, are 

more likely to buy used vehicles than 

new, and spend more on fuel than on 

vehicles on an annual basis than higherincome households. In addition, for 

lower-income households, fuel 

expenditures are a larger portion of 

household income, so the fuel savings 

that would result from this proposal 

may be more impactful to these 

consumers. Thus, the benefits of this 

proposal may be stronger for lowerincome households even if they buy 

used vehicles: As vehicles meeting the 

proposed standards enter the used 

vehicle market, they will retain the fuel 

economy/GHG-reduction benefits, and 

associated fuel savings, while facing a 

smaller portion of the upfront vehicle 

costs. The reduction in operating costs 

may also increase access to 

transportation services, such as ridehailing and ride-sharing, where the 

lower per-mile costs may play a larger 

role than up-front costs in pricing. As a 

result, lower-income consumers may be 

affected more from the reduction in 

operating costs than the increase in upfront costs. 

New electric vehicles currently have 

higher up-front costs and lower 

operating costs than gasoline vehicles 

and require access to charging 

infrastructure that may not be readily 

available to many. EPA has heard from 

some environmental justice groups and 

Tribes that limited access to electric 

vehicles and charging infrastructure can 

be a barrier for purchasing EVs. This 

proposal projects that the vast majority 

of vehicles produced in the time frame 

of the proposed standards will be 

gasoline-fueled vehicles (with EVs and 

PHEVs gradually increasing to about 8 

percent total market share by MY 2026 

compared to about 4 percent in the No 

Action scenario, see DRIA Chapter 4.1.3, 

Table 4–30). However, EPA will monitor 

and study affordability issues related to 

electric vehicles as their prevalence in 

the vehicle fleet increases. 

G. What alternatives is EPA 

considering? 

1. Description of the Alternatives 

Along with the proposed standards, 

EPA analyzed both a more stringent and 

a less stringent alternative. For the less 

stringent alternative, Alternative 1, EPA 

used the coefficients in the California 


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41 41 See ‘‘Benefits and Costs of the EPA Lightduty Vehicle GHG Proposal with and without 

Advanced Technology Multipliers,’’ memorandum 

to Docket. 

Framework for the 2.7 percent effective 

stringency level (as described in Section 

II.B.1) as the basis for the MY 2023 

stringency level and the 2012 rule’s MY 

2025 standards as the basis for the MY 

2026 stringency level, with linear yearover-year reductions between the two 

points for MYs 2024 and 2025. EPA 

views the California Framework as a 

reasonable basis for the least stringent 

alternative that EPA would consider 

finalizing, since it represents a level of 

stringency that five manufacturers have 

already committed to achieving. EPA 

did not include incentive multipliers for 

Alternative 1, as doing so would only 

further reduce the effective stringency of 

this Alternative, and EPA views 

Alternative 1 as the lower end of 

stringency that it believes is appropriate 

through 2026. 

For the more stringent alternative, 

Alternative 2, EPA used the 2012 rule 

standards as the basis for MY 2023– 

2025 targets, with the standards 

continuing to increase in stringency in 

a linear fashion for MY 2026. 

Alternative 2 adopts the 2012 rule 

stringency levels in MY 2023 and 

follows the 2012 rule standard target 

levels through MY 2025. EPA extended 

the same linear average year-over-year 

trajectory for MYs 2023–2025 to MY 

2026 for the final standards under 

Alternative 2. As noted in Section 

II.A.1, EPA believes that it is important 

to continue to make progress in MY 

2026 beyond the MY 2025 standard 

levels in the 2012 rule. As with the 

proposal, Alternative 2 meets this 

objective. EPA did not include in 

Alternative 2 the proposed incentive 

multipliers with the proposed 

cumulative credit cap in MYs 2022– 

2025, which would have the effect of 

making Alternative 2 less stringent. As 

discussed in Section II.B.1, EPA is 

requesting comment on whether or not 

to include the proposed multipliers, and 

our request for comments extends to 

whether to include multipliers both for 

the proposal and for Alternative 2.41

As previously noted in Section I.B.2, 

EPA is proposing several modifications 

to program flexibilities. These proposed 

program changes, except for the 

advanced technology multipliers, would 

also apply to the alternatives. Table 7 

below provides a list of the proposed 

flexibilities and their applicability to the 

proposed and alternative standards. 

TABLE 7—APPLICABILITY OF REVISED FLEXIBILITY PROVISIONS TO THE PROPOSAL AND ALTERNATIVES

Provision Proposal Alternative 1 Alternative 2 

Extension of credit carry-forward for MY 2016–2020 credits ............................................. Yes ................... Yes ................... Yes. 

Advanced technology incentive multipliers for MYs 2022–2025 with cap ......................... Yes ................... No ..................... No. 

Increase of off-cycle menu cap from 10 to 15 g/mile ......................................................... Yes ................... Yes ................... Yes. 

Reinstatement of full-size pickup incentives for strong hybrids or equivalent technologies for MYs 2022–2025.Yes ................... Yes ................... Yes. 

EPA’s technical analysis, presented in Section III, consists of model runs using a model capable of reflecting some but not all of these provisions. The modeling includes consideration of advanced technology incentive multipliers for the proposal but not for the alternatives. The model 

runs also include the 15 grams per mile off-cycle menu cap as appropriate given the standards or targets to which a fleet being modeled is complying. Not included in the model runs are the full-size pickup truck technology incentive credit or the extension of the emissions credit carryforward. 

The fleet average targets for the two 

alternatives compared to the proposed 

standards are provided in Table 8 

below. EPA also requests comment on 

the level of stringency for MY 2026 for 

the alternatives and the proposed 

standards. Specifically, EPA requests 

comment on standards for MY 2026 that 

would result in fleet average target 

levels that are in the range of 5–10 

g/mile lower (i.e., more stringent) than 

the levels shown for MY 2026 in Table 

8. EPA is requesting specific comment 

on whether the level of stringency for 

MY 2026 should be greater in keeping 

with the additional lead time available 

for this out-year compared to MYs 

2023–2025, and because EPA may 

determine that it is appropriate, 

particularly in light of the accelerating 

transition to electrified vehicles, to 

require additional reductions in this 

timeframe. As discussed in detail in 

Section A.3 of the Executive Summary, 

there has been a proliferation of recent 

announcements from automakers 

signaling a rapidly growing shift in 

investment away from internalcombustion technologies and toward 

high levels of electrification. EPA has 

also heard from a wide range of 

stakeholders over the past several 

months, including but not limited to the 

automotive manufacturers and the 

automotive suppliers, that the 

significant investments being made now 

to develop and launch new EV product 

offerings and in the expansion of EV 

charging infrastructure could enable 

higher levels of EV penetration to occur 

in the marketplace by the MY 2026 time 

frame than EPA has projected in this 

proposal for both the proposed MY 2026 

standards and the Alternative 2 MY 

2026 standards. The information 

concerning the investment landscape 

potentially accelerating to an even 

greater extent of market penetration of 

EV products helps inform EPA’s request 

for comment on the potential for a more 

stringent MY 2026 standard that would 

reflect this information and related 

considerations, including any additional 

information provided by commenters. In 

light of these stakeholder views and 

other available information, EPA is 

soliciting comment on the 

appropriateness of more stringent MY 

2026 standards. 

TABLE 8—PROJECTED FLEET AVERAGE TARGET LEVELS FOR PROPOSED STANDARDS AND ALTERNATIVES

[CO2 grams/mile] 

Model year 

Proposal 

projected 

targets 

Alternative 1 

projected 

targets 

Alternative 2 

projected 

targets 

2021 ............................................................................................................................................. * 223 * 223 * 224 

2022 ............................................................................................................................................. * 220 * 220 * 220 


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TABLE 8—PROJECTED FLEET AVERAGE TARGET LEVELS FOR PROPOSED STANDARDS AND ALTERNATIVES—Continued 

[CO2 grams/mile] 

Model year 

Proposal 

projected 

targets 

Alternative 1 

projected 

targets 

Alternative 2 

projected 

targets 

2023 ............................................................................................................................................. 199 203 195 

2024 ............................................................................................................................................. 189 194 186 

2025 ............................................................................................................................................. 180 185 177 

2026 ** .......................................................................................................................................... 171 177 169 

* SAFE rule standards included here for reference. 

** EPA is also requesting comment on MY 2026 standards that would result in fleet average levels that are 5–10 g/mile more stringent than the 

levels shown. 

As shown in Figure 2, the range of 

alternatives that EPA has analyzed is 

fairly narrow, with the proposed 

standard targets differing from the 

alternatives in any given MY in MYs 

2023–2026 by 2 to 6 g/mile, although 

EPA is requesting comment on a wider 

range of standards, particularly for MY 

2026 as noted above. EPA believes this 

approach is reasonable and appropriate 

considering the relatively limited lead 

time for the proposed standards, 

especially for MYs 2023–2025, EPA’s 

assessment of feasibility, the existing 

automaker commitments to meet the 

California Framework (representing 

about one-third of the auto market), the 

standards adopted in the 2012 rule; and 

the need to reduce GHG emissions. EPA 

provides a discussion of the feasibility 

of the proposed standard and 

alternatives and the selection of the 

proposed standards in Section III.D. The 

analysis of costs and benefits of 

Alternatives 1 and 2 is shown in the 

DRIA Chapters 4, 6, and 10. EPA 

requests comments on all aspects of 

Alternatives 1 and 2 or other 

alternatives roughly within the 

stringency range of the proposal and the 

Alternatives. 

2. Summary of Costs and Benefits of the 

Alternatives 

EPA estimates that Alternative 1 

would result in significant present-value 

net benefits of $76 billion to $130 

billion (annualized net benefits of $4.1 

billion to $6.6 billion)—that is, the total 

benefits far exceed the total costs of the 

program. Table 9 below summarizes 

EPA’s estimates of total discounted 

costs, fuel savings, and benefits for 

Alternative 1. The results presented 

here project the monetized 


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240 

230 

220 

210 

Q) 200 

E 

-

~ 

ON 190 

u 

180 

170 

160 

150 

2020 2021 2022 2023 2024 2025 

Model Year 

••• SAFE FRM 

--2012 FRM 

-Proposal 

• • • Alternative 1 

- -Alternative 2 

----

2026 2027 

Figure 2 Proposed Standards Fleet Average Targets Compared to Alternatives 
43740 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

environmental and economic impacts 

associated with the proposed standards 

during each calendar year through 2050. 

Alternative 1 also would have 

significant benefits for consumers, as 

the fuel savings for American drivers 

would total $98 billion to $200 billion 

through 2050. With these fuel savings, 

consumers would benefit from reduced 

operating costs over the vehicle lifetime. 

The benefits include climate-related 

economic benefits from reducing 

emissions of GHGs that contribute to 

climate change, reductions in energy 

security externalities caused by U.S. 

petroleum consumption and imports, 

the value of certain particulate matterrelated health benefits (including 

premature mortality), the value of 

additional driving attributed to the 

rebound effect, and the value of reduced 

refueling time needed to fill a more fuelefficient vehicle. The analysis also 

includes estimates of economic impacts 

stemming from additional vehicle use, 

such as the economic damages caused 

by crashes, congestion, and noise (from 

increased rebound driving). See the 

DRIA for more information regarding 

these estimates. 

TABLE 9—MONETIZED DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS OF ALTERNATIVE 1 FOR CALENDAR YEARS

THROUGH 2050 

[Billions of 2018 dollars] abcde

Present value Annualized value 

3% 

Discount rate 

7% 

Discount rate 

3% 

Discount rate 

7% 

Discount rate 

Costs ........................................................................................ $190 $110 $9.5 $9.2 

Fuel savings ............................................................................. 200 98 10 7.9 

Benefits .................................................................................... 120 93 6 5.4 

Net benefits .............................................................................. 130 76 6.6 4.1 

Notes: 

aValues rounded to two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and benefits included in the analysis (2021–2050) and discounted back to year 2021. b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate but the Agency does not have 

a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC–GHG 

estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated using 

discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions (SC–GHGs at 5, 3, and 2.5 percent) is used to 

calculate the present and annualized values of climate benefits for internal consistency, while all other costs and benefits are discounted at either 

3% or 7%. d Net benefits reflect the fuel savings plus benefits minus costs. e Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

A second way to present the net 

benefits of the proposal is using a 

vehicle MY lifetime basis. Table 10 and 

Table 11 summarize EPA’s estimates of 

total discounted costs, fuel savings, and 

benefits through the full lifetime of 

vehicles projected to be sold in MYs 

2023–2026 under Alternative 1. The 

estimated results presented here project 

the monetized environmental and 

economic impacts associated with the 

Alternative 1 standards. Note that 

standards continue at their MY2026 

levels beyond MY2026 in any scenario. 

At both a 3% and 7% discount rate all 

model years show substantial fuel 

savings and net benefits. 

TABLE 10—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE ALTERNATIVE 1 MYS 2023–2026 GHG 

STANDARDS, 3% DISCOUNT RATE

[For vehicles produced in MY 2023–2026] abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Present values 

2023 ................................................................................................................. $3.9 $3.4 $2 $1.5 

2024 ................................................................................................................. 4.9 6.5 3.7 5.3 

2025 ................................................................................................................. 5.6 7.7 4.5 6.5 

2026 ................................................................................................................. 6.4 10 6 9.7 

Sum .......................................................................................................... 21 28 16 23 

Annualized values 

2023 ................................................................................................................. 0.17 0.15 0.085 0.067 

2024 ................................................................................................................. 0.21 0.28 0.16 0.23 

2025 ................................................................................................................. 0.24 0.33 0.19 0.28 

2026 ................................................................................................................. 0.28 0.44 0.26 0.42 

Sum .......................................................................................................... 0.9 1.2 0.7 1 

Notes: 


jbell on DSKJLSW7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43741 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4, and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 3% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

TABLE 11—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE ALTERNATIVE 1 MYS 2023–2026 GHG 

STANDARDS, 7% DISCOUNT RATE

[For Vehicles Produced in MY 2023–2026] abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Present values 

2023 ................................................................................................................. $3.7 $2.4 $1.7 $0.4 

2024 ................................................................................................................. 4.7 4.3 3.2 2.8 

2025 ................................................................................................................. 5.1 4.9 3.8 3.6 

2026 ................................................................................................................. 5.6 6.2 5 5.6 

Sum .......................................................................................................... 19 18 14 12 

Annualized values 

2023 ................................................................................................................. 0.28 0.18 0.091 ¥0.0084 

2024 ................................................................................................................. 0.35 0.32 0.17 0.14 

2025 ................................................................................................................. 0.38 0.37 0.2 0.19 

2026 ................................................................................................................. 0.42 0.47 0.26 0.31 

Sum .......................................................................................................... 1.4 1.3 0.72 0.63 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 7% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

EPA estimates that Alternative 2 

would result in significant present value 

net benefits of $110 billion to $180 

billion (annualized net benefits of $5.7 

billion to $9.1 billion)—that is, the total 

benefits far exceed the total costs of the 

program. Table 12 below summarizes 

EPA’s estimates of total discounted 

costs, fuel savings, and benefits for 

Alternative 2. The results presented 

here project the monetized 

environmental and economic impacts 

associated with the proposed standards 

during each calendar year through 2050. 

Alternative 2 also would have 

significant benefits for consumers, as 

the fuel savings for American drivers 

would total $150 billion to $290 billion 

through 2050. With these fuel savings, 

consumers would benefit from reduced 

operating costs over the vehicle lifetime. 

The benefits include climate-related 

economic benefits from reducing 

emissions of GHGs that contribute to 

climate change, reductions in energy 

security externalities caused by U.S. 

petroleum consumption and imports, 

the value of certain particulate matterrelated health benefits (including 

premature mortality), the value of 

additional driving attributed to the 

rebound effect, and the value of reduced 

time needed to refuel a more fuel 

efficient vehicle. The analysis also 

includes estimates of economic impacts 

stemming from additional vehicle use, 

such as the economic damages caused 

by crashes, congestion, and noise (from 

increased rebound driving). See the 

DRIA for more information regarding 

these estimates. 


jbell on DSKJLSW7X2PROD with PROPOSALS2
43742 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

TABLE 12—MONETIZED DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS OF ALTERNATIVE 2 FOR CALENDAR YEARS

THROUGH 2050 

[Billions of 2018 dollars] abcde

Present value Annualized value 

3% 

Discount rate 

7% 

Discount rate 

3% 

Discount rate 

7% 

Discount rate 

Costs ........................................................................................ $290 $180 $15 $14 

Fuel Savings ............................................................................ 290 150 15 12 

Benefits .................................................................................... 170 140 8.8 8 

Net Benefits ............................................................................. 180 110 9.1 5.7 

Notes: 

aValues rounded to two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and benefits included in the analysis (2021–2050) and discounted back to year 2021. b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate but the Agency does not have 

a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC–GHG 

estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated using 

discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions (SC–GHGs at 5, 3, and 2.5 percent) is used to 

calculate the present and annualized values of climate benefits for internal consistency, while all other costs and benefits are discounted at either 

3% or 7%. d Net benefits reflect the fuel savings plus benefits minus costs. 

e Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

A second way to present the net 

benefits of the proposal is using a 

vehicle MY lifetime basis. Table 13 and 

Table 14 summarize EPA’s estimates of 

total discounted costs, fuel savings, and 

benefits through the full lifetime of 

vehicles projected to be sold in MYs 

2023–2026 under Alternative 2. The 

estimated results presented here project 

the monetized environmental and 

economic impacts associated with the 

proposed standards. Note that standards 

continue at their MY2026 levels beyond 

MY2026 in any scenario. At both a 3% 

and 7% discount rate all model years 

show substantial fuel savings and net 

benefits. 

TABLE 13—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE ALTERNATIVE 2 MY 2023–2026 GHG 

STANDARDS, 3% DISCOUNT RATE

[For vehicles produced in MY 2023–2026] abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Present values 

2023 ................................................................................................................. $6.8 $7.7 $4.6 $5.5 

2024 ................................................................................................................. 7.7 9.8 5.7 7.8 

2025 ................................................................................................................. 8.4 11 6.5 9.1 

2026 ................................................................................................................. 9.2 13 7.8 12 

Sum .......................................................................................................... 32 42 25 34 

Annualized values 

2023 ................................................................................................................. $0.3 $0.33 $0.2 $0.24 

2024 ................................................................................................................. 0.33 0.42 0.25 0.34 

2025 ................................................................................................................. 0.37 0.48 0.28 0.39 

2026 ................................................................................................................. 0.4 0.57 0.34 0.51 

Sum .......................................................................................................... 1.4 1.8 1.1 1.5 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 3% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 


jbell on DSKJLSW7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43743 

TABLE 14—GHG ANALYSIS OF LIFETIME COSTS & BENEFITS TO MEET THE ALTERNATIVE 2 MY 2023–2026 GHG 

STANDARDS, 7% DISCOUNT RATE

[For vehicles produced in MY 2023–2026] abcd

[Billions of 2018$] 

MY Costs Fuel savings Benefits Net benefits 

Present values 

2023 ................................................................................................................. $6.3 $5.4 $4 $3.1 

2024 ................................................................................................................. 7 6.5 5 4.4 

2025 ................................................................................................................. 7.4 7.1 5.5 5.2 

2026 ................................................................................................................. 7.9 8.2 6.6 6.9 

Sum .......................................................................................................... 29 27 21 20 

Annualized Values 

2023 ................................................................................................................. 0.48 0.4 0.21 0.14 

2024 ................................................................................................................. 0.53 0.49 0.26 0.22 

2025 ................................................................................................................. 0.56 0.54 0.29 0.27 

2026 ................................................................................................................. 0.59 0.61 0.34 0.37 

Sum .......................................................................................................... 2.2 2 1.1 1 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 7% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

3. Summary of the Proposal’s Costs and 

Benefits Compared to the Alternatives 

Here we present the proposal’s costs 

and benefits (as summarized previously 

in Section I.D) alongside the costs and 

benefits of the alternatives (as 

summarized previously in Section 

I.G.2). 

Table 15 below summarizes EPA’s 

estimates of present value total 

discounted costs, fuel savings, and 

benefits. Table 16 below summarizes 

EPA’s estimates of annualized values of 

the total discounted costs, fuel savings, 

and benefits. The results presented in 

these tables project the monetized 

environmental and economic impacts 

associated with the proposed standards 

during each calendar year through 2050. 

The benefits include climate-related 

economic benefits from reducing 

emissions of GHGs that contribute to 

climate change, reductions in energy 

security externalities caused by U.S. 

petroleum consumption and imports, 

the value of certain particulate matterrelated health benefits (including 

premature mortality), the value of 

additional driving attributed to the 

rebound effect, and the value of reduced 

refueling time needed to fill a more fuel 

efficient vehicle. The analysis also 

includes estimates of economic impacts 

stemming from additional vehicle use, 

such as the economic damages caused 

by crashes, congestion, and noise (from 

increased rebound driving). See the 

DRIA for more information regarding 

these estimates. 

TABLE 15—PRESENT VALUE MONETIZED DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS OF THE PROPOSED

PROGRAM AND ALTERNATIVES FOR CALENDAR YEARS THROUGH 2050 

[Billions of 2018 dollars] abcde

3% Discount rate 7% Discount rate 

Proposal Alternative 1 Alternative 2 Proposal Alternative 1 Alternative 2 

Costs .................... $240 $190 $290 $150 $110 $180 

Fuel Savings ........ 250 200 290 120 98 150 

Benefits ................ 130 120 170 110 93 140 

Net Benefits ......... 140 130 180 86 76 110 

Notes: 

aValues rounded to two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and benefits included in the analysis (2021–2050) and discounted back to year 2021. b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate but the Agency does not have 

a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC–GHG 

estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated using 

discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. 


jbell on DSKJLSW7X2PROD with PROPOSALS2
43744 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

cThe same discount rate used to discount the value of damages from future GHG emissions (SC–GHGs at 5, 3, and 2.5 percent) is used to 

calculate the present and annualized values of climate benefits for internal consistency, while all other costs and benefits are discounted at either 

3% or 7%. d Net benefits reflect the fuel savings plus benefits minus costs. 

e Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

TABLE 16—ANNUALIZED MONETIZED DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS OF THE PROPOSED PROGRAM

AND ALTERNATIVES FOR CALENDAR YEARS THROUGH 2050 

[Billions of 2018 dollars] abcde

3% Discount rate 7% Discount rate 

Proposal Alternative 1 Alternative 2 Proposal Alternative 1 Alternative 2 

Costs .................... $12 $9.5 $15 $12 $9.2 $14 

Fuel Savings ........ 13 10 15 9.9 7.9 12 

Benefits ................ 6.9 6 8.8 6.3 5.4 8 

Net Benefits ......... 7.3 6.6 9.1 4.2 4.1 5.7 

Notes: 

aValues rounded to two significant figures; totals may not sum due to rounding. Present and annualized values are based on the stream of annual calendar year costs and benefits included in the analysis (2021–2050) and discounted back to year 2021. b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate but the Agency does not have 

a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC–GHG 

estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated using 

discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions (SC–GHGs at 5, 3, and 2.5 percent) is used to 

calculate the present and annualized values of climate benefits for internal consistency, while all other costs and benefits are discounted at either 

3% or 7%. d Net benefits reflect the fuel savings plus benefits minus costs. 

e Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

A second way to present the net 

benefits is using a vehicle MY lifetime 

basis. Table 17 and Table 18 summarize 

EPA’s estimates of total discounted 

costs, fuel savings, and benefits through 

the full lifetime of vehicles projected to 

be sold in MYs 2023–2026. The 

estimated results presented here project 

the monetized environmental and 

economic impacts associated with the 

proposed standards. Note that standards 

continue at their MY2026 levels beyond 

MY2026 in any scenario. At both a 3% 

and 7% discount rate all model years 

show substantial fuel savings and net 

benefits. 

TABLE 17—PRESENT VALUE GHG ANALYSIS OF LIFETIME COSTS & BENEFITS FOR MY 2023–2026 GHG STANDARDS

UNDER THE PROPOSAL AND ALTERNATIVES

[For vehicles produced in MY 2023–2026] abcd

[Billions of 2018$] 

3% Discount rate 7% Discount rate 

MY Costs Fuel 

savings Benefits Net benefits Costs Fuel savings Benefits Net benefits 

Proposal 

2023 ................................................................. $4.8 $3.6 $1.9 $0.68 $4.4 $2.6 $1.7 ¥$0.14 

2024 ................................................................. 5.9 7 3.6 4.7 5.5 4.7 3.3 2.4 

2025 ................................................................. 6.7 8.6 4.4 6.2 6.1 5.5 3.9 3.4 

2026 ................................................................. 8.1 13 7.2 12 7.3 8.2 6.2 7.2 

Sum ........................................................... 26 33 17 24 23 21 15 13 

Alternative 1 

2023 ................................................................. $3.9 $3.4 $2 $1.5 $3.7 $2.4 $1.7 $0.4 

2024 ................................................................. 4.9 6.5 3.7 5.3 4.7 4.3 3.2 2.8 

2025 ................................................................. 5.6 7.7 4.5 6.5 5.1 4.9 3.8 3.6 

2026 ................................................................. 6.4 10 6 9.7 5.6 6.2 5 5.6 

Sum ........................................................... 21 28 16 23 19 18 14 12 

Alternative 2 

2023 ................................................................. $6.8 $7.7 $4.6 $5.5 $6.3 $5.4 $4 $3.1 


jbell on DSKJLSW7X2PROD with PROPOSALS2

I I I I I I 
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43745 

TABLE 17—PRESENT VALUE GHG ANALYSIS OF LIFETIME COSTS & BENEFITS FOR MY 2023–2026 GHG STANDARDS

UNDER THE PROPOSAL AND ALTERNATIVES—Continued 

[For vehicles produced in MY 2023–2026] abcd

[Billions of 2018$] 

3% Discount rate 7% Discount rate 

MY Costs Fuel 

savings Benefits Net benefits Costs Fuel savings Benefits Net benefits 

2024 ................................................................. 7.7 9.8 5.7 7.8 7 6.5 5 4.4 

2025 ................................................................. 8.4 11 6.5 9.1 7.4 7.1 5.5 5.2 

2026 ................................................................. 9.2 13 7.8 12 7.9 8.2 6.6 6.9 

Sum ........................................................... 32 42 25 34 29 27 21 20 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. In this table, we show the benefits associated with the average SC–GHGs at a 3% discount rate, but the Agency does not 

have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC– 

GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the DRIA, a consideration of climate benefits calculated 

using discount rates below 3 percent, including 2 percent and lower, is also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 3% in this table. d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

TABLE 18—ANNUALIZED GHG ANALYSIS OF LIFETIME COSTS & BENEFITS FOR MY 2023–2026 GHG STANDARDS UNDER

THE PROPOSAL AND ALTERNATIVES

[For vehicles produced in MY 2023–2026] abcd

[Billions of 2018$] 

3% Discount rate 7% Discount rate 

MY Costs Fuel 

savings Benefits Net benefits Costs Fuel savings Benefits Net benefits 

Proposal 

2023 ............................................................. $0.21 $0.16 $0.08 $0.029 $0.33 $0.19 $0.085 ¥$0.053 

2024 ............................................................. 0.26 0.3 0.16 0.2 0.41 0.35 0.16 0.1 

2025 ............................................................. 0.29 0.37 0.19 0.27 0.45 0.41 0.19 0.15 

2026 ............................................................. 0.35 0.58 0.31 0.54 0.55 0.62 0.31 0.38 

Sum ....................................................... 1.1 1.4 0.74 1 1.7 1.6 0.75 0.58 

Alternative 1 

2023 ............................................................. $0.17 $0.15 $0.085 $0.067 $0.28 $0.18 $0.091 ¥$0.0084 

2024 ............................................................. 0.21 0.28 0.16 0.23 0.35 0.32 0.17 0.14 

2025 ............................................................. 0.24 0.33 0.19 0.28 0.38 0.37 0.2 0.19 

2026 ............................................................. 0.28 0.44 0.26 0.42 0.42 0.47 0.26 0.31 

Sum ....................................................... 0.9 1.2 0.7 1 1.4 1.3 0.72 0.63 

Alternative 2 

2023 ............................................................. $0.3 $0.33 $0.2 $0.24 $0.48 $0.4 $0.21 $0.14 

2024 ............................................................. 0.33 0.42 0.25 0.34 0.53 0.49 0.26 0.22 

2025 ............................................................. 0.37 0.48 0.28 0.39 0.56 0.54 0.29 0.27 

2026 ............................................................. 0.4 0.57 0.34 0.51 0.59 0.61 0.34 0.37 

Sum ....................................................... 1.4 1.8 1.1 1.5 2.2 2 1.1 1 

Notes: 

aThe lifetime costs and benefits of each MY vehicle are discounted back to 2021. 

b Climate benefits are based on reductions in CO2, CH4 and N2O emissions and are calculated using four different estimates of the social cost 

of each greenhouse gas (SC–GHG model average at 2.5%, 3%, and 5% discount rates; 95th percentile at 3% discount rate), which each increase over time. For the presentational purposes of this table, we show the benefits associated with the average SC–GHGs at a 3% discount 

rate, but the Agency does not have a single central SC–GHG point estimate. We emphasize the importance and value of considering the benefits calculated using all four SC–GHG estimates and present them later in this preamble. As discussed in Chapter 3.3 of the RIA, a consideration 

of climate benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also warranted when discounting intergenerational impacts. cThe same discount rate used to discount the value of damages from future GHG emissions is used to calculate the present and annualized 

value of SC–GHGs for internal consistency, while all other costs and benefits are discounted at 3% in this table. 


jbell on DSKJLSW7X2PROD with PROPOSALS2

I I I I I I 

I I I I I I I I 
43746 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

42 Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990–2019 (EPA–430–R–21–005, 

published April 2021). 

43 Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990–2019 (EPA–430–R–21–005, 

published April 2021). 

44See Sections III and VI for a discussion of lead 

time. 

45Footprint curves are graphical representations 

of the algebraic formulae defining the emission 

standards in the regulatory text. 

46The reference to CO2 here refers to CO2

equivalent reductions, as this level includes some 

reductions in emissions of greenhouse gases other 

than CO2, from refrigerant leakage, as one part of 

the A/C related reductions. 

47As with the previous GHG emissions standards, 

EPA will continue to use the same vehicle category 

definitions as in the CAFE program. MDPVs are 

grouped with light trucks for fleet average 

compliance determinations. 

d Non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental effects that, 

if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton values that 

reflect only human health impacts associated with reductions in PM2.5 exposure. 

II. EPA Proposal for MY 2023–2026 

Light-Duty Vehicle GHG Standards 

A. Proposed Model Year 2023–2026 

GHG Standards for Light-Duty Vehicles, 

Light-Duty Trucks, and Medium Duty 

Passenger Vehicles 

As noted, the transportation sector is 

the largest U.S. source of GHG 

emissions, making up 29 percent of all 

emissions.42 Within the transportation 

sector, light-duty vehicles are the largest 

contributor, 58 percent, to 

transportation GHG emissions in the 

U.S.43 EPA has concluded that more 

stringent standards are appropriate in 

light of our reassessment of the need to 

reduce GHG emissions, technological 

feasibility, costs, lead time, and other 

factors. The program that EPA is 

proposing through MY 2026 in this 

notice does not represent the level of 

GHG reductions that will ultimately be 

achievable and appropriate for the lightduty sector, but it does serve as an 

important stepping off point for a 

longer-term program beyond 2026. The 

following section provides the details of 

EPA’s proposed standards and related 

provisions, followed by a discussion of 

the alternatives EPA considered. EPA 

requests comments on all of the 

proposed provisions and alternatives. 

EPA is proposing revised, more 

stringent standards to control the 

emissions of greenhouse gases (GHGs) 

from MY 2023 and later light-duty 

vehicles.44 Carbon dioxide (CO2) is the 

primary greenhouse gas resulting from 

the combustion of vehicular fuels. The 

standards regulate CO2 on a gram per 

mile (g/mile) basis, which EPA defines 

by separate footprint curves for a 

manufacturer’s car and truck fleets.45

Based on complying with these 

proposed standards, the industry-wide 

average emissions target for new lightduty vehicles is projected to be 171 g/ 

mile of CO2 in MY 2026.46 Also, as 

discussed in Section II.C below, EPA is 

requesting comment on standards for 

MY 2026 that are in the range of 5–10 

g/mile lower (i.e., more stringent) than 

the levels proposed, resulting in fleet 

average target levels that are in the range 

of 166–161 g/mile. EPA is not proposing 

to change existing averaging, banking, 

and trading program elements, except 

for a proposed limited extension of 

credit carry-forward for one or two years 

for credits generated in MYs 2016–2020, 

as discussed in Section II.B.4. The 

proposed standards would apply to 

passenger cars, light-duty trucks, and 

medium-duty passenger vehicles 

(MDPVs).47 As an overall group, they 

are referred to in this preamble as lightduty vehicles or simply as vehicles. In 

this preamble, passenger cars may be 

referred to simply as ‘‘cars,’’ and lightduty trucks and MDPVs as ‘‘light 

trucks’’ or ‘‘trucks.’’ 

As discussed in section II.B, EPA is 

proposing several revised provisions 

that would allow manufacturers to 

generate credits or that provide 

additional incentives for use of 

advanced emission reduction 

technologies. These include ‘‘off-cycle’’ 

credits for technologies that reduce CO2

emissions during off-cycle operation 

that are not reasonably accounted for by 

the 2-cycle tests used for compliance 

purposes. EPA is proposing to increase 

the existing credit cap for menu-based 

credits from 10 g/mile to 15 g/mile and 

is proposing a number of program 

revisions and clarifications to address 

issues that have been identified as EPA 

has implemented the program. In 

addition, EPA is proposing to extend 

multiplier incentives for EVs, PHEVs, 

and FCVs, with a cumulative cap on 

credits. Multiplier incentives allow 

these low-emitting vehicles to count as 

more than one vehicle in a 

manufacturer’s compliance calculation. 

EPA is proposing to eliminate multiplier 

incentives for natural gas vehicles 

adopted in the SAFE rule after MY 

2022. EPA is also proposing to reinstate 

full size pick-up truck incentives 

through MY 2025 for vehicles that meet 

efficiency performance criteria or 

include strong hybrid technology at a 

minimum level of production volumes. 

The SAFE rule removed the full-size 

pickup incentives for MYs 2022–2025. 

The current program includes several 

program elements that will remain in 

place, without change. EPA is not 

proposing to change the fundamental 

structure of the standards, which are 

based on the footprint attribute with 

separate footprint curves for cars and 

trucks. EPA is not proposing to change 

the existing CH4 and N2O emissions 

standards. EPA is not proposing changes 

to the program structure in terms of 

vehicle certification, compliance, and 

enforcement. These aspects of the 

program continue to function as 

intended and EPA does not currently 

believe changes are needed. EPA is 

continuing to use tailpipe-only values to 

determine vehicle GHG emissions, 

without accounting for upstream 

emissions (EVs and PHEVs will 

continue to use 0 g/mile through MY 

2026). EPA is also not proposing 

changes to current program 

opportunities to earn credits toward the 

fleet-wide average CO2 standards for 

improvements to air conditioning 

systems. The current A/C credits 

program provides credits for 

improvements to address both 

hydrofluorocarbon (HFC) refrigerant 

direct losses (i.e., system ‘‘leakage’’) and 

indirect CO2 emissions related to the 

increased load on the engine (also 

referred to as ‘‘A/C efficiency’’ related 

emissions). 

1. What fleet-wide emissions levels 

correspond to the CO2 standards? 

EPA is proposing revised more 

stringent standards for MYs 2023–2026 

that are projected to result in an 

industry-wide average target for the 

light-duty fleet of 171 g/mile of CO2 in 

MY 2026. The proposed standards are 

designed to reach the same level of 

stringency as the California Framework 

emission reduction targets in MY 2023, 

and then ramp down in a linear fashion 

with year over year average stringency 

increases of 4.7–5.0 percent. For MY 

2026, the proposal goes beyond the 2012 

rule level of stringency for MY 2025, by 

about 3 percent more stringent, making 

the proposed MY 2026 standard the 

most stringent vehicle GHG standard 

that EPA has proposed to date. EPA 

believes that is possible and worthwhile 

to make additional progress in MY 2026 

by surpassing the level of stringency of 

the original MY 2025 standards 

established nine years ago in the 2012 

rule. EPA is proposing an ambitious and 

reasonable approach that would take the 

initial steps towards making needed 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43747 

48 ‘‘Final Determination on the Appropriateness 

of the Model Year 2022–2025 Light-Duty Vehicle 

Greenhouse Gas Emissions Standards under the 

Midterm Evaluation,’’ EPA–420–R–17–001, January 

2017. 

49For comparison purposes, the California 

Framework estimates are based on a scenario in 

which all manufacturers meet the California 

Framework in MYs 2021–2026 (not only the 

manufacturers that agreed to the California 

Framework). 

reductions in GHG emissions. EPA does 

not propose any change to the approach 

of having separate standards for cars 

and light trucks under existing program 

definitions. 

The industry fleet average and car/ 

truck year-over-year percent reductions 

for the proposed standards compared to 

the existing SAFE rule standards are 

provided in Table 19 below. For 

passenger cars, the proposed footprint 

curves call for reducing CO2 by 8.3 

percent in MY 2023 followed by year 

over year reductions of 4.7 to 5.1 

percent from the MY 2023 passenger car 

standard through MY 2026. For lightduty trucks, the proposed footprint 

curves standards would require 

reducing CO2 by 10.8 percent in MY 

2023 followed by year over year 

reductions of 4.7 to 5.2 percent on 

average from the MY 2023 light-duty 

truck standard through MY 2026. 

TABLE 19—PROJECTED INDUSTRY FLEET AVERAGE TARGET YEAR-OVER-YEAR PERCENT REDUCTIONS

SAFE rule Proposal 

Cars 

(%) 

Trucks 

(%) 

Combined 

(%) 

Cars 

(%) 

Trucks 

(%) 

Combined 

(%) 

2023 ......................................................... 1.7 1.5 1.6 8.3 10.8 9.8 

2024 ......................................................... 1.1 1.2 1.2 4.8 4.7 4.7 

2025 ......................................................... 2.3 2.0 2.2 5.1 5.0 4.9 

2026 ......................................................... 1.8 1.6 1.7 * 4.7 * 5.2 * 5.0 

* The percentages shown do not include EPA’s request for comments on MY 2026 standards that are 5–10 g/mile more stringent than 

proposed. 

For light-trucks, EPA is proposing to 

change the upper right cutpoints of the 

CO2-footprint curves (i.e., the footprint 

sizes in sq. ft. at which the CO2

standards level off as flat CO2 target 

values for larger vehicle footprints. See 

Figure 5 below). The SAFE rule altered 

these cutpoints and EPA is now 

proposing to restore them to the original 

upper right cutpoints initially 

established in the 2012 rule, for MYs 

2023–2026, essentially requiring 

increasingly more stringent CO2 targets 

at the higher footprint range up to the 

revised cutpoint levels. The shapes of 

the curves and the cutpoints are 

discussed in Section II.A.2. 

The 171 g/mile estimated industrywide target for MY 2026 noted above is 

based on EPA’s current fleet mix 

projections for MY 2026 (approximately 

50 percent cars and 50 percent trucks, 

with only slight variations from MY 

2023–2026). As discussed below, the 

final fleet average standards for each 

manufacturer ultimately will depend on 

each manufacturer’s actual rather than 

projected production in each MY from 

MY 2023 to MY 2026 under the salesweighted footprint-based standard 

curves for the car and truck regulatory 

classes. In the 2012 rule, EPA estimated 

that the fleet average target would be 

163 g/mile in MY 2025 based on the 

projected fleet mix for MY 2025 (67 

percent car and 33 percent trucks) based 

on information available at the time of 

the 2012 rulemaking. Primarily due to 

the historical and ongoing shift in fleet 

mix that included more crossover and 

small and mid-size SUVs and fewer 

passenger cars, EPA’s projection in the 

Midterm Evaluation (MTE) January 2017 

Final Determination for the original MY 

2025 fleet average target level increased 

to 173 g/mile.48 EPA has again updated 

its fleet mix projections and now 

projects that the original 2012 rule MY 

2025 footprint curves standards would 

result in an industry-wide fleet average 

target level of 177 g/mile. The projected 

fleet average targets under the 2012 rule, 

using the updated fleet mix projections 

and the projected fleet average targets 

for the proposal are provided in Table 

20 below. Figure 3 below, based on the 

values in Table 20, shows the proposed 

standards target levels along with 

estimated targets for the 2012 rule, 

SAFE rule, and California Framework 

for comparison.49

TABLE 20—FLEET AVERAGE TARGET PROJECTIONS FOR THE PROPOSED STANDARDS COMPARED TO UPDATED FLEET

AVERAGE TARGET PROJECTIONS FOR THE 2012 RULE, SAFE RULE AND CALIFORNIA FRAMEWORK

[CO2 grams/mile] 

MY 

Proposal projected 

targets 

2012 Rule 

projected 

targets 

(updated) 

SAFE rule projected 

targets 

(updated) 

California 

framework 

projected 

targets 

2021 ................................................................................................................. * 223 214 223 214 

2022 ................................................................................................................. * 220 205 220 206 

2023 ................................................................................................................. 199 195 216 199 

2024 ................................................................................................................. 189 186 214 191 

2025 ................................................................................................................. 180 177 209 184 


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43748 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

50The total A/C adjustment is 18.8 g/mile for cars 

and 24.4 g/mile for trucks. 

TABLE 20—FLEET AVERAGE TARGET PROJECTIONS FOR THE PROPOSED STANDARDS COMPARED TO UPDATED FLEET

AVERAGE TARGET PROJECTIONS FOR THE 2012 RULE, SAFE RULE AND CALIFORNIA FRAMEWORK—Continued 

[CO2 grams/mile] 

MY 

Proposal projected 

targets 

2012 Rule 

projected 

targets 

(updated) 

SAFE rule projected 

targets 

(updated) 

California 

framework 

projected 

targets 

2026 ................................................................................................................. * 171 177 205 177 

* Projected targets under the SAFE rule standards. 

** EPA is also requesting comment on MY 2026 standards that would result in fleet average levels that are 5–10 g/mile more stringent than the 

level shown. 

EPA’s standards are based in part on 

EPA’s projection of average industry 

wide CO2-equivalent emission 

reductions from A/C improvements, 

where the footprint curves are made 

numerically more stringent by an 

amount equivalent to this projection of 

A/C refrigerant leakage credits.50

Including this projection of A/C credits 

for purposes of setting GHG standards 

levels is consistent with the 2012 rule 

and the SAFE rule. 

Table 21 below shows overall fleet 

average target levels for both cars and 

light trucks that are projected over the 

implementation period of the proposed 

standards. A more detailed 

manufacturer by manufacturer break 

down of the projected target and 

achieved levels is provided in Section 

III.B.1 below. The actual fleet-wide 

average g/mile level that would be 

achieved in any year for cars and trucks 

will depend on the actual production of 

vehicles for that year, as well as the use 

of the various credit and averaging, 

banking, and trading provisions. For 

example, in any year, manufacturers 

would be able to generate credits from 

cars and use them for compliance with 

the truck standard, or vice versa. In 

Section V, EPA discusses the year-byyear estimate of emissions reductions 

that are projected to be achieved by the 

proposed standards. 

In general, the schedule of the 

proposed standards allows an 

incremental phase-in to the MY 2026 

level and reflects consideration of the 

appropriate lead time for manufacturers 

to take actions necessary to meet the 


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-------------11 EPA requests comment on a 5 

to 10 g/mi greater stringency 

for the proposal in MY2026 

2020 2021 2022 2023 2024 

Model Year 

2025 

Figure 3 Proposed CO? Standard Target Levels Compared to Other Programs 

2026 2027 
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43749 

51As discussed in Section III, EPA has used the 

Corporate Average Fuel Economy (CAFE) 

Compliance and Effects Modeling System (CCEMS) 

to support the technical assessment. Among the 

ways EPA has considered lead time in the proposal 

is by using the constraints built into the CCEMS 

model which are designed to represent lead-time 

constraints, including the use of redesign and 

refresh cycles. See CCEMS Model Documentation 

on web page https://www.nhtsa.gov/corporateaverage-fuel-economy/compliance-and-effectsmodeling-system and contained in the docket for 

this rule. 52 Due to rounding during calculations, the 

estimated fleet-wide CO2 target levels may vary by 

plus or minus 1 gram. 53Nor do they reflect flexibilities under the ABT 

program. 54The GHG emission standards apply for a useful 

life of 10 years or 120,000 miles for LDVs and 

LLDTs and 11 years or 120,000 miles for HLDTs 

and MDPVs. See 40 CFR 86.1805–17. 

55See 49 CFR part 523. Generally, passenger cars 

include cars and smaller cross-overs and SUVs, 

while the truck category includes larger cross-overs 

and SUVs, minivans, and pickup trucks. 

56Because compliance is based on a salesweighting of the full range of vehicles in a 

manufacturer’s car and truck fleets, the foot-print 

based CO2 emission levels of specific vehicles 

within the fleet are referred to as targets, rather than 

standards. 

proposed standards.51 The technical 

feasibility of the standards is discussed 

in Section III below and in the DRIA. 

Note that MY 2026 is the final MY in 

which the proposed standards become 

more stringent. The MY 2026 CO2

standards would remain in place for 

later MYs, unless and until revised by 

EPA in a future rulemaking for those 

MYs. 

EPA has estimated the overall fleetwide CO2 emission levels that 

correspond with the attribute-based 

footprint standards, based on 

projections of the composition of each 

manufacturer’s fleet in each year of the 

program. As noted above, EPA estimates 

that, on a combined fleet-wide national 

basis, the 2026 MY standards would 

result in a level of 171 g/mile CO2. The 

derivation of the 171 g/mile estimate is 

described in Section III.A. EPA 

aggregated the estimates for individual 

manufacturers based on projected 

production volumes into the fleet-wide 

averages for cars, trucks, and the entire 

fleet, shown in Table 21.52 As discussed 

above, the combined fleet estimates are 

based on projected fleet mix of cars and 

trucks that varies over the MY 2023– 

2026 timeframe. This fleet mix 

distribution can also be found in 

Section III.A. 

TABLE 21—ESTIMATED FLEET-WIDE CO2 TARGET LEVELS CORRESPONDING TO THE PROPOSED STANDARDS

Model year Cars CO2

(g/mile) 

Trucks CO2

(g/mile) 

Fleet CO2

(g/mile) 

2023 ............................................................................................................................................. 165 232 199 

2024 ............................................................................................................................................. 157 221 189 

2025 ............................................................................................................................................. 149 210 180 

2026 and later * ............................................................................................................................ 142 199 171 

** EPA is also requesting comment on MY 2026 standards that would result in fleet average levels that are 5–10 g/mile more stringent than the 

levels shown. 

As shown in Table 21, fleet-wide CO2

emission target levels for cars under the 

proposed standards are projected to 

decrease from 165 to 142 g/mile 

between MY 2023 and MY 2026. 

Similarly, fleet-wide CO2 target levels 

for trucks are projected to decrease from 

232 to 199 g/mile. These numbers do 

not reflect the effects of flexibilities and 

credits in the program.53 The estimated 

fleetwide achieved values can be found 

in Section V. 

As noted above, EPA is proposing 

standards that set increasingly stringent 

levels of CO2 control from MY 2023 

though MY 2026. Applying the CO2

footprint curves applicable in each MY 

to the vehicles (and their footprint 

distributions) expected to be sold in 

each MY produces progressively more 

stringent estimates of fleet-wide CO2

emission standards. EPA believes 

manufacturers can achieve the proposed 

standards’ important CO2 emissions 

reductions through the application of 

available control technology at 

reasonable cost, as well as the use of 

program flexibilities. 

The existing program includes several 

provisions that we are not proposing to 

change and so would continue during 

the implementation timeframe of this 

proposed rule. Consistent with the 

requirement of CAA section 202(a)(1) 

that standards be applicable to vehicles 

‘‘for their useful life,’’ the proposed MY 

2023–2026 vehicle standards will apply 

for the useful life of the vehicle.54 Also, 

EPA is not proposing any changes to the 

test procedures over which emissions 

are measured and weighted to 

determine compliance with the GHG 

standards. These procedures are the 

Federal Test Procedure (FTP or ‘‘city’’ 

test) and the Highway Fuel Economy 

Test (HFET or ‘‘highway’’ test). While 

EPA may consider requiring the use of 

test procedures other than the 2-cycle 

test procedures in a future rulemaking, 

EPA is not considering any test 

procedure changes in this rulemaking. 

EPA has analyzed the feasibility of 

achieving the proposed CO2 standards 

through the application of currently 

available technologies, based on 

projections of the technology and 

technology penetration rates to reduce 

emissions of CO2, during the normal 

redesign process for cars and trucks, 

taking into account the effectiveness 

and cost of the technology. The results 

of the analysis are discussed in detail in 

Section III below and in the DRIA. EPA 

also presents the overall estimated costs 

and benefits of the proposed car and 

truck CO2 standards in Section VII.I. 

2. What are the proposed CO2 attributebased standards? 

As with the existing GHG standards, 

EPA is proposing separate car and truck 

standards—that is, vehicles defined as 

cars would have one set of footprintbased curves, and vehicles defined as 

trucks would have a different set.55 In 

general, for a given footprint, the CO2 g/ 

mile target 56 for trucks is higher than 

the target for a car with the same 

footprint. The curves are described 

mathematically in EPA’s regulations by 

a family of piecewise linear functions 

(with respect to vehicle footprint) that 

gradually and continually ramp down 

from the MY 2022 curves established in 

the SAFE rule. EPA’s proposed 

minimum and maximum footprint 

targets and the corresponding cutpoints 

are provided below in Table 22 for MYs 

2023–2026 along with the slope and 

intercept defining the linear function for 

footprints falling between the minimum 

and maximum footprint values. For 

footprints falling between the minimum 

and maximum, the targets are calculated 

as follows: Slope × Footprint + Intercept 

= Target. Figure 4 and Figure 5 provide 

the existing MY 2021–2022 and 

proposed MY 2023–2026 footprint 

curves graphically for both car and light 

trucks, respectively. 


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43750 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

TABLE 22—PROPOSED FOOTPRINT-BASED CO2 STANDARD CURVE COEFFICIENTS

Car Truck 

2023 2024 2025 2026 2023 2024 2025 2026 

MIN CO2 (g/mi) ................................................ 145.6 138.6 131.9 125.6 181.1 172.1 163.5 155.4 

MAX CO2 (g/mi) ............................................... 199.1 189.5 180.3 171.6 312.1 296.5 281.8 267.8 

Slope (g/mi/ft2) ................................................. 3.56 3.39 3.23 3.07 3.97 3.77 3.58 3.41 

Intercept (g/mi) ................................................. ¥0.4 ¥0.4 ¥0.3 ¥0.3 18.4 17.4 16.6 15.8 

MIN footprint (ft2) ............................................. 41 41 41 41 41 41 41 41 

MAX footprint (ft2) ............................................ 56 56 56 56 74 74 74 74 

BILLING CODE 6560–01–P 


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70 

so 

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footprint (ft2) 

Figure 4 Car Cunres 

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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43751 

57 77 FR 62781. 

58EPA did so in 2009 for the group of six wellmixed greenhouse gases—carbon dioxide, methane, 

nitrous oxide, hydrofluorocarbons, 

perfluorocarbons, and sulfur hexafluoride—which 

taken in combination endanger both the public 

health and the public welfare of current and future 

generations. EPA further found that the combined 

emissions of these greenhouse gases from new 

motor vehicles and new motor vehicle engines 

contribute to greenhouse gas air pollution that 

endangers public health and welfare. 74 FR 66496 

(Dec. 15, 2009). 

BILLING CODE 6560–01–C 

The shapes of the proposed MY 2023– 

2026 car curves are similar to the MY 

2022 curve. By contrast, the proposed 

MY 2023–2026 truck curves return to 

the cutpoint of 74.0 sq ft originally 

established in the 2012 rule, but 

changed in the SAFE rule.57 The gap 

between the 2022 curves and the 2023 

curves is indicative of the design of the 

proposed standards as described earlier, 

where the gap between the MY 2022 

and MY 2023 curves is roughly double 

the gap between the curves for MYs 

2024–2026. 

3. EPA’s Statutory Authority Under the 

CAA 

i. Standards-Setting Authority Under 

CAA Section 202(a) 

Title II of the Clean Air Act (CAA) 

provides for comprehensive regulation 

of mobile sources, authorizing EPA to 

regulate emissions of air pollutants from 

all mobile source categories. Pursuant to 

these sweeping grants of authority, 

when setting GHG standards for lightduty vehicles, EPA considers such 

issues as technology effectiveness, 

technology cost (per vehicle, per 

manufacturer, and per consumer), the 

lead time necessary to implement the 

technology, and—based on these 

considerations—the feasibility and 

practicability of potential standards; as 

weel as the impacts of potential 

standards on emissions reductions of 

both GHGs and non-GHGs; the impacts 

of standards on oil conservation and 

energy security; the impacts of 

standards on fuel savings by consumers; 

the impacts of standards on the auto 

industry; other energy impacts; and 

other relevant factors such as impacts 

on safety. 

Pursuant to Title II of the Clean Air 

Act, EPA has taken a comprehensive, 

integrated approach to mobile source 

emission control that has produced 

benefits well in excess of the costs of 

regulation. In developing the Title II 

program, the Agency’s historic, initial 

focus was on personal vehicles since 

that category represented the largest 

source of mobile source emissions. 

Title II emission standards have 

stimulated the development of a broad 

set of advanced automotive 

technologies, such as on-board 

computers and fuel injection systems, 

which have been the building blocks of 

automotive designs and have yielded 

not only lower pollutant emissions, but 

improved vehicle performance, 

reliability, and durability. In response to 

EPA’s adoption of Title II emission 

standards for GHGs from light-duty 

vehicles in 2010 and later, 

manufacturers have continued to 

significantly ramp up their development 

and application of a wide range of new 

and improved technologies, including 

more fuel-efficient engine designs, 

transmissions, aerodynamics, and tires, 

air conditioning systems that contribute 

to lower GHG emissions, and various 

levels of electrified vehicle 

technologies. 

This proposed rule implements a 

specific provision from Title II, section 

202(a). Section 202(a)(1) of the CAA, 42 

U.S.C. 7521(a)(1), states that ‘‘the 

Administrator shall by regulation 

prescribe (and from time to time revise) 

. . . standards applicable to the 

emission of any air pollutant from any 

class or classes of new motor vehicles 

. . . which in his judgment cause, or 

contribute to, air pollution which may 

reasonably be anticipated to endanger 

public health or welfare.’’ Once EPA 

makes the appropriate endangerment 

and cause or contribute findings,58 then 

section 202(a) authorizes EPA to issue 

standards applicable to emissions of 

those pollutants. Indeed, EPA’s 

obligation to do so is mandatory. See 

Coalition for Responsible Regulation v. 


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Figure 5 Truck Curves 

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43752 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

59Since its earliest Title II regulations, EPA has 

considered the safety of pollution control 

technologies. See 45 FR 14496, 14503 (1980) (‘‘EPA 

would not require a particulate control technology 

that was known to involve serious safety problems. 

If during the development of the trap-oxidizer 

safety problems are discovered, EPA would 

reconsider the control requirements implemented 

by this rulemaking’’). 

EPA, 684 F.3d 102, 126–27 (D.C. Cir. 

2012); Massachusetts v. EPA, 549 U.S. 

497, 533 (2007). Moreover, EPA’s 

mandatory legal duty to promulgate 

these emission standards derives from 

‘‘a statutory obligation wholly 

independent of DOT’s mandate to 

promote energy efficiency.’’ 

Massachusetts, 549 U.S. at 532. 

Consequently, EPA has no discretion to 

decline to issue greenhouse gas 

standards under section 202(a), or to 

defer issuing such standards due to 

NHTSA’s regulatory authority to 

establish fuel economy standards. 

Rather, ‘‘[j]ust as EPA lacks authority to 

refuse to regulate on the grounds of 

NHTSA’s regulatory authority, EPA 

cannot defer regulation on that basis.’’ 

Coalition for Responsible Regulation, 

684 F.3d at 127. 

Any standards under CAA section 

202(a)(1) ‘‘shall be applicable to such 

vehicles . . . for their useful life.’’ 

Emission standards set by EPA under 

CAA section 202(a)(1) are technologybased, as the levels chosen must be 

premised on a finding of technological 

feasibility. Thus, standards promulgated 

under CAA section 202(a) are to take 

effect only ‘‘after such period as the 

Administrator finds necessary to permit 

the development and application of the 

requisite technology, giving appropriate 

consideration to the cost of compliance 

within such period.’’ CAA section 

202(a)(2); see also NRDC v. EPA, 655 F. 

2d 318, 322 (D.C. Cir. 1981). EPA must 

consider costs to those entities which 

are directly subject to the standards. 

Motor & Equipment Mfrs. Ass’n Inc. v. 

EPA, 627 F. 2d 1095, 1118 (D.C. Cir. 

1979). Thus, ‘‘the [s]ection 202(a)(2) 

reference to compliance costs 

encompasses only the cost to the motorvehicle industry to come into 

compliance with the new emission 

standards, and does not mandate 

consideration of costs to other entities 

not directly subject to the proposed 

standards.’’ See Coalition for 

Responsible Regulation, 684 F.3d at 128. 

EPA is afforded considerable 

discretion under section 202(a) when 

assessing issues of technical feasibility 

and availability of lead time to 

implement new technology. Such 

determinations are ‘‘subject to the 

restraints of reasonableness,’’ which 

‘‘does not open the door to ‘crystal ball’ 

inquiry.’’ NRDC, 655 F. 2d at 328, 

quoting International Harvester Co. v. 

Ruckelshaus, 478 F. 2d 615, 629 (D.C. 

Cir. 1973). However, ‘‘EPA is not 

obliged to provide detailed solutions to 

every engineering problem posed in the 

perfection of [a particular device]. In the 

absence of theoretical objections to the 

technology, the agency need only 

identify the major steps necessary for 

development of the device, and give 

plausible reasons for its belief that the 

industry will be able to solve those 

problems in the time remaining. The 

EPA is not required to rebut all 

speculation that unspecified factors may 

hinder ‘real world’ emission control.’’ 

NRDC, 655 F. 2d at 333–34. In 

developing such technology-based 

standards, EPA has the discretion to 

consider different standards for 

appropriate groupings of vehicles 

(‘‘class or classes of new motor 

vehicles’’), or a single standard for a 

larger grouping of motor vehicles. 

NRDC, 655 F.2d at 338. Finally, with 

respect to regulation of vehicular 

greenhouse gas emissions, EPA is not 

‘‘required to treat NHTSA’s . . . 

regulations as establishing the baseline 

for the [section 202(a) standards].’’ 

Coalition for Responsible Regulation, 

684 F.3d at 127 (noting that the section 

202(a) standards provide ‘‘benefits 

above and beyond those resulting from 

NHTSA’s fuel-economy standards.’’) 

Although standards under CAA 

section 202(a)(1) are technology-based, 

they are not based exclusively on 

technological capability. EPA has the 

discretion to consider and weigh 

various factors along with technological 

feasibility, such as the cost of 

compliance (section 202(a)(2)), lead 

time necessary for compliance (section 

202(a)(2)), safety (see NRDC, 655 F. 2d 

at 336 n. 31) 59 and other impacts on 

consumers, and energy impacts 

associated with use of the technology. 

See George E. Warren Corp. v. EPA, 159 

F.3d 616, 623–624 (D.C. Cir. 1998) 

(ordinarily permissible for EPA to 

consider factors not specifically 

enumerated in the Act). 

In addition, EPA has clear authority to 

set standards under CAA section 202(a) 

that are technology-forcing when EPA 

considers that to be appropriate, but 

EPA is not required to do so (as 

distinguished from standards under 

provisions such as section 202(a)(3) and 

section 213(a)(3)). Section 202(a) of the 

CAA does not specify the degree of 

weight to apply to each factor, and EPA 

accordingly has discretion in choosing 

an appropriate balance among factors. 

See Sierra Club v. EPA, 325 F.3d 374, 

378 (D.C. Cir. 2003) (even where a 

provision is technology-forcing, the 

provision ‘‘does not resolve how the 

Administrator should weigh all [the 

statutory] factors in the process of 

finding the ‘greatest emission reduction 

achievable’ ’’); NPRA v. EPA, 287 F.3d 

1130, 1135 (D.C. Cir. 2002) (EPA 

decisions, under CAA provision 

authorizing technology-forcing 

standards, based on complex scientific 

or technical analysis are accorded 

particularly great deference); see also 

Husqvarna AB v. EPA, 254 F. 3d 195, 

200 (D.C. Cir. 2001) (great discretion to 

balance statutory factors in considering 

level of technology-based standard, and 

statutory requirement ‘‘to [give 

appropriate] consideration to the cost of 

applying . . . technology’’ does not 

mandate a specific method of cost 

analysis); Hercules Inc. v. EPA, 598 F. 

2d 91, 106 (D.C. Cir. 1978) (‘‘In 

reviewing a numerical standard we 

must ask whether the agency’s numbers 

are within a zone of reasonableness, not 

whether its numbers are precisely 

right’’); Permian Basin Area Rate Cases, 

390 U.S. 747, 797 (1968) (same); Federal 

Power Commission v. Conway Corp., 

426 U.S. 271, 278 (1976) (same); Exxon 

Mobil Gas Marketing Co. v. FERC, 297 

F. 3d 1071, 1084 (D.C. Cir. 2002) (same). 

ii. Testing Authority 

Under section 203 of the CAA, sales 

of vehicles are prohibited unless the 

vehicle is covered by a certificate of 

conformity. EPA issues certificates of 

conformity pursuant to section 206 of 

the CAA, based on (necessarily) pre-sale 

testing conducted either by EPA or by 

the manufacturer. The Federal Test 

Procedure (FTP or ‘‘city’’ test) and the 

Highway Fuel Economy Test (HFET or 

‘‘highway’’ test) are used for this 

purpose. Compliance with standards is 

required not only at certification but 

throughout a vehicle’s useful life, so 

that testing requirements may continue 

post-certification. Useful life standards 

may apply an adjustment factor to 

account for vehicle emission control 

deterioration or variability in use 

(section 206(a)). 

EPA establishes the test procedures 

under which compliance with the CAA 

GHG standards is measured. EPA’s 

testing authority under the CAA is 

broad and flexible. EPA has also 

developed tests with additional cycles 

(the so-called 5-cycle tests) which are 

used for purposes of fuel economy 

labeling and are also used in the EPA 

program for extending off-cycle credits 

under the light-duty vehicle GHG 

program. 


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60 40 CFR 86.1865–12. 

61The EPCA/EISA statutory framework for the 

CAFE program limits credit carry-forward to 5 years 

and credit carry-back to 3 years. 

62EPA provides general information on credit 

trades annually as part of its annual Automotive 

Trends and GHG Compliance Report. The latest 

report is available at: https://www.epa.gov/ 

automotive-trends and the docket for this 

rulemaking. 63 ‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003 

January 2021. 

iii. Compliance and Enforcement 

Authority 

EPA oversees testing, collects and 

processes test data, and performs 

calculations to determine compliance 

with CAA standards. CAA standards 

apply not only at certification but also 

throughout the vehicle’s useful life. The 

CAA provides for penalties should 

manufacturers fail to comply with their 

fleet average standards, and there is no 

option for manufacturers to pay fines in 

lieu of compliance with the standards. 

Under the CAA, penalties for violation 

of a fleet average standard are typically 

determined on a vehicle-specific basis 

by determining the number of a 

manufacturer’s highest emitting vehicles 

that cause the fleet average standard 

violation. Penalties for reporting 

requirements under Title II of the CAA 

apply per day of violation, and other 

violations apply on a per vehicle, or a 

per part or component basis. See CAA 

sections 203(a) and 205(a) and 40 CFR 

19.4. 

Section 207 of the CAA grants EPA 

broad authority to require 

manufacturers to remedy vehicles if 

EPA determines there are a substantial 

number of noncomplying vehicles. In 

addition, section 205 of the CAA 

authorizes EPA to assess penalties of up 

to $48,762 per vehicle for violations of 

various prohibited acts specified in the 

CAA. In determining the appropriate 

penalty, EPA must consider a variety of 

factors such as the gravity of the 

violation, the economic impact of the 

violation, the violator’s history of 

compliance, and ‘‘such other matters as 

justice may require.’’ The CAA does not 

authorize vehicle manufacturers to pay 

fines in lieu of meeting emission 

standards. 

4. Averaging, Banking, and Trading 

Provisions for CO2 Standards 

i. Background 

Averaging, banking, and trading 

(ABT) is an important compliance 

flexibility and ABT has been built into 

various highway engine and vehicle 

programs (and nonroad engines and 

equipment programs) to support 

emissions standards that through the 

introduction of new technologies, result 

in reductions in air pollution. The lightduty ABT program for GHG standards 

includes existing provisions initially 

established in the 2010 rule for how 

credits may be generated and used 

within the program.60 These provisions 

include credit carry-forward, credit 

carry-back (also called deficit carryforward), credit transfers (within a 

manufacturer), and credit trading 

(across manufacturers). 

Credit carry-forward refers to banking 

(saving) credits for future use, after 

satisfying any needs to offset prior MY 

debits within a vehicle category (car 

fleet or truck fleet). Credit carry-back 

refers to using credits to offset any 

deficit in meeting the fleet average 

standards that had accrued in a prior 

MY. A manufacturer may have a deficit 

at the end of a MY (after averaging 

across its fleet using credit transfers 

between cars and trucks)—that is, a 

manufacturer’s fleet average level may 

fail to meet the required fleet average 

standard for the MY. The CAA does not 

expressly limit the duration of such 

credit provisions, and in the MY 2012– 

2016 and 2017–2025 programs, EPA 

chose to adopt 5-year credit carryforward (generally, with an exception 

noted below) and 3-year credit carryback provisions as a reasonable 

approach that maintained consistency 

between the EPA GHG and NHTSA’s 

CAFE provisions.61 While some 

stakeholders had suggested that lightduty GHG credits should have an 

unlimited credit life, EPA did not adopt 

that suggestion for the light-duty GHG 

program because it would pose 

enforcement challenges and could lead 

to some manufacturers accumulating 

large banks of credits that could 

interfere with the program’s goal to 

develop and transition to progressively 

more advanced emissions control 

technologies in the future. 

Although the credit carry-forward and 

carry-back provisions generally 

remained in place for MY 2017 and later 

standards, EPA finalized provisions 

allowing all unused (banked) credits 

generated in MY 2010–2016 (but not 

MY 2009 early credits) to be carried 

forward through MY 2021. See 

§ 86.1865–12(k)(6)(ii); 77 FR 62788 

October 15, 2012. This is the normal 5- 

year carry-forward for MY 2016 and 

later credits but provides additional 

carry-forward years for credits generated 

in MYs 2010–2015. Extending the life of 

MY 2010–2015 credits provided greater 

flexibility for manufacturers in using the 

credits. This provision was intended to 

facilitate the transition to increasingly 

stringent standards through MY 2021 by 

helping manufacturers resolve lead time 

issues they might face in the early MYs 

of the program. This extension of credit 

carry-forward also provided additional 

incentive for manufacturers to generate 

credits earlier, for example in MYs 2014 

and 2015, thereby encouraging the 

earlier use of additional CO2 reducing 

technologies. 

Transferring credits in the EPA 

program refers to exchanging credits 

between the two averaging sets— 

passenger cars and light trucks—within 

a manufacturer. For example, credits 

accrued by overcompliance with a 

manufacturer’s car fleet average 

standard can be used to offset debits 

accrued due to that manufacturer not 

meeting the truck fleet average standard 

in a given year. (Put another way, a 

manufacturer’s car and truck fleets are, 

in essence, a single averaging set in the 

EPA program). Finally, accumulated 

credits may be traded to another 

manufacturer. Credit trading has 

occurred on a regular basis in EPA’s 

vehicle program.62 Manufacturers 

acquiring credits may offset credit 

shortfalls and bank credits for use 

toward future compliance within the 

carry-forward constraints of the 

program. 

The ABT provisions are an integral 

part of the vehicle GHG program and the 

agency expects that manufacturers will 

continue to utilize these provisions into 

the future. EPA’s annual Automotive 

Trends Report provides details on the 

use of these provisions in the GHG 

program.63 ABT allows EPA to consider 

standards more stringent than we would 

otherwise consider by giving 

manufacturers an important tool to 

resolve lead time and feasibility issues. 

EPA believes the targeted extension of 

credit carry-forward that we are 

proposing, discussed below, is 

appropriate considering the stringency 

and implementation timeframe of the 

proposed standards. 

ii. Extended Credit Carry-Forward 

Proposal 

As in the transition to more stringent 

standards under the 2012 rule, EPA 

recognizes that auto manufacturers are 

again facing a transition to more 

stringent standards with our MY 2023– 

2026 standards proposal. We also 

recognize that the stringency increase 

from MY 2022 to MY 2023 is the 

steepest step in our proposed program 

with relatively limited lead time. 

Therefore, we believe it is again 

appropriate in the current context to 

provide a targeted, limited amount of 

additional flexibility to carry-forward 


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43754 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

64 77 FR 62788. 

65See 75 FR 25468–25488 and 77 FR 62884– 

62887 for a description of these provisions. See also 

‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003 

January 2021 for additional information regarding 

EPA compliance determinations. 

66See https://ww2.arb.ca.gov/our-work/programs/ 

obd-board-diagnostic-program/obd-workshops. 

credits into the 2023–2026 MYs, to ease 

the manufacturers’ transition to these 

more stringent standards. 

EPA is proposing to temporarily 

increase the number of years that MY 

2016–2020 vintage credits that may be 

carried-forward to provide additional 

flexibility for manufacturers in the 

transition to more stringent standards. 

EPA proposes to increase credit carryforward for MY 2016 credits by two 

years such that they would not expire 

until after MY 2023. For MY 2017–2020 

credits, EPA proposes to extend the 

credit life by one year, so that those 

banked credits can be used through MYs 

2023–2026, depending on the MY in 

which the credits are banked. For MY 

2021 and later credits, EPA is not 

proposing any modification to credit 

carry-forward in this notice. Credit 

carry-forward would return to the 

normal 5 years in the existing ABT 

regulations. Table 23 below provides an 

illustration of the proposed credit carryforward provisions. 

TABLE 23—PROPOSED EXTENSION OF CREDIT CARRY-FORWARD FOR MY 2016–2020 CREDITS

MY 

credits 

are 

banked 

MYs credits are valid under EPA’s proposed extension 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 

2016 ..... ................ x x x x x + + ................ ................ ................

2017 ..... ................ ................ x x x x x + ................ ................ ................

2018 ..... ................ ................ ................ x x x x x + ................ ................

2019 ..... ................ ................ ................ ................ x x x x x + ................

2020 ..... ................ ................ ................ ................ ................ x x x x x + 

2021 ..... ................ ................ ................ ................ ................ ................ x x x x x 

x = Current program. + = Proposed additional years. 

Extending the life for MY 2016–2020 

credits provides greater flexibility for 

manufacturers in using the credits they 

have generated through overcompliance 

with the stringent standards in those 

MYs. These credits would help 

manufacturers to ease the transition to 

the more stringent proposed standards. 

Providing the extended credit carryforward will help some manufacturers 

to lower overall costs and address any 

potential lead time issues they may face 

during these MYs, especially in the first 

year of the proposed standards (MY 

2023). 

EPA is proposing to extend credit life 

only for credits generated against 

standards established in the 2012 rule 

for MYs 2016–2020. EPA views these 

credits as a reflection of manufacturers’ 

having achieved reductions beyond and 

earlier than those required by the 

standards. EPA is not proposing to 

extend credit life for credits generated 

in MYs 2021–2022 against the SAFE 

standards, as we view these credits as 

windfall credits, accumulated by 

manufacturers mostly because of the 

large reduction in the stringency of 

standards under the SAFE rule, as 

compared to the 2012 rule standards 

previously in effect, rather than for 

technology-based actions taken by a 

manufacturer to reduce fleet emissions. 

As noted above, there is precedent for 

extending credit carry-forward 

temporarily beyond five years to help 

manufacturers transition to more 

stringent standards. In the 2012 rule, 

EPA extended carry-forward for MY 

2010–2015 credits to MY 2021 for 

similar reasons, to provide more 

flexibility for a limited time during a 

transition to more stringent standards.64

ABT is an important compliance 

flexibility and has been built into 

various highway engine and vehicle 

programs to support emissions 

standards programs that through the 

introduction of new technologies result 

in reductions in air pollution. While the 

normal five-year credit life in the lightduty GHG program is generally 

sufficient to address the need for 

manufacturer flexibility while 

considering the practical challenges of 

properly tracking credits over an 

extended period of time for compliance 

and enforcement purposes, there are 

occasions—such as when the industry is 

transitioning to significantly more 

stringent standards—where more 

flexibility is appropriate. As noted 

above, ABT allows EPA to consider 

standards more stringent than we would 

otherwise consider by giving 

manufacturers an important tool to 

resolve lead time and feasibility issues, 

and EPA believes the targeted extension 

of credit life that we are proposing is 

appropriate given the stringency and 

implementation timeframe of the 

proposed standards. 

5. Certification, Compliance, and 

Enforcement 

EPA established comprehensive 

vehicle certification, compliance, and 

enforcement provisions for the GHG 

standards as part of the rulemaking 

establishing the initial GHG standards 

for MY 2012–2016 vehicles.65

Manufacturers have been using these 

provisions since MY 2012 and EPA is 

not proposing or seeking comment on 

changes in the areas of certification, 

compliance, or enforcement. 

6. On-Board Diagnostics Program 

Updates 

EPA regulations state that onboard 

diagnostics (OBD) systems must 

generally detect malfunctions in the 

emission control system, store trouble 

codes corresponding to detected 

malfunctions, and alert operators 

appropriately. EPA adopted (as a 

requirement for an EPA certificate) the 

2013 California Air Resources Board 

(CARB) OBD regulation, with certain 

additional provisions, clarifications and 

exceptions, in the Tier 3 Motor Vehicle 

Emission and Fuel Standards final 

rulemaking (40 CFR 86.1806–17; 79 FR 

23414, April 28, 2014). Since that time, 

CARB has made several updates to their 

OBD regulations and continues to 

consider changes periodically.66

Manufacturers may find it difficult to 

meet both the 2013 OBD regulation 

adopted in the EPA regulations and the 

currently applicable CARB OBD 

regulation on the same vehicles. This 

may result in different calibrations 

being required for vehicles sold in states 

subject to Federal OBD (2013 CARB 

OBD) and vehicles sold in states subject 

to current CARB OBD. 

To provide clarity and regulatory 

certainty to manufacturers, EPA is 

proposing a limited regulatory change to 


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67 86 FR 7037, January 25, 2021. 68 Massachusetts v. EPA, 549 U.S. at 532. 

69https://ww2.arb.ca.gov/our-work/programs/ 

advanced-clean-cars-program/lev-program/lowemission-vehicle-greenhouse-gas. 70The California Air Resources Board (CARB) 

received a waiver of Clean Air Act preemption on 

January 9, 2013 (78 FR 2211) for its Advanced Clean 

Car (ACC) program. CARB’s ACC program includes 

the MYs 2017–2025 greenhouse gas (GHG) 

standards as well as regulations for zero-emission 

vehicle (ZEV) sales requirements and California’s 

low emission vehicle (LEV) III requirements. 

71 Draft Technical Assessment Report: Midterm 

Evaluation of Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel 

Economy Standards for Model Years 2022–2025, 

EPA–420–D–16–900 July 2016. 

streamline OBD requirements. Under 

the proposed change, EPA could find 

that a manufacturer met OBD 

requirements for purposes of the EPA 

certification process if the manufacturer 

could show that the vehicles meet 

newer CARB OBD regulations than the 

2013 CARB regulation which currently 

establishes the core OBD requirements 

for EPA certification and that the OBD 

system meets the intent of the EPA 

regulation, including provisions that are 

in addition to or different from the 

applicable CARB regulation. The intent 

of the proposed provision is to allow 

manufacturers to produce vehicles with 

one OBD system (software, calibration, 

and hardware) for all 50 states. 

7. Stakeholder Engagement 

In developing this proposal, EPA 

conducted outreach with a wide range 

of stakeholders, including auto 

manufacturers, automotive suppliers, 

labor groups, state/local governments, 

environmental and public interest 

groups, public health professionals, 

consumer groups, and other 

organizations. We also coordinated 

extensively with the California Air 

Resources Board as we considered this 

proposal. Consistent with Executive 

Order 13990, in developing this 

proposal EPA has considered the views 

from labor unions, states, and industry, 

as well as other stakeholders. 

EPA looks forward to hearing from all 

stakeholders through comments on this 

proposal and during the public hearing. 

Looking ahead, we also plan to continue 

engagement with interested 

stakeholders as we embark on a future 

rulemaking to set standards beyond 

2026, so diverse views can continue to 

be considered in our development of a 

longer-term program. 

8. How do EPA’s proposed standards 

relate to NHTSA’s CAFE proposal and 

to California’s GHG program? 

i. EPA and NHTSA Rulemaking 

Coordination 

In Executive Order 13990, President 

Biden directed NHTSA and EPA to 

consider whether to propose 

suspending, revising, or rescinding the 

SAFE Rule standards for MYs 2021– 

2026.67 Both agencies have determined 

that it is appropriate to propose 

revisions to their respective standards; 

EPA is proposing to revise its GHG 

standards and, in a separate rulemaking 

action, NHTSA will propose to revise its 

CAFE standards. Since 2010, EPA and 

NHTSA have adopted fuel economy and 

greenhouse gas standards in joint 

rulemakings. In the 2010 joint rule, EPA 

and NHTSA explained the purpose of 

the joint rulemaking effort was to 

develop a coordinated and harmonized 

approach to implementing the two 

agencies’ statutes. The joint rule 

approach was one appropriate 

mechanism for the agencies to 

coordinate closely, given the common 

technical issues both agencies needed to 

consider and the importance of avoiding 

inconsistency between the programs. 

However, in light of additional 

experience as the GHG and CAFE 

standards have co-existed since the 

2010 rule and the agencies have engaged 

in several joint rulemakings, EPA has 

concluded that, while it remains 

committed to ensuring that GHG 

emissions standards for light duty 

vehicles are coordinated with fuel 

economy standards for those vehicles, it 

is unnecessary for EPA to do so 

specifically through a joint rulemaking. 

In reaching this conclusion, EPA 

notes that the agencies have different 

statutory mandates and their respective 

programs have always reflected those 

differences. As the Supreme Court has 

noted ‘‘EPA has been charged with 

protecting the public’s ‘health’ and 

‘welfare,’ a statutory obligation wholly 

independent of DOT’s mandate to 

promote energy efficiency.’’ 68 The 

agencies have recognized these different 

mandates, and the fact that they have 

produced different analytical 

approaches and standards. For example, 

since EPA’s responsibility is to address 

air pollution, it sets standards not only 

for carbon dioxide (measured as grams 

per mile), but also for methane and 

nitrous oxide. Even more significantly, 

EPA regulates leakage of fluorocarbons 

from air conditioning units by providing 

a credit against the tailpipe CO2

standard for leakage reduction and 

adjusting those standards numerically 

downwards to reflect the anticipated 

availability of those credits. NHTSA, 

given its responsibility for fuel economy 

(measured as miles per gallon), does not 

have these elements in the CAFE 

program. There have always been other 

differences between the programs as 

well, which generally can be traced back 

to differences in statutory mandates. 

Finally, EPA notes that EPA may 

coordinate with NHTSA, and has done 

so, regardless of the formality of joint 

rulemaking. EPA has consulted 

significantly with NHTSA in the 

development of this proposal. 

Consultation is the usual approach 

Congress specifies when it recognizes 

that EPA and another agency share 

expertise and equities in an area. 

Indeed, the Clean Air Act does not 

require joint rulemaking for its many 

provisions that require EPA’s 

consultation with other agencies on 

topics such as the impacts of ozonedepleting substances on the atmosphere, 

renewable fuels, the importance of 

visibility on public lands, regulation of 

aerospace coatings, and federal 

procurement. For example, for aircraft 

emissions standards, where EPA sets the 

standards in consultation with the 

Federal Aviation Administration (FAA), 

and FAA implements the standards, the 

two agencies may undertake, and have 

undertaken, separate rulemakings. 

Likewise, when EPA revises tests 

procedures for NHTSA’s fuel economy 

standards, those rules are not done as 

joint rulemaking (unless they were 

included as part of a larger joint 

rulemaking on GHG and fuel economy 

standards). Thus, EPA concludes that 

joint rulemaking is unnecessary, 

particularly to the extent it was 

originally intended to ensure that the 

agencies work together and coordinate 

their rules. 

ii. California GHG Program 

California has long been a partner in 

reducing light-duty vehicle emissions, 

often leading the nation by setting more 

stringent standards before similar 

standards are adopted by EPA. This 

historically has been the case with GHG 

emissions standards in past federal 

rulemakings, where California provided 

technical support to EPA’s nationwide 

programs. Prior to EPA’s 2010 rule 

establishing the first nationwide GHG 

standards for MY 2012–2016 vehicles, 

California had adopted GHG standards 

for MYs 2009–2016.69 After EPA 

adopted its standards in the 2012 rule 

for MYs 2017–2025, California also 

adopted similar standards for these 

MYs.70 California also assisted and 

worked with EPA in the development of 

the 2016 Draft Technical Assessment 

Report for the Mid-term Evaluation,71

issued jointly by EPA, CARB and 

NHTSA, that served as an important 

technical basis for EPA’s original 

January 2017 Final Determination that 

the standards adopted in the 2012 rule 


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43756 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

72https://ww2.arb.ca.gov/our-work/programs/ 

advanced-clean-cars-program/advanced-clean-carsmidterm-review. 

73EPA’s waiver for CARB’s Advanced Clean Car 

regulations is at 78 FR 2211 (January 9, 2013). The 

SAFE NPRM is at 83 FR 42986 (August 24, 2018). 

74 84 FR 51310 (Sept. 27, 2019). 

75The five California Framework Agreements 

may be found in the docket for this rulemaking and 

at: https://ww2.arb.ca.gov/news/frameworkagreements-clean-cars. 76 80 FR 22421 (April 28, 2021). 

77See Tables III–2 and III–3, 77 FR 62772, 

October 15, 2012. 

78 77 FR 62812, October 15, 2012. 

79See ‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003 

January 2021 for additional information regarding 

manufacturer use of program flexibilities. 

for MYs 2022–2025 remained 

appropriate. California also conducted 

its own Midterm Review that arrived at 

a similar conclusion.72

In August 2018, EPA and NHTSA 

jointly issued the SAFE rule proposal, 

which included an EPA proposal to 

withdraw CARB’s Advanced Clean Car 

(ACC) waiver as it related to California 

GHG emission standards and ZEV sales 

requirements (that would preclude 

California from enforcing its own 

program) as well as a proposal to 

sharply reduce the stringency of the 

national standards.73 In September 

2019, EPA and NHTSA then jointly 

issued a final SAFE ‘‘Part One’’ rule, 

which included a final EPA action 

withdrawing CARB’s ACC waiver as it 

related to California GHG emission 

standards and ZEV sales 

requirements.74 In response to the SAFE 

rule proposal, California and five auto 

manufacturers entered into identical 

agreements commonly referred to as the 

California Framework Agreements. The 

Framework Agreements included GHG 

emission reduction targets for MYs 

2021–2026 that in terms of stringency 

are about halfway between the original 

2012 rule standards and those adopted 

in the final SAFE rule. The Framework 

Agreements also included additional 

flexibilities such as additional incentive 

multipliers for advanced technologies, 

off-cycle credits, and full-size pickup 

strong hybrid incentives. These 

flexibilities are discussed further in 

Section II.B, below. 

EPA has considered California 

standards in past vehicle standards 

rules as we considered the factors of 

feasibility, costs of compliance and lead 

time. The California Framework 

Agreement provisions, and the fact that 

five automakers representing about a 

third of U.S. vehicle sales voluntarily 

committed to them, at a minimum 

provide a clear indication of 

manufacturers’ capabilities to produce 

cleaner vehicles than required by the 

SAFE rule standards in the 

implementation timeframe of this 

proposed rule.75 The Framework 

Agreements’ emissions reduction targets 

therefore served as one starting point for 

EPA’s assessment of potential standards 

and other provisions for the proposal. 

EPA conducted extensive outreach with 

the California Air Resources Board, 

Framework manufacturers, and 

manufacturers that have not entered 

into California Framework Agreements, 

along with numerous other stakeholders 

in developing this proposed rule, as 

further described in Section II.A.7. As 

discussed further below, EPA is 

proposing standards that are equivalent 

to the stringency of the California 

Framework Agreements emission 

reduction targets in MY 2023 and 

increasingly more stringent than the 

Framework Agreements from MY 2024 

through 2026. 

In a separate but related action, on 

April 28, 2021, EPA issued a Notice of 

Reconsideration for the previous 

withdrawal of the California ACC 

waiver, requesting comments on 

whether the withdrawal should be 

rescinded, which would reinstate the 

waiver.76 EPA conducted a virtual 

public hearing on June 2, 2021 and the 

comment period closed on July 6, 2021. 

EPA is currently reviewing comments, 

after which EPA plans to take final 

action. 

B. Additional Manufacturer Compliance 

Flexibilities 

As discussed previously in Section 

II.A.4, the ABT provisions, including 

credit carry-forward and carry-back 

provisions, define how credits may be 

used and are an important part of the 

program. The program also includes 

several additional credit and incentive 

program elements that allow 

manufacturer flexibility in deciding 

how to comply with the standards laid 

out in Section II.A. This section 

provides an overview of those 

provisions as well as areas where EPA 

is proposing changes or is seeking 

comment. 

The current GHG program includes 

temporary incentives through MY 2021 

that encourage the use of advanced 

technologies such as all electric, plug-in 

hybrid, and fuel cell vehicles, as well as 

incentives for full-size pickups using 

either strong hybridization or 

technologies providing similar 

emissions reductions. When EPA 

established these incentives in the 2012 

rule, EPA recognized that temporary 

regulatory incentives would reduce the 

overall emission reductions required by 

the standards, but the agency believed 

that it was worthwhile to have a limited 

short-term loss of emission reductions 

to increase the potential for far-greater 

emissions reductions in the longer 

run.77 EPA understood that the 

temporary regulatory incentives may 

help bring some technologies to market 

more quickly than in the absence of 

incentives.78 EPA continues to believe 

that temporary regulatory incentives 

will help accomplish those goals, which 

supported those incentives in the 2012 

rule. As such, EPA is proposing to 

increase and extend multiplier 

incentives though MY 2025 and to 

reinstate the full-size pickup incentives 

that were removed from the program by 

the SAFE rule for MYs 2022–2025. Also, 

EPA is proposing to remove the 

multiplier incentives for natural gas 

vehicles for MYs 2023–2026 established 

by the SAFE rule. Multipliers and fullsize pickup incentives are discussed in 

Sections II.B.1 and II.B.2, respectively. 

The current program also includes 

credits for real-world emissions 

reductions not reflected on the test 

cycles used for measuring CO2

emissions for compliance with the fleet 

average GHG standards. Credits for 

using technologies that reduce 

emissions that are not captured on EPA 

tests (‘‘off-cycle’’ technologies) and 

improvements to air conditioning (A/C) 

systems that increase efficiency and 

reduce refrigerant leakage (‘‘A/C 

credits’’) are discussed below in 

sections II.B.3 and II.B.1, respectively. 

These credit opportunities currently do 

not sunset, remaining a part of the 

program through MY 2026 and beyond 

unless the program is changed as part of 

a future regulatory action. EPA is not 

proposing any changes for the A/C 

credits but is proposing to modify the 

off-cycle credit program. 

The use of the optional credit and 

incentive provisions has varied, and 

EPA continues to expect it to vary, from 

manufacturer to manufacturer. 

However, most manufacturers are 

currently using at least some of the 

flexibilities.79 Although a 

manufacturer’s use of the credit and 

incentive provisions is optional, EPA 

projects that the proposed standards 

would be met fleet-wide by using a 

combination of reductions in tailpipe 

CO2 and some use of the optional credit 

and incentive provisions. These 

projections are discussed in Section III, 

below and in the Draft RIA. 


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80See 77 FR 62811 et seq. 81 77 FR 62810, October 15, 2012. 82 77 FR 62813–62816, October 15, 2012. 

1. Multiplier Incentives for Advanced 

Technology Vehicles 

i. Background 

In the 2012 rule, EPA included 

incentives for advanced technologies to 

promote the commercialization of 

technologies that have the potential to 

transform the light-duty vehicle sector 

by achieving zero or near-zero GHG 

emissions in the longer term, but which 

faced major near-term market barriers. 

EPA recognized that providing 

temporary regulatory incentives for 

certain advanced technologies would 

decrease the overall GHG emissions 

reductions associated with the program 

in the near term, by reducing the 

effective stringency of the standards in 

years in which the incentives were 

available, to the extent the incentives 

were used. However, in setting the 

2017–2025 standards, EPA believed it 

was worthwhile to forego modest 

additional emissions reductions in the 

near term in order to lay the foundation 

for much larger GHG emissions 

reductions in the longer term. EPA also 

believed that the temporary regulatory 

incentives may help bring some 

technologies to market more quickly 

than in the absence of incentives.80

EPA established multiplier incentives 

for MYs 2017–2021 electric vehicles 

(EVs), plug-in hybrid electric vehicles 

(PHEVs), fuel cell vehicles (FCVs), and 

natural gas vehicles (NGVs).81 The 

multiplier allows a vehicle to ‘‘count’’ 

as more than one vehicle in the 

manufacturer’s compliance calculation. 

Table 24 provides the multipliers for the 

various vehicle technologies included in 

the 2012 final rule for MY 2017–2021 

vehicles.82 Since the GHG performance 

for these vehicle types is significantly 

better than that of conventional 

vehicles, the multiplier provides a 

significant benefit to the manufacturer. 

EPA chose the magnitude of the 

multiplier levels to be large enough to 

provide a meaningful incentive, but not 

be so large as to provide a windfall for 

vehicles that still would have been 

produced even at lower multiplier 

levels. The multipliers for EVs and 

FCVs were larger because these 

technologies faced greater market 

barriers. 

TABLE 24—INCENTIVE MULTIPLIERS

FOR EV, FCV, PHEVS, AND NGVS

ESTABLISHED IN 2012 RULE

Model years EVs and 

FCVs 

PHEVs 

and 

NGVs 

2017–2019 ................ 2.0 1.6 

2020 .......................... 1.75 1.45 

2021 .......................... 1.5 1.3 

EPA requested comments in the SAFE 

rule proposal on increasing and/or 

extending CNG multiplier incentives. 

After considering comments, EPA 

adopted a multiplier of 2.0 for MYs 

2022–2026 NGVs, noting that no NGVs 

were being sold by auto manufacturers 

at that time. EPA did not extend 

multipliers for other vehicle types in the 

SAFE rule, as the SAFE standards did 

not contemplate the extensive use of 

these technologies in the future so there 

was no need to continue the incentives. 

ii. Proposed Multiplier Extension and 

Cap 

EPA is proposing to extend 

multipliers for EVs, PHEVs, and FCVs 

for MYs 2022–2025, but with a cap to 

limit the magnitude of resulting 

emissions reduction losses and to 

provide a means to more definitively 

project the impact of the multipliers on 

the overall stringency of the program. 

Although EPA chose not to include 

additional multipliers in the SAFE rule 

except for natural gas vehicles, EPA is 

now proposing standards significantly 

more stringent than in the SAFE rule 

and therefore EPA believes limited 

additional multiplier incentives are 

appropriate for the purposes of 

encouraging manufacturers to accelerate 

the introduction of zero and near-zero 

emissions vehicles and maintaining 

momentum for that market transition. 

EPA requests comment on all aspects of 

the proposed extension of multipliers, 

including the proposed multiplier 

levels, model years when multipliers are 

available, and the size and structure of 

the multiplier credit cap. 

Given that the previously established 

multipliers only run through MY 2021, 

EPA proposes to start the new 

multipliers in MY 2022 to provide 

continuity for the incentives over MYs 

2021–2025. The multipliers would 

function in the same way as they have 

in the past, allowing manufacturers to 

count eligible vehicles as more than one 

vehicle in their fleet average 

calculations. The levels of the proposed 

multipliers, shown in Table 25 below, 

are the same as those contained in the 

California Framework Agreements for 

MY 2022–2025. EPA is proposing to 

sunset the multipliers after MY 2025, 

rather than extending them to MY 2026, 

because EPA has always intended them 

to be a temporary part of the program to 

incentivize technology in the near-term. 

Sunsetting the multipliers in MY 2025 

helps signal that EPA does not intend to 

include multipliers in its proposal for 

standards for MY 2027 and later MYs, 

where these technologies are likely to be 

integral to the feasibility of the 

standards, as the goal of a long-term 

program would be to quickly transition 

the light-duty fleet to zero-emission 

technology, in which case ‘‘incentives’’ 

would no longer be appropriate. As 

zero-emissions technologies become 

more mainstream, EPA believes it is 

appropriate to transition away from 

multiplier incentives. EPA also believes 

sunsetting multipliers would simplify 

programmatically a transition to a more 

stringent program for MY 2027. The MY 

2025 sunset date combined with the 

cap, discussed below, begins the process 

of transitioning away from auto 

manufacturers’ ability to make use of 

the incentive multipliers. While EPA is 

proposing to end multipliers after MY 

2025 for these reasons, EPA requests 

comments on whether it would be more 

appropriate to allow multiplier credits 

to be generated in MY 2026 without an 

increase in the cap. This may provide an 

additional incentive for manufacturers 

who have not yet produced advanced 

technology vehicles by MY 2026 to do 

so but could also potentially complicate 

transitioning to MY 2027 standards for 

some manufacturers. 

TABLE 25—EPA PROPOSED MULTIPLIER INCENTIVES FOR MYS 2022–2025 

Model years EVs and FCVs PHEVs 

2022–2024 ................................................................... 2.0 ............................................................................... 1.6. 

2025 ............................................................................. 1.75 ............................................................................. 1.45. 

2026+ ........................................................................... 1.0 (no multiplier credits) ............................................ 1.0 (no multiplier credits). 


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83Proposed Multiplier Credit Cap [Mg] = (2.5 g/ 

mile CO2 × VMT × Actual Annual Production)/ 

1,000,000 calculated annually for each fleet and 

summed. Manufacturers may use values higher than 

2.5 g/mile in the calculation as long as the sum of 

the cumulative values over MYs 2022–2025 does 

not exceed 10.0 g/mile. The vehicle miles traveled 

(VMT) used in credit calculations in the GHG 

program, as specified in the regulations, are 195,264 

miles for cars and 225,865 for trucks. See 40 CFR 

86.1866–12. See also 40 CFR 86.1866–12(c) for the 

calculation of multiplier credits to be compared to 

the cap. 

84 See ‘‘The 2020 EPA Automotive Trends 

Report, Greenhouse Gas Emissions, Fuel Economy, 

and Technology since 1975,’’ EPA–420–R–21–003 

January 2021. 

EPA believes that an important 

element of this incentive program is to 

limit the potential effect of the 

multipliers on reducing the effective 

stringency of the standards. Therefore, 

EPA proposes to cap the credits 

generated by a manufacturer’s use of the 

multipliers to the Megagram (Mg) 

equivalent of 2.5 g/mile for their car and 

light truck fleets per MY for MYs 2022– 

2025 or 10.0 g/mile on a cumulative 

basis.83 Above the cap, the multiplier is 

effectively a value of 1.0—in other 

words, after a manufacturer reaches the 

cap, the multiplier is no longer available 

and has no further effect on credit 

calculations. A manufacturer would 

sum the Mg values calculated for each 

of its car and light truck fleets at the end 

of a MY into a single cap value that 

would serve as the overall multiplier 

cap for the combined car and light truck 

fleets for that MY. This approach would 

limit the effect on stringency of the 

standards for manufacturers that use the 

multipliers to no greater than 2.5 g/mile 

less stringent each year on average over 

MYs 2022–2025. EPA proposes that 

manufacturers would be able to choose 

how to apply the cap within the fouryear span of MYs 2022–2025 to best fit 

their product plans. Manufacturers may 

opt to use values other than 2.5 g/mile 

in the cap calculation as long as the sum 

of those values over MYs 2022–2025 

does not exceed 10.0 g/mile (e.g., 0.0, 

2.5, 2.5, 5.0 g/mile in MYs 2022–2025). 

In the 2012 rule, EPA did not cap the 

use of multipliers. At that time, the 

advanced technologies incentivized by 

the multipliers were in their relative 

infancy and EPA believed it was 

appropriate to encourage manufacturers 

to continue to develop and introduce 

those vehicles for the long-term benefits 

of the program. We are now in a 

transitional period where manufacturers 

are actively increasing their zeroemission vehicle offerings. In MY 2019, 

almost all manufacturers made use of 

advanced technology credits.84 EPA 

believes extending the multipliers is 

important to encourage manufacturers 

to accelerate bringing these technologies 

to the market to help sustain market 

momentum for the long-term. However, 

EPA also believes that if left uncapped, 

the multiplier credits have the potential 

to lead to stagnation or even backsliding 

for internal combustion engine vehicles 

for some manufacturers in the near-term 

as sales of advanced technology vehicles 

continue to increase. If EPA were to 

consider a significantly more generous 

cap or even uncapped credits, EPA 

would tighten the standards beyond the 

levels EPA is proposing to rebalance the 

overall stringency of the program. 

Therefore, as under the California 

Framework Agreements, EPA is 

proposing to extend multiplier credits 

but also to include a multiplier cap to 

balance these considerations. 

The proposed cap differs from and 

limits the effective stringency loss more 

than the cap contained in the California 

Framework Agreements. The 

cumulative cap in the Framework 

Agreements is based on the area 

between the 2.7 percent and 3.7 percent 

year over year reduction in the 

standards from MY 2021 levels, as 

shown for an average fleet in Figure 6 

below. This is equivalent to 27 percent 

(1%/3.7%) of the total increase in 

stringency from MY 2021 through MY 

2026 in the Framework Agreements. 

BILLING CODE 6560–50–P 


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EPA is proposing a cap that extends 

over fewer MYs and is less generous 

than the cap in the California 

Framework Agreements. The EPA 

proposed cap would provide additional 

flexibility in the near term, as shown in 

Figure 7. This is equivalent to about 6 

percent of the total increase in 

stringency relative to the MY 2021 level 

from MY 2021 through MY 2026. 


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240 

220 

180 

rm 2020 1021 2022 2.0-23 

Mode-I Year 

--3.7%standard - -2.7%cap 

2024 2025 

Figure 6 California Framework Standards Fleet Average Target Levels and Multiplier Cap 

202.-6 
43760 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

85EPA analyzed the MY 2021–2026 timeframe to 

allow for a more direct comparison of the estimated 

emissions loss in tons of the proposed multipliers 

and cap with the impact of the California 

Framework multiplier cap. 86 85 FR 25211. 

87The last vehicle to be offered, a CNG Honda 

Civic, was discontinued after MY 2015. It had 

approximately 20 percent lower CO2 than the 

gasoline Civic. For more recent advanced internal 

combustion engines, the difference may be less than 

20% due to lower emissions of the gasoline-fueled 

vehicles. 

BILLING CODE 6560–50–C 

To estimate the potential impact of 

multipliers on the tons of CO2 reduction 

provided by the proposed program, EPA 

modeled scenarios with and without 

multipliers. As shown, EPA estimates 

that the proposed multipliers, if fully 

utilized by manufacturers, would result 

in roughly 46 MMT (596 minus 550 

MMT) fewer tons of CO2 reduced over 

the lifetimes of MY 2021–2026 

vehicles.85 We have also analyzed the 

impact of the advanced technology 

multipliers on BEV and PHEV 

penetration rates and have found that 

the impact on the fleet is less than 0.5 

percent in any MY 2023 through 2026 

(see RIA Chapter 4.1.3). EPA believes 

such an approach represents a 

reasonable balance of providing an 

incentive for advanced technology 

vehicles in the timeframe of the 

rulemaking while limiting the impact on 

effective stringency of the proposed 

program. EPA requests comment on the 

proposed extension of multipliers, 

including the proposed multiplier 

levels, model years when multipliers are 

available, size and structure of the 

multiplier credit cap. EPA also requests 

comments on whether the proposed 

extension of multipliers is appropriate 

in light of the stringency level of the 

proposed standards or whether there 

should be no multipliers beyond those 

in the current program that are 

scheduled to end after MY 2021. 

iii. Natural Gas Vehicle Multipliers 

As noted above, the SAFE rule did not 

extend multipliers for advanced 

technology vehicles but did extend and 

increase multiplier incentives for dualfuel and dedicated natural gas vehicles 

(NGVs). The current regulations include 

a multiplier of 2.0, uncapped, for MY 

2022–2026 NGVs. In the SAFE rule, 

EPA said it was extending the 

multipliers for NGVs because ‘‘NGVs 

could be an important part of the overall 

light-duty vehicle fleet mix, and such 

offerings would enhance the diversity of 

potentially cleaner alternative fueled 

vehicles available to consumers.’’ 86

After further considering the issue, EPA 

now proposes to remove the extended 

multiplier incentives added by the 

SAFE rule from the GHG program after 

MY 2022. EPA is proposing to end 

multipliers for NGVs in this manner 

because NGVs are not a near-zero 

emissions technology and EPA no 

longer believes it is appropriate to 

incentivize these vehicles to encourage 

manufacturers to introduce them in the 

light-duty vehicle market. EPA does not 

view NGVs as a pathway for significant 

vehicle GHG emissions reductions in 

the future. Any NGV multiplier credits 

generated in MY 2022 would be 

included under the proposed multiplier 

cap. There are no NGVs currently 

offered by manufacturers in the lightduty market and EPA is unaware of any 

plans to introduce NGVs, so EPA does 

not expect the removal of multipliers for 

NGVs to have an impact on 

manufacturers’ ability to meet 

standards.87 EPA requests comment on 

its proposed treatment of multipliers for 

NGVs including whether they should be 

eliminated altogether for MYs 2023– 

2026 as proposed or retained partially or 

at a lower level for MYs 2023–2025. 

2. Advanced Technology Incentives for 

Full-Size Pickups 

In the 2012 rule, EPA included a pervehicle credit provision for 

manufacturers that hybridize a 

significant number of their full-size 


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:nu 

100 

190 -- --- ---- ---------------

100 

Hill -----------------

2021 

--..-

' 

2022 

' ' ' , Effective stringency loss due 

''= -.:._- --/- toproposedmultipUers 

2023 

... -' 

Model Year 

202:4 2025 2026 

-fleet Average Target Levels - -2.5 g/mile proposed cap 

Figure 7 Proposed Multiplier Cap Compared to Fleet Average Target Levels 
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43761 

88As with multiplier credits, full-size pickup 

credits are in Megagrams (Mg). Full-size pickup 

credits are derived by multiplying the number of 

full-size pickups produced with the eligible 

technology by the incentive credit (either 10 or 20 

g/mile) and a vehicle miles traveled (VMT) value 

for trucks of 225,865, as specified in the regulations. 

The resulting value is divided by 1,000,000 to 

convert it from grams to Mg. EPA is not proposing 

a cap for these credits and they are only available 

for full-size pickups, rather than the entire fleet, so 

the calculation is simpler than that for multiplier 

credits. 89 77 FR 62825, October 15, 2012. 90 77 FR 62825, October 15, 2012. Mild and strong 

hybrid definitions as based on energy flow to the 

high-voltage battery during testing. Both types of 

vehicles must have start/stop and regenerative 

braking capability. Mild hybrid is a vehicle where 

the recovered energy over the Federal Test 

Procedure is at least 15 percent but less than 65 

percent of the total braking energy. Strong hybrid 

means a hybrid vehicle where the recovered energy 

over the Federal Test Procedure is at least 65 

percent of the total braking energy. 

91 77 FR 62826, October 15, 2012. For additional 

discussion of the performance requirements, see 

Section 5.3.4 of the ‘‘Joint Technical Support 

Document: Final Rulemaking for 2017–2025 Lightduty Vehicle Greenhouse Gas Emission Standards 

and Corporate Average Fuel Economy Standards’’ 

for the Final Rule,’’ EPA–420–R–12–901, August 

2012. 

92 40 CFR 86.1870–12. 

pickup trucks or use other technologies 

that comparably reduce CO2 emissions. 

EPA’s goal was to incentivize the 

penetration into the marketplace of lowemissions technologies for these 

pickups. The incentives were intended 

to provide an opportunity in the 

program’s early years to begin 

penetration of advanced technologies 

into this category of vehicles, which 

face unique challenges in the costs of 

applying advanced technologies due to 

the need to maintain vehicle utility and 

meet consumer expectations. In turn, 

the introduction of low-emissions 

technologies in this market segment 

creates more opportunities for achieving 

the more stringent later year standards. 

Under the existing program, full-size 

pickup trucks using mild hybrid 

technology are eligible for a per-truck 10 

g/mile CO2 credit during MYs 2017– 

2021.88 Full-size pickup trucks using 

strong hybrid technology are eligible for 

a per-truck 20 g/mile CO2 credit during 

MYs 2017–2021, if certain minimum 

production thresholds are met.89 EPA 

established definitions in the 2012 rule 

for full-size pickup and mild and strong 

hybrid for the program.90

Alternatively, manufacturers may 

generate performance-based credits for 

full-size pickups. This performancebased credit is 10 g/mile CO2 or 20 g/ 

mile CO2 for full-size pickups achieving 

15 percent or 20 percent, respectively, 

better CO2 performance than their 

footprint-based targets in a given MY.91

This second option incentivizes other, 

non-hybrid, advanced technologies that 

can reduce pickup truck GHG emissions 

and fuel consumption at rates 

comparable to strong and mild hybrid 

technology. These performance-based 

credits have no specific technology or 

design requirements; automakers can 

use any technology or set of 

technologies as long as the vehicle’s CO2

performance is at least 15 or 20 percent 

below the vehicle’s footprint-based 

target. However, a vehicle cannot 

receive both hybrid and performancebased credits, since that would be 

double-counting. 

Access to any of these large pickup 

credits requires that the technology be 

used on a minimum percentage of a 

manufacturer’s full-size pickups. These 

minimum percentages, established in 

the 2012 final rule, are set to encourage 

significant penetration of these 

technologies, leading to long-term 

market acceptance. Meeting the 

penetration threshold in one MY does 

not ensure credits in subsequent years; 

if the production level in a MY drops 

below the required threshold, the credit 

is not earned for that MY. The required 

penetration levels are shown in Table 26 

below.92

TABLE 26—PENETRATION RATE REQUIREMENTS BY MODEL YEAR FOR FULL-SIZE PICKUP CREDITS

[% of production] 

2017 2018 2019 2020 2021 

Strong hybrid ........................................................................ 10 10 10 10 10 

Mild Hybrid ........................................................................... 20 30 55 70 80 

20% better performance ...................................................... 10 10 10 10 10 

15% better performance ...................................................... 15 20 28 35 40 

Under the 2012 rule, the strong 

hybrid/20% better performance 

incentives initially extended out 

through MY 2025, the same as the 10 

percent production threshold. However, 

the SAFE rule removed these incentives 

after MY 2021. The mild hybrid/15% 

better performance incentive was not 

affected by the SAFE rule, as those 

provisions end after MY 2021. EPA 

proposes to reinstate the full-size 

pickup credits as they existed before the 

SAFE rule, for MYs 2022 through 2025. 

While no manufacturer has yet claimed 

these credits, the rationale for 

establishing them in the 2012 rule 

remains valid. At the time of the SAFE 

rule, EPA did not envision significantly 

more stringent standards in the future 

and so did not believe the incentives 

were useful. In the context of this 

proposal that includes significantly 

more stringent standards for MY 2023– 

2026, EPA believes these full-size 

pickup truck credits are appropriate to 

further incentivize advanced 

technologies penetrating this 

particularly challenging segment of the 

market. As with the original program, 

EPA is limiting this incentive to fullsize pickups rather than broadening it to 

other vehicle types. Introducing 

advanced technologies with very low 

CO2 emissions in the full-size pickup 

market segment remains a challenge due 

to the need to preserve the towing and 

hauling capabilities of the vehicles. The 

full-size pickup credits incentivize 

advanced technologies into the full-size 

pickup truck segment to help address 

cost, utility, and consumer acceptance 

challenges. EPA requests comments on 

whether or not to reinstate the 

previously existing full-size pickup 

strong hybrid/20% better performance 

incentives and the proposed approach 

for doing so. EPA notes for this proposal 

our analysis does not include the 

impacts of this incentive on the 

projected GHG emissions, costs, benefits 

and other program effects. EPA requests 

comment on the potential impacts of the 

full-size pickup incentive credit, and 

whether, and how, EPA should take the 

projected effects into account in the 

final rulemaking. 

In the 2012 rule, EPA included a 

provision that prevents a manufacturer 

from using both the full-size pickup 

performance-based credit pathway and 

the multiplier credits for the same 

vehicles. This would prevent, for 

example, an EV full-size pickup from 

generating both credits. EPA did not 

include the same restriction for vehicles 

qualifying for the full-size pickup 


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43762 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

93https://www.epa.gov/vehicle-and-fuelemissions-testing/dynamometer-drive-schedules. 

See also 75 FR 25439 for a discussion of 5-cycle 

testing. 

94The city and highway test cycles, commonly 

referred to together as the ‘‘2-cycle tests’’ are 

laboratory compliance tests are effectively required 

by law for CAFE, and also used for determining 

compliance with the GHG standards. 49 U.S.C. 

32904(c). 

95See ‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003 

January 2021 for information regarding the use of 

each pathway by manufacturers. 

96See 40 CFR 86.1869–12(b). 

97See 40 CFR 86.1869–12(c). 

98See 40 CFR 86.1869–12(d). 

99 85 FR 25237. 

100 See ‘‘The 2020 EPA Automotive Trends 

Report, Greenhouse Gas Emissions, Fuel Economy, 

and Technology since 1975,’’ EPA–420–R–21–003 

January 2021 for information on the use of menu 

credits. 

hybrid credit pathway. For example, a 

PHEV could qualify for both the strong 

hybrid credit and the multiplier credits 

under the prior regulations as they were 

established in the 2012 rule. With our 

proposal to extend the multiplier credits 

and reinstate the full-size pickup credit, 

EPA believes allowing both credits 

would in a sense be double-counting 

and inappropriate. Therefore, EPA 

proposes to modify the regulations such 

that manufacturers may choose between 

the two credits in instances where fullsize pickups qualify for both but may 

not use both credits for the same 

vehicles. A manufacturer may choose to 

use the full-size pickup strong hybrid 

credit, for example, if the manufacturer 

either has reached the multiplier credit 

cap or intends to do so with other 

qualifying vehicles. Or a manufacturer 

may instead decide to forego the strong 

hybrid credit in cases where the 

manufacturer does not expect to reach 

the multiplier cap and the multiplier 

provides more credits than the strong 

hybrid credit. EPA requests comments 

on this approach to avoid doublecounting of credits, by restricting the 

use of the two types of credits for the 

same vehicles. 

3. Off-Cycle Technology Credits 

i. Background 

Starting with MY 2008, EPA started 

employing a ‘‘five-cycle’’ test 

methodology to measure fuel economy 

for purposes of new car window stickers 

(labels) to give consumers better 

information on the fuel economy they 

could more reasonably expect under 

real-world driving conditions.93

However, for GHG compliance, EPA 

continues to use the established ‘‘twocycle’’ (city and highway test cycles, 

also known as the FTP and HFET) test 

methodology.94 As learned through 

development of the ‘‘five-cycle’’ 

methodology and prior rulemakings, 

there are technologies that provide realworld GHG emissions improvements, 

but whose improvements are not fully 

reflected on the ‘‘two-cycle’’ test. EPA 

established the off-cycle credit program 

to provide an appropriate level of CO2

credit for technologies that achieve CO2

reductions, but may not otherwise be 

chosen as a GHG control strategy, as 

their GHG benefits are not measured on 

the specified 2-cycle test. For example: 

High efficiency lighting is not measured 

on the EPA 2-cycle tests because 

lighting is not turned on as part of the 

test procedure but reduces CO2

emissions by decreasing the electrical 

load on the alternator and engine. The 

key difference between the credits 

discussed below and the incentives 

discussed in the previous two sections 

is that off-cycle credits—as well as A/C 

credits, discussed in the next section— 

represent real-world emissions 

reductions if appropriately sized and 

therefore their use should not result in 

deterioration of program benefits, and 

should not be viewed as cutting into the 

effective stringency of the program. 

Under EPA’s existing regulations, 

there are three pathways by which a 

manufacturer may accrue off-cycle 

technology credits.95 The first pathway 

is a predetermined list or ‘‘menu’’ of 

credit values for specific off-cycle 

technologies that was effective starting 

in MY 2014.96 This pathway allows 

manufacturers to use credit values 

established by EPA for a wide range of 

off-cycle technologies, with minimal or 

no data submittal or testing 

requirements. The menu includes a 

fleetwide cap on credits of 10 g/mile to 

address the uncertainty of a one-sizefits-all credit level for all vehicles and 

the limitations of the data and analysis 

used as the basis of the menu credits. A 

second pathway allows manufacturers 

to use 5-cycle testing to demonstrate 

and justify off-cycle CO2 credits.97 The 

additional emissions tests allow 

emission benefits to be demonstrated 

over some elements of real-world 

driving not captured by the GHG 

compliance tests, including high speeds, 

rapid accelerations, and cold 

temperatures. Under this pathway, 

manufacturers submit test data to EPA, 

and EPA determines whether there is 

sufficient technical basis to approve the 

off-cycle credits. The third pathway 

allows manufacturers to seek EPA 

approval, through a notice and comment 

process, to use an alternative 

methodology other than the menu or 5- 

cycle methodology for determining the 

off-cycle technology CO2 credits.98 This 

option is only available if the benefit of 

the technology cannot be adequately 

demonstrated using the 5-cycle 

methodology. 

ii. EPA Proposal To Increase Menu 

Credit Cap 

EPA has received comments from 

manufacturers on multiple occasions 

requesting that EPA increase the menu 

credit cap. Previously, EPA has opted 

not to increase the cap for several 

reasons.99 First, the cap is necessary 

given the uncertainty in the menu 

values for any given vehicle. Menu 

credits are values EPA established to be 

used across the fleet rather than vehiclespecific values. When EPA established 

the menu credits in the 2012 rule, EPA 

included a cap because of the 

uncertainty inherent in using limited 

data and modeling as the basis of a 

single credit value for either cars or 

trucks. While off-cycle technologies 

should directionally provide an offcycle emissions reduction, quantifying 

the reductions and setting an 

appropriate credit values based on 

limited data was difficult. 

Manufacturers wanting to generate 

credits beyond the cap may do so by 

bringing in their own test data as the 

basis for the credits. Credits established 

under the second and third pathways do 

not count against the menu cap. Also, 

until recently most manufacturers still 

had significant headroom under the cap 

allowing them to continue to introduce 

additional menu technologies.100

Finally, during the implementation of 

the program, EPA has expended 

significantly more effort than 

anticipated on scrutinizing menu credits 

to determine if a manufacturer’s 

technology approach was eligible under 

the technology definitions contained in 

the regulations. This further added to 

concerns about whether the technology 

could reasonably be expected to provide 

the real-world benefits that credits are 

meant to represent. For these reasons, 

EPA has been reluctant to consider 

increasing the cap. 

EPA may make changes to the test 

procedures for the GHG program in the 

future that could change the need for an 

off-cycle credits program, but there are 

no such test procedure changes 

proposed in this rule. Off-cycle credits, 

therefore, will likely remain an 

important source of emissions 

reductions under the program, at least 

through MY 2026. Off-cycle 

technologies are often more cost 

effective than other available 

technologies that reduce vehicle GHG 

emissions over the 2-cycle tests and 


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101 In MY 2019, Ford, FCA, and Jaguar Land 

Rover reached the 10 g/mile cap and three other 

manufacturers were within 3 g/mile of the cap. See 

‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003 

January 2021. 102 85 FR 25236. 103 85 FR 25237. 

104See 40 CFR 86.1869–12(b). See also ‘‘Joint 

Technical Support Document: Final Rulemaking for 

2017–2025 Light-duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel 

Economy Standards for the Final Rule,’’ EPA–420– 

R–12–901, August 2012, for further information on 

the definitions and derivation of the credits values. 

manufacturer use of the program 

continues to grow. Off-cycle credits 

reduce program costs and provide 

additional flexibility in terms of 

technology choices to manufacturers 

which has resulted in many 

manufacturers using the program. 

Multiple manufacturers were at or 

approaching the 10 g/mile credit cap in 

MY 2019.101 Also, in the SAFE rule, 

EPA added menu credits for high 

efficiency alternators but did not 

increase the credit cap for the reasons 

noted above.102 While adding the 

technology to the menu has the 

potential to reduce the burden 

associated with the credits for both 

manufacturers and EPA, it further 

exacerbates the credit cap issue for some 

manufacturers. 

After considering the above points 

further in the context of the proposed 

standards, EPA is proposing to increase 

the cap on menu-based credits from the 

current 10 g/mile to 15 g/mile beginning 

as early as MY 2020. As a companion 

to increasing the credit cap, though, 

EPA is also proposing modifications to 

some of the off-cycle technology 

definitions to improve program 

implementation and to better 

accomplish the goal of the off-cycle 

credits program: To ensure emissions 

reductions occur in the real-world from 

the use of the off-cycle technologies. 

Manufacturers wanting to claim menu 

credits between 10 and 15 g/mile in 

MYs 2020–2022 would need to meet all 

revised technology definitions across 

both the car and truck fleets. For MYs 

2023 and later, the revised definitions 

would apply exclusively, and the 

current definitions would no longer be 

used in the program. EPA is proposing 

this approach as a reasonable transition 

to the new definitions. 

EPA is proposing not to require the 

use of the revised definitions prior to 

MY 2023 for manufacturers not opting 

into the 15 g/mile credit cap. Requiring 

their use for MYs 2020 and earlier for 

all manufacturers would potentially 

affect credits already awarded to 

manufacturers, causing significant 

problems in program implementation 

and manufacturer plans to comply with 

the proposed MY 2023–2026 standards. 

Similarly, MY 2021 is underway, and 

some manufacturers are already 

producing MY 2022 vehicles. EPA 

believes credits that were generated in 

a manner consistent with the applicable 

regulatory definitions in place at the 

time the vehicles were produced should 

continue to be allowed in compliance 

determinations for the proposed MY 

2023–2026 standards. The 10 g/mile cap 

EPA adopted to address uncertainties 

around the menu credits, including the 

definitions, is acting as intended and 

the proposed approach of allowing 

menu credits beyond the 10 g/mile cap 

only for manufacturers meeting the 

revised definitions is the appropriate 

approach until the 15 g/mile menu cap 

and revised definitions are fully 

implemented in MY 2023. EPA views 

the proposed definition updates as 

refinements to the ongoing off-cycle 

program to improve its implementation 

and help ensure that the program 

produces real-world benefits as 

intended and believes that it is 

reasonable to make these updates in 

parallel with the proposed cap increase. 

Manufacturers that utilized technologies 

in MY 2020 that meet the proposed 

revised definitions, in addition to the 

unchanged current definitions, would 

be able to claim menu credits up to the 

15 g/mile cap. 

EPA requests comment on whether 

the menu credit cap should be increased 

to 15 g/mile, EPA’s proposed approach 

for implementing the increased credit 

cap, including the start date of MY 

2020, as well as the proposed 

application of revised technology 

definitions, discussed below. EPA 

specifically requests comment on 

whether an increased credit cap, if 

finalized, should begin in MY 2020 as 

proposed or a later MY such as MY 

2021, 2022, or 2023. Commenters 

supporting off-cycle provisions that 

differ from EPA’s proposal are 

encouraged to address how such 

differences could be implemented to 

improve real-world emissions benefits 

and how such provisions could be 

effectively implemented. 

iii. EPA Proposed Modifications to 

Menu Technology Definitions 

Some stakeholders have previously 

raised concerns about whether the offcycle credit program produces the realworld emissions reductions as intended, 

or results in a loss of emissions 

benefits.103 EPA shares these concerns, 

as noted above, and believes it is 

important to address to the extent 

possible the issues that the agency has 

experienced in implementing the menu 

credits, alongside proposing to raise the 

menu cap. EPA believes that raising the 

menu cap is appropriate so long as the 

agency can improve the program and 

reasonably expect the use of menu 

technologies to provide real-world 

emissions reductions, consistent with 

the intent of the program. Providing 

additional opportunities for menu 

credits may allow for more emissions 

reductions sooner and at a lower cost 

than would otherwise be possible under 

a program without off-cycle credits. 

Indeed, the additional credits are fully 

incorporated as an element of the cost 

and feasibility analysis of the proposed 

standards. With that in mind, EPA 

proposes to modify the menu 

definitions discussed below to coincide 

with increasing the menu cap. 

The existing menu technologies and 

associated credits are provided below in 

Table 27 and Table 28 for reference.104

TABLE 27—EXISTING OFF-CYCLE TECHNOLOGIES AND CREDITS FOR CARS AND LIGHT TRUCKS

Technology 

Credit for 

cars 

g/mi 

Credit for 

light trucks 

g/mi 

High Efficiency Alternator (at 73%; scalable) ............................................................................................................. 1.0 ................ 1.0. 

High Efficiency Exterior Lighting (at 100W) ............................................................................................................... 1.0 ................ 1.0. 

Waste Heat Recovery (at 100W; scalable) ................................................................................................................ 0.7 ................ 0.7. 

Solar Roof Panels (for 75W, battery charging only) .................................................................................................. 3.3 ................ 3.3. 

Solar Roof Panels (for 75W, active cabin ventilation plus battery charging) ............................................................ 2.5 ................ 2.5. 

Active Aerodynamic Improvements (scalable) ........................................................................................................... 0.6 ................ 1.0. 

Engine Idle Start-Stop with heater circulation system ............................................................................................... 2.5 ................ 4.4. 


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TABLE 27—EXISTING OFF-CYCLE TECHNOLOGIES AND CREDITS FOR CARS AND LIGHT TRUCKS—Continued 

Technology 

Credit for 

cars 

g/mi 

Credit for 

light trucks 

g/mi 

Engine Idle Start-Stop without heater circulation system .......................................................................................... 1.5 ................ 2.9. 

Active Transmission Warm-Up ................................................................................................................................... 1.5 ................ 3.2. 

Active Engine Warm-Up ............................................................................................................................................. 1.5 ................ 3.2. 

Solar/Thermal Control ................................................................................................................................................. Up to 3.0 ...... Up to 4.3. 

TABLE 28—OFF-CYCLE TECHNOLOGIES AND CREDITS FOR SOLAR/THERMAL CONTROL TECHNOLOGIES FOR CARS AND

LIGHT TRUCKS

Thermal control technology Car credit 

(g/mi) 

Truck credit 

(g/mi) 

Glass or Glazing ......................................................................................................................................................... Up to 2.9 ...... Up to 3.9. 

Active Seat Ventilation ................................................................................................................................................ 1.0 ................ 1.3. 

Solar Reflective Paint ................................................................................................................................................. 0.4 ................ 0.5. 

Passive Cabin Ventilation ........................................................................................................................................... 1.7 ................ 2.3. 

Active Cabin Ventilation .............................................................................................................................................. 2.1 ................ 2.8. 

a. Passive Cabin Ventilation 

Some manufacturers have claimed the 

passive cabin ventilation credits based 

on the addition of software logic to their 

HVAC system that sets the interior 

climate control outside air/recirculation 

vent to the open position when the 

power to vehicle is turned off at higher 

ambient temperatures. The 

manufacturers have claimed that the 

opening of the vent allows for the flow 

of ambient temperature air into the 

cabin. While opening the vent may 

ensure that the interior of the vehicle is 

open for flow into the cabin, no other 

action is taken to improve the flow of 

heated air out of the vehicle. This 

technology relies on the pressure in the 

cabin to reach a sufficient level for the 

heated air in the interior to flow out 

through body leaks or the body 

exhausters to open and vent heated air 

out of the cabin. 

The credits for passive cabin 

ventilation were determined based on 

an NREL study that strategically opened 

a sunroof to allow for the unrestricted 

flow of heated air to exit the interior of 

the vehicle while combined with 

additional floor openings to provide a 

minimally restricted entry for cooler 

ambient air to enter the cabin. The 

modifications that NREL performed on 

the vehicle reduced the flow restrictions 

for both heated cabin air to exit the 

vehicle and cooler ambient air to enter 

the vehicle, creating a convective 

airflow path through the vehicle cabin. 

Analytical studies performed by 

manufacturers to evaluate the 

performance of the open dash vent 

demonstrate that while the dash vent 

may allow for additional airflow of 

ambient temperature air entering the 

cabin, it does not reduce the existing 

restrictions on heated cabin air exiting 

the vehicle, particularly in the target 

areas of the occupant’s upper torso. That 

hotter air generally must escape through 

restrictive (by design to prevent water 

and exhaust fumes from entering the 

cabin) body leaks and occasional 

venting of the heated cabin air through 

the body exhausters. While this may 

provide some minimal reduction in 

cabin temperatures, this open dash vent 

technology is not as effective as the 

combination of vents used by the NREL 

researchers to allow additional ambient 

temperature air to enter the cabin and 

also to reduce the restriction of heated 

air exiting the cabin. 

As noted in the Joint Technical 

Support Document: Final Rulemaking 

for 2017–2025 Light-Duty Vehicle 

Greenhouse Gas Emission Standards 

and Corporate Average Fuel Economy 

Standards, pg. 584, ‘‘For passive 

ventilation technologies, such as 

opening of windows and/or sunroofs 

and use of floor vents to supply fresh air 

to the cabin (which enhances convective 

airflow), (1.7 grams/mile for LDVs and 

2.3 grams/mile for LDTs) a cabin air 

temperature reduction of 5.7 °C can be 

realized.’’ The passive cabin ventilation 

credit values were based on achieving 

the 5.7 °C cabin temperature reduction. 

The Agency has decided to revise the 

passive cabin ventilation definition to 

make it consistent with the technology 

used to generate the credit value. The 

Agency continues to allow for 

innovation as the definition includes 

demonstrating equivalence to the 

methods described in the Joint TSD. 

EPA proposes to revise the definition 

of passive cabin ventilation to only 

include methods that create and 

maintain convective airflow through the 

body’s cabin by opening windows or a 

sunroof, or equivalent means of creating 

and maintaining convective airflow, 

when the vehicle is parked outside in 

direct sunlight. 

Current systems claiming the passive 

ventilation credit by opening the dash 

vent would not meet the updated 

definition. Manufacturers seeking to 

claim credits for the open dash vent 

system will be eligible to petition the 

Agency for credits for this technology 

using the alternative EPA approved 

method outlined in § 86.1869–12(d). 

b. Active Engine and Transmission 

Warm-Up 

In the NPRM for the 2012 rule (76 FR 

74854) EPA proposed capturing waste 

heat from the exhaust and using that 

heat to actively warm-up targeted parts 

of the engine and the transmission fluid. 

The exhaust waste heat from an internal 

combustion engine is heat that is not 

being used as it is exhausted to the 

atmosphere. 

In the 2012 Final Rule (77 FR 62624), 

the Agency revised the definitions for 

active engine and transmission warm-up 

by replacing exhaust waste heat with 

the waste heat from the vehicle. As 

noted in the Joint TSD, pages 5–98 and 

5–99, the Alliance of Automobile 

Manufacturers and Volkswagen 

recommended the definition be 

broadened to account for other methods 

of warm-up besides exhaust heat such 

as a secondary coolant loop. 

EPA concluded that other methods, in 

addition to waste heat from the exhaust, 

that could provide similar 

performance—such as coolant loops or 

direct heating elements—may prove to 

be more effective alternative to direct 

exhaust heat. Therefore, the Agency 


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105 40 CFR 1867–12 and 40 CFR 86.1868–12. 

expanded the definition in the 2012 

Final Rule. 

In the 2012 Final Rule the Agency 

also required two unique heat exchanger 

loops—one for the engine and one for 

the transmission—for a manufacturer to 

claim both the Active Engine Warm-up 

and Active Transmission Warm-up 

credits. EPA stated in the Joint TSD that 

manufacturers utilizing a single heat 

exchanging loop would need to 

demonstrate that the performance of the 

single loop would be equivalent to two 

dedicated loops in order for the 

manufacturer to claim both credits, and 

that this test program would need to be 

performed using the alternative method 

off-cycle GHG credit application 

described in § 86.1869–12(d). 

All Agency analysis regarding active 

engine and transmission warm-up 

through the 2012 Final Rule (77 FR 

62624) was performed assuming the 

waste heat utilized for these 

technologies would be obtained directly 

from the exhaust prior to being released 

into the atmosphere and not from any 

engine-coolant-related loops. At this 

time no manufacturer has introduced an 

exhaust waste heat exchanger to be used 

to warm up the engine or transmission. 

The systems in use are engine-coolantloop-based and are taking heat from the 

coolant to warm-up the engine oil and 

transmission fluid. 

EPA provided additional clarification 

on the use of waste heat from the engine 

coolant in preamble to SAFE rule (85 FR 

24174). EPA focused on systems using 

heat from the exhaust as a primary 

source of waste heat because that heat 

would be available quickly and also 

would be exhausted by the vehicle and 

otherwise unused (85 FR 25240). Heat 

from the engine coolant already may be 

used by design to warm up the internal 

engine oil and components. That heat is 

traditionally not considered ‘‘waste 

heat’’ until the engine reaches normal 

operating temperature and subsequently 

requires it to be cooled in the radiator 

or other heat exchanger. 

EPA allowed for the possible use of 

other sources of heat such as engine 

coolant circuits, as the basis for the 

credits as long as those methods would 

‘‘provide similar performance’’ as 

extracting the heat directly from the 

exhaust system and would not 

compromise how the engine systems 

would heat up normally absent the 

added heat source. However, the SAFE 

rule also allowed EPA to require 

manufacturers to demonstrate that the 

system is based on ‘‘waste heat’’ or heat 

that is not being preferentially used by 

the engine or other systems to warm up 

other areas like engine oil or the interior 

cabin. Systems using waste heat from 

the coolant do not qualify for credits if 

their operation depends on, and is 

delayed by, engine oil temperature or 

interior cabin temperature. As the 

engine and transmission components 

are warming up, the engine coolant and 

transmission oil typically do not have 

any ‘‘waste’’ heat available for warming 

up anything else on the vehicle since 

they are both absorbing any heat from 

combustion cylinder walls or from 

friction between moving parts in order 

to achieve normal operating 

temperatures. During engine and 

transmission warm-up, the only waste 

heat source in a vehicle with an internal 

combustion engine is the engine 

exhaust, as the transmission and coolant 

have not reached warmed-up operating 

temperature and therefore do not have 

any heat to share (85 FR 25240). 

EPA proposes to revise the menu 

definitions of active engine and 

transmission warm-up to no longer 

allow systems that capture heat from the 

coolant circulating in the engine block 

to qualify for the Active Engine and 

Active Transmission warm-up menu 

credits. EPA would allow credit for 

coolant systems that capture heat from 

a liquid-cooled exhaust manifold if the 

system is segregated from the coolant 

loop in the engine block until the engine 

has reached fully warmed-up operation. 

The Agency would also allow system 

design that captures and routes waste 

heat from the exhaust to the engine or 

transmission, as this was the basis for 

these two credits as originally proposed 

in the proposal for the 2012 rule. EPA’s 

proposed approach would help ensure 

that the level of menu credit is 

consistent with the technology design 

envisioned by EPA when it established 

the credit in the 2012 rule. 

Manufacturers seeking to utilize their 

existing systems that capture coolant 

heat before the engine is fully warmedup and transfer this heat to the engine 

oil and transmission fluid would remain 

eligible to seek credits through the 

alternative method application process 

outlined in § 86.1869–12(d). EPA 

expects that these technologies may 

provide some benefit. But, as noted 

above since these system designs 

remove heat that is needed to warm-up 

the engine the Agency expects that these 

technologies will be less effective than 

those that capture and utilize exhaust 

waste heat. 

iv. Clarification Regarding Use of Menu 

Credits 

Finally, EPA proposes to clarify that 

manufacturers claiming credits for a 

menu technology must use the menu 

pathway rather than claim credits 

through the public process or 5-cycle 

testing pathways. EPA views this as 

addressing a potential loophole around 

the menu cap. As is currently the case, 

a new technology that represents an 

advancement compared to the 

technology represented by the menu 

credit—that is, by providing 

significantly more emissions reductions 

than the menu credit technology— 

would be eligible for the other two 

pathways. 

4. Air Conditioning System Credits 

There are two mechanisms by which 

A/C systems contribute to the emissions 

of GHGs: Through leakage of 

hydrofluorocarbon refrigerants into the 

atmosphere (sometimes called ‘‘direct 

emissions’’) and through the 

consumption of fuel to provide 

mechanical power to the A/C system 

(sometimes called ‘‘indirect 

emissions’’).105 The high global 

warming potential of the previously 

most common automotive refrigerant, 

HFC–134a, means that leakage of a 

small amount of refrigerant will have a 

far greater impact on global warming 

than emissions of a similar amount of 

CO2. The impacts of refrigerant leakage 

can be reduced significantly by systems 

that incorporate leak-tight components, 

or, ultimately, by using a refrigerant 

with a lower global warming potential. 

The A/C system also contributes to 

increased tailpipe CO2 emissions 

through the additional work required to 

operate the compressor, fans, and 

blowers. This additional power demand 

is ultimately met by using additional 

fuel, which is converted into CO2 by the 

engine during combustion and 

exhausted through the tailpipe. These 

emissions can be reduced by increasing 

the overall efficiency of an A/C system, 

thus reducing the additional load on the 

engine from A/C operation, which in 

turn means a reduction in fuel 

consumption and a commensurate 

reduction in GHG emissions. 

Manufacturers may generate credits 

for improved A/C systems to help them 

comply with the CO2 fleet average 

standards since the MY 2012 and later 

MYs. Because A/C credits represent a 

low-cost and effective technology 

pathway, EPA expected manufacturers 

to generate both A/C refrigerant and 

efficiency credits, and EPA accounted 

for those credits in developing the final 

CO2 standards for the 2012 and SAFE 

rules, by adjusting the standards to 

make them more stringent. EPA believes 

it is important to encourage 

manufacturers to continue to implement 

low GWP refrigerants or low leak 

systems. Thus, EPA is not proposing 


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106 83 FR 43464, August 24, 2018. 

107 85 FR 25211, April 30, 2020. 

108 85 FR 25210–25211. 

109 85 FR 25211. 

110 Ibid. 

111See 40 CFR 600.510–12(j)(2)(v) and 

(j)(2)(vii)(A). 

any changes for its A/C credit 

provisions and is taking the same 

approach in adjusting the level of the 

proposed standards to reflect the use of 

the A/C credits. However, if EPA were 

to remove the refrigerant credits from 

the program, the proposed standards 

would need to be adjusted or increased 

by the amount of the credit to reflect its 

elimination from the program. 

5. Natural Gas Vehicles Technical 

Correction 

In the SAFE proposal, EPA sought 

comment on whether it should adopt 

additional incentives for natural gasfueled light-duty vehicles.106 After 

considering comments, EPA finalized 

additional incentive multipliers for MYs 

2022–2026 natural gas vehicles.107 EPA 

also received comments recommending 

that EPA adopt an additional incentive 

for natural gas vehicles in the form of a 

0.15 multiplicative factor that would be 

applied to the CO2 emissions measured 

from the vehicle when tested on natural 

gas. Commenters recommended the 0.15 

factor as an appropriate way to account 

for the potential use of renewable 

natural gas (RNG) in the vehicles.108

EPA decided not to adopt the 

additional 0.15 factor incentive, as 

discussed in the preamble to the SAFE 

Rule.109 EPA provided a detailed 

rationale for its decision not to 

implement a 0.15 factor recommended 

by commenters in the SAFE Rule.110

EPA is not revisiting or reopening its 

decision regarding the 0.15 factor. 

However, the regulatory text adopted in 

the SAFE rule contains an inadvertent 

clerical error that conflicts with EPA’s 

decision and rationale in the final SAFE 

rule preamble and provides an option 

for manufacturers to use this additional 

incentive in MYs 2022–2026 by 

multiplying the measured CO2

emissions measured during natural gas 

operation by the 0.15 factor.111 EPA is 

proposing narrow technical 

amendments to its regulations to correct 

this clerical error by removing the 

option to use the 0.15 factor in MY 2022 

(as discussed in Section II.B.1.iii, EPA is 

proposing to eliminate multipliers for 

NGVs after MY 2022). This will ensure 

the regulations are consistent with the 

decision and rationale in the SAFE final 

rule. EPA likely would not have granted 

credits under the erroneous regulatory 

text if such credits were sought by a 

manufacturer because the intent of the 

agency was clear in the preamble text. 

In addition, natural gas vehicles are not 

currently offered by any manufacturer 

and EPA is not aware of any plans to do 

so. Therefore, there are no significant 

impacts associated with the correction 

of this clerical error. 

C. What alternatives is EPA considering? 

Along with the proposed standards, 

EPA analyzed both a more stringent and 

a less stringent alternative. For the less 

stringent alternative, Alternative 1, EPA 

used the coefficients in the California 

Framework for the 2.7 percent effective 

stringency level (as described 

previously in Section II.B.1) as the basis 

for the MY 2023 stringency level and 

the 2012 rule MY 2025 standards as the 

basis for the MY 2026 stringency level, 

with linear year-over-year reductions 

between the two points for MYs 2024 

and 2025. EPA views the California 

Framework as a reasonable basis for the 

least stringent alternative that EPA 

would consider finalizing, since it 

represents a level of stringency that five 

manufacturers have already committed 

to achieving. EPA did not include 

incentive multipliers for Alternative 1, 

as doing so would only further reduce 

the effective stringency of this 

Alternative, and EPA views Alternative 

1 as the lower end of stringency that it 

believes is appropriate through MY 

2026. 

For the more stringent alternative, 

Alternative 2, EPA used the 2012 rule 

standards as the basis for MY 2023– 

2025 targets, with the standards 

continuing to increase in stringency in 

a linear fashion for MY 2026. 

Alternative 2 adopts the 2012 rule 

stringency levels in MY 2023 and 

follows the 2012 rule standard target 

levels through MY 2025. EPA extended 

the same linear average year-over-year 

trajectory for MYs 2023–2025 to MY 

2026 for the final standards under 

Alternative 2. As noted in Section 

II.A.1, EPA believes it is important to 

continue to make progress in MY 2026 

beyond the MY 2025 standard levels in 

the 2012 rule. As with the proposal, 

Alternative 2 meets this objective. EPA 

also did not include in Alternative 2 the 

proposed incentive multipliers with the 

proposed cumulative credit cap in MYs 

2022–2025, which would have the effect 

of making Alternative 2 less stringent. 

As noted in Section II.B.1, EPA is 

requesting comment on whether or not 

to include the proposed multipliers, and 

our request for comments extends to 

whether to include multipliers both for 

the proposal and for Alternative 2. 

The fleet average targets for the two 

alternatives compared to the proposed 

standards are provided in Table 29 

below. EPA also requests comment on 

the level of stringency for MY 2026 for 

the alternatives and the proposed 

standards. Specifically, EPA requests 

comment on standards for MY 2026 that 

would result in fleet average target 

levels that are in the range of 5–10 g/ 

mile lower (i.e., more stringent) than the 

levels shown for MY 2026 in Table 29. 

EPA is requesting specific comment on 

whether the level of stringency for MY 

2026 should be greater in keeping with 

the additional lead time available for 

this out-year compared to MYs 2023– 

2025, and because EPA may determine 

that it is appropriate, particularly in 

light of the accelerating transition to 

electrified vehicles, to require 

additional reductions in this time frame. 

As discussed in detail in Section A.3 of 

the Executive Summary, there has been 

a proliferation of recent announcements 

from automakers signaling a rapidly 

growing shift in investment away from 

internal-combustion technologies and 

toward high levels of electrification. 

EPA has also heard from a wide range 

of stakeholders over the past several 

months, including but not limited to the 

automotive manufacturers and the 

automotive suppliers, that the 

significant investments being made now 

to develop and launch new EV product 

offerings and in the expansion of EV 

charging infrastructure could enable 

higher levels of EV penetration to occur 

in the marketplace by the MY 2026 time 

frame than EPA has projected as the 

basis for both the proposed MY 2026 

standards and the Alternative 2 MY 

2026 standards. The information 

concerning the investment landscape 

potentially accelerating to an even 

greater extent of market penetration of 

EV products is the basis on which EPA 

is relying in soliciting comment on the 

potential for a more stringent MY 2026 

standard that would reflect this 

information and related considerations, 

including any additional information 

provided by commenters. 


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TABLE 29—PROJECTED FLEET AVERAGE TARGET LEVELS FOR PROPOSED STANDARDS AND ALTERNATIVES

[CO2 grams/mile] 

Model year 

Proposal 

projected 

targets 

Alternative 1 

projected 

targets 

Alternative 2 

projected 

targets 

2021 ........................................................................................................................... * 223 * 223 * 224 

2022 ........................................................................................................................... * 220 * 220 * 220 

2023 ........................................................................................................................... 199 203 195 

2024 ........................................................................................................................... 189 194 186 

2025 ........................................................................................................................... 180 185 177 

2026 ** ........................................................................................................................ 171 177 169 

* SAFE rule standards included here for reference. 

** EPA is also requesting comment on MY 2026 standards and alternatives that would result in fleet average levels that are 5–10 g/mile more 

stringent than the levels shown. 

As shown in Figure 8, the range of 

alternatives that EPA is considering is 

fairly narrow, with the proposed 

standard targets differing from the 

alternatives in any given MY in MYs 

2023–2026 by 2 to 6 g/mile, 

notwithstanding EPA’s request for 

comment on more stringent standards 

for MY 2026 standards noted above. 

EPA believes this approach is 

reasonable and appropriate considering 

the relatively short lead time for the 

proposed standards, especially for MYs 

2023–2025; our assessment of 

feasibility, the existing automaker 

commitments to meet the California 

Framework (representing about onethird of the auto market), the standards 

adopted in the 2012 rule; and the need 

to reduce GHG emissions. EPA provides 

a discussion of the feasibility of the 

proposed standard and alternatives and 

the selection of the proposed standards 

in Section III.D. The analysis of costs 

and benefits of Alternatives 1 and 2 is 

shown in the DRIA Chapters 4, 6, and 

10. EPA requests comments on all 

aspects of Alternatives 1 and 2 or other 

alternatives roughly within the 

stringency range of the proposal and the 

Alternatives. 

III. Technical Assessment of the 

Proposed CO2 Standards 

Section II provided a description of 

EPA’s proposed standards and related 

program elements and industry-wide 

estimates of projected GHG emissions 

targets. This Section III provides an 

overview of EPA’s technical assessment 

of the proposed standards including the 

approach EPA used for its analysis, 


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220 

210 

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180 

170 

160 

150 

2020 2021 

EPA requests comment on a 5 to 10 g/mi 

greater stringency for the proposal and 

each alternative in MY2026 

2022 2023 2024 2025 

Model Year 

••• SAFE FRM 

--2012 FRM 

-Proposal 

• • • Alternative 1 

- -Alternative 2 

2026 

Figure 8 Proposed Standards Fleet Average Targets Compared to Alternatives 

2027 
43768 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

112See 85 FR 24218. 

EPA’s projected target levels by 

manufacturer, projected per vehicle cost 

for each manufacturer, EPA’s 

projections of EV and PHEV technology 

penetration rates, and a discussion of 

why EPA believes the proposed 

standards are technologically feasible, 

drawing from these analyses. Finally, 

this section discusses the alternative 

standards EPA analyzed in developing 

the proposal. The DRIA presents further 

details of the analysis including a full 

assessment of technology penetration 

rate and cost projections. EPA discusses 

the basis for our proposed standards 

under CAA section 202(a) in Section VI, 

and Section VII presents aggregate cost 

and benefit projections as well as other 

program impacts. 

a. What approach did EPA use in 

analyzing potential standards? 

The proposed standards are based on 

the extensive light-duty GHG technical 

analytical record developed over the 

past dozen years, as represented by the 

EPA supporting analyses for the 2010 

and 2012 final rules, the Mid-Term 

Evaluation (including the Draft TAR, 

Proposed Determination and Final 

Determinations), as well as the updated 

analysis for this proposed rule and the 

supporting analysis for the SAFE rule. 

The updated analysis for this proposed 

rule is intended to allow direct 

comparison to the analysis used in the 

SAFE FRM and is not intended to be the 

sole technical basis of the proposed 

standards. EPA’s extensive record is 

consistent and makes clear that GHG 

standards at the level of stringency and 

in the time frame of this proposed rule 

are feasible at reasonable costs and 

result in significant GHG emission 

reductions and public health and 

welfare benefits. The updated analysis 

also shows that, consistent with past 

analyses, when modeling standards of 

similar stringency to those set forth in 

the 2012 rule, the results are similar to 

those results presented previously. In 

particular, the estimated costs for 

manufacturers to meet standards similar 

to those proposed have been roughly 

consistent since EPA first estimated 

them in 2012. The DRIA Chapter 1 

further discusses and synthesizes EPA’s 

record supporting stringent GHG 

standards through the MY 2025/2026 

time frame. 

To confirm that these past analyses 

continue to provide valid results for 

consideration by the Administrator in 

selecting the most appropriate level of 

stringency and other aspects of the 

proposed standards, we have conducted 

an updated analysis of the proposed 

standards. In the past, EPA has 

traditionally used its OMEGA 

(Optimization Model for reducing 

Emissions of Greenhouse gases from 

Automobiles) model as the basis for 

setting light-duty GHG emissions 

standards. EPA’s OMEGA model was 

not used to support the analysis of the 

GHG standards for the SAFE FRM; 

instead, NHTSA’s Corporate Average 

Fuel Economy (CAFE) Compliance and 

Effects Modeling System (CCEMS) 

model was used. 

In considering modeling tools to 

support the analysis for today’s 

proposed GHG standards, EPA has 

chosen to use the peer reviewed CCEMS 

model and to use the same version of 

that model used in support of the SAFE 

FRM. EPA has made this choice specific 

to this proposal for the purpose of 

enabling direct comparison to the SAFE 

FRM analysis, which addressed a 

model-year timespan consistent with 

this proposal. 

Given that the SAFE FRM was 

published only a year ago, direct 

comparisons between the analysis 

presented here and the analysis 

presented in support of the SAFE FRM 

are made more direct if the same 

modeling tool is used. For example, 

CCEMS has categorizations of 

technologies and model output formats 

that are distinct to the model, so 

continuing use of CCEMS for this 

proposal facilitates comparisons to the 

SAFE FRM. Also, by using the same 

modeling tool as used in the SAFE rule, 

we can more clearly illustrate the 

influence of some of the key updates to 

the inputs used in the SAFE FRM. EPA 

believes that using that same tool, with 

changes to some of the critical inputs as 

discussed below (see Table 30), 

provides a better apples-to-apples 

comparison and serves to strengthen the 

basis for why we are proposing changes 

to the standards. 

Some public comments received on 

the SAFE NPRM argued that EPA 

should use its own modeling tools to 

support the EPA action. In addition to 

the reasoning described above on the 

value of comparing results to the SAFE 

FRM, our decision here to utilize the 

CCEMS model as an appropriate tool for 

this analysis is informed by our 

consideration of the significant 

revisions made to the model between 

the SAFE proposal and the SAFE FRM 

and carried over here, and by the 

opportunity this analysis provides to 

incorporate additional updates to key 

inputs and assumptions. 

Other commenters expressed 

concerns about technical issues with the 

NPRM analysis. During EPA’s own 

review and after consideration of public 

comments, we concluded that a number 

of these concerns were well founded, 

and potentially significant enough to 

merit revisions to the analysis. Some 

key revisions made for the SAFE FRM 

version of the CCEMS model include 

changes to the decision logic for 

technology application by 

manufacturers and changes related to 

the SAFE NPRM’s unrealistic changes in 

VMT associated with the scrappage 

modeling. Similarly, a number of 

revisions were also made to the model 

inputs for the SAFE FRM, including the 

adjustment of some technology 

effectiveness values. 

In considering what revisions to the 

analysis were needed from the SAFE 

NRPM to the SAFE FRM, and from the 

SAFE FRM to this proposal, we are 

careful to make a distinction between 

the model and the inputs. As stated in 

the SAFE FRM preamble, ‘‘[I]nputs do 

not define models; models use inputs. 

Therefore, disagreements about inputs 

do not logically extend to disagreements 

about models. Similarly, while models 

determine resulting outputs, they do so 

based on inputs.’’ 112 To illustrate, while 

CCEMS and OMEGA are different 

models, they both provide comparable 

results when comparable inputs are 

used. For example, as discussed in 

Chapter 1.2.2 of the DRIA, EPA’s 

OMEGA model runs conducted for the 

MTE show a MY2025 technology cost 

for the 2012 rule relative to the SAFE 

FRM of between $922 to $1,228 per 

vehicle, depending on the specific 

analysis. Thus, the MY2025 per vehicle 

costs of $942 (see RIA Chapter 4.1.2.1) 

from CCEMS modeling runs for this 

proposal relative to a full fleet meeting 

the SAFE FRM are comparable to our 

past analyses of standards for the 

similar level of stringency and are 

within the bounds of previous EPA 

analyses and sensitivity studies 

conducted for the MTE using OMEGA 

(see DRIA Chapter 1.2.2). 

Throughout the development of the 

SAFE FRM, EPA had significant input 

on revisions to the analysis and EPA 

considered the FRM version of the 

CCEMS model, given changes made in 

response to public comments and our 

own input, to be an effective modeling 

tool for purposes of assessing standards 

through the MY 2026 timeframe. 

While we believe the SAFE FRM 

model and inputs, together with the key 

changes that we have made since the 

SAFE FRM, are appropriate for the 

particular analysis at hand in assessing 

standards through MY2026, we 

welcome comments on other changes to 

the inputs that may be more appropriate 

for use in the final rule. 


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113See 83 FR 16077. 114See CCEMS Model Documentation on web 

page https://www.nhtsa.gov/corporate-average-fueleconomy/compliance-and-effects-modeling-system. 

Finally, EPA recognizes that in the 

Revised Final Determination 113 and the 

SAFE rule, the agency expressed 

concerns that were based at least in part 

on comments from certain stakeholders 

about uncertainties, lack of rigor and 

certain technical issues in the analyses 

used for the 2016 Proposed 

Determination and 2017 Final 

Determination. However, EPA has 

reconsidered those criticisms, as well as 

the prior analyses, and concludes that 

the prior concerns expressed do not 

undermine the utility and relevance of 

the prior analyses for this rulemaking. 

Our consideration of such analyses is 

reasonable because EPA no longer 

agrees with those concerns and/or 

because the concerns raised technical 

issues that we believe do not 

significantly impact the analyses. 

Additionally, the updated modeling for 

this rulemaking addresses many of the 

concerns previously identified. 

For use in future vehicle standards 

analyses, EPA is developing an updated 

version of its OMEGA model. This 

updated model, OMEGA2, is being 

developed to better account for the 

significant evolution over the past 

decade in vehicle markets, technologies, 

and mobility services. In particular, the 

recent advancements in battery electric 

vehicles (BEVs), and their introduction 

into the full range of market segments 

provides strong evidence that vehicle 

electrification can play a central role in 

achieving greater levels of emissions 

reduction in the future. In developing 

OMEGA2, EPA is exploring the 

interaction between consumer and 

producer decisions when modeling 

compliance pathways and the 

associated technology penetration into 

the vehicle fleet. OMEGA2 also is being 

designed to have expanded capability to 

model a wider range of GHG program 

options than are possible using existing 

tools, which will be especially 

important for the assessment of policies 

that are designed to address future GHG 

reduction goals. While the OMEGA2 

model is not available for use in this 

proposal, we plan to begin peer review 

of the draft model in the fall of 2021. 

As noted, to allow for direct 

comparison to the analytical results 

used to support the recent SAFE FRM, 

our updated analysis is based on the 

same version of the CCEMS model that 

was used for the SAFE FRM. The 

CCEMS model was extensively 

documented by NHTSA for the SAFE 

FRM and the documentation also 

applies to the updated analysis for this 

proposed rule.114 While the CCEMS 

model itself remains unchanged from 

the version used in the SAFE rule, EPA 

has made the following changes (shown 

in Table 30) to the inputs for this 

analysis. Additional information 

concerning the changes in model inputs 

can be found in the sections of the 

preamble and DRIA cited in the table. 

EPA invites public comment on the 

input changes noted below, as well as 

on whether there are other input choices 

that EPA should consider making for the 

final rule. In offering comments on the 

modeling inputs, EPA encourages 

stakeholders to provide technical 

support for any suggestions in changes 

to modeling inputs. 

TABLE 30—CHANGES MADE TO CCEMS MODEL INPUTS FOR THIS PROPOSAL, RELATIVE TO THE SAFE FRM ANALYSIS

Input file Changes 

parameters file ................................ Global social cost of carbon $/ton values in place of domestic values (see DRIA Chapter 3.3). 

Inclusion of global social cost of methane (CH4) and nitrous oxide (N2O) $/ton values (see Section IV). 

Updated PM2.5 cost factors (benefit per ton values, see Section VII.E). 

Rebound effect of ¥0.10 rather than ¥0.20 (see DRIA Chapter 3.1). 

AEO2021 fuel prices (expressed in 2018 dollars) rather than AEO2019. 

Updated energy security cost per gallon factors (see Section VII.F). 

Congestion cost factors of 6.34/6.34/5.66 (car/van-SUV/truck) cents/mile rather than 15.4/15/4/13.75 (see 

RIA Chapter 5). 

Discounting values to calendar year 2021 rather than calendar year 2019. 

The following fuel import and refining inputs have been changed based on AEO2021 (see DRIA Chapter 

3.2): 

Share of fuel savings leading to lower fuel imports: 

Gasoline 7%; E85 19%; Diesel 7% rather than 50%; 7.5%; 50%. 

Share of fuel savings leading to reduced domestic fuel refining: 

Gasoline 93%; E85 25.1%; Diesel 93% rather than 50%; 7.5%; 50%. 

Share of reduced domestic refining from domestic crude: 

Gasoline 9%; E85 2.4%; Diesel 9% rather than 10%; 1.5%; 10%. 

Share of reduced domestic refining from imported crude: 

Gasoline 91%; E85 24.6%; Diesel 91% rather than 90%; 13.5%; 90%. 

technology file ................................. High compression ratio level 2 (HCR2, sometimes referred to as Atkinson cycle) technology allowance set 

to TRUE for all engines beginning in 2018 (see DRIA Chapter 2). 

market file ....................................... On the Engines sheet, we allow high compression ratio level 1 (HCR1) and HCR2 technology on all 6- 

cyclinder and smaller engines rather than allowing it on no engines (see DRIA Chapter 2). 

Change the off-cycle credit values on the Credits and Adjustments sheet to 15 grams/mile for 2020 

through 2026 (for the CA Framework) or to 15 gram/mile for 2023 through 2026 (for the proposed option) depending on the model run. 

Consistent with the SAFE FRM, EPA 

is using the MY2017 base year fleet, 

which is projected to a future fleet based 

on the CCEMS model’s sales, scrappage, 

and fleet mix responses to the standards 

being analyzed. When performing 

compliance analyses, EPA will often 

attempt to utilize the most recent base 

year data that is available as finalized 

compliance data, which at the time of 

this analysis was for MY2019. It is 

important to note that because the 

model applies technologies to future 

vehicles for all alternatives being 

analyzed, including the ‘‘No Action’’ 

scenario, the vintage of the base year 

normally will not have a significant 

impact on the model results for 


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43770 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

115See Table 3.1, U.S. Environmental Protection 

Agency (2021). 2020 EPA Automotive Trends 

Report: Greenhouse Gas Emissions, Fuel Economy, 

and Technology since 1975. EPA–420–R–21–003. 

116See 85 FR 24647. 

117See EPA_CCEMS_PostProcessingTool, Release 

0.3.1 July 21, 2021. 

118Note that these targets are projected based on 

both projected future sales in applicable MYs and 

our proposed standards; after the standards are 

finalized the targets will change depending on each 

manufacturer’s actual sales. 

projected fleets. There might be 

additional reason to update the base 

year fleet in cases where a broad shift 

has occurred in vehicle power-to-weight 

ratios, since that can impact the 

incremental cost effectiveness of 

emissions-reducing technologies. EPA’s 

annual Automotive Trends Report 115

shows only a modest increase 

(approximately 3 percent) in the average 

vehicle power-to-weight ratio between 

MYs 2017 and 2019, and therefore we 

have concluded that the MY2017 base 

year remains a sound basis for this 

analysis. EPA requests comment on the 

use of the MY2017 base year fleet and 

whether it would be more appropriate to 

update the base year fleet for the final 

rule, for example by using a base year 

fleet reflecting the most recent final 

compliance data. Accordingly, we are 

using the data contained in the SAFE 

FRM market file (the base year fleet) 

except as described in Table 30 and 

splitting the market file into separate 

California Framework OEM (FW–OEM) 

and non-Framework OEM (NonFW– 

OEM) fleets for some model runs. Note 

that the scrappage model received many 

negative comments in response to the 

SAFE NPRM, but changes made for the 

FRM version of the CCEMS model were 

responsive to the identified issues 

involving sales and VMT results of the 

SAFE NPRM version of the CCEMS 

model.116

As mentioned, for some model runs 

we have split the fleet in two, one fleet 

consisting of California Framework 

OEMs (FW–OEMs) and the other 

consisting of the non-Framework OEMs 

(NonFW–OEMs). This was done because 

the FW–OEMs would be meeting more 

stringent emission reduction targets (as 

set in the scenarios file) and would have 

access to more (15 g/mi rather than 10 

g/mi) off-cycle credits (as set in the 

market and scenarios file) and more 

advanced technology incentive 

multipliers, while the NonFW–OEMs 

would be meeting less stringent 

standards and would have access to 10 

g/mi off-cycle credits and would not 

have access to any advanced technology 

multipliers. For such model runs, a 

post-processing step was necessary to 

properly sales-weight the two sets of 

model outputs into a single fleet of 

results. This post-processing tool is in 

the docket for this rule.117

Importantly, our primary model runs 

consist of a ‘‘No Action’’ scenario and 

an ‘‘action’’ scenario. The results, or 

impact of our proposed standards, are 

measured relative to the no action 

scenario. Our No Action scenario 

consists of the Framework OEMs 

(roughly 29 percent of fleet sales) 

meeting the Framework emission 

reduction targets and the NonFramework OEMs (roughly 71 percent 

of fleet sales) meeting the SAFE FRM 

standards. Our action scenario consists 

of the whole fleet meeting our proposed 

standards for MYs 2023 and later. 

Throughout this preamble, our ‘‘No 

Action scenario’’ refers to this 

Framework-OEM/NonFramework-OEM 

compliance split. EPA may consider a 

different No Action scenario for the 

final rule. For example, currently the No 

Action baseline includes the California 

Framework Agreement emission targets 

for those automakers who have 

committed to them, but does not 

include California’s GHG or ZEV 

standards, because California does not 

currently have a waiver to enforce those 

standards. If, after consideration of 

public comment, EPA were to rescind 

the withdrawal of California’s Advanced 

Clean Car waiver, then it might be 

appropriate to update the No Action 

scenario to reflect California’s GHG and 

ZEV standards. EPA seeks comment on 

potential adjustments to the No Action 

scenario. 

In our updated analysis, as indicated 

in Table 18, we are using a vehiclemiles-traveled (VMT) rebound effect of 

10 percent. The 10 percent value has 

been used in EPA supporting analyses 

for the 2010 and 2012 final rules as well 

as the MTE. The SAFE rule used a VMT 

rebound effect of 20 percent. Our 

assessment indicates that a rebound 

effect of 10 percent is appropriate and 

supported by the body of research on 

the rebound effect for light-duty vehicle 

driving, as described further in the 

DRIA Chapter 3.1. We are requesting 

comment on the use of the 10 percent 

VMT rebound value, or an alternative 

value such as 5 or 15 percent, for our 

analysis of the MY2023 through 2026 

standards. 

EPA has chosen to change a select 

number of the SAFE FRM model inputs, 

as listed in Table 30, largely because we 

concluded that other potential updates, 

regardless of their potential merit, such 

as the continued use of the MY2017 

base year fleet, would not have a 

significant impact on the assessment of 

the proposed standards. In addition, 

while the technology effectiveness 

estimates used in the CCEMS model to 

support the SAFE FRM could have been 

updated with more recent engine maps, 

the incremental effectiveness values are 

of primary importance within the 

CCEMS model and, while the maps are 

somewhat dated, the incremental 

effectiveness values derived from them 

are in rough agreement with 

incremental values derived from more 

up-to-date engine maps (see DRIA 

Chapter 2). Likewise, while the 

electrified vehicle battery costs used in 

the SAFE FRM could have been lower 

based on EPA’s latest assessment, we 

concluded that updating those costs for 

this proposal would not have a notable 

impact on overall cost estimates, 

although we may consider doing so for 

the final rule. The past EPA analyses 

described above generally have 

estimated EV penetrations of less than 5 

percent, and electrification continues to 

play a relatively modest role in our 

projections of compliance paths for the 

proposed standards. In contrast to the 

model inputs unchanged from the SAFE 

rule as described above, the treatment of 

HCR1 and HCR2 technologies in the 

CCEMS model, specifically a broader 

availability of those technologies as a 

compliance choice within the model, 

was considered by EPA to be significant 

and we made an update to the model’s 

inputs relative to the SAFE FRM. We 

made that choice because these are a 

very cost-effective ICE technology that is 

in-use today and ready for broader 

application. In short, there are many 

modeling inputs that EPA has chosen 

not to change out of the very large 

number of inputs required to run a 

model as complex as the CCEMS model, 

but there are others we have updated 

with most of those updated because of 

the way they value the effects of 

emissions on public health. EPA seeks 

comment on our choice of modeling 

inputs, including whether additional 

inputs should be modified for the final 

rule analysis. 

B. Projected Compliance Costs and 

Technology Penetrations 

1. GHG Targets and Compliance Levels 

The proposed curve coefficients were 

presented in Table 22. Here we present 

the projected fleet targets for each 

manufacturer. These targets are 

projected based on each manufacturer’s 

car/truck fleets and their sales weighted 

footprints. As such, each manufacturer 

has a set of targets unique to them. The 

projected targets are shown by 

manufacturer for MYs 2023 through 

2026 in Table 31 for cars, Table 32 for 

trucks, and Table 33 for the combined 

fleets.118


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TABLE 31—CAR TARGETS

[CO2 gram/mile] 

2023 2024 2025 2026 

BMW ................................................................................................................ 166 158 150 143 

Daimler ............................................................................................................. 173 165 157 149 

FCA .................................................................................................................. 169 161 153 146 

Ford .................................................................................................................. 167 159 151 144 

General Motors ................................................................................................ 166 158 151 143 

Honda .............................................................................................................. 163 155 147 140 

Hyundai Kia-H .................................................................................................. 165 157 149 142 

Hyundai Kia-K .................................................................................................. 164 156 149 142 

JLR ................................................................................................................... 174 166 158 150 

Mazda .............................................................................................................. 163 155 147 140 

Mitsubishi ......................................................................................................... 151 143 136 130 

Nissan .............................................................................................................. 164 156 148 141 

Subaru ............................................................................................................. 160 152 145 138 

Tesla ................................................................................................................ 191 182 173 165 

Toyota .............................................................................................................. 162 154 147 140 

Volvo ................................................................................................................ 172 164 156 148 

VWA ................................................................................................................. 160 152 145 138 

Total .......................................................................................................... 165 157 149 142 

TABLE 32—TRUCK TARGETS

[CO2 gram/mile] 

2023 2024 2025 2026 

BMW ................................................................................................................ 219 208 198 188 

Daimler ............................................................................................................. 225 214 203 193 

FCA .................................................................................................................. 233 222 211 200 

Ford .................................................................................................................. 246 234 222 211 

General Motors ................................................................................................ 252 239 228 216 

Honda .............................................................................................................. 215 205 195 185 

Hyundai Kia-H .................................................................................................. 214 203 193 183 

Hyundai Kia-K .................................................................................................. 217 206 196 186 

JLR ................................................................................................................... 221 210 199 190 

Mazda .............................................................................................................. 206 196 186 177 

Mitsubishi ......................................................................................................... 194 184 175 166 

Nissan .............................................................................................................. 225 214 203 193 

Subaru ............................................................................................................. 197 187 178 169 

Tesla ................................................................................................................ ........................ ........................ ........................ ........................

Toyota .............................................................................................................. 227 216 205 195 

Volvo ................................................................................................................ 222 211 200 190 

VWA ................................................................................................................. 218 207 196 187 

Total .......................................................................................................... 232 221 210 199 

TABLE 33—COMBINED FLEET TARGETS

[CO2 gram/mile] 

2023 2024 2025 2026 

BMW ................................................................................................................ 187 178 169 161 

Daimler ............................................................................................................. 195 186 177 168 

FCA .................................................................................................................. 221 210 200 190 

Ford .................................................................................................................. 215 205 195 185 

General Motors ................................................................................................ 215 204 195 185 

Honda .............................................................................................................. 185 176 167 159 

Hyundai Kia-H .................................................................................................. 168 160 152 145 

Hyundai Kia-K .................................................................................................. 177 169 161 153 

JLR ................................................................................................................... 211 200 190 181 

Mazda .............................................................................................................. 176 167 159 151 

Mitsubishi ......................................................................................................... 168 160 152 145 

Nissan .............................................................................................................. 185 176 167 159 

Subaru ............................................................................................................. 187 178 169 161 

Tesla ................................................................................................................ 191 182 173 165 

Toyota .............................................................................................................. 194 185 176 167 

Volvo ................................................................................................................ 205 195 185 176 

VWA ................................................................................................................. 179 171 162 155 


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TABLE 33—COMBINED FLEET TARGETS—Continued 

[CO2 gram/mile] 

2023 2024 2025 2026 

Total .......................................................................................................... 198 189 180 171 

The modeled achieved CO2- 

equivalent (CO2e) levels for the 

proposed standards are shown in Table 

34 for cars, Table 35 for trucks, and 

Table 36 for the combined fleets. These 

values were produced by the modeling 

analysis and represent the projected 

certification emissions values for 

possible compliance approaches with 

the proposed standards for each 

manufacturer. These achieved values, 

shown as averages over the respective 

car, truck and combined fleets, include 

the 2-cycle tailpipe emissions based on 

the modeled application of emissionsreduction technologies minus the 

modeled application of off-cycle credit 

technologies and the full A/C efficiency 

credits. The values also reflect any 

application of the proposed advanced 

technology multipliers, up to the cap. 

Hybrid pickup truck incentive credits 

were not modeled (the CCEMS version 

used does not have this capability) and 

are therefore not included in the 

achieved values. 

Comparing the target and achieved 

values, it can be seen that some 

manufacturers are projected to have 

achieved values that are over target 

(higher emissions) on trucks, and under 

target (lower emissions) on cars, and 

vice versa for other manufacturers. This 

is a feature of the unlimited credit 

transfer provision, which results in a 

compliance determination that is based 

on the combined car and truck fleet 

credits rather than a separate 

determination of each fleet’s 

compliance. The application of 

technologies is influenced by the 

relative cost-effectiveness of 

technologies among each manufacturer’s 

vehicles, which explains why different 

manufacturers exhibit different 

compliance approaches in the modeling 

results. For the combined fleet, the 

achieved values are typically close to, or 

slightly under the target values, which 

would represent the banking of credits 

that can be carried over into other 

model years. For all manufacturers, the 

total achieved values for MYs 2023 to 

2026 are within ¥1 to +3 grams/mile of 

the total target values. This indicates 

that overall, the modeled fleet tracks the 

standards very closely from year-to-year. 

Note that an achieved value for a 

manufacturer’s combined fleet that is 

above the target in a given model year 

does not indicate a likely failure to 

comply with the standards, since the 

model includes the GHG program credit 

banking provisions that allow credits 

from one year to be carried into another 

year. 

TABLE 34—CAR ACHIEVED LEVELS

[CO2e gram/mile] 

2023 2024 2025 2026 

BMW ................................................................................................................ 173 168 168 131 

Daimler ............................................................................................................. 184 169 166 168 

FCA .................................................................................................................. 183 178 178 171 

Ford .................................................................................................................. 168 160 159 151 

General Motors ................................................................................................ 152 136 133 132 

Honda .............................................................................................................. 161 161 161 130 

Hyundai Kia-H .................................................................................................. 162 147 146 145 

Hyundai Kia-K .................................................................................................. 138 134 134 137 

JLR ................................................................................................................... 217 162 158 165 

Mazda .............................................................................................................. 156 156 156 146 

Mitsubishi ......................................................................................................... 136 136 129 129 

Nissan .............................................................................................................. 165 153 147 147 

Subaru ............................................................................................................. 193 193 193 174 

Tesla ................................................................................................................ ¥20 ¥20 ¥20 ¥20 

Toyota .............................................................................................................. 161 143 135 133 

Volvo ................................................................................................................ 185 185 184 145 

VWA ................................................................................................................. 146 144 143 135 

Total .......................................................................................................... 161 150 147 141 

TABLE 35—TRUCK ACHIEVED LEVELS

[CO2e gram/mile] 

2023 2024 2025 2026 

BMW ................................................................................................................ 220 210 156 161 

Daimler ............................................................................................................. 206 206 151 126 

FCA .................................................................................................................. 218 217 217 207 

Ford .................................................................................................................. 245 234 234 216 

General Motors ................................................................................................ 270 261 245 224 

Honda .............................................................................................................. 212 210 210 210 

Hyundai Kia-H .................................................................................................. 222 129 129 140 

Hyundai Kia-K .................................................................................................. 225 209 209 209 

JLR ................................................................................................................... 210 210 176 187 

Mazda .............................................................................................................. 177 177 177 176 


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119As shown in Table 23, Tesla incurs nearly 

$400 in costs per vehicle despite being a pure 

electric vehicle maker (0 grams/mile) and despite 

there being no upstream emissions accounting 

under the proposal. The costs shown for Tesla 

represent the costs of 15 grams/mile of off-cycle 

credit. 

TABLE 35—TRUCK ACHIEVED LEVELS—Continued 

[CO2e gram/mile] 

2023 2024 2025 2026 

Mitsubishi ......................................................................................................... 194 194 185 185 

Nissan .............................................................................................................. 220 218 198 192 

Subaru ............................................................................................................. 187 187 187 168 

Tesla ................................................................................................................ ........................ ........................ ........................ ........................

Toyota .............................................................................................................. 239 231 224 204 

Volvo ................................................................................................................ 181 180 176 183 

VWA ................................................................................................................. 240 200 173 122 

Total .......................................................................................................... 233 226 218 203 

TABLE 36—COMBINED FLEET ACHIEVED LEVELS

[CO2e gram/mile] 

2023 2024 2025 2026 

BMW ................................................................................................................ 192 184 163 143 

Daimler ............................................................................................................. 194 185 159 150 

FCA .................................................................................................................. 211 210 210 200 

Ford .................................................................................................................. 215 205 205 190 

General Motors ................................................................................................ 220 208 197 185 

Honda .............................................................................................................. 183 181 182 164 

Hyundai Kia-H .................................................................................................. 166 146 145 145 

Hyundai Kia-K .................................................................................................. 160 153 153 156 

JLR ................................................................................................................... 212 200 172 182 

Mazda .............................................................................................................. 162 162 162 155 

Mitsubishi ......................................................................................................... 159 160 152 152 

Nissan .............................................................................................................. 184 175 164 163 

Subaru ............................................................................................................. 189 189 189 170 

Tesla ................................................................................................................ ¥20 ¥20 ¥20 ¥20 

Toyota .............................................................................................................. 199 186 179 168 

Volvo ................................................................................................................ 182 182 179 170 

VWA ................................................................................................................. 178 163 153 131 

Total .......................................................................................................... 197 188 183 172 

2. Projected Compliance Costs per 

Vehicle 

EPA has performed an updated 

assessment of the estimated per vehicle 

costs for manufacturers to meet the 

proposed MY2023–2026 standards. The 

car costs per vehicle from this analysis 

are shown in Table 37, followed by 

truck costs in Table 38 and combined 

fleet costs in Table 39.119

As shown in these tables, the 

combined cost for car and truck fleets, 

averaged over all manufacturers, 

increases from MY 2023 to MY 2026 as 

the proposed standards become more 

stringent. The costs for trucks tend to be 

somewhat higher than for cars—many 

technology costs scale with engine and 

vehicle size—but it is important to note 

that the absolute emissions, and 

therefore emissions reductions, also 

tend to be higher for trucks. Projected 

costs for individual manufacturers vary 

based on the composition of vehicles 

produced. The estimated costs for 

California Framework Agreement 

manufacturers in MY 2026 range from 

approximately $500–$850 dollars per 

vehicle—because the proposed 

standards are more stringent than the 

Framework emission reduction targets— 

and fall within the wider cost range of 

non-Framework manufacturers. The 

estimated costs for Framework 

manufacturers are somewhat lower than 

the overall industry average costs of 

approximately $1,000 per vehicle in MY 

2026. 

TABLE 37—CAR COSTS PER VEHICLE RELATIVE TO THE NO ACTION SCENARIO

[2018 dollars] 

2023 2024 2025 2026 

BMW * .............................................................................................................. $64 $40 $42 $254 

Daimler ............................................................................................................. 37 414 490 487 

FCA .................................................................................................................. 465 525 511 823 

Ford * ................................................................................................................ 22 234 228 458 

General Motors ................................................................................................ 662 1,351 1,354 1,512 

Honda * ............................................................................................................ 39 44 43 766 

Hyundai Kia-H .................................................................................................. 457 845 847 878 


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TABLE 37—CAR COSTS PER VEHICLE RELATIVE TO THE NO ACTION SCENARIO—Continued 

[2018 dollars] 

2023 2024 2025 2026 

Hyundai Kia-K .................................................................................................. 395 406 396 416 

JLR ................................................................................................................... ¥510 1,075 1,076 1,006 

Mazda .............................................................................................................. 510 522 517 745 

Mitsubishi ......................................................................................................... 870 860 993 985 

Nissan .............................................................................................................. 614 825 940 912 

Subaru ............................................................................................................. 403 397 392 710 

Tesla ................................................................................................................ 398 393 387 382 

Toyota .............................................................................................................. 470 822 958 979 

Volvo * .............................................................................................................. 212 210 222 211 

VWA * ............................................................................................................... 158 168 177 185 

Total .......................................................................................................... 383 643 682 846 

* Framework Manufacturer. 

TABLE 38—TRUCK COST PER VEHICLE RELATIVE TO THE NO ACTION SCENARIO

[2018 dollars] 

2023 2024 2025 2026 

BMW * .............................................................................................................. $270 $264 $1,080 $1,037 

Daimler ............................................................................................................. 1,641 1,582 2,964 4,233 

FCA .................................................................................................................. 1,074 1,022 974 1,423 

Ford * ................................................................................................................ 34 279 267 500 

General Motors ................................................................................................ 786 977 1,350 2,100 

Honda * ............................................................................................................ 25 64 63 62 

Hyundai Kia-H .................................................................................................. 398 3,370 3,170 2,995 

Hyundai Kia-K .................................................................................................. 435 482 475 468 

JLR ................................................................................................................... 752 740 2,140 2,007 

Mazda .............................................................................................................. 787 783 777 788 

Mitsubishi ......................................................................................................... 440 434 599 592 

Nissan .............................................................................................................. 556 590 978 1,178 

Subaru ............................................................................................................. 415 410 404 808 

Tesla ................................................................................................................ 0 0 0 0 

Toyota .............................................................................................................. 440 590 763 1,081 

Volvo * .............................................................................................................. 1,193 1,140 1,040 997 

VWA * ............................................................................................................... 35 1,028 1,595 2,148 

Total .......................................................................................................... 546 682 855 1,232 

* Framework Manufacturer. 

TABLE 39—FLEET AVERAGE COST PER VEHICLE RELATIVE TO THE NO ACTION SCENARIO

[2018 dollars] 

2023 2024 2025 2026 

BMW * .............................................................................................................. $145 $129 $459 $566 

Daimler ............................................................................................................. 727 917 1,567 2,123 

FCA .................................................................................................................. 957 927 886 1,309 

Ford * ................................................................................................................ 29 261 252 485 

General Motors ................................................................................................ 733 1,138 1,353 1,854 

Honda * ............................................................................................................ 33 52 52 467 

Hyundai Kia-H .................................................................................................. 454 1,006 997 1,015 

Hyundai Kia-K .................................................................................................. 404 424 413 426 

JLR ................................................................................................................... 471 813 1,904 1,784 

Mazda .............................................................................................................. 591 599 595 758 

Mitsubishi ......................................................................................................... 697 688 833 825 

Nissan .............................................................................................................. 595 746 954 1,005 

Subaru ............................................................................................................. 412 406 401 783 

Tesla ................................................................................................................ 398 393 387 382 

Toyota .............................................................................................................. 456 709 863 1,033 

Volvo * .............................................................................................................. 860 827 766 731 

VWA * ............................................................................................................... 116 456 656 853 

Total .......................................................................................................... 465 663 771 1,044 

* Framework Manufacturer. 


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Overall, EPA estimates the average 

costs of today’s proposal at $1,044 per 

vehicle in MY2026 relative to meeting 

the No Action scenario in MY2026. As 

discussed in Section VII, there are 

benefits resulting from these costs 

including savings to consumers in the 

form of lower fuel costs. 

3. Technology Penetration Rates 

In this section we discuss the 

projected new sales technology 

penetration rates from EPA’s updated 

analysis for the proposed standards. 

Additional detail on this topic can be 

found in the DRIA. EPA’s assessment for 

the proposal, consistent with past EPA 

assessments, shows that the proposed 

standards can largely be met with 

increased sales of advanced gasoline 

vehicle technologies, and relatively low 

penetration rates of electrified vehicle 

technology. 

Table 40, Table 41, and Table 42 show 

the EPA projected penetration rates of 

BEV+PHEV technology under today’s 

proposal with the remaining share being 

traditional or advanced ICE technology. 

Values shown reflect absolute values of 

fleet penetration and are not increments 

from the No Action scenario or other 

standards. It is important to note that 

this is a projection and represents one 

out of many possible compliance 

pathways for the industry. The 

proposed standards are performancebased and do not mandate any specific 

technology for any manufacturer or any 

vehicles. As the proposed standards 

become more stringent over MYs 2023 

to 2026, the projected penetration of 

electrified vehicles increases by 

approximately 4 percent over this 4-year 

period (from 3.6 percent to 7.8 percent), 

reaching nearly 8 percent of overall 

vehicle production in MY2026. While 

this is not an insignificant change, it is 

notable that we estimate that over 92 

percent of new light-duty vehicle sales 

will continue to utilize ICE technology 

under our updated analysis. This 

conclusion that ICE vehicles will 

continue to play an important role in 

meeting GHG standards is consistent 

with EPA’s prior analyses for this 

timeframe. 

TABLE 40—CAR BEV+PHEV PENETRATION RATES UNDER THE PROPOSED STANDARDS

2023 2024 2025 2026 

BMW ................................................................................................................ 8.4% 8.4% 8.4% 19.5% 

Daimler ............................................................................................................. 7.2 8.0 8.0 8.0 

FCA .................................................................................................................. 4.3 6.3 6.2 6.2 

Ford .................................................................................................................. 7.7 9.3 9.6 9.6 

General Motors ................................................................................................ 6.1 12.2 12.1 13.3 

Honda .............................................................................................................. 0.1 0.1 0.1 12.7 

Hyundai Kia-H .................................................................................................. 0.3 3.4 3.8 3.8 

Hyundai Kia-K .................................................................................................. 9.2 9.2 9.1 9.1 

JLR ................................................................................................................... 0.5 11.2 11.2 11.2 

Mazda .............................................................................................................. 0.0 0.0 0.0 0.0 

Mitsubishi ......................................................................................................... 0.0 0.0 0.0 0.0 

Nissan .............................................................................................................. 1.0 1.2 1.2 1.2 

Subaru ............................................................................................................. 0.0 0.0 0.0 0.0 

Tesla ................................................................................................................ 100.0 100.0 100.0 100.0 

Toyota .............................................................................................................. 2.6 4.0 4.4 4.4 

Volvo ................................................................................................................ 0.0 0.0 0.0 16.6 

VWA ................................................................................................................. 15.4 15.5 15.5 17.2 

Total .......................................................................................................... 4.6 6.3 6.4 8.4 

TABLE 41—TRUCK BEV+PHEV PENETRATION RATES UNDER THE PROPOSED STANDARDS

2023 2024 2025 2026 

BMW ................................................................................................................ 4.3% 4.3% 8.9% 8.9% 

Daimler ............................................................................................................. 28.8 28.8 38.3 39.6 

FCA .................................................................................................................. 5.6 5.6 5.6 5.6 

Ford .................................................................................................................. 1.8 4.8 4.8 7.3 

General Motors ................................................................................................ 2.3 3.7 5.0 11.0 

Honda .............................................................................................................. 0.0 0.0 0.0 0.0 

Hyundai Kia-H .................................................................................................. 0.0 20.6 20.6 20.6 

Hyundai Kia-K .................................................................................................. 0.0 0.0 0.0 0.0 

JLR ................................................................................................................... 13.0 13.0 24.6 24.6 

Mazda .............................................................................................................. 0.0 0.0 0.0 0.0 

Mitsubishi ......................................................................................................... 0.0 0.0 0.0 0.0 

Nissan .............................................................................................................. 0.0 0.0 3.7 5.9 

Subaru ............................................................................................................. 0.0 0.0 0.0 0.0 

Tesla ................................................................................................................ 0.0 0.0 0.0 0.0 

Toyota .............................................................................................................. 0.0 0.0 1.9 1.9 

Volvo ................................................................................................................ 15.6 15.6 17.3 17.3 

VWA ................................................................................................................. 1.2 20.8 20.8 39.5 

Total .......................................................................................................... 2.6 4.0 5.1 7.2 

TABLE 42—FLEET BEV+PHEV PENETRATION RATES UNDER THE PROPOSED STANDARDS

2023 2024 2025 2026 

BMW ................................................................................................................ 6.8% 6.8% 8.6% 15.2% 


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120Although the MTE 2018 Revised Final 

Determination ‘‘withdrew’’ the 2017 Final 

Determination, the D.C. Circuit Court has noted that 

EPA did ‘‘not erase[ ] the Draft Technical 

Assessment Report, Technical Support Document, 

or any of the other prior evidence [EPA] collected.’’ 

California v. EPA, 940 F.3d 1342, 1351 (D.C. Cir. 

2019). 

121See the SAFE Final Rule preamble: ‘‘The 

levels of electrified vehicle technologies projected 

in this final rule to meet the baseline Alternative 

(the previous GHG standards) differ slightly from 

those projected in the 2017 Final Determination. In 

this final rule, EPA projects a combined strong and 

mild hybrid penetration of 16 percent (compared to 

20 percent in the 2017 Final Determination), with 

the share of mild hybrids somewhat lower (7 

percent compared to 18 percent in the 2017 Final 

Determination) and the share of strong hybrids 

higher (9 percent compared to 2 percent in the 2017 

Final Determination). EPA projects a total level of 

plug-in vehicles of 6 percent, similar to the 5 

percent total projected in the 2017 Final 

Determination, but with a slightly different mix of 

plug-in hybrid electric vehicles (0.4 percent 

compared to 2 percent in the 2017 Final 

Determination) and dedicated electric vehicles (5.7 

percent compared to 3 percent in the 2017 Final 

Determination). 85 FR 25107, April 30, 2020. 

122 ‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003, 

January 2021. 

123 Fueleconomy.gov, 2015 Fuel Economy Guide 

and 2021 Fuel Economy Guide. 

124Environmental Defense Fund and M.J. Bradley 

& Associates, ‘‘Electric Vehicle Market Status— 

Update, Manufacturer Commitments to Future 

Electric Mobility in the U.S. and Worldwide,’’ April 

2021. 

TABLE 42—FLEET BEV+PHEV PENETRATION RATES UNDER THE PROPOSED STANDARDS—Continued 

2023 2024 2025 2026 

Daimler ............................................................................................................. 16.5 17.0 21.2 21.8 

FCA .................................................................................................................. 5.3 5.7 5.7 5.7 

Ford .................................................................................................................. 4.1 6.5 6.7 8.2 

General Motors ................................................................................................ 3.9 7.4 8.0 12.0 

Honda .............................................................................................................. 0.1 0.1 0.1 7.3 

Hyundai Kia-H .................................................................................................. 0.2 4.5 4.9 4.9 

Hyundai Kia-K .................................................................................................. 6.9 6.9 6.8 6.8 

JLR ................................................................................................................... 10.2 12.6 21.7 21.7 

Mazda .............................................................................................................. 0.0 0.0 0.0 0.0 

Mitsubishi ......................................................................................................... 0.0 0.0 0.0 0.0 

Nissan .............................................................................................................. 0.6 0.8 2.1 2.8 

Subaru ............................................................................................................. 0.0 0.0 0.0 0.0 

Tesla ................................................................................................................ 100.0 100.0 100.0 100.0 

Toyota .............................................................................................................. 1.3 2.0 3.1 3.1 

Volvo ................................................................................................................ 10.3 10.3 11.5 17.0 

VWA ................................................................................................................. 10.7 17.3 17.3 24.7 

Total .......................................................................................................... 3.6 5.1 5.8 7.8 

C. Are the proposed standards feasible? 

The proposed standards are based on 

the extensive light-duty GHG technical 

analytical record developed over the 

past dozen years, as represented by the 

EPA supporting analyses for the 2010 

and 2012 final rules, the Mid-Term 

Evaluation (including the Draft TAR, 

Proposed Determination and Final 

Determinations), as well as the updated 

analysis for this proposed rule and the 

supporting analysis for the SAFE 

rule.120 Our conclusion that the 

proposed program is technologically 

feasible is based in part on a projection 

that the standards will be met using the 

same advances in light-duty vehicle 

engine technologies, transmission 

technologies, electric drive systems, 

aerodynamics, tires, and vehicle mass 

reduction that have gradually entered 

the light-duty vehicle fleet over the past 

decade and that are already in place in 

today’s vehicles. This conclusion is also 

supported by the analysis performed by 

NHTSA that served as the basis for the 

SAFE final rule. In the SAFE final rule, 

the NHTSA analysis showed that the 

2012 CO2 standards could be met 

primarily with improvements in 

gasoline vehicle and hybrid technology 

and with only 6 percent penetration of 

EV+PHEV, which is very similar to 

today’s projection.121 The feasibility of 

the proposed standards does not rely on 

dramatically increased penetration of 

electric vehicles into the fleet during the 

2023–2026 model years. Our updated 

analysis projects that the proposed 

standards can be met with a gradually 

increasing market share of EVs and 

PHEVs up to approximately 8 percent 

by MY 2026 (see Section III.B.3 of this 

preamble and the following paragraph). 

The percentage share of specific 

MY2015 to MY2020 engine and 

transmission technologies are 

summarized from EPA Automotive 

Trends Report data within Chapter 2.2 

of the DRIA. The introduction of GHG 

reducing technologies has been steadily 

increasing within the light-duty vehicle 

fleet. As of MY2020, more than half of 

light-duty gasoline spark ignition 

engines now use direct injection (GDI) 

engines and more than a third are 

turbocharged. Nearly half of all lightduty vehicles have planetary automatic 

transmissions with 8 or more gear ratios, 

and one-quarter are using continuously 

variable transmissions (CVT). The sales 

of vehicles with 12V start/stop systems 

has increased from approximately 7 

percent to approximately 42 percent 

between MY2015 and MY2020. 

Significant levels of powertrain 

electrification of all types (HEV, PHEV, 

and EV) have increased more than 3- 

fold from MY2015 to MY2020. In 

MY2015, hybrid electric vehicles 

accounted for approximately 2.4 percent 

of vehicle sales, which increased to 

approximately 6.5 percent of vehicle 

sales in MY2020. Sales of plug-in hybrid 

electric vehicles (PHEVs) and battery 

electric vehicles (EVs) together 

comprised 0.7 percent of vehicle sales 

in MY2015 and increased to about 2 

percent of sales for MY2019.122 The 

pace of introduction of new EV and 

PHEV models is rapidly increasing. For 

example, the number of EV and PHEV 

models available for sale in the U.S. has 

more than doubled from about 24 in MY 

2015 to about 60 in MY 2021.123 Even 

in the absence of more stringent 

standards, manufacturers have indicated 

that the number of EV and PHEV 

models will increase to more than 80 by 

MY 2023, with many more expected to 

reach production before the end of the 

decade.124 Although our analysis 

projects that approximately 8 percent of 

new vehicles meeting the MY 2026 

proposed standards would be EVs or 

PHEVs, it is possible that an even higher 

percentage may be electrified during the 

time period of our proposed MY 2023– 

2026 standards, when taking into 

account the pace at which new EV and 

PHEV models are being announced for 

introduction by automakers, under 


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125Rhodium Group, ‘‘Pathways to Build Back 

Better: Investing in Transportation 

Decarbonization,’’ May 13, 2021. 

current policy, over the next three to 

five years.125

EPA believes that the proposed 

program is technologically feasible 

based on our projection that the 

standards can be met largely with the 

kinds of advanced gasoline vehicle 

technologies already in place in vehicles 

within today’s new vehicle fleet and 

relies on a penetration of plug-in 

electric vehicles into the fleet during the 

2023–2026 model years that is 

commensurate with current trends in 

the industry. This conclusion, which is 

supported by EPA’s updated analysis, is 

consistent with EPA’s past analyses of 

standards similar to those proposed in 

this notice, see Section III.B and Chapter 

2 of the DRIA. The analysis confirms 

EPA’s previous conclusions that a wide 

variety of emission reducing 

technologies are already available at 

reasonable costs for manufacturers to 

incorporate into their vehicles within 

the timeframe of the proposed 

standards. 

D. How did EPA consider the two 

alternatives in choosing the proposed 

program? 

In Section II.C, we described two 

alternative stringency levels that we 

considered in developing the level of 

stringency of the proposed program— 

Alternative 1 (less stringent than the 

proposed program) and Alternative 2 

(more stringent). All three potential 

programs would incorporate year-overyear increases in GHG stringency, with 

varying starting stringencies in MY2023, 

and varying ending stringencies in 

MY2026, and with fairly linear 

increases in stringency between 

MY2023 and 2026 that would 

essentially follow the same slope as the 

2012 program. All three potential 

programs would also result, by MY2026, 

in standards at least as stringent as the 

last year (MY2025) of the 2012 program. 

See Figure 8 and Table 16 in Section 

II.C. 

In determining the stringency of the 

proposed standards, our primary focus 

was on the first and last model years of 

the proposed program, 2023 and 2026. 

Some stakeholders have encouraged 

EPA to propose standards that would 

closely follow the stringency levels of 

the California Framework Agreements, 

or that would represent less stringent 

standards (between the California 

Framework emission reduction targets 

and the relaxed standards of the SAFE 

rule). In Section VI below, we discuss 

why we believe the auto industry’s 

technological achievements over the 

past decade, and the availability of a 

range of existing and proposed 

compliance flexibilities, puts 

automakers in a strong position to meet 

the proposed revised standards for 

model years 2023 through 2026 on a 

year-by-year trajectory close to the 

standards in the 2012 program. Given 

our conclusion that standards more 

stringent than those in Alternative 1 are 

clearly feasible considering available 

technology and compliance costs, and 

in light of the critical national need to 

quickly and substantially reduce lightduty GHG emissions, we believe at this 

time that a program of the stringency of 

Alternative 1 (and any less stringent 

alternative) would not be appropriate 

given EPA’s consideration of the public 

health and welfare benefits of potential 

standards. Nonetheless, we invite 

comment on Alternative 1 and may 

consider it in determining the standards 

for the final rule. 

Similarly, we considered the 

implications of a more stringent 

program in Alternative 2. In this 

alternative program, the standards 

would more quickly return to the 2012 

program’s trajectory, in model year 

2023. While we believe, given the 

combination of factors discussed in 

Section VI, reaching the 2012 program’s 

levels in 2023 may be feasible 

industrywide, we are proposing a 

slightly less stringent standard for that 

first year to provide a more gradual 

transition to the 2012 trajectory. 

All three alternative programs after 

MY2023 would essentially follow the 

same slope of increasing year-over-year 

stringency of the 2012 program. For 

Alternative 1, this would mean that the 

standards would reach the model year 

2025 level of the 2012 rule (the final 

increase in stringency of the 2012 

program) in model year 2026, resulting 

in a less stringent program compared to 

the 2012 rule until MY2026. Chapter 

5.1.1.2 of the DRIA shows the associated 

lower amount of GHG reductions 

achieved under Alternative 1 compared 

to the proposal. Again, given the urgent 

need for GHG reductions to address the 

climate challenge, we believe 

Alternative 1 does not go far enough and 

would be inappropriate, as discussed 

above. 

For Alternative 2, the standards by 

MY2025 would nearly match the 

stringency level of the MY2025 

standards in the 2012 rule and would 

continue to increase in stringency for 

one additional year in MY2026. 

Consistent with EPA’s previous 

discussions regarding feasibility, 

compliance costs, and lead time, we 

believe that Alternative 2 may be 

feasible. Several arguments can be made 

in support of Alternative 2 that are 

similar to those that support the 

proposed standards. In terms of 

technology penetrations, Alternative 2 

projects that nearly 10 percent of the 

fleet would need to be made up of EV/ 

PHEVs compared with about 8 percent 

for the proposed standards. See Table 4– 

23, and Table 4–28 of the DRIA. Several 

automakers have made public 

announcements regarding electrification 

of the light-duty fleet, particularly 

regarding the latter years of the 

proposed program. These electrified 

products will provide a significant 

contribution to the ability of these 

manufacturers to comply with more 

stringent standards. However, EPA 

recognizes that the additional 

penetration of electrification by 2026 

could be challenging for any 

manufacturers that are not currently 

investing in advanced technologies, 

such as EVs, for this timeframe, 

although with additional investment 

and product development, or greater 

reliance on the emissions ABT program 

including credit trading, this level of 

stringency may be achievable. EPA also 

recognizes Alternative 2 is more 

stringent than the proposal in MY2023, 

and EPA believes a lower level of 

stringency increase for 2023 may be 

appropriate taking into consideration 

lead time. 

Projected costs and technology 

penetrations associated with 

Alternatives 1 and 2 are available in 

Chapter 4 of the DRIA. 

We invite comment on our assessment 

of Alternatives. 

IV. How would this proposal reduce 

GHG emissions and their associated 

effects? 

A. Impact on GHG Emissions 

EPA used the CCEMS to estimate 

GHG emissions inventories including 

tailpipe emissions from light-duty cars 

and trucks and the upstream emissions 

associated with the fuels used to power 

those vehicles (both at the refinery and 

the electricity generating unit). The 

upstream emission factors used in the 

modeling are identical to those used for 

the SAFE FRM and were generated 

using the DOE/Argonne GREET model 

as described in the SAFE FRM (See 

DRIA Chapter 5.1.1, referencing the 

SAFE FRM). 

The resultant annual GHG inventory 

estimates are shown in Table 43 for the 

calendar years 2023 through 2050. The 

table shows our proposed program 

would result in net GHG reductions 

compared to the No Action scenario. 

The CO2, CH4 and N2O emissions 


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reductions from the proposed program total 2,205 MMT, 2.7 MMT and 0.072 

MMT, respectively, by 2050. 

TABLE 43—ESTIMATED GHG IMPACTS OF THE PROPOSED STANDARDS RELATIVE TO THE NO ACTION SCENARIO

Year 

Emission impacts relative to no action Percent change from no action 

CO2

(million 

metric tons) 

CH4

(metric tons) 

N2O 

(metric tons) 

CO2

(%) 

CH4

(%) 

N2O 

(%) 

2023 ......................................................... ¥4 ¥4,821 ¥105 0 0 0 

2024 ......................................................... ¥7 ¥8,560 ¥200 0 0 0 

2025 ......................................................... ¥11 ¥13,412 ¥330 ¥1 ¥1 ¥1 

2026 ......................................................... ¥17 ¥21,154 ¥534 ¥1 ¥1 ¥1 

2027 ......................................................... ¥25 ¥30,702 ¥785 ¥2 ¥2 ¥1 

2028 ......................................................... ¥33 ¥41,019 ¥1,051 ¥2 ¥2 ¥2 

2029 ......................................................... ¥42 ¥51,607 ¥1,325 ¥3 ¥3 ¥2 

2030 ......................................................... ¥50 ¥62,014 ¥1,591 ¥4 ¥3 ¥3 

2031 ......................................................... ¥58 ¥72,138 ¥1,847 ¥4 ¥4 ¥3 

2032 ......................................................... ¥66 ¥81,872 ¥2,096 ¥5 ¥5 ¥4 

2033 ......................................................... ¥74 ¥91,079 ¥2,332 ¥6 ¥5 ¥4 

2034 ......................................................... ¥81 ¥99,597 ¥2,555 ¥6 ¥6 ¥5 

2035 ......................................................... ¥86 ¥106,981 ¥2,739 ¥7 ¥6 ¥5 

2036 ......................................................... ¥92 ¥113,813 ¥2,915 ¥7 ¥7 ¥6 

2037 ......................................................... ¥97 ¥119,952 ¥3,090 ¥8 ¥7 ¥6 

2038 ......................................................... ¥101 ¥125,292 ¥3,245 ¥8 ¥7 ¥6 

2039 ......................................................... ¥105 ¥129,675 ¥3,368 ¥9 ¥8 ¥7 

2040 ......................................................... ¥108 ¥133,346 ¥3,474 ¥9 ¥8 ¥7 

2041 ......................................................... ¥110 ¥136,405 ¥3,564 ¥9 ¥8 ¥7 

2042 ......................................................... ¥112 ¥138,441 ¥3,630 ¥9 ¥8 ¥7 

2043 ......................................................... ¥113 ¥140,060 ¥3,693 ¥9 ¥9 ¥7 

2044 ......................................................... ¥114 ¥141,230 ¥3,745 ¥10 ¥9 ¥8 

2045 ......................................................... ¥115 ¥141,929 ¥3,790 ¥10 ¥9 ¥8 

2046 ......................................................... ¥116 ¥142,314 ¥3,826 ¥10 ¥9 ¥8 

2047 ......................................................... ¥116 ¥142,870 ¥3,872 ¥10 ¥9 ¥8 

2048 ......................................................... ¥116 ¥142,942 ¥3,901 ¥10 ¥9 ¥8 

2049 ......................................................... ¥117 ¥143,167 ¥3,938 ¥10 ¥9 ¥8 

2050 ......................................................... ¥117 ¥143,681 ¥4,001 ¥10 ¥9 ¥8 

Sum ................................................... ¥2,205 ¥2,720,073 ¥71,543 ¥6 ¥6 ¥5 

B. Climate Change Impacts From GHG 

Emissions 

Elevated concentrations of GHGs have 

been warming the planet, leading to 

changes in the Earth’s climate including 

changes in the frequency and intensity 

of heat waves, precipitation, and 

extreme weather events, rising seas, and 

retreating snow and ice. The changes 

taking place in the atmosphere as a 

result of the well-documented buildup 

of GHGs due to human activities are 

changing the climate at a pace and in a 

way that threatens human health, 

society, and the natural environment. 

While EPA is not making any new 

scientific or factual findings with regard 

to the well-documented impact of GHG 

emissions on public health and welfare 

in support of this proposal, EPA is 

providing some scientific background 

on climate change to offer additional 

context for this rulemaking and to 

increase the public’s understanding of 

the environmental impacts of GHGs. 

Extensive additional information on 

climate change is available in the 

scientific assessments and the EPA 

documents that are briefly described in 

this section, as well as in the technical 

and scientific information supporting 

them. One of those documents is EPA’s 

2009 Endangerment and Cause or 

Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the CAA 

(74 FR 66496, December 15, 2009). In 

the 2009 Endangerment Finding, the 

Administrator found under section 

202(a) of the CAA that elevated 

atmospheric concentrations of six key 

well-mixed GHGs—CO2, methane (CH4), 

nitrous oxide (N2O), HFCs, 

perfluorocarbons (PFCs), and sulfur 

hexafluoride (SF6)—‘‘may reasonably be 

anticipated to endanger the public 

health and welfare of current and future 

generations’’ (74 FR 66523). The 2009 

Endangerment Finding, together with 

the extensive scientific and technical 

evidence in the supporting record, 

documented that climate change caused 

by human emissions of GHGs (including 

HFCs) threatens the public health of the 

U.S. population. It explained that by 

raising average temperatures, climate 

change increases the likelihood of heat 

waves, which are associated with 

increased deaths and illnesses (74 FR 

66497). While climate change also 

increases the likelihood of reductions in 

cold-related mortality, evidence 

indicates that the increases in heat 

mortality will be larger than the 

decreases in cold mortality in the 

United States (74 FR 66525). The 2009 

Endangerment Finding further 

explained that compared with a future 

without climate change, climate change 

is expected to increase tropospheric 

ozone pollution over broad areas of the 

United States, including in the largest 

metropolitan areas with the worst 

tropospheric ozone problems, and 

thereby increase the risk of adverse 

effects on public health (74 FR 66525). 

Climate change is also expected to cause 

more intense hurricanes and more 

frequent and intense storms of other 

types and heavy precipitation, with 

impacts on other areas of public health, 

such as the potential for increased 

deaths, injuries, infectious and 

waterborne diseases, and stress-related 

disorders (74 FR 66525). Children, the 

elderly, and the poor are among the 

most vulnerable to these climate-related 

health effects (74 FR 66498). 


jbell on DSKJLSW7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43779 

126The CAA states in section 302(h) that ‘‘[a]ll 

language referring to effects on welfare includes, 

but is not limited to, effects on soils, water, crops, 

vegetation, manmade materials, animals, wildlife, 

weather, visibility, and climate, damage to and 

deterioration of property, and hazards to 

transportation, as well as effects on economic 

values and on personal comfort and well-being, 

whether caused by transformation, conversion, or 

combination with other air pollutants.’’ 42 U.S.C. 

7602(h). 

127USGCRP, 2018: Impacts, Risks, and 

Adaptation in the United States: Fourth National 

Climate Assessment, Volume II [Reidmiller, D.R., 

C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. 

Lewis, T.K. Maycock, and B.C. Stewart (eds.)]. U.S. 

Global Change Research Program, Washington, DC, 

USA, 1515 pp. doi: 10.7930/NCA4.2018. https://

nca2018.globalchange.gov. 

128Roy, J., P. Tschakert, H. Waisman, S. Abdul 

Halim, P. Antwi-Agyei, P. Dasgupta, B. Hayward, 

M. Kanninen, D. Liverman, C. Okereke, P.F. Pinho, 

K. Riahi, and A.G. Suarez Rodriguez, 2018: 

Sustainable Development, Poverty Eradication and 

Reducing Inequalities. In: Global Warming of 1.5°C. 

An IPCC Special Report on the impacts of global 

warming of 1.5 °C above pre-industrial levels and 

related global greenhouse gas emission pathways, in 

the context of strengthening the global response to 

the threat of climate change, sustainable 

development, and efforts to eradicate poverty 

[Masson-Delmotte, V., P. Zhai, H.-O. Po ̈rtner, D. 

Roberts, J. Skea, P.R. Shukla, A. Pirani, W. 

Moufouma-Okia, C. Pe ́an, R. Pidcock, S. Connors, 

J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. 

Lonnoy, T. Maycock, M. Tignor, and T. Waterfield 

(eds.)]. In Press. https://www.ipcc.ch/sr15/chapter/ 

chapter-5. 

129National Academies of Sciences, Engineering, 

and Medicine. 2019. Climate Change and 

Ecosystems. Washington, DC: The National 

Academies Press. https://doi.org/10.17226/25504. 

130NOAA National Centers for Environmental 

Information, State of the Climate: Global Climate 

Report for Annual 2020, published online January 

2021, retrieved on February 10, 2021, from https:// 

www.ncdc.noaa.gov/sotc/global/202013. 

131 Inventory of U.S. Greenhouse Gas Emissions 

and Sinks: 1990–2019 (EPA–430–R–21–005, 

published April 2021). 

The 2009 Endangerment Finding also 

documented, together with the 

extensive scientific and technical 

evidence in the supporting record, that 

climate change touches nearly every 

aspect of public welfare 126 in the 

United States with resulting economic 

costs, including: Changes in water 

supply and quality due to changes in 

drought and extreme rainfall events; 

increased risk of storm surge and 

flooding in coastal areas and land loss 

due to inundation; increases in peak 

electricity demand and risks to 

electricity infrastructure; and the 

potential for significant agricultural 

disruptions and crop failures (though 

offset to some extent by carbon 

fertilization). These impacts are also 

global and may exacerbate problems 

outside the United States that raise 

humanitarian, trade, and national 

security issues for the United States (74 

FR 66530). 

In 2016, the Administrator similarly 

issued Endangerment and Cause or 

Contribute Findings for greenhouse gas 

emissions from aircraft under section 

231(a)(2)(A) of the CAA (81 FR 54422, 

August 15, 2016). In the 2016 

Endangerment Finding, the 

Administrator found that the body of 

scientific evidence amassed in the 

record for the 2009 Endangerment 

Finding compellingly supported a 

similar endangerment finding under 

CAA section 231(a)(2)(A), and also 

found that the science assessments 

released between the 2009 and the 2016 

Findings ‘‘strengthen and further 

support the judgment that GHGs in the 

atmosphere may reasonably be 

anticipated to endanger the public 

health and welfare of current and future 

generations’’ (81 FR 54424). 

Since the 2016 Endangerment 

Finding, the climate has continued to 

change, with new observational records 

being set for several climate indicators 

such as global average surface 

temperatures, GHG concentrations, and 

sea level rise. Additionally, major 

scientific assessments continue to be 

released that further advance our 

understanding of the climate system and 

the impacts that GHGs have on public 

health and welfare both for current and 

future generations. 

These updated observations and 

projections document the rapid rate of 

current and future climate change both 

globally and in the United 

States.127 128 129 130

C. Global Climate Impacts and Benefits 

Associated With the Proposal’s GHG 

Emissions Reductions 

Transportation is the largest source of 

GHG emissions in the United States, 

making up 29 percent of all emissions. 

Within the transportation sector, lightduty vehicles are the largest contributor, 

58 percent, to transportation GHG 

emissions in the U.S, and 17 percent of 

all emissions.131 Reducing GHG 

emissions, including the four GHGs 

affected by the proposed program, will 

contribute toward the goal of holding 

the increase in the global average 

temperature to well below 2 °C above 

pre-industrial levels, and subsequently 

reducing the probability of severe 

climate change related impacts 

including heat waves, drought, sea level 

rise, extreme climate and weather 

events, coastal flooding, and wildfires. 

While EPA did not conduct modeling to 

specifically quantify changes in climate 

impacts resulting from this proposal in 

terms of avoided temperature change or 

sea-level rise, we did quantify the 

climate benefits by monetizing the 

emission reductions through the 

application of the social cost of 

greenhouse gases (SC–GHGs), as 

described in Section VII.D. 

V. How would the proposal impact nonGHG emissions and their associated 

effects? 

A. Impact on Non-GHG Emissions 

The model runs that EPA conducted 

estimated the inventories of non-GHG 

air pollutants resulting from tailpipe 

emissions from light-duty cars and 

trucks, and the upstream emissions 

associated with the fuels used to power 

those vehicles (both at the refinery and 

the electricity generating unit). The 

tailpipe emissions of PM2.5, NOX, VOCs, 

CO and SO2 are estimated using 

emission factors from EPA’s Midterm 

model. The emission factors used are 

identical to those used in the SAFE 

FRM. The upstream emissions are then 

calculated using emission factors 

applied to the gallons of liquid fuels 

projected to be consumed and the 

kilowatt hours of electricity projected to 

be consumed. The upstream emission 

factors used in the modeling are 

identical to those used for the SAFE 

FRM and were generated using the 

DOE/Argonne GREET model as 

described in the SAFE FRM. 

On the whole, the proposed standards 

reduce non-GHG emissions. Table 44 

presents the annual tailpipe and 

upstream inventory impacts for years 

2023 through 2050 and Table 45 

presents the net annual inventory 

impacts for those same years. 

Specifically, we project reductions in 

emissions of non-GHG pollutants from 

upstream sources, except for SO2. For 

tailpipe emissions we project initial 

increases from most non-GHG 

pollutants, except SO2, followed by 

decreases in all non-GHG pollutants 

over time. The increases in non-GHG 

tailpipe emissions are due to increased 

driving, and the increases in upstream 

SO2 are due to increased EGU 

emissions. 


jbell on DSKJLSW7X2PROD with PROPOSALS2
43780 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

TABLE 44—ESTIMATED NON-GHG EMISSION IMPACTS OF THE PROPOSED STANDARDS RELATIVE TO THE NO ACTION

SCENARIO

Year 

Upstream 

(U.S. tons) 

Tailpipe emissions 

(U.S. tons) 

PM2.5 NOX SO2 VOC CO PM2.5 NOX SO2 VOC CO 

2023 ........................................................ ¥56 ¥628 ¥36 ¥1,211 ¥334 17 1,037 ¥24 1,345 12,884 

2024 ........................................................ ¥97 ¥1,040 282 ¥2,245 ¥539 37 2,385 ¥45 3,255 29,814 

2025 ........................................................ ¥150 ¥1,570 699 ¥3,595 ¥802 50 3,270 ¥72 4,501 41,380 

2026 ........................................................ ¥236 ¥2,454 1,183 ¥5,699 ¥1,251 58 4,032 ¥114 5,583 50,655 

2027 ........................................................ ¥342 ¥3,546 1,730 ¥8,279 ¥1,807 57 4,356 ¥166 6,183 52,764 

2028 ........................................................ ¥457 ¥4,747 2,167 ¥11,023 ¥2,429 40 4,010 ¥220 5,817 43,400 

2029 ........................................................ ¥575 ¥5,973 2,611 ¥13,840 ¥3,065 24 3,656 ¥276 5,491 34,336 

2030 ........................................................ ¥690 ¥7,182 2,963 ¥16,588 ¥3,699 5 3,072 ¥331 4,889 21,673 

2031 ........................................................ ¥806 ¥8,419 3,094 ¥19,228 ¥4,342 ¥16 2,359 ¥383 4,105 7,504 

2032 ........................................................ ¥917 ¥9,601 3,248 ¥21,779 ¥4,952 ¥41 1,506 ¥433 3,137 ¥8,754 

2033 ........................................................ ¥1,023 ¥10,726 3,340 ¥24,183 ¥5,533 ¥70 573 ¥480 2,048 ¥26,420 

2034 ........................................................ ¥1,121 ¥11,756 3,468 ¥26,425 ¥6,058 ¥101 ¥401 ¥525 904 ¥44,195 

2035 ........................................................ ¥1,207 ¥12,685 3,364 ¥28,315 ¥6,542 ¥128 ¥1,265 ¥561 ¥116 ¥59,229 

2036 ........................................................ ¥1,286 ¥13,520 3,349 ¥30,084 ¥6,969 ¥156 ¥2,094 ¥596 ¥1,085 ¥74,202 

2037 ........................................................ ¥1,355 ¥14,232 3,506 ¥31,727 ¥7,319 ¥188 ¥2,951 ¥629 ¥2,088 ¥90,292 

2038 ........................................................ ¥1,416 ¥14,846 3,646 ¥33,163 ¥7,616 ¥219 ¥3,746 ¥657 ¥3,021 ¥105,517 

2039 ........................................................ ¥1,466 ¥15,374 3,601 ¥34,301 ¥7,878 ¥246 ¥4,394 ¥679 ¥3,809 ¥117,461 

2040 ........................................................ ¥1,508 ¥15,804 3,594 ¥35,264 ¥8,085 ¥272 ¥4,963 ¥699 ¥4,502 ¥127,860 

2041 ........................................................ ¥1,544 ¥16,174 3,571 ¥36,067 ¥8,264 ¥295 ¥5,463 ¥714 ¥5,091 ¥138,174 

2042 ........................................................ ¥1,569 ¥16,411 3,581 ¥36,619 ¥8,371 ¥316 ¥5,901 ¥726 ¥5,600 ¥147,394 

2043 ........................................................ ¥1,588 ¥16,573 3,706 ¥37,098 ¥8,429 ¥336 ¥6,304 ¥735 ¥6,065 ¥156,119 

2044 ........................................................ ¥1,602 ¥16,679 3,831 ¥37,464 ¥8,458 ¥356 ¥6,662 ¥743 ¥6,472 ¥164,134 

2045 ........................................................ ¥1,610 ¥16,714 4,022 ¥37,729 ¥8,443 ¥374 ¥6,983 ¥749 ¥6,834 ¥171,092 

2046 ........................................................ ¥1,615 ¥16,711 4,249 ¥37,913 ¥8,381 ¥390 ¥7,269 ¥753 ¥7,153 ¥177,417 

2047 ........................................................ ¥1,622 ¥16,708 4,571 ¥38,172 ¥8,310 ¥408 ¥7,590 ¥759 ¥7,507 ¥185,213 

2048 ........................................................ ¥1,624 ¥16,659 4,821 ¥38,284 ¥8,219 ¥424 ¥7,855 ¥762 ¥7,801 ¥191,667 

2049 ........................................................ ¥1,627 ¥16,620 5,110 ¥38,450 ¥8,129 ¥440 ¥8,138 ¥766 ¥8,100 ¥198,645 

2050 ........................................................ ¥1,632 ¥16,556 5,686 ¥38,781 ¥8,000 ¥460 ¥8,501 ¥774 ¥8,475 ¥207,606 

TABLE 45—ESTIMATED NON-GHG EMISSION IMPACTS OF THE PROPOSED STANDARDS RELATIVE TO THE NO ACTION

SCENARIO

Year 

Upstream 

(U.S. tons) 

Tailpipe emissions 

(U.S. tons) 

PM2.5 NOX SO2 VOC CO PM2.5

(%) 

NOX

(%) 

SO2

(%) 

VOC 

(%) 

CO 

(%) 

2023 ........................................................ ¥40 409 ¥59 134 12,550 0 0 0 0 0 

2024 ........................................................ ¥60 1,345 237 1,010 29,275 0 0 0 0 0 

2025 ........................................................ ¥101 1,700 627 907 40,578 0 0 0 0 0 

2026 ........................................................ ¥179 1,578 1,068 ¥116 49,405 0 0 1 0 0 

2027 ........................................................ ¥285 810 1,565 ¥2,096 50,956 ¥1 0 1 0 0 

2028 ........................................................ ¥417 ¥737 1,947 ¥5,207 40,971 ¥1 0 1 0 0 

2029 ........................................................ ¥550 ¥2,316 2,334 ¥8,349 31,271 ¥1 0 1 ¥1 0 

2030 ........................................................ ¥685 ¥4,109 2,632 ¥11,699 17,974 ¥2 ¥1 1 ¥1 0 

2031 ........................................................ ¥822 ¥6,060 2,711 ¥15,123 3,162 ¥2 ¥1 1 ¥2 0 

2032 ........................................................ ¥959 ¥8,095 2,815 ¥18,642 ¥13,706 ¥3 ¥1 1 ¥2 0 

2033 ........................................................ ¥1,093 ¥10,153 2,860 ¥22,136 ¥31,953 ¥3 ¥1 1 ¥3 0 

2034 ........................................................ ¥1,222 ¥12,156 2,943 ¥25,522 ¥50,254 ¥3 ¥2 1 ¥3 ¥1 

2035 ........................................................ ¥1,335 ¥13,949 2,802 ¥28,431 ¥65,771 ¥4 ¥2 1 ¥4 ¥1 

2036 ........................................................ ¥1,442 ¥15,614 2,753 ¥31,169 ¥81,171 ¥4 ¥3 1 ¥4 ¥1 

2037 ........................................................ ¥1,543 ¥17,183 2,877 ¥33,815 ¥97,611 ¥4 ¥3 1 ¥5 ¥1 

2038 ........................................................ ¥1,635 ¥18,592 2,989 ¥36,184 ¥113,133 ¥5 ¥3 2 ¥5 ¥2 

2039 ........................................................ ¥1,712 ¥19,769 2,921 ¥38,110 ¥125,338 ¥5 ¥4 1 ¥6 ¥2 

2040 ........................................................ ¥1,779 ¥20,767 2,895 ¥39,766 ¥135,945 ¥5 ¥4 1 ¥6 ¥2 

2041 ........................................................ ¥1,839 ¥21,637 2,857 ¥41,158 ¥146,438 ¥5 ¥4 1 ¥7 ¥2 

2042 ........................................................ ¥1,885 ¥22,312 2,856 ¥42,219 ¥155,765 ¥6 ¥5 1 ¥7 ¥3 

2043 ........................................................ ¥1,924 ¥22,877 2,971 ¥43,164 ¥164,548 ¥6 ¥5 2 ¥7 ¥3 

2044 ........................................................ ¥1,958 ¥23,341 3,088 ¥43,935 ¥172,591 ¥6 ¥5 2 ¥8 ¥3 

2045 ........................................................ ¥1,984 ¥23,697 3,273 ¥44,563 ¥179,535 ¥6 ¥5 2 ¥8 ¥3 

2046 ........................................................ ¥2,005 ¥23,979 3,496 ¥45,066 ¥185,798 ¥6 ¥5 2 ¥8 ¥3 

2047 ........................................................ ¥2,031 ¥24,298 3,812 ¥45,678 ¥193,523 ¥6 ¥5 2 ¥8 ¥4 

2048 ........................................................ ¥2,047 ¥24,515 4,060 ¥46,086 ¥199,886 ¥6 ¥6 2 ¥9 ¥4 

2049 ........................................................ ¥2,067 ¥24,758 4,344 ¥46,550 ¥206,774 ¥7 ¥6 2 ¥9 ¥4 

2050 ........................................................ ¥2,093 ¥25,057 4,912 ¥47,256 ¥215,607 ¥7 ¥6 2 ¥9 ¥4 


jbell on DSKJLSW7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43781 

132 Insert 2012 rule RIA ref, EPA–420–R–12–016. 

B. Health and Environmental Effects 

Associated With Exposure to Non-GHG 

Pollutants Impacted by the Proposed 

Standards 

Along with reducing GHG emissions, 

these proposed standards would also 

have an impact on non-GHG (criteria 

and air toxic pollutant) emissions from 

vehicles and non-GHG emissions that 

occur during the extraction, transport, 

distribution and refining of fuel and 

from power plants. The non-GHG 

emissions that would be impacted by 

the proposed standards contribute, 

directly or via secondary formation, to 

concentrations of pollutants in the air 

which affect human and environmental 

health. These pollutants include 

particulate matter, ozone, nitrogen 

oxides, sulfur oxides, carbon monoxide 

and air toxics. Chapter 7 of the DRIA 

includes more detailed information 

about the health and environmental 

effects associated with exposure to these 

non-GHG pollutants. This includes 

pollutant specific health effect 

information, discussion of exposure to 

the mixture of traffic-related pollutants 

in the near road environment, and 

effects of particulate matter and gases on 

visibility, effects of ozone on 

ecosystems, and the effect of deposition 

of pollutants from the atmosphere to the 

surface. 

C. Air Quality Impacts of Non-GHG 

Pollutants 

Photochemical air quality modeling is 

necessary to accurately project levels of 

most criteria and air toxic pollutants, 

including ozone and PM. Air quality 

models use mathematical and numerical 

techniques to simulate the physical and 

chemical processes that affect air 

pollutants as they disperse and react in 

the atmosphere. Based on inputs of 

meteorological data and source 

information, these models are designed 

to characterize primary pollutants that 

are emitted directly into the atmosphere 

and secondary pollutants that are 

formed through complex chemical 

reactions within the atmosphere. 

Photochemical air quality models have 

become widely recognized and 

routinely utilized tools in regulatory 

analysis for assessing the impacts of 

control strategies. 

Section V.A of the preamble presents 

projections of the changes in non-GHG 

emissions due to the proposed 

standards. Section VII.E describes the 

monetized non-GHG health impacts of 

this proposal which are estimated using 

a reduced-form benefit-per-ton 

approach. The atmospheric chemistry 

related to ambient concentrations of 

PM2.5, ozone and air toxics is very 

complex, and making predictions based 

solely on emissions changes is 

extremely difficult. However, based on 

the magnitude of the emissions changes 

predicted to result from the proposed 

standards, we expect that there will be 

very small changes in ambient air 

quality in most places. The changes in 

tailpipe and upstream non-GHG 

emissions that were inputs to the air 

quality modeling analysis for the 2012 

rule were larger than the changes in 

non-GHG emissions projected for this 

proposal. The air quality modeling for 

the 2012 rule projected very small 

impacts across most of the country, with 

the direction of the small impact 

(increase or decrease) dependent on 

location.132 For the next phase of LD 

GHG standards to be considered in a 

separate, future rulemaking for model 

years 2027 and beyond, we expect that 

impacts may be considerably larger and 

are considering how best to project air 

quality impacts from changes in nonGHG emissions. 

VI. Basis for the Proposed GHG 

Standards Under CAA Section 202(a) 

In this section, EPA discusses the 

basis for our proposed standards under 

our authority in CAA section 202(a), 

how we are balancing the factors 

considered in our assessment that the 

proposed standards are appropriate, and 

how this balancing of factors differs 

from that used in the SAFE rule. This 

section draws from information 

presented elsewhere in this preamble, 

including EPA’s statutory authority in 

Section II, our presentation of 

compliance costs and technology 

penetrations in Section III, GHG 

emissions impacts in Section IV, nonGHG emissions impacts in Section V, 

and the total costs and benefits of the 

proposal in Section VII. 

EPA has considered the technological 

feasibility and cost of the proposed 

standards, available lead time for 

manufacturers, and other relevant 

factors under section 202(a) of the CAA. 

Based on our analyses, discussed in 

greater detail in other sections of this 

preamble and in Chapter 2 of the DRIA, 

we believe that the proposed standards 

are reasonable and appropriate. Greater 

reductions in GHG emissions from light 

duty vehicles over these model years are 

both feasible and warranted as a step to 

reduce the impacts of climate change on 

public health and welfare. In addition, 

the proposal would achieve reductions 

in emissions of some criteria pollutants 

and air toxics that would achieve 

benefits for public health and welfare. 

Our analysis for this proposed rule, as 

well as our earlier analyses of similar 

standards, supports the conclusion that 

the proposed model years 2023–2026 

standards are technologically feasible 

and the costs of compliance for 

manufacturers are reasonable. In 

addition, we project that there would be 

a net savings to consumers over the 

lifetime of vehicles meeting the 

proposed standards, which we think is 

a more significant consideration, 

particularly for lower-income 

consumers, than the anticipated 

increase in cost for new vehicles. 

Importantly, the benefits of the 

proposed program would significantly 

exceed the costs. 

A. Consideration of Technological 

Feasibility and Lead Time 

1. Technological Readiness of the Auto 

Industry in Meeting Revised GHG 

Standards 

The technological readiness of the 

auto industry to meet the proposed 

revised standards for model years 2023– 

2026 is best understood in the context 

of the decade-long light-duty vehicle 

GHG emission reduction program in 

which the auto industry has introduced 

a wide lineup of ever more fuelefficient, GHG-reducing technologies. 

Over this time period, the industry has 

been planning for increasingly stringent 

GHG emissions requirements. The result 

has been the widespread and continual 

introduction of new and improved 

GHG-reducing technologies across the 

industry, many of which were in the 

early stages of development at the 

beginning of the EPA program in 2012. 

(See Section III.A of this preamble and 

Chapter 2 of the DRIA for a discussion 

of technological progression, status of 

technology penetration, and our 

assessment of continuing technology 

penetration across the fleet.) 

The technological achievements 

already developed and applied to 

vehicles within the current new vehicle 

fleet will enable the industry to achieve 

the proposed standards even without 

the development of new technologies 

beyond those already widely available. 

Rather, in response to the increased 

stringency of the proposed standards 

compared to existing standards, 

automakers would be expected to adopt 

these technologies at an increasing pace 

across more of their vehicle fleets. In 

other words, the technologies needed to 

meet the proposed standards are already 

widely available and in use on 

vehicles—there is no need for 

development of new technologies for 

the time frame of these proposed 

standards. Instead, compliance with the 

proposed standards will necessitate 


jbell on DSKJLSW7X2PROD with PROPOSALS2
43782 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

133For example, in its comments on the 2012 

rule, Ford stated that manufacturers typically begin 

to firm up their product plans roughly five years in 

advance of actual production. (Docket OAR–2009– 

0472–7082.1, p. 10.) 

134Competitive Enterprise Institute v. NHTSA, 

D.C. Cir. No. 20–1145 (and consolidated cases 

brought by several states, localities, environmental 

and public organizations, and others), filed on May 

1, 2020 and later dates. 

135https://ww2.arb.ca.gov/resources/documents/ 

framework-agreements-clean-cars (last updated on 

May 22, 2021). 

136 85 FR 25116. 

greater implementation and pace of 

technology penetration through MY2026 

using existing GHG reduction 

technologies. In addition, as we discuss 

further below, our assessment shows 

that a large portion of the current fleet 

(MY2021 vehicles), across a wide range 

of vehicle segments, already meets their 

proposed MY2023 footprint-based CO2

targets. 

The availability of current models 

across a range of vehicle segments 

meeting the standards is notable 

because EPA recognizes that auto design 

and development is a multi-year 

process, which imposes some 

constraints on the ability of 

manufacturers to immediately redesign 

vehicles with new technologies. 

However, EPA also understands that 

this multi-year process means that the 

industry’s product plans developed in 

response to EPA’s 2012 GHG standards 

rulemaking for MYs 2017–2025 has 

largely continued, notwithstanding the 

SAFE rule that was published on April 

30, 2020 and that did not relax 

standards until MY 2021. In their past 

comments on EPA’s light-duty GHG 

programs, some automakers broadly 

stated that they generally require about 

five years to design, develop, and 

produce a new vehicle model.133 Under 

that schedule, it would follow that in 

most cases the vehicles that automakers 

will be selling during the first years of 

the proposed MY 2023–26 program 

were already designed under the 

original, more stringent GHG standards 

finalized in 2012 for those model years. 

At the time of this proposal, the relaxed 

GHG standards under the SAFE rule 

have been in place for little more than 

one year. During this time, the ability of 

the industry to commit to revised plans 

based on the SAFE rule’s relaxed 

standards, especially for MYs 2023 and 

later, has been highly uncertain in light 

of pending litigation,134 and concern 

was regularly expressed across the auto 

industry over the uncertain future of the 

SAFE standards. In fact, due in part to 

this uncertainty, five automakers 

voluntarily agreed to more stringent 

national emission reduction targets 

under the California Framework 

Agreements (discussed further below). 

Therefore, the automakers’ own past 

comments regarding product plan 

development and the regulatory and 

litigation history of the GHG standards 

since 2012 support EPA’s expectation 

that automakers remain largely on track 

in terms of technological readiness 

within their product plans to meet the 

approximate trajectory of increasingly 

stringent standards initially 

promulgated in 2012. Although we do 

not believe that automakers have 

significantly changed their product 

plans in response to the SAFE final rule 

issued in 2020, any that did would have 

done so relatively recently and there is 

reason to expect that, for any 

automakers that changed their plans 

after the SAFE rule, the automakers’ 

earlier plans could be reinstated or 

adapted with little change. We also note 

that some automakers may have adopted 

product plans to overcomply with the 

prior, more stringent standards, with the 

intention of selling credits to other 

automakers. For these automakers, the 

proposed standards of this rule, if 

adopted, would reduce or eliminate the 

sudden disruption to product plans 

caused by the SAFE rule. EPA invites 

comment on the impact of EPA’s current 

and recent rulemakings on automakers’ 

product plans. It is important to note 

that we have considered the need for 

manufacturers to transition from the 

SAFE standards (or the California 

Framework emission reduction targets) 

to standards that are closer in stringency 

to the 2012 standards and we have 

structured the proposed standards 

(including the proposed footprint curves 

as well as the combination of flexibility 

and credit options) to be less stringent 

than the 2012 standards for model years 

2023, 2024, and 2025. 

EPA considers this an important 

aspect of its analysis that mitigates 

concerns about lead time for 

manufacturers to meet the proposed 

standards beginning with the 2023 

model year. We see no reason to expect 

that the major GHG-reducing 

technologies that automakers have 

already developed and introduced, or 

have already been planning for nearterm implementation, will not be 

available for model year 2023–2026 

vehicles. Thus, in contrast to the 

situation that existed prior to EPA’s 

adoption of the initial light-duty GHG 

standards in the 2012 rule, automakers 

now have had the benefit of at least 8 

to 9 years of planning and development 

in preparation for meeting the proposed 

standards. 

Another important factor in 

considering the feasibility of the 

proposed standards is the fact that five 

automakers voluntarily entered into the 

California Framework Agreements with 

the California Air Resources Board, first 

announced in July 2019, to meet more 

stringent GHG emission reduction 

targets nationwide than the relaxed 

standards in the SAFE rule.135 These 

voluntary actions by automakers that 

collectively represent approximately 

one-third of the U.S. vehicle market 

speak directly to the feasibility of 

meeting standards at least as stringent as 

the emission reduction targets under the 

California Framework Agreements. As 

discussed in Section II.A.5, the 

California Framework Agreements were 

a key consideration in our development 

and assessment of the proposed EPA 

standards. 

It is important to note that our 

conclusion that the proposed program is 

technologically feasible is based in part 

on a projection that the standards will 

be met largely with the kinds of 

advanced gasoline vehicle technologies 

already in place in vehicles within 

today’s fleet and does not rely on a 

significant penetration of electric 

vehicles into the fleet during the 2023– 

2026 model years. As discussed above, 

EPA modeled auto manufacturers’ 

decisions in choosing among available 

emission reduction technologies to 

incorporate in their vehicles, taking into 

account both the projected costs and 

effectiveness of the technologies. This 

updated analysis is consistent with 

EPA’s past analyses of standards similar 

to those proposed in this notice, see 

Section III.B and Chapter 2 of the DRIA. 

The analysis demonstrates that a wide 

variety of emission reducing 

technologies are already available for 

manufacturers to incorporate into their 

gasoline vehicles within the time frame 

of the proposed standards. 

We recognize that although the 

technology penetration rates that we 

project in this rulemaking are generally 

similar to the technology penetration 

rates that we projected in the SAFE 

rulemaking, in the SAFE rulemaking 

EPA concluded that the projected level 

of advanced technologies was ‘‘too high 

from a consumer-choice perspective’’ 

and ultimately could lead to automakers 

changing the vehicle types they offer.136

EPA currently does not believe this is an 

accurate assessment or one that deserves 

weight that could overcome EPA’s 

expert assessment of the appropriate 

standards under section 202 of the CAA. 

Rather, EPA’s judgment is that the 

history of the significant developments 

in automotive offerings over the last ten 

years supports the conclusion that 

automakers are capable of deploying a 


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137‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology issue 1975,’’ EPA-420-R-21-003 January 

2021. 

138 E.g., When fuel economy standards were not 

footprint-based, less efficient vehicles were priced 

higher than more efficient vehicles to encourage 

sales of the latter. Austin, D., and T. Dinan (2004). 

‘‘Clearing the air: The costs and consequences of 

higher CAFE standards and increased gasoline 

taxes.’’ Journal of Environmental Economics and 

Management 50: 562–582. Greene, D., P. Patterson, 

M. Singh, and J. Li (2005). ‘‘Feebates, rebates, and 

gas-guzzler taxes: A study of incentives for 

increased fuel economy.’’ Energy Policy 33: 757– 

775 found that automakers were more likely to add 

technology than use pricing mechanisms to achieve 

standards. Whitefoot, K., M. Fowlie, and S. Skerlos 

(2017). ‘‘Compliance by Design: Influence of 

Acceleration Trade-offs on CO2 Emissions and Costs 

of Fuel Economy and Greenhouse Gas Regulations.’’ 

Environmental Science and Technology 51: 10307– 

10315 find evidence consistent with automakers 

using trade-offs with acceleration as yet another 

path to comply with fuel economy standards. 

wide range of advanced technologies 

across the entire vehicle fleet, and that 

consumers remain interested and 

willing to purchase vehicles with 

advanced technologies. Reinforcing this 

updated judgement, the recent 

announcements of BEV light-duty trucks 

and the introduction of hybrid minivans 

and pickups exemplify such a trend, 

and EPA sees no reason why the 

standards proposed in this rule would 

fundamentally alter it. 

Our updated analysis projects that 

about 8 percent of vehicles meeting the 

MY 2026 proposed standards would be 

EV/PHEVs (See Section III.B.3). Given 

manufacturers’ public announcements 

about their ambitious plans to transition 

fleets to electrified vehicles, we believe 

it is possible that an even higher 

percentage of the industry-wide fleet 

could be electrified during the time 

period of our proposed model year 

2023–2026 standards. Moreover, EPA is 

committed to encouraging the rapid 

development and broad acceptance of 

zero-emission vehicles, and we are 

proposing incentives to support this 

transition (see Section II.B.2). Any 

acceleration in electric vehicle 

penetration would be beneficial and 

would further expand the technology 

choices available to manufacturers to 

meet the proposed standards. 

2. Opportunities Provided Through 

Credits and Incentives Provisions 

In considering feasibility of the 

proposed standards EPA also considers 

the impact of available compliance 

flexibilities on automakers’ compliance 

options. As we discuss above, the 

advanced technologies that automakers 

are continuing to incorporate in vehicle 

models today directly contribute to each 

company’s compliance plan (i.e., these 

vehicle models have lower GHG 

emissions). In addition, automakers 

widely utilize the program’s established 

ABT provisions which provide a variety 

of flexible paths to plan compliance 

(See more detail in Section II.A.4). 

EPA’s annual Automotive Trends 

Report illustrates how different 

automakers have chosen to make use of 

the GHG program’s various credit 

features.137 It is clear that manufacturers 

are widely utilizing the various credit 

programs available, and we have every 

expectation that manufacturers will 

continue to take advantage of the 

compliance flexibilities and crediting 

programs to their fullest extent, thereby 

providing them with additional 

powerful tools in finding the lowest cost 

compliance solutions in light of the 

proposed revised standards. 

The GHG credit program was 

designed to recognize that automakers 

typically have a multi-year redesign 

cycle and not every vehicle will be 

redesigned every year to add GHGreducing technology. Moreover, when 

GHG-reducing technology is added, it 

will generally not achieve emissions 

reductions corresponding exactly to a 

single year-over-year change in 

stringency of the standards. Instead, in 

any given model year, some vehicles 

will be ‘‘credit generators,’’ overperforming compared to the footprintbased CO2 target in that model year, 

while other vehicles will be ‘‘debit 

generators’’ and under-performing 

against their footprint-based targets. 

Together, an automaker’s mix of creditgenerator and debit-generator vehicles 

contribute to its sales-weighted fleet 

average CO2 performance, compared to 

its standard, for that year. If a 

manufacturer’s sales-weighted fleet CO2

performance is better than its fleet 

average standard at the end of the model 

year, those credits can be banked for the 

automaker’s future use in certain years 

(under the credit carry-forward 

provisions) or sold to other 

manufacturers (under the credit trading 

provisions). Likewise, if a 

manufacturer’s sales-weighted fleet CO2

performance falls short of its fleet 

average standard at the end of a model 

year, the automaker can use banked 

credits or purchase credits to meet the 

standard. Furthermore, in recognition of 

the possibility that a manufacturer 

might comply with a standard for a 

given model year with credits earned in 

a future model year (under the 

allowance for ‘‘credit carryback’’), a 

manufacturer may also choose to carry 

a deficit forward up to three years before 

showing compliance with that model 

year. 

EPA has examined manufacturer 

certification data to assess the extent to 

which model year 2021 vehicles already 

being produced and sold today would 

be credit generators compared to the 

proposed model year 2023 targets 

(accounting for projected off-cycle and 

air conditioning credits). As detailed in 

Chapter 2.4 of the DRIA, automakers are 

selling approximately 216 vehicle 

models (60 percent of them are 

advanced gasoline technology vehicles) 

that would be credit generators 

compared to the proposed model year 

2023 targets, and they appear in nearly 

all light-duty vehicle market segments. 

This information supports our 

conclusion about the feasibility of 

vehicles with existing technologies 

meeting the proposed MY2023 

standards. We also considered the 

ability of MY2021 vehicles to generate 

credits based on the MY2021 and 

MY2022 standards relaxed in the SAFE 

rule. Of the 1370 distinct MY2021 

vehicle models, EPA’s analysis (DRIA, 

Chapter 2.4) indicates that 355 of these 

models are credit generators for 

MY2021, with most of those also 

generating credits for the MY2022 SAFE 

standards (25 percent of today’s new 

vehicle fleet offerings). This represents 

an opportunity for manufacturers to 

build their credit banks for both MY 

2021 and MY2022 and carry those 

credits forward to help meet the 

MY2023–2026 proposed standards. 

These data demonstrate the 

opportunities for manufacturers to sell 

more of the credit-generator vehicles as 

another available strategy to generate 

credits that will help them comply with 

the proposed model year 2023 and later 

standards. Our analysis clearly shows 

this could be done within vehicle 

segments to maintain consumer choice 

(we would not expect that overall car/ 

truck fleet mix would shift), as creditgenerating vehicles exist across vehicle 

segments, representing 95 percent of 

vehicle sales. Under the fleet-average 

based standards, manufacturers have 

multiple feasible paths to compliance, 

including varying sales volumes of 

credit generating vehicles,138 adopting 

GHG-reducing technologies, and 

implementing other credit and incentive 

provisions including those proposed in 

this notice. 

EPA further considered the issue of 

generating credits against the MY2021 

and MY2022 SAFE standards in the 

context of lead time. In discussions 

during development of this proposed 

rule, some stakeholders suggested that 

EPA should limit automakers’ ability to 

generate credits against the relaxed 

SAFE standards or discount the value of 

such credits. These stakeholders argue 

that the nominal 1.5 percent year-overVerDate Sep<11>2014 18:18 Aug 09, 2021 Jkt 253001 PO 00000 Frm 00059 Fmt 4701 Sfmt 4702 E:\FR\FM\10AUP2.SGM 10AUP2

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43784 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

139 We note that the 2020 SAFE FRM presented 

a 0 percent year-over-year alternative for MYs 

2021–2026. In that scenario with no stringency 

change, the modeled fleet improved fuel economy 

by 0.9 percent per year from 38.3 mpg in 2021 to 

40.0 mpg in 2026. (see 2020 SAFE FRIA, Table I– 

19, Alternative 1) 

140 Trends Report, Figure ES–8. 

141 ‘‘FCA historically pursued compliance with 

fuel economy and greenhouse gas regulations in the 

markets where it operated through the most cost 

effective combination of developing, manufacturing 

and selling vehicles with better fuel economy and 

lower GHG emissions, purchasing compliance 

credits, and, as allowed by the U.S. federal 

Corporate Average Fuel Economy (‘‘CAFE’’) 

program, paying regulatory penalties. The cost of 

each of these components of FCA’s strategy has 

increased and is expected to continue to increase 

in the future. The compliance strategy for the 

combined company is currently being assessed by 

Stellantis management.’’ Stellantis N.V. (2020). 

‘‘Annual Report and Form 20–F for the year ended 

December 31, 2020.’’ 

142EPA 2020 Trends Report, page 110 and Figure 

5.15. 

year stringency increase of the SAFE 

standards barely keeps up with a 

‘‘business as usual’’ scenario of industry 

GHG emissions improvements.139 EPA 

has considered that argument. EPA also 

considered the recent performance of 

the auto industry in meeting the GHG 

standards; in MY2019 the industry-wide 

average performance was 7 g/mi above 

the industry-wide average standard and 

compliance was achieved by many 

manufacturers through applying banked 

credits.140 In light of the 

implementation timeframe of the 

proposed revised standards beginning in 

model year 2023, we are proposing to 

continue allowing manufacturers to 

generate credits against the SAFE 

standards in model years 2021 and 

2022. We are not proposing to shorten 

the existing 5-year credit carry-forward 

provision for credits generated in model 

years 2021 and 2022, so those credits 

can be carried forward under the 

existing regulations to facilitate the 

transition from the SAFE standards to 

the proposed more stringent standards. 

However, EPA seeks comment on 

whether there should be any restrictions 

placed on credits generated in model 

years 2021 and 2022, for example, 

discounting of MY2021 and MY2022 

credits, given the relaxed stringency of 

the SAFE standards in those model 

years. 

In addition, EPA is proposing a 

targeted set of extended credit and 

compliance flexibility options for 

manufacturers, specifically designed to 

further address any potential concerns 

of manufacturers about stringency and 

lead time under the proposed standards 

(as explained in detail in Section II.B.3 

and II.C). These proposals include a 

limited extension of credit carryforward, such that credits from model 

years 2016–2020 would be available to 

carry forward for one (or two, in the 

case of 2016 credits) additional model 

year(s) for compliance in model years 

2023–2026; an extension of the off-cycle 

credit menu cap from 10 grams/mile to 

15 grams/mile to provide additional 

credit to manufacturers who install 

technologies that reduce GHG emissions 

that are not captured on EPA’s GHG 

certification tests; and two forms of 

incentive credits for applying advanced 

technologies in the manufacturer’s 

vehicle fleet (i.e., an extension of 

incentive multipliers for EV, PHEV and 

FCV vehicles, and extra credits for fullsize pickup trucks that utilize strong 

hybrid technology or achieve similar 

performance-based GHG reductions). 

Collectively, these proposed flexibilities 

provide additional strategies 

manufacturers can use to smooth their 

path to compliance with the proposed 

revised standards. In fact, these 

additional credits and incentives 

provisions were an important factor in 

EPA’s consideration of the appropriate 

level of stringency for this proposal, and 

they provide additional support for our 

consideration of revised standards even 

more stringent than if we were not 

including these provisions in the 

proposed program. 

Just as the fleet average standard 

approach of the light duty vehicle GHG 

program allows manufacturers to design 

a compliance strategy relying on the sale 

of both credit-generating vehicles and 

debit generating vehicles in a single 

year, the credit banking and trading 

provisions of the program allow 

manufacturers to design a compliance 

strategy relying on overcompliance and 

undercompliance in different years, or 

even by different manufacturers. Credit 

trading is a compliance flexibility 

provision that allows one vehicle 

manufacturer to purchase credits from 

another, accommodating the ability of 

manufacturers to make strategic choices 

in planning for and reacting to normal 

fluctuations in an automotive business 

cycle. When credits are available for less 

than the marginal cost of compliance, 

EPA would anticipate that an automaker 

might choose to adopt a compliance 

strategy relying on credits.141 As shown 

in the most recent EPA Trends Report, 

more than 10 vehicle firms collectively 

have participated in 70 credit trading 

transactions since the inception of the 

EPA program through Model Year 2019, 

including many of the largest 

automotive firms.142 EPA does not 

believe that the fact that automakers 

have adopted a compliance strategy 

relying on credits (whether banked or 

purchased) is per se evidence that 

standards are not appropriate under 

section 202. 

EPA recognizes that several industry 

stakeholders suggested in comments on 

the MTE and SAFE rule that 

underperformance compared to CO2

targets indicated the standards were 

overly stringent, EPA previously stated 

that a declining credit balance indicated 

future compliance would be more 

difficult, and EPA was taking into 

consideration the unwillingness of 

manufacturers to design a compliance 

strategy around purchasing credits. 

However, as explained above, EPA does 

not believe a declining credit balance is 

evidence the standards are infeasible or 

less feasible than anticipated. EPA 

believes the more accurate view is that 

manufacturers are able and willing to 

purchase credits, as well as use banked 

credits, as part of their compliance 

strategies and that significant use of 

credits for compliance is indicative of 

EPA’s flexibilities working as intended, 

to offer a wide array of compliance 

strategies which reduce overall costs of 

compliance. 

In summary, there is ample evidence 

that, in addition to the demonstration of 

technological feasibility resulting from 

the ‘‘head start’’ that automakers have 

toward complying with the proposed 

standards, there are a wide range of 

credit and flexibility strategies, as well 

as fleet mix strategies, that 

manufacturers can marshal to enable 

them to comply with the proposed 

standards. 

B. Consideration of Vehicle Costs of 

Compliance 

In addition to technological feasibility 

and lead time, EPA has considered the 

cost for the auto industry to comply 

with the proposed revised standards. 

See section III.B and Chapter 2 of the 

DRIA for our analysis of compliance 

costs. As shown in Section III.B.2 and 

Chapter 4.1.2 of the DRIA, the average 

per-vehicle cost for a MY2026 vehicle is 

$1,044 compared to the No Action 

scenario. Average per-vehicle costs rise 

from $465 in MY2023 to $771 in 

MY2025. The $1,044 average pervehicle cost is consistent with prior EPA 

analyses (see DRIA Chapter 1.2). EPA 

has also evaluated costs by 

manufacturer (see Section III.B.2) and 

finds the range of costs to be similarly 

consistent with findings from prior 

analyses. 

The estimated costs to meet the 

proposed standards are lower than those 

projected in the 2012 rule, which EPA 

estimated at about $1,200 (see DRIA 

Table 1–4). EPA found in the 2012 rule 

that these (higher) costs were 

reasonable, even without considering 


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143Anderson, John F and Sherwood, 

‘‘Comparison of EPA and Other Estimates of Mobile 

Source Rule Costs to Actual Price Changes,’’ SAE 

paper 2003–1–1980. 144 85 FR 25114. 

145See, e.g., 45 FR 14496, 14503 (1980) (‘‘EPA 

would not require a particulate control technology 

that was known to involve serious safety 

problems.’’). 

the fuel savings, which more than 

offsets these costs. See 77 FR 62663– 

62665, 62880, and 62922. This decrease 

in estimated per-vehicle cost since the 

2012 rule is not surprising—technology 

to achieve environmental improvements 

has often proved to be less costly than 

EPA’s initial estimates.143

As part of these cost estimates, we 

project significant increases in the use 

of advanced gasoline technologies 

(including mild and strong hybrids), 

comprising more than 92 percent of the 

fleet. (See Section III.B.3). EPA has 

considered the feasibility of the 

standards under several different 

assumptions about future fuel prices, 

technology application or credit trading 

(see DRIA Chapters 4 and 10), which 

shows very small variations in average 

per-vehicle cost or technology 

penetration mix. Our conclusion that 

there are multiple ways the MY2023– 

2026 standards can be met given the 

wide range of technologies at reasonable 

cost, and predominantly with advanced 

gasoline engine and vehicle 

technologies, holds true across all these 

scenarios. 

These cost estimates are in the same 

range as EPA’s earlier analyses of 

similarly stringent GHG standards 

including the model year 2023 and later 

timeframe. (See Chapter 1 of the DRIA). 

EPA concludes that the per-vehicle 

costs of the proposed standards are 

reasonable. 

C. Consideration of Impacts on 

Consumers 

Another important consideration for 

EPA is the impact of the proposed 

standards on consumers. EPA concludes 

that the proposed standards would be 

beneficial for consumers because the 

lower operating costs from significant 

fuel savings would offset the upfront 

vehicle costs. Total fuel savings for 

consumers through 2050 are estimated 

at $120 billion to $250 billion (7 percent 

and 3 percent discount rates, see 

Section VII.I, Table 40). Thus, the 

proposal would result in significant 

savings for consumers, as further 

described in Section VII.J. 

The Administrator also carefully 

considered the affordability impacts of 

these proposed standards, especially 

considering Executive Order 14008 and 

EPA’s increasing focus on 

environmental justice and equity. EPA 

examined the impacts of the proposed 

standards on the affordability of new 

and used cars and trucks in Section 

VII.M of this preamble and Chapter 8.3 

of the DRIA. Because lower-income 

households spend more on gasoline 

than on vehicle purchases, the effects of 

reduced operating costs may be 

especially important for these 

households. 

EPA recognizes that in the SAFE 

rulemaking we placed greater weight on 

the upfront costs of vehicles, and little 

weight on total cost of ownership. In 

part, that rulemaking explained that 

approach on the ground that ‘‘[n]ew 

vehicle purchasers are not likely to 

place as much weight on fuel savings 

that will be realized by subsequent 

owners.’’ 144 However, in light of 

changes in policy priorities (including 

concern about accounting for benefits to 

lower-income households), EPA now 

believes in assessing the benefits of 

these standards it is more appropriate to 

consider the total fuel savings of the 

vehicle, over its lifetime, including 

those fuel savings that may accrue to 

later owners. Disregarding those 

benefits, which often accrue to lower 

income households, who more often 

purchase used cars, would provide a 

less accurate picture of total benefits to 

society. Likewise, EPA has reconsidered 

the weight placed in the SAFE 

rulemaking on promoting fleet turnover 

as a standalone factor and is now 

considering the influence of turnover in 

the context of the full range effects of 

the proposed standards. While 

recognizing that standards can influence 

purchasing decisions, EPA currently 

believes that, for the range of 

appropriate emissions standards, the 

emissions reductions from more 

stringent standards far outweigh any 

temporary effect from delayed 

purchases. 

D. Consideration of Emissions of GHGs 

and Other Air Pollutants 

An essential factor that EPA 

considered in determining the 

appropriate level of the proposed 

standards is the reductions in emissions 

that would result from the program. 

This primarily includes reductions in 

vehicle GHG emissions, given the 

increased urgency of the climate crisis. 

We also considered the effects of the 

proposed standards on criteria pollutant 

and air toxics emissions and associated 

public health and welfare impacts. 

The GHG emissions reductions from 

our proposed standards are projected to 

exceed 2,200 MMT of CO2, 2.7 MMT of 

CH4 and 71,000 metric tons of N2O, as 

the fleet turns over year-by-year to new 

vehicles that meet the proposed 

standards, in an analysis through 2050. 

See Section IV.A, Table 29. The 

monetized benefit of these GHG 

reductions is estimated at $22 billion to 

$280 billion across a range of discount 

rates and values for the social cost of 

carbon (see Section VII.I). These GHG 

reductions are important to continued 

progress in addressing climate change. 

In fact, EPA believes that we will need 

to achieve far deeper GHG reductions 

from the light-duty sector in future years 

beyond the compliance timeframe for 

the proposed standards, which is why 

we will be initiating a rulemaking in the 

near future to establish more stringent 

standards after model year 2026. 

The criteria pollutant emissions 

reductions expected to result from the 

proposed standards are also a factor 

considered by the Administrator. The 

proposed standards would result in 

emissions reductions of some criteria 

pollutants and air toxics and associated 

benefits for public health and welfare. 

Public health benefits are estimated to 

total $3.3 billion to $8 billion (7 percent 

and 3 percent discount rates, see 

Section VII.H, Table 38). EPA finds that 

this proposal is important in reducing 

the public health impacts of air 

pollution. 

E. Consideration of Energy, Safety and 

Other Factors 

EPA also evaluated the impacts of the 

proposed standards on energy, in terms 

of fuel consumption and energy 

security. This proposal is projected to 

reduce U.S. gasoline consumption by 

291 million barrels through 2050 (see 

Section VII.C). EPA considered the 

impacts of this projected reduction in 

fuel consumption on energy security, 

specifically the avoided costs of 

macroeconomic disruption (See Section 

VII.F). We estimate the energy security 

benefits of the proposal in 2050 at $6.1 

billion to $13 billion (7 percent and 3 

percent discount rate, see Section VII.H. 

Table 37). EPA considers this proposal 

to be beneficial from an energy security 

perspective. 

Section 202(a)(4)(A) of the CAA 

specifically prohibits the use of an 

emission control device, system or 

element of design that will cause or 

contribute to an unreasonable risk to 

public health, welfare, or safety. EPA 

has a long history of considering the 

safety implications of its emission 

standards,145 up to and including the 

more recent light-duty GHG regulations: 

The 2010 rule which established the 

MY2012–2016 light-duty vehicle GHG 


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146See, e.g., CAA sections 101(a)(2) (finding that 

‘‘the increasing use of motor vehicles[ ] has resulted 

in mounting dangers to the public health and 

welfare’’); 101(b)(1) (declaring one purpose of the 

CAA is ‘‘to protect and enhance the quality of the 

Nation’s air resources, so as to promote the public 

health and welfare’’); 101(c) (‘‘a primary goal of this 

chapter is to encourage or otherwise promote 

reasonable Federal . . . actions . . . for pollution 

prevention’’). 

standards, the 2012 rule which first 

established MY2017–2025 light-duty 

vehicle GHG standards, the MTE 2016 

Proposed Determination and the 2020 

SAFE rule. The relationship between 

GHG emissions standards and safety is 

multi-faceted, and can be influenced not 

only by control technologies, but also by 

consumer decisions about vehicle 

ownership and use. EPA has estimated 

the impacts of this proposal on safety by 

accounting for changes in new vehicle 

purchase, changes in vehicle scrappage, 

fleet turnover, and VMT, and changes in 

vehicle weight as an emissions control 

strategy. EPA finds that under this 

proposal, the estimated risk of fatal and 

non-fatal injuries per distance traveled 

will remain virtually unchanged (see 

Section VII.H). This proposal also 

projects that as the costs of driving 

declines due to the improvement in fuel 

economy, consumers overall will choose 

to drive more miles (this is the ‘‘VMT 

rebound’’ effect). As a result of this 

personal decision by consumers to drive 

more due to the reduce cost of driving, 

EPA also projects this will result in an 

increase in accidents, injuries, and 

fatalities. EPA recognizes that in the 

SAFE rulemaking EPA placed emphasis 

on the estimated total number of fatal 

and non-fatal injuries. However, EPA 

currently believes it is more appropriate 

to consider the risk of injuries per mile 

traveled. EPA requests comment on 

what role these negative impacts due to 

consumers’ decision to drive additional 

miles should play in EPA’s standardsetting decision-making. 

F. Balancing of Factors Under CAA 

202(a) 

Under section 202(a) EPA has 

statutory authority providing 

considerable discretion in setting or 

revising vehicle emission standards 

with adequate lead time for the 

development and application of 

technology to meet the standards. EPA’s 

proposed standards properly implement 

this statutory provision, as discussed 

above. As discussed throughout this 

preamble, the emission reduction 

technologies needed to meet the 

proposed standards are already 

available at reasonable cost, and a 

significant fraction of new vehicles 

today already meets these standards. 

Moreover, the flexibilities already 

available under EPA’s existing 

regulations, including fleet average 

standards and the ABT program—in 

effect enabling manufacturers to spread 

the compliance requirement for any 

particular model year across multiple 

model years—and the additional 

flexibilities being proposed in this 

notice further support EPA’s conclusion 

that the proposed standards provide 

sufficient time for the development and 

application of technology, giving 

appropriate consideration to cost. 

EPA recognizes that the cost and 

technology penetration estimates in this 

rule are similar to the estimates in the 

SAFE rulemaking and that the 

Administrator is balancing the factors 

considered differently than in the SAFE 

rule to reach his conclusion about what 

standards are appropriate to propose. In 

the SAFE rulemaking, EPA promulgated 

relaxed GHG standards that were 

projected to result in increases in GHG 

and criteria pollutant emissions and 

adverse public health impacts (e.g., 

increases in premature mortality and 

illnesses due to increased air pollution). 

The SAFE rulemaking was the most 

significant weakening of mobile source 

emissions standards in EPA’s history. It 

is particularly notable that the rationale 

for the revision was not that the 

standards had turned out to be 

technologically infeasible or, even that 

they would impose unexpectedly high 

costs on society. As we have noted, the 

estimated costs for more stringent 

standards in the SAFE rulemaking were 

not significantly different from the costs 

estimated in 2012, or for this 

rulemaking. Rather, in balancing the 

factors under consideration for the 

SAFE rulemaking, EPA placed greatest 

weight on reducing the cost of 

compliance on the regulated industry 

and the upfront (but not total) cost to 

consumers, and placed little weight on 

reductions in GHGs and other 

pollutants, contrary to EPA’s traditional 

approach to adopting standards under 

section 202. 

Although EPA continues to believe 

that the Administrator has significant 

discretion to weigh various factors 

under Section 202, the Administrator 

now notes that the purpose of adopting 

standards under that provision of the 

Clean Air Act is to address air pollution 

that may reasonably be anticipated to 

endanger public health and welfare and 

that reducing air pollution has 

traditionally been the focus of such 

standards. In this action, the 

Administrator is proposing more 

stringent standards based on a balancing 

of the factors under consideration 

different from that in the SAFE 

rulemaking, a balancing that the 

Administrator believes is more 

consistent with Congressional intent 

and the goals of the Clean Air Act.146

Taking into consideration the 

importance of reducing GHG emissions 

and the primary purpose of CAA section 

202 to reduce the threat posed to human 

health and the environment by air 

pollution, the Administrator finds it is 

appropriate to place greater weight on 

reducing emissions and to adopt 

standards that, when implemented, 

would result in significant reductions of 

light duty vehicle emissions both the 

near term and over the longer term. As 

discussed above and the DRIA Chapter 

1.2.2, EPA has updated the analyses for 

this rule. The updated analysis shows 

several key analytical results that are 

similar to those from the SAFE final 

rule. EPA concludes that the 

Administrator’s current approach to 

considering the relevant factors would 

fully support the proposed standards 

even if they were based solely on the 

technical record and conclusions that 

were used to set standards in the final 

SAFE rule. 

Finally, EPA estimates net benefits of 

this proposal in 2050 at $93 billion to 

$150 billion (7 percent and 3 percent 

discount rates, with 3 percent SC–GHG) 

(see Section VII.H). In comparison, the 

SAFE rule estimated net benefits at 

$16.1 billion to negative $13.1 billion (7 

percent and 3 percent discount rates, 

respectively)—in other words, the SAFE 

rule estimated net costs to society under 

a 3 percent discount rate. Our 

conclusion that the estimated benefits 

considerably exceed the estimated costs 

of the proposed program reinforces our 

view that the proposed standards 

represent an appropriate weighing of the 

statutory factors and other relevant 

considerations. 

In summary, after consideration of a 

number of relevant factors, given the 

technical feasibility of the proposed 

standards, the moderate costs per 

vehicle, the savings to consumers in fuel 

costs over the lifetime of the vehicle, the 

very significant reductions in GHG 

emissions and fuel consumption, and 

the significantly greater quantified 

benefits compared to quantified costs, 

EPA believes that the proposed 

standards are appropriate under EPA’s 

section 202(a) authority. 

VII. What are the estimated cost, 

economic, and other impacts of the 

proposal? 

This Section VII discusses EPA’s 

assessment of a variety of impacts 

related to the proposed standards, 

including impacts on vehicle sales, fuel 


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147U.S. Environmental Protection Agency (2021). 

2020 EPA Automotive Trends Report: Greenhouse 

Gas Emissions, Fuel Economy, and Technology 

since 1975, Chapter 4. EPA–420–R–21–003, https:// 

www.epa.gov/automotive-trends/downloadautomotive-trends-report#Full%20Report, accessed 

4/15/2021. 

148 Jaffe, A.B., and Stavins, R.N. (1994). ‘‘The 

Energy Paradox and the Diffusion of Conservation 

Technology.’’ Resource and Energy Economics 

16(2): 91–122. 

149 75 FR 25510–25513; 77 FR 62913–62917; U.S. 

Environmental Protection Agency (2016), Proposed 

Determination on the Appropriateness of the Model 

Year 2022–2025 Light-Duty Vehicle Greenhouse 

Gas Emissions Standards under the Midterm 

Evaluation, EPA–420–R–16–020, Appendix B.1.2; 

85 FR 24603–24613. 

150https://www.epa.gov/regulations-emissionsvehicles-and-engines/midterm-evaluation-lightduty-vehicle-greenhouse-gas. 

151 Helfand, G., et al. (2016). ‘‘Searching for 

Hidden Costs: A Technology-Based Approach to the 

Energy Efficiency Gap in Light-Duty Vehicles.’’ 

Energy Policy 98: 590–606; Huang, H., et al. (2018). 

‘‘Re-Searching for Hidden Costs: Evidence from the 

Adoption of Fuel-Saving Technologies in LightDuty Vehicles.’’ Transportation Research Part D 65: 

194–212. 

152 Huang, H., G. Helfand, and K. Bolon (2018a). 

‘‘Consumer Satisfaction with New Vehicles Subject 

to Greenhouse Gas and Fuel Economy Standards.’’ 

Presentation at the Society for Benefit-Cost Analysis 

annual conference, March. https://

benefitcostanalysis.org/docs/G.4_Huang_Slides.pdf, 

accessed 4/7/2021. 

153 Knittel, C.R. (2011). ‘‘Automobiles on 

Steroids: Product Attribute Trade-Offs and 

Technological Progress in the Automobile Sector.’’ 

American Economic Review 101(7): pp. 3368–3399; 

Klier, T. and Linn, J. (2016). ‘‘The Effect of Vehicle 

Fuel Economy Standards on Technology 

Adoption.’’ Journal of Public Economics 133: 41– 

63; McKenzie, D. and Heywood, J. B. (2015). 

‘‘Quantifying efficiency technology improvements 

in U.S. cars from 1975–2009.’’ Applied Energy 157: 

918–928. 

154 Watten, A., S. Anderson, and G. Helfand 

(2021). ‘‘Attribute Production and Technical 

Change: Rethinking the Performance and Fuel 

Economy Trade-off for Light-duty Vehicles.’’ 

Working paper. 

155 Moskalik, A., K. Bolon, K. Newman, and J. 

Cherry (2018). ‘‘Representing GHG Reduction 

Technologies in the Future Fleet with Full Vehicle 

Simulation.’’ SAE Technical Paper 2018–01–1273. 

doi:10.4271/2018–01–1273. 

156 75 FR 25510–25513; 77 FR 62913–62917; U.S. 

Environmental Protection Agency (2016), Proposed 

Determination on the Appropriateness of the Model 

Year 2022–2025 Light-Duty Vehicle Greenhouse 

Gas Emissions Standards under the Midterm 

Evaluation, EPA–420–R–16–020, Appendix B.1.2; 

85 FR 24603–24613. 

157 U.S. Environmental Protection Agency (2010). 

‘‘How Consumers Value Fuel Economy: A 

Literature Review.’’ EPA–420–R–10–008, https://

cfpub.epa.gov/si/si_public_file_download.cfm?p_

download_id=499454&Lab=OTAQ (accessed 4/15/ 

2021); U.S. Environmental Protection Agency 

(2018). ‘‘Consumer Willingness to Pay for Vehicle 

Attributes: What is the Current State of 

Knowledge?’’ EPA–420–R–18–016, https://

cfpub.epa.gov/si/si_public_file_download.cfm?p_

download_id=536423&Lab=OTAQ (accessed 4/15/ 

2021); Greene, D., A. Hossain, J. Hofmann, G. 

Continued 

consumption, energy security, 

additional driving, and safety. It 

presents an overview of EPA’s estimates 

of GHG reduction benefits and non-GHG 

health impacts. This Section VII 

presents a summary of aggregate costs, 

drawing from the per-vehicle cost 

estimates presented in Section III, and 

estimated program benefits. Finally, the 

section discusses EPA’s assessment of 

the potential impacts on consumers and 

employment impacts. The DRIA 

presents further details of the analyses 

presented in this Section VII. 

A. Conceptual Framework for 

Evaluating Consumer Impacts 

A significant question in analyzing 

consumer impacts from vehicle GHG 

standards has been why there have 

appeared to be existing technologies 

that, if adopted, would reduce fuel 

consumption enough to pay for 

themselves in short periods, but which 

were not widely adopted. If the benefits 

to vehicle buyers outweigh the costs to 

those buyers of the new technologies, 

conventional economic principles 

suggest that automakers would provide 

them, and people would buy them. Yet 

engineering analyses have identified a 

number of technologies whose costs are 

quickly covered by their fuel savings, 

such as downsized-turbocharged 

engines, gasoline direct injection, and 

improved aerodynamics, that were not 

widely adopted before the issuance of 

standards, but which were adopted 

rapidly afterwards.147 Why did markets 

fail, on their own, to adopt these 

technologies? This question, termed the 

‘‘energy paradox’’ or ‘‘energy efficiency 

gap,’’ 148 has been discussed in detail in 

previous rulemakings.149 As discussed 

in more detail in DRIA Chapter 8.1.1, 

EPA has evaluated whether the 

efficiency gap exists, as well as potential 

explanations for why the gap might 

exist. 

Whether the efficiency gap exists 

depends on the assessment of fuel 

savings relative to technology costs and 

‘‘hidden costs,’’ i.e., any adverse effects 

on other vehicle attributes. In the 

Midterm Evaluation,150 EPA evaluated 

both the costs and the effectiveness for 

reducing fuel consumption (and GHG 

emissions) of technologies used to meet 

the emissions standards to date; the 

agency found that the estimates used in 

the original rulemakings were generally 

correct. 

EPA also examined the relationship 

between the presence of fuel-saving 

technologies and negative evaluations of 

vehicle operating characteristics, such 

as performance and noise, in auto 

reviews and found that the presence of 

the technologies was more often 

correlated with positive evaluations 

than negative ones.151 Preliminary work 

with data from recent purchasers of new 

vehicles found similar results.152 While 

these studies cannot prove that the 

technologies pose no problems to other 

vehicle attributes, they suggest that it is 

possible to implement the technologies 

without imposing hidden costs. 

EPA has also evaluated the 

relationship between performance and 

fuel economy, in light of research 

arguing that fuel consumption must 

come at the expense of other vehicle 

attributes.153 Research in progress from 

Watten et al. (2021) 154 distinguishes 

between technologies that improve, or 

do not adversely affect, both 

performance and fuel economy and 

technologies that reduce engine 

displacement, which does trade off 

improved fuel economy for 

performance. Following Moskalik et al. 

(2018),155 Watten et al. observe that the 

‘‘marginal rate of attribute substitution’’ 

between power and fuel economy has 

changed substantially over time. In 

particular, it has become relatively more 

costly to improve efficiency by reducing 

power, and relatively less costly to add 

technologies that improve efficiency. 

These technology improvements do not 

reduce power and in some cases may 

enhance it. It supports the concept that 

automakers take consumer preferences 

into account in identifying where to add 

technology. 

EPA cannot reject the observation that 

the energy efficiency gap has existed for 

light-duty vehicles—that is, it appears 

that markets on their own have not led 

to adoption of a number of technologies 

whose fuel savings quickly outweigh the 

costs in the absence of standards. As 

discussed in DRIA Chapter 8.1.1.2, EPA 

has previously identified a number of 

hypotheses to explain this apparent 

market failure.156 Some relate to 

consumer behavior, such as putting 

little emphasis on future fuel savings 

compared to up-front costs (a form of 

‘‘myopic loss aversion’’), not having a 

full understanding of potential cost 

savings, or not prioritizing fuel 

consumption in the complex process of 

selecting a vehicle. Other potential 

explanations relate to automaker 

behaviors that grow out of the large 

fixed costs of investments involved with 

switching to new technologies, as well 

as the complex and uncertain processes 

involved in technological innovation 

and adoption. 

It is challenging to identify which of 

these hypotheses for the efficiency gap 

explain its apparent existence. On the 

consumer side, EPA has explored the 

evidence on how consumers evaluate 

fuel economy in their vehicle purchase 

decisions.157 As noted, there does not 


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43788 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

Helfand, and R. Beach (2018). ‘‘Consumer 

Willingness to Pay for Vehicle Attributes: What Do 

We Know?’’ Transportation Research Part A 118: 

258–279. 

158 ‘‘The 2020 EPA Automotive Trends Report, 

Greenhouse Gas Emissions, Fuel Economy, and 

Technology since 1975,’’ EPA–420–R–21–003 

January 2021. See Table 2–1 for total vehicle 

production by model year. 

159See Greene et al. (2018), Footnote 157. Greene 

et al. (2018) cite a ballpark value of reducing 

driving costs by $0.01/mile as $1150, but does not 

provide enough detail to replicate their analysis 

perfectly. The 30% estimate is calculated by 

assuming, following assumptions in Greene et al. 

(2018), that a vehicle is driven 15,000 miles per 

year for 13.5 years, 10% discount rate. Those 

figures produce a ‘‘present value of miles’’ of 

108,600; thus, a $0.01/mile change in the cost of 

driving would be worth $1086. In contrast, saving 

$0.01/mile for 2.5 years using these assumptions is 

worth about $318, or 29% of the value over 13.5 

years. Multiplying Greene et al.’s 29 percent to 

$1150 = $334. 

160National Research Council (2015). Cost, 

Effectiveness, and Deployment of Fuel Economy 

Technologies for Light-Duty Vehicles. Washington, 

DC: The National Academies Press. https://doi.org/ 

10.17226/21744, p. 9–10. 

appear to be consensus in that literature 

on that behavior; the variation in 

estimates is very large. Even less 

research has been conducted on 

producer-side behavior. The reason 

there continues to be limited adoption 

of cost-effective fuel-saving technologies 

before the implementation of more 

stringent standards remains an open 

question. Yet, more stringent standards 

have been adopted without apparent 

disruption to the vehicle market after 

they become effective.158

B. Vehicle Sales Impacts 

As discussed in Section III.A EPA 

utilized the CCEMS model for this 

analysis. The FRIA for the SAFE rule 

(starting p. 871) describes the approach 

used in the model for estimating vehicle 

sales impacts. First, it projects future 

new vehicle sales in the reference case 

based on projections of macroeconomic 

variables. Second, it applies an 

elasticity of ¥1 (that is, a one percent 

increase in price produces a one percent 

decrease in the quantity sold) to the 

change in net price, where net price is 

the difference in technology costs less 

an estimate of the change in fuel costs 

over 2.5 years. This approach assumes 

that both automakers and vehicle buyers 

take into consideration the fuel savings 

that buyers might expect to accrue over 

the first 2.5 years of vehicle ownership. 

As discussed in Section VII.C, and in 

more detail in DRIA Chapter 8.1.1.2, 

there does not yet appear to be 

consensus around the role of fuel 

consumption in vehicle purchase 

decisions, and the assumption that 2.5 

years of fuel consumption is the right 

number for both automakers and vehicle 

buyers deserves further evaluation. As 

noted there, Greene et al. (2018) 

provides a reference value of $1,150 for 

the value of reducing fuel costs by 

$0.01/mile over the lifetime of an 

average vehicle; for comparison, 2.5 

years of fuel savings is only about 30 

percent of that value, or about $334.159

This $334 is within the large standard 

deviation in Greene et al. (2018) for the 

willingness to pay to reduce fuel costs, 

but it is far lower than both the mean 

of $1,880 (160 percent of that value) and 

the median of $990 (85 percent of that 

value) per one cent per mile in the 

paper. On the other hand, the 2015 NAS 

report (cited in the 2021 NAS report) 

observed that automakers ‘‘perceive that 

typical consumers would pay upfront 

for only one to four years of fuel 

savings’’ (pp. 9–10),160 a range of values 

within that identified in Greene et al. 

(2018) for consumer response, but well 

below the median or mean. Thus, it 

appears possible that automakers 

operate under a different perception of 

consumer willingness to pay for 

additional fuel economy than how 

consumers actually behave. The CCEMS 

model does not differentiate between 

automaker perception and consumer 

perception of the value of additional 

fuel economy in its sales modeling. 

In addition, setting the elasticity of 

demand at ¥1 in the SAFE FRIA was 

based on literature more than 25 years 

old. EPA is currently working to review 

more recent estimates of the elasticity of 

demand for new vehicles. A smaller 

elasticity would not change the 

direction of sales effects, but it would 

reduce the magnitude of the effects. 

The CCEMS model also makes use of 

a dynamic fleet share model (SAFE 

FRIA p. 877) that estimates, separately, 

the shares of passenger cars and light 

trucks based on vehicle characteristics, 

and then adjusts them so that the market 

shares sum to one. The model also 

includes the effects of the standards on 

vehicle scrappage based on a statistical 

analysis (FRIA starting p. 926). The 

model looks for associations between 

vehicle age, change in new vehicle 

prices, fuel prices, cost per mile of 

driving, and macroeconomic measures 

and the scrappage rate, with different 

equations for cars, SUVs/vans, and 

pickups. EPA’s project to review new 

vehicle demand elasticities also 

includes a review of the literature on the 

relationship between new and used 

vehicle markets and scrappage. 

For this proposal, EPA is maintaining 

these assumptions for its modeling. We 

also examine a sensitivity case using an 

elasticity of ¥0.4. We hope to complete 

our work on both the vehicle demand 

elasticity and scrappage in time to be 

able to consider it for use in analyses 

that will be developed for the final rule. 

With the modeling assumptions that 

both automakers and vehicle buyers 

consider 2.5 years of future fuel 

consumption in the purchase decision 

and that the demand elasticity is ¥1, 

vehicle sales would decrease by roughly 

2 percent compared to sales in the SAFE 

rule, as discussed in more detail in 

DRIA Chapter 8.1.4. In contrast, when 

modeled using a demand elasticity of 

¥0.4, sales decrease by between 0.5 and 

1 percent. If, however, automakers 

underestimate consumers’ valuation of 

fuel economy, then sales may increase 

relative to the baseline under the 

proposed standards. 

C. Changes in Fuel Consumption 

The proposed standards will reduce 

not only GHG emissions but also fuel 

consumption. Reducing fuel 

consumption is a significant means of 

reducing GHG emissions from the 

transportation fleet. Table 46 shows the 

estimated fuel consumption changes 

under the proposed standards relative to 

the No Action scenario and include 

rebound effects, credit usage and 

advanced technology multiplier use. 

The largest changes in fuel 

consumption come from gasoline, 

which follows from our projection that 

improvements to gasoline vehicles will 

be the primary way that manufacturers 

meet the proposed standards. By 2050, 

our proposal would reduce gasoline 

consumption by more than 290 million 

barrels—a nearly 10 percent reduction 

in U.S. gasoline consumption. Since 

only about 8 percent of the fleet is 

projected to be either EV or PHEV by 

MY2026 to meet the proposed 

standards, we project smaller changes in 

the electricity to fuel these vehicles. 


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TABLE 46—CHANGE IN FUEL CONSUMPTION FROM THE LIGHT-DUTY FLEET

Gasoline 

(million 

barrels) 

Percent of 

2020 U.S. 

consumption 

Electricity 

(gigawatt 

hours) 

Percent of 

2020 U.S. 

consumption 

2023 ................................................................................................................. ¥9 ¥0.3 929 0.0 

2026 ................................................................................................................. ¥43 ¥1.5 6,798 0.2 

2030 ................................................................................................................. ¥124 ¥4.2 19,017 0.5 

2035 ................................................................................................................. ¥211 ¥7.2 30,735 0.8 

2040 ................................................................................................................. ¥263 ¥8.9 38,228 1.0 

2050 ................................................................................................................. ¥291 ¥9.9 48,122 1.3 

NOTES: One barrel (BBL) contains 42 gallons of gasoline; according to the Energy Information Administration (EIA), US gasoline consumption 

in 2020 was 123.49 billion gallons (see https://www.eia.gov/tools/faqs/faq.php?id=23&t=10, last accessed July 19, 2021), roughly 16 percent less 

(due to the coronavirus pandemic) than the highest consumption on record (2018). According to the Department of Energy, there are 0.031 kWh 

of electricity per gallon gasoline equivalent, the metric reported by the CCEMS model for electricity consumption and used here to convert to 

kWh. According to statista.com, the US consumed 3,802 terawatt hours of electricity in 2020. 

With changes in fuel consumption 

come associated changes in the amount 

of time spent refueling vehicles. 

Consistent with the assumptions used in 

the SAFE FRM (and presented in Table 

47), the costs of time spent refueling are 

calculated as the total amount of time 

the driver of a typical vehicle would 

spend refueling multiplied by the value 

of their time. If less time is spent 

refueling vehicles under the proposed 

standards, then a refueling time savings 

would be incurred. 

TABLE 47—CCEMS INPUTS USED TO ESTIMATE REFUELING TIME COSTS

Cars Vans/SUVs Pickups 

Fixed Component of Average Refueling Time in Minutes (by Fuel Type) 

Gasoline ....................................................................................................................................... 3.5 3.5 3.5 

Ethanol¥85 ................................................................................................................................. 3.5 3.5 3.5 

Diesel ........................................................................................................................................... 3.5 3.5 3.5 

Electricity ...................................................................................................................................... 3.5 3.5 3.5 

Hydrogen ..................................................................................................................................... 0 0 0 

Compressed Natural Gas ............................................................................................................ 0 0 0 

Average Tank Volume Refueled ................................................................................................. 65 65 65 

Value of Travel Time per Vehicle (2018 $/hour) ......................................................................... 20.46 20.79 20.79 

D. Greenhouse Gas Emission Reduction 

Benefits 

EPA estimated the climate benefits for 

this proposed rulemaking using 

measures of the social cost of three 

GHGs: Carbon, methane, and nitrous 

oxide. While the program also accounts 

for reduction in HFCs through the AC 

credits program, EPA has not quantified 

the associated emission reductions. The 

social cost of each gas (i.e., the social 

cost of carbon (SC–CO2), methane (SC– 

CH4), and nitrous oxide (SC–N2O)) is 

the monetary value of the net harm to 

society associated with a marginal 

increase in emissions in a given year, or 

the benefit of avoiding that increase. 

Collectively, these values are referenced 

as the ‘‘social cost of greenhouse gases’’ 

(SC–GHG). In principle, SC–GHG 

includes the value of all climate change 

impacts, including (but not limited to) 

changes in net agricultural productivity, 

human health effects, property damage 

from increased flood risk and natural 

disasters, disruption of energy systems, 

risk of conflict, environmental 

migration, and the value of ecosystem 

services. The SC–GHG therefore, reflects 

the societal value of reducing emissions 

of the gas in question by one metric ton. 

We estimate the global social benefits 

of CO2, CH4, and N2O emission 

reductions expected from this proposed 

rule using the SC–GHG estimates 

presented in the February 2021 

Technical Support Document (TSD): 

Social Cost of Carbon, Methane, and 

Nitrous Oxide Interim Estimates under 

E.O. 13990 (IWG 2021). These SC–GHG 

estimates are interim values developed 

under E.O. 13990 for use in benefit-cost 

analyses until an improved estimate of 

the impacts of climate change can be 

developed based on the best available 

climate science and economics. As 

discussed in Section 3.3 of the RIA, 

these interim SC–GHG estimates have a 

number of limitations, including that 

the models used to produce them do not 

include all of the important physical, 

ecological, and economic impacts of 

climate change recognized in the 

climate-change literature and that 

several model input assumptions are 

outdated. As discussed in the February 

2021 TSD, the Interagency Working 

Group on the Social Cost of Greenhouse 

Gases (IWG) finds that, taken together, 

the limitations suggest that these SC– 

GHG estimates likely underestimate the 

damages from GHG emissions. The IWG 

is currently working on a 

comprehensive update of the SC–GHG 

estimates (to be released by January 

2022 under E.O. 13990) taking into 

consideration recommendations from 

the National Academies of Sciences, 

Engineering and Medicine, recent 

scientific literature, public comments 

received on the February 2021 TSD and 

other input from experts and diverse 

stakeholder groups. We request 

comment on this approach to estimating 

social benefits of GHG in this 

rulemaking in light of the ongoing 

interagency process. See Section VII.I 

for a summary of the monetized GHG 

benefits and Section 3.3 of the RIA for 

more on the application of SC–GHG 

estimates. 

E. Non-Greenhouse Gas Health Impacts 

It is important to quantify the health 

and environmental impacts associated 

with the proposed program because a 

failure to adequately consider ancillary 

impacts could lead to an incorrect 

assessment of a program’s costs and 


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161U.S. Environmental Protection Agency (U.S. 

EPA). 2012. Regulatory Impact Analysis for the 

Final Revisions to the National Ambient Air Quality 

Standards for Particulate Matter. EPA452/R–12– 

003. Office of Air Quality Planning and Standards, 

Health and Environmental Impacts Division, 

Research Triangle Park, NC. December. Available at: 

http://www.epa.gov/ttnecas1/regdata/RIAs/ 

finalria.pdf. 

162U.S. Environmental Protection Agency (U.S. 

EPA). 2014. Regulatory Impact Analysis for the 

Proposed Carbon Pollution Guidelines for Existing 

Power Plants and Emission Standards for Modified 

and Reconstructed Power Plants. EPA–542/R–14– 

002. Office of Air Quality Planning and Standards, 

Research Triangle Park, NC. June. Available at 

http://www.epa.gov/ttnecas1/regdata/RIAs/ 

111dproposalRIAfinal0602.pdf. 

163Wolfe, P.; Davidson, K.; Fulcher, C.; Fann, N.; 

Zawacki, M.; Baker, K. R. 2019. Monetized Health 

Benefits Attributable to Mobile Source Emission 

Reductions across the United States in 2025. Sci. 

Total Environ. 650, 2490–2498. https://doi.org/ 

10.1016/J.SCITOTENV.2018.09.273. Also see 

https://www.epa.gov/benmap/mobile-sector-sourceapportionment-air-quality-and-benefits-ton. 

164Zawacki, M.; Baker, K. R.; Phillips, S.; 

Davidson, K.; Wolfe, P. 2018. Mobile Source 

Contributions to Ambient Ozone and Particulate 

Matter in 2025. Atmos. Environ. 188, 129–141. 

165Fann, N.; Fulcher, C. M.; Baker, K. 2013. The 

Recent and Future Health Burden of Air Pollution 

Apportioned across U.S. Sectors. Environ. Sci. 

Technol. 47 (8), 3580–3589. https://doi.org/ 

10.1021/es304831q. 

166US EPA, 2018. Technical Support Document: 

Estimating the Benefit per Ton of Reducing PM2.5

Precursors from 17 Sectors. 2018. Office of Air 

Quality Planning and Standards. Research Triangle 

Park, NC. 

167U.S. Environmental Protection Agency (U.S. 

EPA). 2018. Technical Support Document: 

Estimating the Benefit per Ton of Reducing PM2.5

Precursors from 17 Sectors. 2018. Office of Air 

Quality Planning and Standards. Research Triangle 

Park, NC. 

168U.S. Environmental Protection Agency (U.S. 

EPA). 2021. Regulatory Impact Analysis for the 

Final Revised Cross-State Air Pollution Rule 

(CSAPR) Update for the 2008 Ozone NAAQS. EPA– 

452/R–21–002. March. 

169U.S. Environmental Protection Agency (U.S. 

EPA). 2021. Estimating PM2.5- and OzoneAttributable Health Benefits. Technical Support 

Document (TSD) for the Final Revised Cross-State 

Air Pollution Rule Update for the 2008 Ozone 

Season NAAQS. EPA–HQ–OAR–2020–0272. March. 

170U.S. Environmental Protection Agency (U.S. 

EPA). 2019. Integrated Science Assessment (ISA) for 

Particulate Matter (Final Report, 2019). U.S. 

Environmental Protection Agency, Washington, DC, 

EPA/600/R–19/188, 2019. 

171U.S. Environmental Protection Agency (U.S. 

EPA). 2020. Integrated Science Assessment (ISA) for 

Ozone and Related Photochemical Oxidants (Final 

Report). U.S. Environmental Protection Agency, 

Washington, DC, EPA/600/R–20/012, 2020. 

172U.S. Environmental Protection Agency (U.S. 

EPA). 2009. Integrated Science Assessment for 

Particulate Matter (Final Report). EPA–600–R–08– 

139F. National Center for Environmental 

Assessment—RTP Division, Research Triangle Park, 

NC. December. Available at: http://cfpub.epa.gov/ 

ncea/cfm/recordisplay.cfm?deid=216546. 

173 Krewski D., M. Jerrett, R.T. Burnett, R. Ma, E. 

Hughes, Y. Shi, et al. 2009. Extended Follow-Up 

and Spatial Analysis of the American Cancer 

Society Study Linking Particulate Air Pollution and 

Mortality. HEI Research Report, 140, Health Effects 

Institute, Boston, MA. 

174U.S. Environmental Protection Agency. (2014). 

Control of Air Pollution from Motor Vehicles: Tier 

3 Motor Vehicle Emission and Fuel Standards Final 

Rule: Regulatory Impact Analysis, Assessment and 

Standards Division, Office of Transportation and 

Air Quality, EPA–420–R–14–005, March 2014. 

Available on the internet: http://www3.epa.gov/ 

otaq/documents/tier3/420r14005.pdf. 

175U.S. Environmental Protection Agency. (2012). 

Regulatory Impact Analysis for the Final Revisions 

to the National Ambient Air Quality Standards for 

Particulate Matter, Health and Environmental 

Impacts Division, Office of Air Quality Planning 

and Standards, EPA–452–R–12–005, December 

2012. Available on the internet: http://

www3.epa.gov/ttnecas1/regdata/RIAs/finalria.pdf. 

176U.S. Environmental Protection Agency (U.S. 

EPA). (2012). Regulatory Impact Analysis: Final 

Rulemaking for 2017–2025 Light-Duty Vehicle 

Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards, Assessment and 

Standards Division, Office of Transportation and 

Air Quality, EPA–420–R–12–016, August 2012. 

Available on the internet at: http://www3.epa.gov/ 

otaq/climate/documents/420r12016.pdf. 

benefits. Moreover, the health and other 

impacts of exposure to criteria air 

pollutants and airborne toxics tend to 

occur in the near term, while most 

effects from reduced climate change are 

likely to occur over a time frame of 

several decades or longer. Ideally, 

human health benefits would be 

estimated based on changes in ambient 

PM2.5 and ozone as determined by fullscale air quality modeling. However, the 

projected non-GHG emissions impacts 

associated with the proposal would be 

expected to contribute to very small 

changes in ambient air quality (see 

Preamble Section V.C for more detail). 

In lieu of air quality modeling, we use 

a reduced-form benefit-per-ton (BPT) 

approach to inform our assessment of 

health impacts, which is conceptually 

consistent with EPA’s use of BPT 

estimates in several previous RIAs.161 162

In this approach, the PM2.5-related BPT 

values are the total monetized human 

health benefits (the sum of the economic 

value of the reduced risk of premature 

death and illness) that are expected 

from reducing one ton of directlyemitted PM2.5 or PM2.5 precursor such as 

NOX or SO2. We note, however, that the 

complex, non-linear photochemical 

processes that govern ozone formation 

prevent us from developing reducedform ozone BPT values. This is an 

important limitation to recognize when 

using the BPT approach. 

For tailpipe emissions, we apply 

national PM2.5-related BPT values that 

were recently derived for the ‘‘Onroad 

Light Duty Vehicle’’ sector.163 The 

onroad light-duty vehicle BPT values 

were derived using detailed mobile 

sector source-apportionment air quality 

modeling, and apply EPA’s existing 

method for using reduced-form tools to 

estimate PM2.5-related benefits.164 165

Compared to values that EPA has used 

in the past,166 these BPT values provide 

better resolution by mobile sector and 

geographic area, two features that make 

them especially useful for quantifying 

the benefits of reducing emissions from 

the onroad light-duty sector. 

To monetize the PM2.5-related impacts 

of upstream emissions, we apply BPT 

values that were developed for the 

refinery sector.167 While total upstream 

emissions also include electricity 

generating unit sources, petroleum 

extraction, storage and transport 

sources, as well as sources upstream 

from the refinery, the modeling tool 

used to support this analysis only 

provides estimates of upstream 

emissions impacts aggregated across all 

sources. Furthermore, we assume the 

majority of upstream emission 

reductions associated with the proposal 

would be related to domestic onsite 

refinery emissions and domestic crude 

production, because the fleet 

penetration of electric vehicles 

attributed to the proposed standards is 

relatively small (i.e., the change in 

electric vehicle penetration is projected 

to change from 4 percent in the No 

Action case to 8 percent under the 

proposed standards). We therefore 

believe for purposes of this proposed 

rule it is appropriate to apply the 

refinery values to all upstream 

emissions. We solicit comment on this 

approach and any alternative 

approaches that we should adopt for the 

final rule. 

EPA bases its benefits analyses on 

peer-reviewed studies of air quality and 

health effects and peer-reviewed studies 

of the monetary values of public health 

and welfare improvements. Very 

recently, EPA updated its approach to 

estimating the benefits of changes in 

PM2.5 and ozone.168 169 These updates 

were based on information drawn from 

the recent 2019 PM2.5 and 2020 Ozone 

Integrated Science Assessments (ISAs), 

which were reviewed by the Clean Air 

Science Advisory Committee (CASAC) 

and the public.170 171 Unfortunately, 

EPA has not had an opportunity to 

update its BPT estimates to reflect these 

updates in time for this proposal. 

Instead, we use PM2.5 BPT estimates that 

are based on the review of the 2009 PM 

ISA 172 and include a mortality risk 

estimate derived from the Krewski et al. 

(2009) 173 analysis of the American 

Cancer Society (ACS) cohort and 

nonfatal illnesses consistent with 

benefits analyses performed for the 

analysis of the final Tier 3 Vehicle 

Rule,174 the final 2012 PM NAAQS 

Revision,175 and the final 2017–2025 

Light-duty Vehicle GHG Rule.176 We 

expect this lag in updating our BPT 


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177Turner, MC, Jerrett, M, Pope, A, III, Krewski, 

D, Gapstur, SM, Diver, WR, Beckerman, BS, 

Marshall, JD, Su, J, Crouse, DL and Burnett, RT 

(2016). Long-term ozone exposure and mortality in 

a large prospective study. Am J Respir Crit Care 

Med 193(10): 1134–1142. 

178For more information about income growth 

adjustment factors and EPA’s population 

projections, please refer to the following: https://

www.epa.gov/sites/production/files/2015-04/ 

documents/benmap-ce_user_manual_march_

2015.pdf. 

estimates to have only a minimal impact 

on total PM benefits, since the 

underlying mortality risk estimate based 

on the Krewski study is identical to an 

updated PM2.5 mortality risk estimate 

derived from an expanded analysis of 

the same ACS cohort.177 The Agency is 

currently working to update its BPT 

estimates to reflect these recent updates 

for use in future rulemaking analyses. 

More information on the BPT approach 

to valuing PM-related benefits can be 

found in RIA Chapter 7.2 that 

accompanies this proposal. 

The PM-related BPT estimates used in 

this analysis are provided in Table 48. 

We multiply these BPT values by 

projected national changes in NOX, SO2

and directly-emitted PM2.5, in tons, to 

estimate the total PM2.5-related 

monetized human health benefits 

associated with the proposed program. 

As the table indicates, these values 

differ among pollutants and depend on 

their original source, because emissions 

from different sources can result in 

different degrees of population exposure 

and resulting health impacts. The BPT 

values for emissions of non-GHG 

pollutants from both onroad light-duty 

vehicle use and upstream sources such 

as fuel refineries will increase over time. 

These projected increases reflect rising 

income levels, which increase affected 

individuals’ willingness to pay for 

reduced exposure to health threats from 

air pollution. The BPT values also 

reflect future population growth and 

increased life expectancy, which 

expands the size of the population 

exposed to air pollution in both urban 

and rural areas, especially among older 

age groups with the highest mortality 

risk.178

TABLE 48—PM2.5-RELATED BENEFIT-PER-TON VALUES

[2018$] a

Year 

Onroad light duty vehicles b Upstream Sourcesc

Direct PM2.5 SO2 NOX Direct PM2.5 SO2 NOX

Estimated Using a 3 Percent Discount Rate 

2020 ......................................................... $600,000 $150,000 $6,400 $380,000 $81,000 $8,100 

2025 ......................................................... 660,000 170,000 6,900 420,000 90,000 8,800 

2030 ......................................................... 740,000 190,000 7,600 450,000 98,000 9,600 

2035 ......................................................... 830,000 210,000 8,400 ........................ ........................ ........................

2040 ......................................................... 920,000 230,000 9,000 ........................ ........................ ........................

2045 ......................................................... 1,000,000 250,000 9,600 ........................ ........................ ........................

Estimated Using a 7 Percent Discount Rate 

2020 ......................................................... 540,000 140,000 5,800 350,000 74,000 7,300 

2025 ......................................................... 600,000 150,000 6,200 380,000 80,000 7,900 

2030 ......................................................... 660,000 170,000 6,800 410,000 88,000 8,600 

2035 ......................................................... 750,000 190,000 7,500 ........................ ........................ ........................

2040 ......................................................... 830,000 210,000 8,200 ........................ ........................ ........................

2045 ......................................................... 900,000 230,000 8,600 ........................ ........................ ........................

Notes: 

aThe benefit-per-ton estimates presented in this table are based on estimates derived from the American Cancer Society cohort study 

(Krewski et al., 2009). They also assume either a 3 percent or 7 percent discount rate in the valuation of premature mortality to account for a 

twenty-year segmented premature mortality cessation lag. bBenefit-per-ton values for onroad light duty vehicles were estimated for the years 2020, 2025, 2030, 2035, 2040, and 2045. We hold values 

constant for intervening years (e.g., the 2020 values are assumed to apply to years 2021–2024; 2025 values for years 2026–2029; and 2045 values for years 2046 and beyond). cBenefit-per-ton values for upstream sources were estimated only for the years 2020, 2025 and 2030. We hold values constant for intervening 

years and 2030 values are applied to years 2031 and beyond. dWe assume for the purpose of this analysis that total ‘‘upstream emissions’’ are most appropriately monetized using refinery sector benefit 

per-ton values. 

The monetized PM2.5 health impacts 

of the proposed standards are presented 

in Table 54. Using PM2.5-related BPT 

estimates to monetize the non-GHG 

impacts of the proposed standards omits 

ozone-related impacts, unquantified 

PM-related health impacts, as well as 

other impacts associated with 

reductions in exposure to air toxics, 

ecosystem benefits, and visibility 

improvement. Section V of this 

preamble provides a qualitative 

description of both the health and 

environmental effects of the non-GHG 

pollutants impacted by the proposed 

program. 

F. Energy Security Impacts 

This proposal is designed to require 

reductions in the GHG emissions of 

light-duty vehicles (LDV) and thereby 

reduce fuel consumption. In turn, this 

proposed LDV GHG (2023–2026) 

proposal would help to reduce U.S. 

petroleum imports. A reduction of U.S. 

petroleum imports reduces both 

financial and strategic risks caused by 

potential sudden disruptions in the 

supply of imported petroleum to the 

U.S., thus increasing U.S. energy 

security. 

In order to understand the energy 

security implications of reducing U.S. 

oil imports, EPA has worked with Oak 

Ridge National Laboratory (ORNL), 

which has developed approaches for 

evaluating the social costs and energy 

security implications of oil use. When 

conducting this analysis, ORNL 

considers the full cost of importing 

petroleum into the U.S. The full 

economic cost (i.e., oil security 

premiums, as labeled below) is defined 

to include two components in addition 


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43792 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

179See Energy Security Impacts. Effect of Oil Use 

on the Long-Run Oil Price. Section 10. 5.2.1. pp.10– 

25. 2016. Draft Technical Assessment Report: 

Midterm Evaluation of Light-Duty Vehicle 

Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards for Model Years 

2022–2025. EPA–420–D–16–900. 

to the purchase price of petroleum itself. 

These are: (1) The higher costs/benefits 

for oil imports resulting from the effect 

of changes in U.S. demand on the world 

oil price (i.e., the ‘‘demand’’ or 

‘‘monopsony’’ costs/benefits); and (2) 

the risk of reductions in U.S. economic 

output and disruption to the U.S. 

economy caused by sudden disruptions 

in the supply of imported oil to the U.S. 

(i.e., the avoided macroeconomic 

disruption/adjustment costs). 

For this proposed rule, EPA is using 

oil security premiums estimated using 

ORNL’s methodology, which 

incorporates oil price projections and 

energy market and economic trends 

from the EIA’s Annual Energy Outlook 

(AEO). For this analysis, we are using 

oil security premiums based on AEO 

2018, but for the final rule we intend to 

update this analysis to AEO 2021. We 

only consider the avoided 

macroeconomic disruption/adjustment 

costs oil security premiums (i.e., labeled 

macroeconomic oil security premiums 

below), since the monopsony impacts of 

this proposed rule are considered 

transfer payments. See previous EPA 

GHG vehicle rules for a discussion of 

the monopsony oil security 

premiums.179 In addition, EPA and 

ORNL have worked together to revise 

the oil security premiums based upon 

recent energy security literature (see 

Chapter 3.2.5 of the DRIA 

accompanying this proposed rule for 

how the macroeconomic oil security 

premiums have been updated based 

upon a review of recent energy security 

literature on this topic). We do not 

consider military cost impacts from this 

proposed rule due to methodological 

issues in quantifying these impacts (see 

Chapter 3.2.3 of the DRIA for a review 

of the literature on the military costs 

impacts of U.S. oil import reductions). 

To calculate the energy security 

benefits of this proposed rule, EPA is 

using the ORNL oil security premium 

methodology with: (1) Estimated oil 

savings calculated by EPA and (2) an oil 

import reduction factor of 91 percent, 

which shows how much U.S. oil 

imports are reduced from changes in 

U.S. oil consumption. Each of these 

assumptions is discussed in more detail 

in Chapter 3.2 of the accompanying 

DRIA. Below EPA presents the 

macroeconomic oil security premiums 

used for the proposed standards for 

selected years from 2023–2050 in Table 

49. 

TABLE 49—MACROECONOMIC OIL SECURITY PREMIUMS FOR SELECTED

YEARS FROM 2023–2050 

[2018$/Barrel] * 

Year 

(range) 

Macroeconomic oil 

security premiums 

(range) 

2023 ...................... $3.63 ($1.22–$6.13) 

2026 ...................... $3.78 ($1.17–$6.37) 

2030 ...................... $3.99 ($1.13–$6.74) 

2035 ...................... $4.30 ($1.14–$7.35) 

2040 ...................... $4.66 ($1.26–$7.96) 

2050 ...................... $5.57 ($1.89–$9.53) 

* Top values in each cell are the midpoints, 

the values in parentheses are the 90 percent 

confidence intervals. 

G. Impacts of Additional Driving 

As discussed in Chapter 3.1 of the 

RIA, the assumed rebound effect might 

occur when an increase in vehicle fuel 

efficiency encourages people to drive 

more as a result of the lower cost per 

mile of driving. Along with the safety 

considerations associated with 

increased vehicle miles traveled 

(described in Section VII.H of this 

preamble), additional driving can lead 

to other costs and benefits that can be 

monetized. 

The increase in travel associated with 

the rebound effect produces additional 

benefits to vehicle drivers, which reflect 

the value of the added (or more 

desirable) social and economic 

opportunities that become accessible 

with additional travel. Consistent with 

assumptions used in the SAFE FRM, 

this analysis estimates the economic 

benefits from increased rebound-effect 

driving as the owner/operator surplus 

from the additional accessibility it 

provides. 

The equation for the calculation of the 

Drive Value: 

Drive Value = (1/2) (VMTrebound) [($/ 

mile)NoAction¥($/mile)Action] 

The economic value of the increased 

owner/operator surplus provided by 

added driving is one half of the product 

of the decline in vehicle operating costs 

per vehicle-mile and the resulting 

increase in the annual number of miles 

driven. Because it depends on the extent 

of improvement in fuel consumption, 

the value of benefits from increased 

vehicle use changes by model year and 

varies among alternative standards. 

In contrast to the benefits of 

additional driving are the costs 

associated with that driving. If net 

operating costs of the vehicle decline, 

then we expect a positive rebound 

effect. Increased vehicle use associated 

with a positive rebound effect also 

contributes to increased traffic 

congestion and highway noise. 

Depending on how the additional travel 

is distributed throughout the day and 

where it takes place, additional vehicle 

use can contribute to traffic congestion 

and delays by increasing traffic volumes 

on facilities that are already heavily 

traveled during peak periods. These 

added delays impose higher costs on 

other road users in the form of increased 

travel time and operating expenses. 

Because drivers do not take these 

external costs into account in deciding 

when and where to travel, they must be 

accounted for separately as a cost of the 

added driving associated with the 

rebound effect. 

EPA relies on estimates of congestion 

and noise costs developed by the 

Federal Highway Administration to 

estimate the increased external costs 

caused by added driving due to the 

rebound effect. EPA employed estimates 

from this source previously in the 

analysis accompanying the light-duty 

2010 and 2012 vehicle rulemakings and 

the 2016 Draft TAR and Proposed 

Determination. We continue to find 

them appropriate for this analysis after 

reviewing the procedures used by 

FHWA to develop them and considering 

other available estimates of these values. 

FHWA’s congestion cost estimates 

focus on freeways because non-freeway 

effects are less serious due to lower 

traffic volumes and opportunities to reroute around the congestion. EPA, 

however, applied the congestion cost to 

the overall VMT. The results of this 

analysis potentially overestimate the 

congestions costs associated with 

increased vehicle use, and thus lead to 

a conservative estimate of net benefits. 

EPA has used FHWA’s ‘‘Middle’’ 

estimates for marginal congestion and 

noise costs caused by increased travel 

from vehicles. This approach is 

consistent with the methodology used 

in our prior analyses. The values used 

are shown in Table 50. 

These congestion costs differ from 

those used in the SAFE FRM and, as 

stated, are consistent with those used in 

the 2016 Draft TAR and the 2016 

Proposed Determination. For this 

proposal, EPA has chosen not to adopt 

the approach from the SAFE FRM where 

scaling factors were used to adjust the 

underlying FHWA congestion cost 

estimates. In particular, EPA now finds 

that scaling the marginal per-mile 

congestion costs by the change in VMT 

per lane-mile on U.S. highways from 

1997 to 2017 does not account for 

changes in average speeds and 

improved road design, and may have 

the potential to over-estimate costs. We 


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180These fatality risk values are the average of 

changes in annual risk through 2050. The range of 

values is based on the 5% to 95% confidence 

interval of mass-safety coefficients presented in the 

SAFE FRM. 

181For the estimation of the stream of costs and 

benefits, we assume that after implementation of 

the proposed MY 2023–2026 standards, the 2026 

standards apply to each year thereafter. 

are continuing to use the FHWA 

congestion estimates without scaling, 

consistent with the SAFE NPRM and 

prior EPA rulemakings, and adjusting to 

measure in 2018 dollars. EPA invites 

comments on the congestion cost values 

and methodology. 

TABLE 50—COSTS ASSOCIATED WITH CONGESTION AND NOISE

[2018 Dollars per vehicle mile] 

Passenger 

cars Van/SUVs Pickups 

Congestion ..................................................................................................................................................... 0.0634 0.0634 0.0566 

Noise .............................................................................................................................................................. 0.0009 0.0009 0.0009 

H. Safety Considerations in Establishing 

GHG Standards 

Consistent with previous light-duty 

GHG analyses, EPA has assessed the 

potential of the proposed MY 2023– 

2026 standards to affect vehicle safety. 

EPA applied the same historical 

relationships between mass, size, and 

fatality risk that were established and 

documented in the SAFE rulemaking. 

These relationships are based on the 

statistical analysis of historical crash 

data, which included an analysis 

performed by using the most recently 

available crash studies based on data for 

model years 2007 to 2011. EPA used the 

findings of this analysis to estimate 

safety impacts of the modeled mass 

reductions over the lifetimes of new 

vehicles in response to MY 2023–2026 

standards. As in initially promulgating 

the GHG standards, the MTE Proposed 

Determination and this proposal, EPA’s 

assessment is that manufacturers can 

achieve the MY 2023–2026 standards 

while using modest levels of mass 

reduction as one technology option 

among many. On the whole, EPA 

considers safety impacts in the context 

of all projected health impacts from the 

proposal including public health 

benefits from the projected reductions 

in air pollution. 

The projected change in risk of fatal 

and non-fatal injuries is influenced by 

changes in fleet mix (car/truck share), 

vehicle scrappage rates, distribution of 

VMT among vehicles in the fleet and 

vehicle mass. Because the empirical 

analysis described previously did not 

produce any mass-safety coefficients 

with a statistically significant difference 

from zero, we analyzed safety results 

over the range of coefficient values. We 

project that the effect of the proposed 

standards on annual fatalities per billion 

miles driven ranges from a decrease of 

0.25 percent to an increase of 0.38 

percent, with a central estimate of a 0.07 

percent increase.180

In addition to changes in risk, EPA 

also considered the projected impact of 

the proposed standards on the absolute 

number of fatal and non-fatal injuries. 

The majority of the fatalities projected 

would result from the projected 

increased driving—i.e., people choosing 

to drive more due to the lower operating 

costs of more efficient vehicles. Our 

cost-benefit analysis accounts for both 

the value of this additional driving and 

its associated risk, which we assume are 

considerations in the decision to drive. 

The risk valuation associated with this 

increase in driving partially offsets the 

associated increase in societal costs due 

to increased fatalities and non-fatal 

injuries. 

This analysis projects that there will 

be an increase in vehicle miles traveled 

(VMT) under the proposed standards of 

449 billion miles compared to the No 

Action scenario through 2050 (an 

increase of about 0.5 percent). EPA 

estimates that vehicle safety, in terms of 

risk measured as the total fatalities per 

the total distance traveled over this 

period, will remain almost unchanged at 

4.642 fatalities per billion miles under 

the proposal, compared to 4.640 

fatalities per billion miles for the noaction scenario. EPA has also estimated, 

over the same 30 year period, that total 

fatalities will increase by 2,288, with 

1,952 deaths attributed to increased 

driving and 336 deaths attributed to the 

increase in fatality risk. In other words, 

approximately 85 percent of the change 

in fatalities under these proposed 

standards is due to projected increases 

in VMT and mobility (i.e., people 

driving more). Our analysis also 

considered the increase in non-fatal 

injuries. Consistent with the SAFE FRM, 

EPA assumed that non-fatal injuries 

scale with fatal injuries. 

EPA also estimated the societal costs 

of these safety impacts using 

assumptions consistent with the SAFE 

FRM (see Table 51.) Specifically, we are 

continuing to use the cost associated 

with each fatality of $10.4 million. We 

have also continued to use a scalar of 

approximately 1.6 applied to fatality 

costs to estimate non-fatal injury costs. 

In addition, we have accounted for the 

driver’s inherent valuation of risk when 

making the decision to drive more due 

to rebound. This risk valuation partially 

offsets the fatal and non-fatal injury 

costs described previously, and, 

consistent with the SAFE FRM, is 

calculated as 90 percent of the fatal and 

non-fatal injury costs due to rebound to 

reflect the fact that consumers do not 

fully evaluate the risks associated with 

this additional driving. 

I. Summary of Costs and Benefits 

This section presents a summary of 

costs, benefits, and net benefits of the 

proposed program. Table 51 shows the 

estimated annual monetized costs of the 

proposed program for the indicated 

calendar years. The table also shows the 

present-values (PV) of those costs and 

the annualized costs for the calendar 

years 2021–2050 using both 3 percent 

and 7 percent discount rates.181 The 

table includes an estimate of foregone 

consumer sales surplus, which 

measures the loss in benefits attributed 

to consumers who would have 

purchased a new vehicle in the absence 

of the proposed standards. 


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43794 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

TABLE 51—COSTS ASSOCIATED WITH THE PROPOSED PROGRAM

[Billions of 2018 dollars] 

Calendar year 

Foregone 

consumer 

sales 

surplus a

($) 

Technology 

costs 

($) 

Congestion 

($) 

Noise 

($) 

Fatality 

costs 

($) 

Non-fatal 

crash costs 

($) 

Total costs 

($) 

2023 ......................................................... 0.26 6.7 0.046 0.00073 0.16 0.26 7.4 

2026 ......................................................... 0.64 15 0.19 0.003 0.61 1 18 

2030 ......................................................... 0.43 14 0.59 0.0095 0.58 0.96 17 

2035 ......................................................... 0.28 12 1 0.017 0.2 0.33 14 

2040 ......................................................... 0.21 11 1.3 0.021 ¥0.038 ¥0.062 12 

2050 ......................................................... 0.16 9.9 1.3 0.021 ¥0.0093 ¥0.015 11 

PV, 3% ..................................................... 5.7 210 15 0.24 4.5 7.6 240 

PV, 7% ..................................................... 3.7 130 7.3 0.12 3.4 5.6 150 

Annualized, 3% ........................................ 0.29 11 0.75 0.012 0.23 0.39 12 

Annualized, 7% ........................................ 0.3 10 0.59 0.0095 0.27 0.45 12 

a ‘‘Foregone Consumer Sales Surplus’’ refers to the difference between a vehicle’s price and the buyer’s willingness to pay for the new vehicle; 

the impact reflects the reduction in new vehicle sales described in Section VII.B. See Section 8 of CAFE_Model_Documentation_FR_2020.pdf in 

the docket for more information. 

Table 52 shows the undiscounted 

annual monetized fuel savings of the 

proposed program. The table also shows 

the present- and annualized-values of 

those fuel savings for the same calendar 

years using both 3 percent and 7 percent 

discount rates. The net benefits 

calculations use the aggregate value of 

fuel savings (calculated using pre-tax 

fuel prices) since savings in fuel taxes 

do not represent a reduction in the 

value of economic resources utilized in 

producing and consuming fuel. Note 

that the fuel savings shown in Table 52 

result from reductions in fleet-wide fuel 

use and include rebound effects, credit 

usage and advanced technology 

multiplier use. Thus, fuel savings grow 

over time as an increasing fraction of the 

fleet is projected to meet the proposed 

standards. 

TABLE 52—FUEL SAVINGS ASSOCIATED WITH THE PROPOSED PROGRAM

[Billions of 2018 dollars] 

Calendar year 

Retail fuel 

savings 

($) 

Fuel tax 

savings 

($) 

Pre-tax fuel 

savings 

($) 

2023 ............................................................................................................................................. 0.78 0.2 0.58 

2026 ............................................................................................................................................. 3.5 0.95 2.6 

2030 ............................................................................................................................................. 12 2.7 8.9 

2035 ............................................................................................................................................. 21 4.4 17 

2040 ............................................................................................................................................. 28 5.4 23 

2050 ............................................................................................................................................. 32 5.6 26 

PV, 3% ......................................................................................................................................... 310 62 250 

PV, 7% ......................................................................................................................................... 150 32 120 

Annualized, 3% ............................................................................................................................ 16 3.2 13 

Annualized, 7% ............................................................................................................................ 12 2.5 9.9 

Note: Electricity expenditure increases are included. 

Table 53 presents estimated annual 

monetized benefits from non-emission 

sources for the indicated calendar years. 

The table also shows the present- and 

annualized-value of those benefits for 

the calendar years 2021–2050 using 

both 3 percent and 7 percent discount 

rates. 

TABLE 53—BENEFITS FROM NON-EMISSION SOURCES

[Billions of 2018 dollars] 

Calendar year Drive value 

($) 

Refueling time 

savings 

($) 

Energy 

security 

benefits 

($) 

Total 

non-emission 

benefits 

($) 

2023 ................................................................................................................. 0.065 ¥0.019 0.03 0.076 

2026 ................................................................................................................. 0.25 ¥0.12 0.15 0.28 

2030 ................................................................................................................. 0.83 ¥0.15 0.46 1.1 

2035 ................................................................................................................. 1.6 ¥0.1 0.83 2.3 

2040 ................................................................................................................. 2.1 ¥0.017 1.1 3.2 

2050 ................................................................................................................. 2.3 0.1 1.5 3.9 

PV, 3% ............................................................................................................. 23 ¥0.94 13 35 

PV, 7% ............................................................................................................. 11 ¥0.72 6.1 17 

Annualized, 3% ................................................................................................ 1.2 ¥0.048 0.64 1.8 


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TABLE 53—BENEFITS FROM NON-EMISSION SOURCES—Continued 

[Billions of 2018 dollars] 

Calendar year Drive value 

($) 

Refueling time 

savings 

($) 

Energy 

security 

benefits 

($) 

Total 

non-emission 

benefits 

($) 

Annualized, 7% ................................................................................................ 0.92 ¥0.058 0.49 1.4 

* See Section VII.G, Section VII.C and Section VII.F for more on drive value, refueling time and energy security, respectively. 

Table 54 presents estimated annual 

monetized benefits from non-GHG 

emission sources for the indicated 

calendar years. The table also shows the 

present- and annualized-values of those 

benefits for the calendar years 2021– 

2050 using both 3 percent and 7 percent 

discount rates. 

TABLE 54—PM2.5-RELATED EMISSION REDUCTION BENEFITS

[Billions of 2018 dollars] a b

Calendar year 

Tailpipe benefits 

($) 

Upstream benefits 

($) 

Total PM2.5-related 

benefits 

($) 

3% DR 7% DR 3% DR 7% DR 3% DR 7% DR 

2023 ......................................................... ¥0.013 ¥0.012 0.029 0.027 0.016 0.015 

2026 ......................................................... ¥0.047 ¥0.042 0.014 0.015 ¥0.033 ¥0.028 

2030 ......................................................... 0.035 0.032 0.089 0.084 0.12 0.12 

2035 ......................................................... 0.23 0.21 0.34 0.31 0.57 0.52 

2040 ......................................................... 0.46 0.41 0.48 0.44 0.94 0.85 

2050 ......................................................... 0.74 0.67 0.34 0.31 1.1 0.98 

PV ............................................................ 4.3 1.6 4.5 2 8.8 3.6 

Annualized ............................................... 0.22 0.13 0.23 0.16 0.45 0.29 

Notes: 

a Note that the non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental 

effects that, if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton 

values that reflect only human health impacts associated with reductions in PM2.5 exposure. b Calendar year non-GHG benefits presented in this table assume either a 3 percent or 7 percent discount rate in the valuation of PM-related 

premature mortality to account for a twenty-year segmented cessation lag. Note that annual benefits estimated using a 3 percent discount rate 

were used to calculate the present and annualized values using a 3 percent discount rate and the annual benefits estimated using a 7 percent 

discount rate were used to calculate the present and annualized values using a 7 percent discount rate. 

Table 55 shows the benefits of 

reduced GHG emissions, and 

consequently the annual quantified 

benefits (i.e., total GHG benefits), for 

each of the four interim social cost of 

GHG (SC–GHG) values estimated by the 

interagency working group. As 

discussed in the RIA Chapter 3.3, there 

are some limitations to the SC–GHG 

analysis, including the incomplete way 

in which the integrated assessment 

models capture catastrophic and noncatastrophic impacts, their incomplete 

treatment of adaptation and 

technological change, uncertainty in the 

extrapolation of damages to high 

temperatures, and assumptions 

regarding risk aversion. 

TABLE 55—CLIMATE BENEFITS FROM REDUCTIONS IN GREENHOUSE GAS EMISSIONS

[Billions of 2018 dollars] 

Calendar year 

Discount rate and statistic 

5% Average 

($) 

3% Average 

($) 

2.5% Average 

($) 

3% 95th 

percentile 

($) 

2023 ................................................................................................................. 0.063 0.21 0.31 0.63 

2026 ................................................................................................................. 0.31 1 1.5 3 

2030 ................................................................................................................. 1 3.2 4.6 9.5 

2035 ................................................................................................................. 2 6 8.5 18

2040 ................................................................................................................. 2.8 8.1 11 25 

2050 ................................................................................................................. 3.9 10 14 31 

PV .................................................................................................................... 22 91 140 280 

Annualized ....................................................................................................... 1.4 4.7 6.7 14

Notes: 

The present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount the value 

of damages from future emissions (SC–GHGs at 5, 3, 2.5 percent) is used to calculate the present value of SC–GHGs for internal consistency. 

Annual benefits shown are undiscounted values. 


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Table 56 presents estimated annual 

net benefits for the indicated calendar 

years. The table also shows the present 

and annualized value of those net 

benefits for the calendar years 2021– 

2050 using both 3 percent and 7 percent 

discount rates. The table includes the 

benefits of reduced GHG emissions (and 

consequently the annual net benefits) 

for each of the four SC–GHG values 

considered by EPA. We estimate that the 

total benefits of the proposed program 

far exceed the costs and would result in 

a net present value of benefits that 

ranges between $17–330 billion, 

depending on which SC–GHG and 

discount rate is assumed. 

TABLE 56—NET BENEFITS (EMISSION BENEFITS + NON-EMISSION BENEFITS + FUEL SAVINGS ¥ COSTS) ASSOCIATED

WITH THE PROPOSED PROGRAM

[Billions of 2018 dollars] a b

Calendar year 

Net benefits, 

with climate 

benefits 

based on 5% 

discount rate 

($) 

Net benefits, 

with climate 

benefits 

based on 3% 

discount rate 

($) 

Net benefits, 

with climate 

benefits 

based on 

2.5% 

discount rate 

($) 

Net benefits, 

with climate 

benefits 

based on 3% 

discount rate, 

95th 

percentile 

SC–GHG 

($) 

2023 ................................................................................................................. ¥6.6 ¥6.5 ¥6.4 ¥6.1 

2026 ................................................................................................................. ¥14 ¥14 ¥13 ¥12 

2030 ................................................................................................................. ¥5.8 ¥3.7 ¥2.3 2.7 

2035 ................................................................................................................. 7.6 12 14 24 

2040 ................................................................................................................. 17 22 26 39 

2050 ................................................................................................................. 23 30 34 51 

PV, 3% ............................................................................................................. 73 140 190 330 

PV, 7% ............................................................................................................. 17 86 140 270 

Annualized, 3% ................................................................................................ 4.1 7.3 9.4 17 

Annualized, 7% ................................................................................................ 1 4.2 6.3 14 

Notes: 

aThe present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount the value 

of damages from future emissions (SC–GHG at 5, 3, 2.5 percent) is used to calculate present value of SC–GHGs for internal consistency, while 

all other costs and benefits are discounted at either 3% or 7%. Annual costs and benefits shown are undiscounted values. b Note that the non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental 

effects that, if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton 

values that reflect only human health impacts associated with reductions in PM2.5 exposure. 

EPA also conducted a separate 

analysis of the total benefits over the 

model year lifetimes of the 2023 through 

2026 model year vehicles. In contrast to 

the calendar year analysis presented in 

Table 51 through Table 56 the model 

year lifetime analysis below shows the 

impacts of the proposed program on 

vehicles produced during each of the 

model years 2023 through 2026 over the 

course of their expected lifetimes. The 

net societal benefits over the full 

lifetimes of vehicles produced during 

each of the four model years are shown 

in Table 57 and Table 58 at both 3 

percent and 7 percent discount rates, 

respectively. Similar to the calendar 

year analysis, the net benefits would 

exceed the costs of the program. 

TABLE 57—MONETIZED VEHICLE PROGRAM COSTS, FUEL SAVINGS, BENEFITS, AND NET BENEFITS ASSOCIATED WITH THE

LIFETIMES OF 2023–2026 MODEL YEAR LIGHT-DUTY VEHICLES

[Billions, 2018$; 3% discount rate] abc

MY Costs 

($) 

Fuel savings 

($) 

Benefits 

($) 

Net benefits 

($) 

Present-Values 

2023 ................................................................................................................. 4.8 3.6 0.89 to 4.5 ¥0.29 to 3.3 

2024 ................................................................................................................. 5.9 7 1.8 to 8.8 2.8 to 9.8 

2025 ................................................................................................................. 6.7 8.6 2 to 11 3.9 to 13 

2026 ................................................................................................................. 8.1 13 3.6 to 17 8.8 to 22 

Sum .......................................................................................................... 26 33 8.2 to 41 15 to 48 

Annualized-Values 

2023 ................................................................................................................. 0.21 0.16 0.044 to 0.19 ¥0.0072 to 

0.14 

2024 ................................................................................................................. 0.26 0.3 0.086 to 0.38 0.13 to 0.43 

2025 ................................................................................................................. 0.29 0.37 0.1 to 0.46 0.18 to 0.55 

2026 ................................................................................................................. 0.35 0.58 0.17 to 0.73 0.4 to 0.96 

Sum .......................................................................................................... 1.1 1.4 0.4 to 1.8 0.71 to 2.1 

Notes: 


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182See U.S. Environmental Protection Agency, 

‘‘Fuel Savings Offset to Vehicle Costs_

20210610.xlsx,’’ in the docket for this and the other 

calculations in this section. Fuel prices are based 

on AEO2021 and change over time; for the 

Reference Case, the average retail fuel price for 

years 2026–2036 ranged from $2.53 to $2.98/gallon 

(2020$) for gasoline and $0.118 to $0.119/kWh of 

electricity (2020$). U.S. Energy Information 

Administration (EIA), U.S. Department of Energy 

(DOE), Annual Energy Outlook, 2021. For the 

analysis involving 5-year ownership periods, we 

use the fuel costs associated with the initial year of 

purchase for each owner, i.e., 2026, 2031, 2036. The 

analysis includes the program flexibilities of credit 

banking, fleet averaging, advanced technology 

multipliers, and air conditioning and off-cycle 

credits. 

183The CCEMS models vehicles over a 40 year 

lifetime; however, it includes scrappage rates such 

that fewer and fewer vehicles of any vintage remain 

on the road year after year, and those vehicles that 

remain are driven fewer and fewer miles year after 

year. 

184The EPA Guidelines for Preparing Economic 

Analysis, Chapter 6.4, suggests that a 3 percent 

discount rate is appropriate for calculations 

involving consumption, instead of the opportunity 

cost of capital. Here, the discount rate is applied, 

beginning in 2026 when the vehicle is purchased 

new, to the stream of fuel costs over the vehicle 

lifetime. U.S. Environmental Protection Agency 

(2010). ‘‘Guidelines for Preparing Economic 

Analysis,’’ Chapter 6. https://www.epa.gov/sites/ 

production/files/2017-09/documents/ee-0568- 

06.pdf, accessed 6/14/2021. 

185Argonne National Laboratory (2021). 

‘‘Comprehensive Total Cost of Ownership 

Quantification for Vehicles with Different Size 

Classes and Powertrains.’’ ANL/ESD–21/4, Figure 

ES–2. https://publications.anl.gov/anlpubs/2021/ 

05/167399.pdf, accessed 6/8/2021. 

a Model year values are discounted to 2021; the ‘‘Sum’’ represents those discounted values summed across model years. 

bThe range of benefits and net benefits reflects the low to high range of SC–GHG values. The same discount rate used to discount the value 

of damages from future GHG emissions is used to calculate net present value of SC–GHGs for internal consistency, while all other costs and 

benefits are discounted at 3 percent in this table. c Note that the non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental 

effects that, if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton 

values that reflect only human health impacts associated with reductions in PM2.5 exposure. 

TABLE 58—MONETIZED COSTS, FUEL SAVINGS, BENEFITS, AND NET BENEFITS ASSOCIATED WITH THE LIFETIMES OF

2023–2026 MODEL YEAR LIGHT-DUTY VEHICLES

[Billions, 2018$; 7% discount rate] abc

MY Costs 

($) 

Fuel savings 

($) 

Benefits 

($) 

Net benefits 

($) 

Present-Values 

2023 ................................................................................................................. 4.4 2.6 0.72 to 4.3 ¥1.1 to 2.5 

2024 ................................................................................................................. 5.5 4.7 1.4 to 8.4 0.54 to 7.6 

2025 ................................................................................................................. 6.1 5.5 1.6 to 10 1 to 9.7 

2026 ................................................................................................................. 7.3 8.2 2.6 to 16 3.6 to 17 

Sum .......................................................................................................... 23 21 6.3 to 39 4 to 37 

Annualized-Values 

2023 ................................................................................................................. 0.33 0.19 0.048 to 0.2 ¥0.089 to 

0.061 

2024 ................................................................................................................. 0.41 0.35 0.092 to 0.39 0.029 to 0.32 

2025 ................................................................................................................. 0.45 0.41 0.1 to 0.47 0.064 to 0.43 

2026 ................................................................................................................. 0.55 0.62 0.18 to 0.74 0.25 to 0.81 

Sum .......................................................................................................... 1.7 1.6 0.42 to 1.8 0.25 to 1.6 

Notes: 

a Model year values are discounted to 2021; the ‘‘Sum’’ represents those discounted values summed across model years. 

bThe range of benefits and net benefits reflects the low to high range of SC–GHG values. The same discount rate used to discount the value 

of damages from future GHG emissions is used to calculate net present value of SC–GHGs for internal consistency, while all other costs and 

benefits are discounted at 7 percent in this table. c Note that the non-GHG impacts associated with the standards presented here do not include the full complement of health and environmental 

effects that, if quantified and monetized, would increase the total monetized benefits. Instead, the non-GHG benefits are based on benefit-per-ton 

values that reflect only human health impacts associated with reductions in PM2.5 exposure. 

J. Impacts on Consumers of Vehicle 

Costs and Fuel Savings 

Although the primary purpose of this 

regulatory action is to reduce GHG 

emissions, the impact of the proposed 

EPA standards on consumers is an 

important consideration for EPA. This 

chapter discusses the impact of the 

proposed standards on consumer net 

costs for purchasing and fueling 

vehicles. For further discussion of 

impacts on vehicle sales, see Section 

VII.B; for impacts on affordability, see 

Section VII.M. 

EPA estimates that the average cost of 

a new MY 2026 vehicle will increase by 

$1,044 due to the proposed standards, 

while we estimate that the average permile fuel cost in the first year will 

decrease by 0.59 cents.182 Over time, 

reductions in fuel consumption will 

offset the increase in upfront costs. For 

instance, EPA estimates that, over the 

lifetime of a MY 2026 vehicle,183 the 

reduction in fuel costs will exceed the 

increase in vehicle costs by $883, using 

a 3 percent discount rate.184

Another way to look at the effects on 

vehicle buyers is to examine how the 

costs are distributed among new and 

used vehicle owners. Because 

depreciation occurs over the lifetime of 

the vehicle, the net purchase cost to an 

owner will depend on the vehicle age 

when it was bought, and, if sold, the 

length of time that the vehicle was 

owned. A study from Argonne National 

Laboratory provides estimates for the 

depreciation of light-duty vehicles by 

age, as summarized in Table 59.185 If the 

additional cost of fuel-saving technology 

depreciates at the same rates, then a 

person who buys a new vehicle and 

sells it after 5 years would incur 60 

percent of the upfront costs (100 percent 

of the original value, less 40 percent 

paid back). Analogously, the person 

who buys the vehicle at age 5 would 

incur 20 percent of those costs (40 

percent, less 20 percent paid back), and 

the purchaser of the 10-year-old vehicle 

would face a net 10 percent of the cost 

of the technology after it is sold five 


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186This estimate is calculated as the increase in 

cost, $1044, divided by the reduced per-mile cost, 

$0.0059, to get miles until cost is recovered. 

187The up-front costs for each purchaser are 

based on the cost to the owner based on the 

depreciated price for the vehicle’s age, with 

recovery of some further depreciated cost after 5 

years of ownership. Cost recovery per mile is 

$0.0059, and is multiplied by the number of miles 

in the second column. The remaining columns are 

cost recovery divided by the relevant cost. 

Discounting is not used to abstract from the VMT 

occurring during a specified timeframe. 

years later at vehicle age 15. A person 

purchasing a new vehicle, driving the 

average fleetwide VMT for the given age 

and facing the fuel prices used in this 

analysis, would face an estimated net 

cost of $204, shown in Table 60, which 

reflects fuel savings that offset 70 

percent of the depreciation cost. The 

buyer of that 5-year-old used vehicle 

would see an estimated reduction in net 

cost—that is, a net saving—of $230, 

while the buyer of that same 10-year-old 

used vehicle would see an estimated 

reduction of net cost of $314. In general, 

the purchasers of older vehicles will see 

a greater portion of their depreciation 

costs offset by fuel savings. 

TABLE 59—DEPRECIATION ESTIMATES FOR LIGHT DUTY VEHICLES

Vehicle age 1 2 3 4 5 10 15 

Fraction of original 

value retained ........... 0.70 0.61 0.53 0.475 0.40 0.20 0.10 

Estimated by Argonne National Laboratory using Edmunds data for MY2013–2019 vehicles (see figure ES–2).185

TABLE 60—IMPACT OF PROPOSED STANDARDS ON DEPRECIATION AND FUEL COSTS FOR MY 2026 VEHICLE OVER 5 

YEARS OF OWNERSHIP

Vehicle 

depreciation 

plus fuel 

costs 

($) 

Portion of 

depreciation 

costs offset 

by fuel 

savings 

(%) 

Vehicle Purchased New .......................................................................................................................................... 204 70 

Vehicle Purchased at Age 5 .................................................................................................................................... (230) 197 

Vehicle Purchased at Age 10 .................................................................................................................................. (314) 365 

Calculated using analysis VMT assumptions for proposed standards, using a 3% discount rate from year of purchase. 

Because the use of vehicles varies 

widely across vehicle owners, another 

way to estimate the effects of the 

standards is to examine the ‘‘break 

even’’ number of miles—that is, the 

number of miles driven that would 

result in fuel savings matching the 

increase in up-front costs. For example, 

if operating costs of a MY 2026 vehicle 

decrease by 0.59 cents per mile due to 

reduced fuel consumption, the upfront 

costs (when purchased new) would be 

recovered after 177,000 miles of driving, 

excluding discounting.186 As this 

measure makes clear, the financial effect 

on a new vehicle owner depends on the 

amount that the vehicle is driven. 

Mobility service providers, such as taxis 

or ride-sharing services, are likely to 

accumulate miles more quickly than 

most people who use their vehicles for 

personal use. As discussed in Section 

VII.M, the lower per-mile cost for these 

vehicles may reduce the importance of 

up-front costs in the charge for mobility 

as a service, and thus further enable use 

of that service. 

Table 61 shows, for purchasers of 

different-age MY 2026 vehicles, how the 

degree to which fuel savings offset 

depreciation costs will depend on 

vehicle use levels.187 Cost recovery is 

again higher for older vehicles, and 

faster for vehicles that accumulate VMT 

more quickly. For example, a consumer 

who purchases a 5-year old used 

MY2026 vehicle would recover their 

vehicle costs through fuel savings after 

only 31,000 miles of driving. 

TABLE 61—PROPORTION OF DEPRECIATION COSTS OFFSET BY FUEL SAVINGS, FOR NEW AND USED VEHICLE

PURCHASERS, FOR A MY2026 VEHICLE

When vehicle 

purchased 

new 

(%) 

When vehicle 

purchased at 5 

years old 

(%) 

When vehicle 

purchased at 

10 years old 

(%) 

Portion of vehicle depreciation cost offset by fuel savings 

(own vehicle for 5 years).

At 10,000 miles ......................

At 50,000 miles ......................

At 100,000 miles ....................

9 

47 

94 

32 

161 

322 

69 

347 

693 

Miles where fuel savings fully offset the vehicle owner’s depreciation cost.Owned vehicle for 5 years ..... 106,000 31,000 14,000 

Owned vehicle for full remaining lifetime.177,000 62,000 28,000 

Thus, the financial effects on a 

vehicle buyer depend on how much that 

person drives, as well as whether the 

vehicle is bought new or used. 

Importantly, all people receive the 


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188Full employment is a conceptual target for the 

economy where everyone who wants to work and 

is available to do so at prevailing wages is actively 

employed. The unemployment rate at full 

employment is not zero. 

189Arrow et al. (1996). ‘‘Benefit-Cost Analysis in 

Environmental, Health, and Safety Regulation: A 

Statement of Principles.’’ American Enterprise 

Institute, The Annapolis Center, and Resources for 

the Future. See discussion on bottom of p. 6. In 

practice, distributional impacts on individual 

workers can be important, as discussed later in this 

section. 

190Schmalensee, Richard, and Stavins, Robert N. 

‘‘A Guide to Economic and Policy Analysis of EPA’s 

Transport Rule.’’ White paper commissioned by 

Excelon Corporation, March 2011. 

191Morgenstern, R.D.; Pizer, W.A.; and Shih, J.- 

S. (2002). ‘‘Jobs Versus the Environment: An 

Industry-Level Perspective.’’ Journal of 

Environmental Economics and Management 43: 

412–436. 2002. 

192Berman, E. and Bui, L. T. M. (2001). 

‘‘Environmental Regulation and Labor Demand: 

Evidence from the South Coast Air Basin.’’ Journal 

of Public Economics 79(2): 265–295; Descheˆnes, O. 

(2018). ‘‘Balancing the Benefits of Environmental 

Regulations for Everyone and the Costs to Workers 

and Firms.’’ IZA World of Labor 22v2. https://

wol.iza.org/uploads/articles/458/pdfs/ 

environmental-regulations-and-labor-markets.pdf, 

accessed 4/19/2021. 

193Fair treatment means that ‘‘no group of people 

should bear a disproportionate burden of 

environmental harms and risks, including those 

resulting from the negative environmental 

consequences of industrial, governmental and 

commercial operations or programs and policies.’’ 

Meaningful involvement occurs when ‘‘(1) 

potentially affected populations have an 

Continued 

benefits of reduced GHG emissions, the 

primary focus of this rule. 

K. Employment Impacts 

If the U.S. economy is at full 

employment, even a large-scale 

environmental regulation is unlikely to 

have a noticeable impact on aggregate 

net employment.188 Instead, labor 

would primarily be reallocated from one 

productive use to another, and net 

national employment effects from 

environmental regulation would be 

small and transitory (e.g., as workers 

move from one job to another).189

Affected sectors may nevertheless 

experience transitory effects as workers 

change jobs. Some workers may retrain 

or relocate in anticipation of new 

requirements or require time to search 

for new jobs, while shortages in some 

sectors or regions could bid up wages to 

attract workers. These adjustment costs 

can lead to local labor disruptions. Even 

if the net change in the national 

workforce is small, localized reductions 

in employment may adversely impact 

individuals and communities just as 

localized increases may have positive 

impacts. 

If the economy is operating at less 

than full employment, economic theory 

does not clearly indicate the direction or 

magnitude of the net impact of 

environmental regulation on 

employment; it could cause either a 

short-run net increase or short-run net 

decrease.190 At the level of individual 

companies, employers affected by 

environmental regulation may increase 

their demand for some types of labor, 

decrease demand for other types of 

labor, or for still other types, not change 

it at all. The uncertain direction of labor 

impacts is due to the different channels 

by which regulations affect labor 

demand. 

Morgenstern et al. (2002) 191

decompose the labor consequences in a 

regulated industry facing increased 

abatement costs into three separate 

components. First, there is a demand 

effect caused by higher production costs 

raising market prices. Higher prices 

reduce consumption (and production), 

reducing demand for labor within the 

regulated industry. Second, there is a 

cost effect where, as production costs 

increase, plants use more of all inputs, 

including labor, to produce the same 

level of output. Third, there is a factorshift effect where post-regulation 

production technologies may have 

different labor intensities. Other 

researchers use different frameworks 

along a similar vein.192

DRIA Chapter 8.2 discusses the 

calculation of employment impacts in 

the model used for this analysis. The 

estimates include effects on three 

sectors: Automotive dealers, final 

assembly labor and parts production, 

and fuel economy technology labor. The 

first two of these are examples of 

Morgenstern et al.’s (2002) demandeffect employment, while the third 

reflects cost-effect employment. For 

automotive dealers, the model estimates 

the hours involved in each new vehicle 

sale. To estimate the labor involved in 

final assembly, the model used average 

labor hours per vehicle at a sample of 

U.S. assembly plants, adjusted by the 

ratio of vehicle assembly manufacturing 

employment to employment for total 

vehicle and equipment manufacturing 

for new vehicles. Finally, for fuel 

economy technology labor, DOT 

calculated the average revenue per jobyear for automakers. 

EPA’s assessment of employment 

impacts, in DRIA Chapter 8.2.3, using 

the sales assumptions of both 

automakers and consumers using 2.5 

years of fuel consumption in vehicle 

decisions and a demand elasticity of 

¥1, shows initial very small decreases 

in employment of 0.1 percent, followed 

by small positive gains (less than 1 

percent) in employment due to the labor 

involved in producing the technologies 

needed to meet the proposed standards. 

If, instead, we use the sensitivity 

analysis with a demand elasticity of 

¥0.4, employment is higher for both the 

no-action alternative and the proposed 

standards. Between the no-action 

alternative and the proposal, with an 

elasticity of ¥0.4, the employment 

impacts are positive, rising to about a 2 

percent increase. If automakers 

underestimate consumers’ valuation of 

fuel economy, as noted in Section VII.B, 

then demand-effect employment is 

likely to be higher, and employment 

impacts are likely to be more positive. 

Note that these are employment 

impacts in the directly regulated sector, 

plus the impacts for automotive dealers. 

These do not include economy-wide 

labor impacts. As discussed earlier, 

economy-wide impacts on employment 

are generally driven by broad 

macroeconomic effects. It also does not 

reflect employment effects due to 

reduced spending on fuel consumption. 

Those changes may lead to some 

reductions in employment in gas 

stations, and some increases in other 

sectors to which people reallocate those 

expenditures. 

Electrification of the vehicle fleet is 

likely to affect both the number and the 

nature of employment in the auto and 

parts sectors and related sectors, such as 

providers of charging infrastructure. 

Because this proposal projects relatively 

minor increases in penetration of plugin electric vehicles, from 4.6 percent in 

MY 2023 to 8.4 percent in MY 2026 (see 

Table 42), we do not predict major 

changes in the composition of 

employment in these sectors for MYs 

2023–2026. EPA will continue to assess 

changes in employment as 

electrification of the auto industry 

proceeds. 

L. Environmental Justice 

Executive Order 12898 (59 FR 7629, 

February 16, 1994) establishes federal 

executive policy on environmental 

justice. It directs federal agencies, to the 

greatest extent practicable and 

permitted by law, to make achieving 

environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. EPA 

defines environmental justice as the fair 

treatment and meaningful involvement 

of all people regardless of race, color, 

national origin, or income with respect 

to the development, implementation, 

and enforcement of environmental laws, 

regulations, and policies.193


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43800 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

appropriate opportunity to participate in decisions 

about a proposed activity [e.g., rulemaking] that 

will affect their environment and/or health; (2) the 

public’s contribution can influence [the EPA’s 

rulemaking] decision; (3) the concerns of all 

participants involved will be considered in the 

decision-making process; and (4) [the EPA will] 

seek out and facilitate the involvement of those 

potentially affected’’ A potential EJ concern is 

defined as ‘‘the actual or potential lack of fair 

treatment or meaningful involvement of minority 

populations, low-income populations, tribes, and 

indigenous peoples in the development, 

implementation and enforcement of environmental 

laws, regulations and policies.’’ See ‘‘Guidance on 

Considering Environmental Justice During the 

Development of an Action.’’ Environmental 

Protection Agency, www.epa.gov/ 

environmentaljustice/guidanceconsideringenvironmental-justice-duringdevelopment-action. 

See also https://www.epa.gov/environmentaljustice. 

194 ‘‘Technical Guidance for Assessing 

Environmental Justice in Regulatory Analysis.’’ 

Epa.gov, Environmental Protection Agency, https:// 

www.epa.gov/sites/production/files/2016-06/ 

documents/ejtg_5_6_16_v5.1.pdf. 

195USGCRP, 2018: Impacts, Risks, and 

Adaptation in the United States: Fourth National 

Climate Assessment, Volume II [Reidmiller, D.R., 

C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. 

Lewis, T.K. Maycock, and B.C. Stewart (eds.)]. U.S. 

Global Change Research Program, Washington, DC, 

USA, 1515 pp. doi: 10.7930/NCA4.2018. 

196USGCRP, 2016: The Impacts of Climate 

Change on Human Health in the United States: A 

Scientific Assessment. Crimmins, A., J. Balbus, J.L. 

Gamble, C.B. Beard, J.E. Bell, D. Dodgen, R.J. Eisen, 

N. Fann, M.D. Hawkins, S.C. Herring, L. 

Jantarasami, D.M. Mills, S. Saha, M.C. Sarofim, J. 

Trtanj, and L. Ziska, Eds. U.S. Global Change 

Research Program, Washington, DC, 312 pp. http:// 

dx.doi.org/10.7930/J0R49NQX. 

197Oppenheimer, M., M. Campos, R. Warren, J. 

Birkmann, G. Luber, B. O’Neill, and K. Takahashi, 

2014: Emergent risks and key vulnerabilities. In: 

Climate Change 2014: Impacts, Adaptation, and 

Vulnerability. Part A: Global and Sectoral Aspects. 

Contribution of Working Group II to the Fifth 

Assessment Report of the Intergovernmental Panel 

on Climate Change [Field, C.B., V.R. Barros, D.J. 

Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. 

Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. 

Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R. 

Mastrandrea, and L.L. White (eds.)]. Cambridge 

University Press, Cambridge, United Kingdom and 

New York, NY, USA, pp. 1039–1099. 

198Porter, J.R., L. Xie, A.J. Challinor, K. Cochrane, 

S.M. Howden, M.M. Iqbal, D.B. Lobell, and M.I. 

Travasso, 2014: Food security and food production 

systems. In: Climate Change 2014: Impacts, 

Adaptation, and Vulnerability. Part A: Global and 

Sectoral Aspects. Contribution of Working Group II 

to the Fifth Assessment Report of the 

Intergovernmental Panel on Climate Change [Field, 

C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. 

Mastrandrea, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. 

Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. 

Levy, S. MacCracken, P.R. Mastrandrea, and L.L. 

White (eds.)]. Cambridge University Press, 

Cambridge, United Kingdom and New York, NY, 

USA, pp. 485–533. 

199Smith, K.R., A. Woodward, D. CampbellLendrum, D.D. Chadee, Y. Honda, Q. Liu, J.M. 

Olwoch, B. Revich, and R. Sauerborn, 2014: Human 

health: Impacts, adaptation, and co-benefits. In: 

Climate Change 2014: Impacts, Adaptation, and 

Vulnerability. Part A: Global and Sectoral Aspects. 

Contribution of Working Group II to the Fifth 

Assessment Report of the Intergovernmental Panel 

on Climate Change [Field, C.B., V.R. Barros, D.J. 

Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. 

Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. 

Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R. 

Mastrandrea, and L.L. White (eds.)]. Cambridge 

University Press, Cambridge, United Kingdom and 

New York, NY, USA, pp. 709–754. 

200 IPCC, 2018: Global Warming of 1.5°C. An IPCC 

Special Report on the impacts of global warming of 

1.5°C above pre-industrial levels and related global 

greenhouse gas emission pathways, in the context 

of strengthening the global response to the threat of 

climate change, sustainable development, and 

efforts to eradicate poverty [Masson-Delmotte, V., P. 

Zhai, H.-O. Po ̈rtner, D. Roberts, J. Skea, P.R. Shukla, 

A. Pirani, W. Moufouma-Okia, C. Pe ́an, R. Pidcock, 

S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. 

Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. 

Waterfield (eds.)]. In Press. 

201National Research Council. 2011. America’s 

Climate Choices. Washington, DC: The National 

Academies Press. https://doi.org/10.17226/12781. 

202National Academies of Sciences, Engineering, 

and Medicine. 2017. Communities in Action: 

Executive Order 14008 (86 FR 7619, 

February 1, 2021) also calls on Agencies 

to make achieving environmental justice 

part of their missions ‘‘by developing 

programs, policies, and activities to 

address the disproportionately high and 

adverse human health, environmental, 

climate-related and other cumulative 

impacts on disadvantaged communities, 

as well as the accompanying economic 

challenges of such impacts.’’ It also 

declares a policy ‘‘to secure 

environmental justice and spur 

economic opportunity for disadvantaged 

communities that have been historically 

marginalized and overburdened by 

pollution and under-investment in 

housing, transportation, water and 

wastewater infrastructure and health 

care.’’ Under Executive Order 13563 (76 

FR 3821), federal agencies may consider 

equity, human dignity, fairness, and 

distributional considerations, where 

appropriate and permitted by law. 

EPA’s 2016 ‘‘Technical Guidance for 

Assessing Environmental Justice in 

Regulatory Analysis’’ provides 

recommendations on conducting the 

highest quality analysis feasible, 

recognizing that data limitations, time 

and resource constraints, and analytic 

challenges will vary by media and 

regulatory context.194

When assessing the potential for 

disproportionately high and adverse 

health or environmental impacts of 

regulatory actions on minority 

populations, low-income populations, 

tribes, and/or indigenous peoples, EPA 

strives to answer three broad questions: 

(1) Is there evidence of potential EJ 

concerns in the baseline (the state of the 

world absent the regulatory action)? 

Assessing the baseline will allow EPA to 

determine whether pre-existing 

disparities are associated with the 

pollutant(s) under consideration (e.g., if 

the effects of the pollutant(s) are more 

concentrated in some population 

groups). (2) Is there evidence of 

potential EJ concerns for the regulatory 

option(s) under consideration? 

Specifically, how are the pollutant(s) 

and its effects distributed for the 

regulatory options under consideration? 

And, (3) Do the regulatory option(s) 

under consideration exacerbate or 

mitigate EJ concerns relative to the 

baseline? It is not always possible to 

quantitatively assess these questions. 

EPA’s 2016 Technical Guidance does 

not prescribe or recommend a specific 

approach or methodology for 

conducting an environmental justice 

analysis, though a key consideration is 

consistency with the assumptions 

underlying other parts of the regulatory 

analysis when evaluating the baseline 

and regulatory options. Where 

applicable and practicable, the Agency 

endeavors to conduct such an analysis. 

Going forward, EPA is committed to 

conducting environmental justice 

analysis for rulemakings based on a 

framework similar to what is outlined in 

EPA’s Technical Guidance, in addition 

to investigating ways to further weave 

environmental justice into the fabric of 

the rulemaking process. EPA greatly 

values input from EJ stakeholders and 

communities and looks forward to 

engagement as we consider the impacts 

of light-duty vehicle emissions. 

1. GHG Impacts 

In 2009, under the Endangerment and 

Cause or Contribute Findings for 

Greenhouse Gases Under Section 202(a) 

of the Clean Air Act (‘‘Endangerment 

Finding’’), the Administrator considered 

how climate change threatens the health 

and welfare of the U.S. population. As 

part of that consideration, she also 

considered risks to minority and lowincome individuals and communities, 

finding that certain parts of the U.S. 

population may be especially vulnerable 

based on their characteristics or 

circumstances. These groups include 

economically and socially 

disadvantaged communities; 

individuals at vulnerable lifestages, 

such as the elderly, the very young, and 

pregnant or nursing women; those 

already in poor health or with 

comorbidities; the disabled; those 

experiencing homelessness, mental 

illness, or substance abuse; and/or 

Indigenous or minority populations 

dependent on one or limited resources 

for subsistence due to factors including 

but not limited to geography, access, 

and mobility. 

Scientific assessment reports 

produced over the past decade by the 

U.S. Global Change Research Program 

(USGCRP),195 196 the Intergovernmental 

Panel on Climate Change 

(IPCC),197 198 199 200 and the National 

Academies of Science, Engineering, and 

Medicine 201 202 add more evidence that 


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Pathways to Health Equity. Washington, DC: The 

National Academies Press. https://doi.org/ 

10.17226/24624. 203USGCRP, 2016: The Impacts of Climate 

Change on Human Health in the United States: A 

Scientific Assessment. 204Ebi, K.L., J.M. Balbus, G. Luber, A. Bole, A. 

Crimmins, G. Glass, S. Saha, M.M. Shimamoto, J. 

Trtanj, and J.L. White-Newsome, 2018: Human 

Health. In Impacts, Risks, and Adaptation in the 

United States: Fourth National Climate Assessment, 

Volume II [Reidmiller, D.R., C.W. Avery, D.R. 

Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. 

Maycock, and B.C. Stewart (eds.)]. U.S. Global 

Change Research Program, Washington, DC, USA, 

pp. 539–571. doi: 10.7930/NCA4.2018.CH14. 

205Porter et al., 2014: Food security and food 

production systems. 

206 Jantarasami, L.C., R. Novak, R. Delgado, E. 

Marino, S. McNeeley, C. Narducci, J. RaymondYakoubian, L. Singletary, and K. Powys Whyte, 

2018: Tribes and Indigenous Peoples. In Impacts, 

Continued 

the impacts of climate change raise 

potential environmental justice 

concerns. These reports conclude that 

poorer or predominantly non-White 

communities can be especially 

vulnerable to climate change impacts 

because they tend to have limited 

adaptive capacities and are more 

dependent on climate-sensitive 

resources such as local water and food 

supplies, or have less access to social 

and information resources. Some 

communities of color, specifically 

populations defined jointly by ethnic/ 

racial characteristics and geographic 

location, may be uniquely vulnerable to 

climate change health impacts in the 

United States. In particular, the 2016 

scientific assessment on the Impacts of 

Climate Change on Human Health 203

found with high confidence that 

vulnerabilities are place- and timespecific, lifestages and ages are linked to 

immediate and future health impacts, 

and social determinants of health are 

linked to greater extent and severity of 

climate change-related health impacts. 

i. Effects on Specific Populations of 

Concern 

Individuals living in socially and 

economically disadvantaged 

communities, such as those living at or 

below the poverty line or who are 

experiencing homelessness or social 

isolation, are at greater risk of health 

effects from climate change. This is also 

true with respect to people at vulnerable 

lifestages, specifically women who are 

pre- and perinatal, or are nursing; in 

utero fetuses; children at all stages of 

development; and the elderly. Per the 

Fourth National Climate Assessment, 

‘‘Climate change affects human health 

by altering exposures to heat waves, 

floods, droughts, and other extreme 

events; vector-, food- and waterborne 

infectious diseases; changes in the 

quality and safety of air, food, and 

water; and stresses to mental health and 

well-being.’’ 204 Many health conditions 

such as cardiopulmonary or respiratory 

illness and other health impacts are 

associated with and exacerbated by an 

increase in GHGs and climate change 

outcomes, which is problematic as these 

diseases occur at higher rates within 

vulnerable communities. Importantly, 

negative public health outcomes include 

those that are physical in nature, as well 

as mental, emotional, social, and 

economic. 

To this end, the scientific assessment 

literature, including the aforementioned 

reports, demonstrates that there are 

myriad ways in which these 

populations may be affected at the 

individual and community levels. 

Individuals face differential exposure to 

criteria pollutants, in part due to the 

proximities of highways, trains, 

factories, and other major sources of 

pollutant-emitting sources to lessaffluent residential areas. Outdoor 

workers, such as construction or utility 

crews and agricultural laborers, who 

frequently are comprised of already atrisk groups, are exposed to poor air 

quality and extreme temperatures 

without relief. Furthermore, individuals 

within EJ populations of concern face 

greater housing and clean water 

insecurity and bear disproportionate 

economic impacts and health burdens 

associated with climate change effects. 

They have less or limited access to 

healthcare and affordable, adequate 

health or homeowner insurance. 

Finally, resiliency and adaptation are 

more difficult for economically 

disadvantaged communities: They have 

less liquidity, individually and 

collectively, to move or to make the 

types of infrastructure or policy changes 

to limit or reduce the hazards they face. 

They frequently are less able to selfadvocate for resources that would 

otherwise aid in resiliency and hazard 

reduction and mitigation. 

The assessment literature cited in 

EPA’s 2009 and 2016 Endangerment 

Findings, as well as Impacts of Climate 

Change on Human Health, also 

concluded that certain populations and 

life stages, including children, are most 

vulnerable to climate-related health 

effects. The assessment literature 

produced from 2016 to the present 

strengthens these conclusions by 

providing more detailed findings 

regarding related vulnerabilities and the 

projected impacts youth may 

experience. These assessments— 

including the Fourth National Climate 

Assessment (2018) and The Impacts of 

Climate Change on Human Health in 

the United States (2016)—describe how 

children’s unique physiological and 

developmental factors contribute to 

making them particularly vulnerable to 

climate change. Impacts to children are 

expected from heat waves, air pollution, 

infectious and waterborne illnesses, and 

mental health effects resulting from 

extreme weather events. In addition, 

children are among those especially 

susceptible to allergens, as well as 

health effects associated with heat 

waves, storms, and floods. Additional 

health concerns may arise in lowincome households, especially those 

with children, if climate change reduces 

food availability and increases prices, 

leading to food insecurity within 

households. 

The Impacts of Climate Change on 

Human Health 203 also found that some 

communities of color, low-income 

groups, people with limited English 

proficiency, and certain immigrant 

groups (especially those who are 

undocumented) live with many of the 

factors that contribute to their 

vulnerability to the health impacts of 

climate change. While difficult to isolate 

from related socioeconomic factors, race 

appears to be an important factor in 

vulnerability to climate-related stress, 

with elevated risks for mortality from 

high temperatures reported for Black or 

African American individuals compared 

to White individuals after controlling 

for factors such as air conditioning use. 

Moreover, people of color are 

disproportionately exposed to air 

pollution based on where they live, and 

disproportionately vulnerable due to 

higher baseline prevalence of 

underlying diseases such as asthma, so 

climate exacerbations of air pollution 

are expected to have disproportionate 

effects on these communities. 

Native American Tribal communities 

possess unique vulnerabilities to 

climate change, particularly those 

impacted by degradation of natural and 

cultural resources within established 

reservation boundaries and threats to 

traditional subsistence lifestyles. Tribal 

communities whose health, economic 

well-being, and cultural traditions 

depend upon the natural environment 

will likely be affected by the 

degradation of ecosystem goods and 

services associated with climate change. 

The IPCC indicates that losses of 

customs and historical knowledge may 

cause communities to be less resilient or 

adaptable.205 The Fourth National 

Climate Assessment (2018) noted that 

while Indigenous peoples are diverse 

and will be impacted by the climate 

changes universal to all Americans, 

there are several ways in which climate 

change uniquely threatens Indigenous 

peoples’ livelihoods and economies.206


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Risks, and Adaptation in the United States: Fourth 

National Climate Assessment, Volume II 

[Reidmiller, D.R., C.W. Avery, D.R. Easterling, K.E. 

Kunkel, K.L.M. Lewis, T.K. Maycock, and B.C. 

Stewart (eds.)]. U.S. Global Change Research 

Program, Washington, DC, USA, pp. 572–603. doi: 

10.7930/NCA4.2018.CH15. 

207Porter et al., 2014: Food security and food 

production systems. 

209Mohai, P.; Pellow, D.; Roberts Timmons, J. 

(2009) Environmental justice. Annual Reviews 34: 

405–430. https://doi.org/10.1146/annurev-environ082508-094348. 

210Rowangould, G.M. (2013) A census of the 

near-roadway population: public health and 

environmental justice considerations. Trans Res D 

25: 59–67. http://dx.doi.org/10.1016/ 

j.trd.2013.08.003. 

211Marshall, J.D., Swor, K.R.; Nguyen, N.P (2014) 

Prioritizing environmental justice and equality: 

diesel emissions in Southern California. Environ 

Sci Technol 48: 4063–4068. https://doi.org/10.1021/ 

es405167f. 

212Marshall, J.D. (2000) Environmental 

inequality: air pollution exposures in California’s 

South Coast Air Basin. Atmos Environ 21: 5499– 

5503. https://doi.org/10.1016/ 

j.atmosenv.2008.02.005. 

213C.W. Tessum, D.A. Paolella, S.E. Chambliss, 

J.S. Apte, J.D. Hill, J.D. Marshall, PM2.5 polluters 

disproportionately and systemically affect people of 

color in the United States. Sci. Adv. 7, eabf4491 

(2021). 

214See 80 FR 64662, 64915–64916 (October 23, 

2015). 

215U.S. EPA (2014). Risk and Technology 

Review—Analysis of Socio-Economic Factors for 

Populations Living Near Petroleum Refineries. 

Office of Air Quality Planning and Standards, 

Research Triangle Park, North Carolina. January. 

216Tian, N.; Xue, J.; Barzyk. T.M. (2013) 

Evaluating socioeconomic and racial differences in 

traffic-related metrics in the United States using a 

GIS approach. J Exposure Sci Environ Epidemiol 

23: 215–222. 

217Boehmer, T.K.; Foster, S.L.; Henry, J.R.; 

Woghiren-Akinnifesi, E.L.; Yip, F.Y. (2013) 

Residential proximity to major highways—United 

States, 2010. Morbidity and Mortality Weekly 

Report 62(3): 46–50. 

In addition, there can institutional 

barriers to their management of water, 

land, and other natural resources that 

could impede adaptive measures. 

For example, Indigenous agriculture 

in the Southwest is already being 

adversely affected by changing patterns 

of flooding, drought, dust storms, and 

rising temperatures leading to increased 

soil erosion, irrigation water demand, 

and decreased crop quality and herd 

sizes. The Confederated Tribes of the 

Umatilla Indian Reservation in the 

Northwest have identified climate risks 

to salmon, elk, deer, roots, and 

huckleberry habitat. Housing and 

sanitary water supply infrastructure are 

vulnerable to disruption from extreme 

precipitation events. 

NCA4 noted that Indigenous peoples 

often have disproportionately higher 

rates of asthma, cardiovascular disease, 

Alzheimer’s, diabetes, and obesity, 

which can all contribute to increased 

vulnerability to climate-driven extreme 

heat and air pollution events. These 

factors also may be exacerbated by 

stressful situations, such as extreme 

weather events, wildfires, and other 

circumstances. 

NCA4 and IPCC AR5 207 also 

highlighted several impacts specific to 

Alaskan Indigenous Peoples. Coastal 

erosion and permafrost thaw will lead to 

more coastal erosion, exacerbated risks 

of winter travel, and damage to 

buildings, roads, and other 

infrastructure—these impacts on 

archaeological sites, structures, and 

objects that will lead to a loss of cultural 

heritage for Alaska’s Indigenous people. 

In terms of food security, the NCA 

discussed reductions in suitable ice 

conditions for hunting, warmer 

temperatures impairing the use of 

traditional ice cellars for food storage, 

and declining shellfish populations due 

to warming and acidification. While the 

NCA also noted that climate change 

provided more opportunity to hunt from 

boats later in the fall season or earlier 

in the spring, the assessment found that 

the net impact was an overall decrease 

in food security. 

2. Non-GHG Impacts 

In addition to significant climate 

change benefits, the proposed standards 

would also impact non-GHG emissions. 

In general, we expect small non-GHG 

emissions reductions from the 

combination of ‘‘upstream’’ emissions 

sources related to extracting, refining, 

transporting, and storing petroleum 

fuels. We also expect small increases in 

emissions from upstream electricity 

generating units (EGUs). A possible 

increase in emissions from coal- and 

NG-fired electricity generation to meet 

increased EV electricity demand could 

result in adverse EJ impacts. For on-road 

light duty vehicles, the proposed 

standards would reduce total non-GHG 

emissions, though we expect small 

increases in some non-GHG emissions 

in the years immediately following 

implementation of the proposal, 

followed by growing decreases in 

emissions in later years. This is due to 

our assumptions about increased 

‘‘rebound’’ driving. See Table 44 for 

more detail on the estimated non-GHG 

emissions impacts of the proposal.208 As 

discussed in Section I.A.3 of the 

Executive Summary, future EPA 

regulatory actions that would result in 

increased zero-emission vehicles and 

cleaner energy generation would more 

significantly change the non-GHG 

impacts of transportation and electricity 

generation, and those impacts will be 

analyzed in more detail in those future 

actions. 

There is evidence that communities 

with EJ concerns are disproportionately 

impacted by the non-GHG emissions 

associated with this proposal.209

Numerous studies have found that 

environmental hazards such as air 

pollution are more prevalent in areas 

where minority populations and lowincome populations represent a higher 

fraction of the population compared 

with the general population.210 211 212

Consistent with this evidence, a recent 

study found that most anthropogenic 

sources of PM2.5, including industrial 

sources, and light- and heavy-duty 

vehicle sources, disproportionately 

affect people of color.213

Analyses of communities in close 

proximity to upstream sources, such as 

EGUs, have found that a higher 

percentage of communities of color and 

low-income communities live near these 

sources when compared to national 

averages.214 Vulnerable populations 

near upstream refineries may experience 

potential disparities in pollution-related 

health risk from that source.215 We 

expect that small increases in non-GHG 

emissions from EGUs and small 

reductions in petroleum-sector 

emissions would lead to small changes 

in exposure to these non-GHG 

pollutants for people living in the 

communities near these facilities. 

There is also substantial evidence that 

people who live or attend school near 

major roadways are more likely to be of 

a racial minority, Hispanic ethnicity, 

and/or low socioeconomic status.216 217

We would expect that communities near 

roads will benefit from reductions of 

non-GHG pollutants as fuel efficiency 

improves and the use of zero-emission 

vehicles (such as full battery electric 

vehicles) increases, though increased 

rebound driving may offset some of 

these emission reductions, especially in 

the years immediately after finalization 

of the proposed standards. 

Although proximity to an emissions 

source is a useful indicator of potential 

exposure, it is important to note that the 

impacts of emissions from both 

upstream and tailpipe sources are not 

limited to communities in close 

proximity to these sources. The effects 

of potential increases and decreases in 

emissions from the sources affected by 

this proposal might also be felt many 

miles away, including in communities 

with EJ concerns. The spatial extent of 

these impacts from upstream and 

tailpipe sources depend on a range of 

interacting and complex factors 

including the amount of pollutant 

emitted, atmospheric chemistry and 

meteorology. 


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218Cassidy, A., G. Burmeister, and G. Helfand. 

‘‘Impacts of the Model Year 2017–2025 Light-Duty 

Vehicle Greenhouse Gas Emission Standards on 

Vehicle Affordability.’’ Working paper. 

219U.S. Environmental Protection Agency (2016). 

Proposed Determination on the Appropriateness of 

the Model Year 2022–2025 Light-Duty Vehicle 

Greenhouse Gas Emissions Standards under the 

Midterm Evaluation, Chapter 4.3.3. EPA–420–R– 

16–020. https://nepis.epa.gov/Exe/ 

ZyPDF.cgi? Dockey=P100Q3DO.pdf, accessed 4/26/ 

2021. 

220 Vaidyanathan, S., P. Huether, and B. 

Jennings (2021). ‘‘Understanding Transportation 

Energy Burdens.’’ Washington, DC: American 

Council for an Energy-Efficient White Paper. 

https://www.aceee.org/white-paper/2021-05/ 

understanding-transportation-energy-burdens, 

accessed 5/24/2021. 

221 Gruenspecht, H. (1982). ‘‘Differentiated 

Regulation: The Case of Auto Emissions 

Standards.’’ American Economic Review 72: 328– 

331. 

In summary, we expect this proposed 

rule would result in both small 

reductions and small increases of nonGHG emissions. These effects could 

potentially impact communities with EJ 

concerns, though not necessarily 

immediately and not equally in all 

locations. For this proposal, the air 

quality information needed to perform a 

quantified analysis of the distribution of 

such impacts was not available. We 

therefore recommend caution when 

interpreting these broad, qualitative 

observations. We note that EPA intends 

to develop a future rule to control 

emissions of GHGs as well as criteria 

and air toxic pollutants from light-duty 

vehicles for model years beyond 2026. 

We are considering how to project air 

quality impacts from the changes in 

non-GHG emissions for that future 

rulemaking (see Section V.C). EPA is 

also seeking comment on how to 

conduct an EJ analysis of the non-GHG 

impacts associated with mobile source 

rulemakings, including how EV 

penetration in the future fleet would 

affect these impacts. 

M. Affordability and Equity Impacts 

The impacts of the proposed 

standards on social equity depend in 

part on their effects on the affordability 

of vehicles and transportation services, 

especially for lower-income households. 

Access to transportation improves the 

ability of people, including those with 

low income, to pursue jobs, education, 

health care, and necessities of daily life 

such as food and housing. This section 

discusses how these standards might 

affect affordability of vehicles. We 

acknowledge that vehicles, especially 

household ownership of vehicles, are 

only a portion of the larger issues 

concerning access to transportation and 

mobility services, which also takes into 

consideration public transportation and 

land use design. Though these issues are 

inextricably linked, the following 

discussion focuses on effects related to 

private vehicle ownership and use. We 

also acknowledge that the emissions of 

vehicles, both local pollutants and 

GHGs, can have disproportionate 

impacts on lower-income and minority 

communities; see Preamble Section I.E 

for further discussion of these topics. 

Finally, we note that social equity 

involves issues beyond income and 

affordability, including race, ethnicity, 

gender, gender identification, and 

residential location; EPA will continue 

to examine such impacts and seeks 

comment on the impact of this proposal 

on additional dimensions of equity. 

Affordability is not a well-defined 

concept in academic literature. As 

discussed in Cassidy et al. (2016),218

researchers have generally applied the 

term to necessities such as food, 

housing, or energy, and have identified 

some themes related to: 

Instead of focusing on the traditional 

economic concept of willingness to pay, any 

consideration of affordability must also 

consider the ability to pay for a socially 

defined minimum level of a good, especially 

of a necessity. 

Although the ability to pay is often based 

on the proportion of income devoted to 

expenditures on a particular good, this ratio 

approach is widely criticized for not 

considering expenditures on other possibly 

necessary goods, quality differences in the 

good, and heterogeneity of consumer 

preferences for the good. 

Assessing affordability should take into 

account both the short-term costs and longterm costs associated with consumption of a 

particular good. 

As noted in Cassidy et al. (2016), 

there is very little literature applying the 

concept of affordability to 

transportation, much less to vehicle 

ownership. It is not clear how to 

identify a socially acceptable minimum 

level of transportation service. However, 

it seems reasonable that some minimum 

level of transportation services is 

necessary to enable households access 

to employment, education, and basic 

services such as buying food. It also 

seems reasonable to assume that 

transportation requirements vary 

substantially across populations and 

geographic locations, and it is not clear 

when consumption of transportation 

moves from being a necessity to 

optional. Normatively defining the 

minimum adequate level of 

transportation consumption is difficult 

given the heterogeneity of consumer 

preferences and living situations. As a 

result, it is challenging to define how 

much residual income should remain 

with each household after 

transportation expenditures. It is 

therefore not surprising that academic 

and policy literature have largely 

avoided attempting to define 

transportation affordability. 

We are following the approach in the 

2016 EPA Proposed Determination for 

the Midterm Evaluation 219 of 

considering four questions that relate to 

the effects of the LDV GHG standards on 

new vehicle affordability: How the 

standards affect lower-income 

households; how the standards affect 

the used vehicle market; how the 

standards affect access to credit; and 

how the standards affect the low-priced 

vehicle segment. See DRIA Chapter 8.3 

for further detail. 

The effects of the standards on lowerincome households depend on the 

responses not just to up-front costs but 

also to the reduction in fuel and 

operating costs associated with the 

standards. These responses will affect 

not only the sales of new vehicles, as 

discussed in Sections 0 and VII.B, but 

also the prices of used vehicles as well 

as the costs associated with ride-hailing 

and ride-sharing services. A recent 

study notes that lower-income 

households spend more on gasoline as 

a proportion of their income than 

higher-income households.220 In 

addition, the Proposed Determination, 

Appendix B.1.6, observed that lowerincome households spend more on 

gasoline than on either new or used 

vehicles, and more on used vehicles 

than new ones, suggesting the 

importance of operating costs for these 

households. If the per-mile costs of 

services such as ride hailing and ride 

sharing decrease to reflect lower 

operating costs, those who do not own 

vehicles may benefit. 

If sales of new vehicles decrease, then 

prices of used vehicles, which are 

disproportionately purchased by lowerincome households, would be expected 

to increase; the reverse would happen if 

new vehicle sales increase. These effects 

in the used vehicle market also affect 

how long people hold onto their used 

vehicles. This effect, sometimes termed 

the ‘‘Gruenspecht effect’’ after 

Gruenspecht (1982),221 would lead to 

both slower adoption of vehicles subject 

to the new standards, and more use of 

older vehicles not subject to the new 

standards, with associated higher 

emissions, if new vehicle sales decrease. 

The Gruenspecht effect, therefore, may 

have the additional consequence of 

increased concentrations of older 

vehicles in some communities in the 

short term, and may delay benefits 

associated with advanced vehicle 

technologies for those communities. As 

discussed in Section VII.B, new vehicle 


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222Helfand, Gloria (2021). ‘‘Memorandum: 

Lending Institutions that Provide Discounts for 

more Fuel Efficient Vehicles.’’ U.S. EPA Office of 

Transportation and Air Quality, Memorandum to 

the Docket. 

223U.S. Department of Energy and U.S. 

Environmental Protection Agency. ‘‘Federal Tax 

Credits for New All-Electric and Plug-in Hybrid 

Vehicles.’’ https://www.fueleconomy.gov/feg/ 

taxevb.shtml, accessed 4/28/2021. 

224See Note 219, Chapter 4.3.3.4. 

225Austin, D., and T. Dinan (2005). ‘‘Clearing the 

Air: The Costs and Consequences of Higher CAFE 

Standards and Increased Gasoline.’’ Journal of 

Environmental Economics and Management 50(3): 

562–82; Kleit, A. (2004). ‘‘Impacts of Long-Range 

Increases in the Fuel Economy (CAFE) Standard.’’ 

Economic Inquiry 42(2): 279–294. 

226Motortrend (2021). ‘‘These Are the 10 

Cheapest Cars You Can Buy in 2021.’’ https://

www.motortrend.com/features-collections/top-10- 

cheapest-new-cars/, accessed 4/28/2021; Chevrolet 

Spark, https://www.chevrolet.com/cars/spark, 

accessed 5/27/2021. 

227See Note 218. 

sales are projected to show a roughly 2 

percent decrease from sales under the 

SAFE rule; that value depends on the 

uncertain assumption that vehicle 

buyers consider just a small share of 

future fuel consumption in the purchase 

decision. EPA is working with RTI 

International to understand better the 

connections between the new and the 

used vehicle market. Changes in the 

new vehicle market are expected not 

only to have immediate effects on the 

prices of used vehicles, but also to affect 

the market over time, as the supply of 

used vehicles in the future depends on 

how many new vehicles are sold. 

Access to credit is a potential barrier 

to purchase of vehicles whose up-front 

costs have increased; access may also be 

affected by race, ethnicity, gender, 

gender identity, residential location, 

religion, or other factors. If lenders are 

not willing to provide financing for 

buyers who face higher prices, perhaps 

because the potential buyers are hitting 

a maximum on the debt-to-income ratio 

(DTI) that lenders are willing to accept, 

then those buyers may not be able to 

purchase new vehicles. On the other 

hand, some lenders give discounts on 

loans to purchase more fuel-efficient 

vehicles.222 Subsidies exist from the 

federal government, and some state 

governments, for plug-in electric 

vehicles.223 In addition, as documented 

in the Midterm Evaluation,224 the DTI 

does not appear to be a fixed obstacle 

for access to finance; from 2007 to 2015, 

28 percent of lower-income households 

and 7 percent of higher-income 

households who both had a DTI of over 

36 percent and purchased at least one 

new vehicle financed their vehicle 

purchases. 

Low-priced vehicles may be 

considered an entry point for people 

into buying new vehicles instead of 

used ones; automakers may seek to 

entice people to buy new vehicles 

through a low price point. It is possible 

that higher costs associated with 

proposed standards could affect the 

ability of automakers to maintain 

vehicles in this value segment. At the 

same time, this segment historically 

tended to include more fuel-efficient 

vehicles that assisted automakers in 

achieving CAFE standards.225 The 

footprint-based standards, by 

encouraging improvements in GHG 

emissions and fuel economy across the 

vehicle fleet, reduce the need for lowpriced vehicles to be a primary means 

of compliance with the standards. This 

change in incentives for the marketing 

of this segment may contribute to the 

increases in the prices of vehicles 

previously in this category. Low-priced 

vehicles still exist; the Chevrolet Spark, 

for example, is listed as starting at 

$13,400.226 At the same time, this 

segment is gaining more content, such 

as improved entertainment systems and 

electric windows; they may be 

developing an identity as a desirable 

market segment without regard to their 

previous purpose in enabling the sales 

of less efficient vehicles and compliance 

with CAFE standards.227 Whether this 

segment continues to exist, and in what 

form, may depend on the marketing 

plans of manufacturers: Whether 

benefits are greater from offering basic 

new vehicles to first-time new-vehicle 

buyers, or from making small vehicles 

more attractive by adding more 

desirable features to them. 

New electric vehicles currently have 

higher up-front costs and lower 

operating costs than gasoline vehicles 

and require access to charging 

infrastructure that may not be readily 

available to many. This proposal does 

not project major penetration of electric 

vehicles in response to the proposed 

standards, from 3.6 percent in MY 2023 

to 7.8 percent in MY 2026 (see Table 

42). EPA will monitor and study 

affordability issues related to electric 

vehicles as their prevalence in the 

vehicle fleet increases. 

In sum, as with the effects of the 

proposed standards on vehicle sales 

discussed in Section VII.B, the effects of 

the standards on affordability depend 

on two countervailing effects: The 

increase in the up-front costs of the 

vehicles, and the decrease in operating 

costs. The increase in up-front costs has 

the potential to increase the prices of 

used vehicles, to make credit more 

difficult to obtain, and to make the least 

expensive new vehicles less desirable 

compared to used vehicles. The 

reduction in operating costs has the 

potential to mitigate or reverse all these 

effects. Lower operating costs on their 

own increase mobility (see DRIA 

Chapter 3.1 for a discussion of rebound 

driving). It is possible that lower-income 

households may benefit more from the 

reduction in operating costs than the 

increase in up-front costs, because they 

own fewer vehicles per household, 

spend more on fuel than on vehicles on 

an annual basis, and those fuel 

expenditures represent a higher fraction 

of their household income. 

See DRIA Chapter 8.3 for more 

detailed discussion of these issues. 

VIII. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: ‘‘Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review’’ 

This action is an economically 

significant regulatory action that was 

submitted to the Office of Management 

and Budget (OMB) for review. Any 

changes made in response to OMB 

recommendations have been 

documented in the docket. EPA 

prepared an analysis of the potential 

costs and benefits associated with this 

action. This analysis is in the Draft 

Regulatory Impact Analysis, which can 

be found in the docket for this rule, and 

is briefly summarized in Section VII of 

this preamble. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden under the 

PRA. OMB has previously approved the 

information collection activities 

contained in the existing regulations 

and has assigned OMB control number 

2127–0019. This proposed rule changes 

the level of the existing emission 

standards and revises several existing 

credit provisions, but imposes no new 

information collection requirements. 

C. Regulatory Flexibility Act 

I certify that this action will not have 

a significant economic impact on a 

substantial number of small entities 

under the RFA. This action will not 

impose any requirements on small 

entities. EPA’s existing regulations 

exempt from the GHG standards any 

manufacturer, domestic or foreign, 

meeting Small Business 

Administration’s size definitions of 

small business in 13 CFR 121.201. EPA 

is not proposing any changes to the 

provisions for small businesses under 

this proposal, and thus they would 


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remain exempt. For additional 

discussion see chapter 9 of the DRIA. 

D. Unfunded Mandates Reform Act 

This proposed rule contains no 

federal mandates under UMRA, 2 U.S.C. 

1531–1538, for State, local, or tribal 

governments. The proposed rule would 

impose no enforceable duty on any 

State, local or tribal government. This 

proposed rule would contain a federal 

mandate under UMRA that may result 

in expenditures of $100 million or more 

for the private sector in any one year. 

Accordingly, the costs and benefits 

associated with the proposed rule are 

discussed in Section VII and in the 

DRIA, which are in the docket for this 

rule. 

This action is not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. 

E. Executive Order 13132: ‘‘Federalism’’ 

This action does not have federalism 

implications. It will not have substantial 

direct effects on the states, on the 

relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

F. Executive Order 13175: ‘‘Consultation 

and Coordination With Indian Tribal 

Governments’’ 

This action does not have tribal 

implications as specified in Executive 

Order 13175. Thus, Executive Order 

13175 does not apply to this action. 

However, EPA plans to continue 

engaging with our tribal stakeholders in 

the development of this rulemaking by 

offering a tribal workshop and offering 

government-to-government consultation 

upon request. 

G. Executive Order 13045: ‘‘Protection 

of Children From Environmental Health 

Risks and Safety Risks’’ 

With respect to GHG emissions, EPA 

has determined that this rule will not 

have disproportionate impacts on 

children (62 FR 19885, April 23, 1997). 

This rule will reduce emissions of 

potent GHGs, which as noted earlier in 

Section I.E of this preamble, will reduce 

the effects of climate change, including 

the public health and welfare effects on 

children. 

GHGs contribute to climate change 

and the GHG emissions reductions 

resulting from implementation of this 

proposal would further improve 

children’s health. The assessment 

literature cited in EPA’s 2009 and 2016 

Endangerment Findings concluded that 

certain populations and life stages, 

including children, the elderly, and the 

poor, are most vulnerable to climaterelated health effects. The assessment 

literature since 2016 strengthens these 

conclusions by providing more detailed 

findings regarding these groups’ 

vulnerabilities and the projected 

impacts they may experience. These 

assessments describe how children’s 

unique physiological and 

developmental factors contribute to 

making them particularly vulnerable to 

climate change. Impacts to children are 

expected from heat waves, air pollution, 

infectious and waterborne illnesses, and 

mental health effects resulting from 

extreme weather events. In addition, 

children are among those especially 

susceptible to most allergic diseases, as 

well as health effects associated with 

heat waves, storms, and floods. 

Additional health concerns may arise in 

low-income households, especially 

those with children, if climate change 

reduces food availability and increases 

prices, leading to food insecurity within 

households. More detailed information 

on the impacts of climate change to 

human health and welfare is provided 

in Section IV.B of this preamble. 

We expect this proposed rule would, 

on net, result in both small reductions 

and small increases in non-GHG 

emissions that could impact children, 

though not necessarily immediately and 

not equally in all locations. However, 

with respect to non-GHG emissions, 

EPA has concluded that it is not 

practicable to determine whether there 

would be disproportionate impacts on 

children. EPA intends to develop 

another rule to further reduce emissions 

of GHGs from light-duty vehicles for 

model years beyond 2026. We are 

considering how to project air quality 

and health impacts from the changes in 

non-GHG emissions for that future 

rulemaking (see Section V.C). 

H. Executive Order 13211: ‘‘Energy 

Effects’’ 

This action is not a ‘‘significant 

energy action’’ because it is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy. 

EPA has outlined the energy effects in 

Table 5–7 of the Regulatory Impact 

Analysis (RIA), which is available in the 

docket for this action and is briefly 

summarized here. 

This action proposes to reduce CO2 

for passenger cars and light trucks under 

revised GHG standards, which will 

result in significant reductions of the 

consumption of petroleum, will achieve 

energy security benefits, and have no 

adverse energy effects. Because the GHG 

emission standards result in significant 

fuel savings, this rule encourages more 

efficient use of fuels. Table 5–7 in the 

RIA shows 291 million barrels of 

gasoline per year will be saved in 2050, 

which can be summarized as a net 

reduction of 797,260 barrels of gasoline 

per day in 2050. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the NTTAA, 15 

U.S.C. 272 note, directs federal agencies 

to use voluntary consensus standards 

(VCSs) in their regulatory activities 

unless to do so would be ‘‘inconsistent 

with applicable law or otherwise 

impractical.’’ VCSs are technical 

standards, which include materials 

specifications, test methods, sampling 

protocols, business practices and 

management systems developed or 

adopted by voluntary consensus 

standards bodies (VCSBs), both 

domestic and international. These 

bodies plan, develop, establish or 

coordinate voluntary consensus 

standards using agreed-upon 

procedures. 

In addition, the statute encourages 

agencies to consult with VCSBs and 

participate in the development of such 

standards when compatible with agency 

missions, authorities, priorities and 

budget resources. The use of VCSs, 

whenever practicable and appropriate, 

is intended to achieve the following 

goals: 

• To eliminate the cost to the 

government of developing its own 

standards and decrease the cost of goods 

procured and the burden of complying 

with agency regulation; 

• To provide incentives and 

opportunities to establish standards that 

serve national needs; 

• To encourage long-term growth for 

U.S. enterprises and promote efficiency 

and economic competition through 

harmonization of standards; and 

• To further the policy of reliance 

upon the private sector to supply 

government needs for goods and 

services. 

The requirements apply to the use of 

VCSs in ‘‘regulatory and procurement 

activities.’’ Regulations that do not 

establish or involve technical standards 

do not trigger the NTTAA requirements, 

but it is recommended that agencies 

provide a brief explanation for why the 

NTTAA does not apply. 

Note that agencies retain broad 

discretion in deciding when to use 

VCSs; however, agencies are required to 

justify the use of government-unique 

standards when potentially applicable 

VCSs are available. The NTTAA also 

does not affect the agency’s authority to 

determine substantive standards as 


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opposed to technical standards (see 

guidance from the Office of 

Management and Budget (OMB) at 

http://www.whitehouse.gov/omb/ 

circulars_a119. 

This rulemaking involves technical 

standards. The Agency conducted a 

search to identify potentially applicable 

voluntary consensus standards. For CO2, 

emissions, we identified no such 

standards. For CO2 emissions, EPA is 

therefore collecting data over the same 

tests that are used for the current CO2

standards and for the CAFE program. 

This will minimize the amount of 

testing done by manufacturers, since 

manufacturers are already required to 

run these tests. For A/C credits, EPA is 

using the test specified in 40 CFR 

1066.845. EPA knows of no voluntary 

consensus standard for the A/C test. 

We are proposing to amend 40 CFR 

86.1 to reference SAE J1711, 

Recommended Practice for Measuring 

the Exhaust Emissions and Fuel 

Economy of Hybrid-Electric Vehicles, 

Including Plug-in Hybrid Vehicles, 

Revised June 2010. The regulation 

already has rulemaking provisions at 40 

CFR 86.1866–12(b) that include 

references to SAE J1711. We rely on the 

published procedure to describe test 

methods related to measuring exhaust 

emissions from hybrid-electric vehicles. 

The proposed amendment would 

complete the administrative steps 

needed to properly accomplish this 

incorporation by reference. The 

referenced recommended practice may 

be obtained from SAE International on 

the internet at www.sae.org, by email at 

CustomerService@sae.org, or by calling 

877–606–7323 or 724–776–4970. 

J. Executive Order 12898: ‘‘Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations’’ 

For this proposed action, EPA is only 

able to qualitatively evaluate the extent 

to which this action may result in 

disproportionately high and adverse 

human health or environmental effects 

on minority populations, low income 

populations, and/or indigenous peoples, 

as specified in Executive Order 12898 

(59 FR 7629, February 16, 1994). With 

respect to GHG emissions, EPA has 

determined that this rule will benefit all 

U.S. populations, including minority 

populations, low-income populations 

and/or indigenous peoples. While this 

proposed rule would substantially 

reduce GHG emissions, future impacts 

of climate change are still expected in 

the baseline and will likely be unevenly 

distributed in ways that uniquely 

impact these communities. EPA has not 

quantitatively assessed these effects. 

For non-GHG pollutants EPA has 

concluded that it is not practicable 

given the timing of this proposed action 

to determine the extent to which effects 

on minority populations, low-income 

populations and/or indigenous peoples 

are differentially distributed. We expect 

this proposed rule would result in both 

small reductions and small increases of 

non-GHG emissions that could impact 

communities with EJ concerns, though 

not necessarily immediately and not 

equally in all locations. It was not 

practicable to develop the air quality 

information needed to perform a 

quantified analysis of the distribution of 

such non-GHG impacts. EPA intends to 

develop a future rule to further reduce 

emissions of GHGs from light-duty 

vehicles for model years beyond 2026. 

We are considering how to project air 

quality impacts from the changes in 

non-GHG emissions for that future 

rulemaking (see Section V.C). EPA is 

taking comment on the types of effects 

that are important to consider from an 

EJ perspective as well as ways in which 

such effects could be quantitatively 

evaluated for future rulemakings. 

Section VII.L describes how we 

considered environmental justice in this 

action. 

IX. Statutory Provisions and Legal 

Authority 

Statutory authority for this proposed 

rule is found in section 202(a) (which 

authorizes standards for emissions of 

pollutants from new motor vehicles 

which emissions cause or contribute to 

air pollution which may reasonably be 

anticipated to endanger public health or 

welfare), 202(d), 203–209, 216, and 301 

of the Clean Air Act, 42 U.S.C. 7521(a), 

7521(d), 7522–7525, 7541–7543, 7550, 

and 7601. 

List of Subjects 

40 CFR Part 86 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Incorporation by reference, Labeling, 

Motor vehicle pollution, Reporting and 

recordkeeping requirements. 

40 CFR Part 600 

Environmental protection, 

Administrative practice and procedure, 

Electric power, Fuel economy, Labeling, 

Reporting and recordkeeping 

requirements. 

Michael S. Regan, 

Administrator. 

For the reasons set out in the 

preamble, we propose to amend title 40, 

chapter I of the Code of Federal 

Regulations as set forth below. 

PART 86—CONTROL OF EMISSIONS 

FROM NEW AND IN-USE HIGHWAY 

VEHICLES AND ENGINES 

■ 1. The authority citation for part 86 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

■ 2. Amend § 86.1 by redesignating 

paragraphs (g)(3) through (27) as (g)(4) 

through (28) and adding new paragraph 

(g)(3) to read as follows: 

§ 86.1 Incorporation by reference. 

* * * * * 

(g) * * * 

(3) SAE J1711, Recommended Practice 

for Measuring the Exhaust Emissions 

and Fuel Economy of Hybrid-Electric 

Vehicles, Including Plug-in Hybrid 

Vehicles, Revised June 2010, IBR 

approved for § 86.1866–12(b). 

* * * * * 

■ 3. Amend § 86.1806–17 by revising 

paragraph (a) introductory text to read 

as follows: 

§ 86.1806–17 Onboard diagnostics. 

* * * * * 

(a) Vehicles must comply with the 

2013 OBD requirements adopted for 

California as described in this paragraph 

(a). California’s 2013 OBD–II 

requirements are part of Title 13, 

§ 1968.2 of the California Code of 

Regulations, approved on July 31, 2013 

(incorporated by reference in § 86.1). We 

may approve your request to certify an 

OBD system meeting a later version of 

California’s OBD requirements if you 

demonstrate that it complies with the 

intent of this section. The following 

clarifications and exceptions apply for 

vehicles certified under this subpart: 

* * * * * 

■ 4. Amend § 86.1818–12 by revising 

paragraph (c)(2)(i) and (3)(i) to read as 

follows: 

§ 86.1818–12 Greenhouse gas emission 

standards for light-duty vehicles, light-duty 

trucks, and medium-duty passenger 

vehicles. 

* * * * * 

(c) * * * 

(2) * * * 

(i) Calculation of CO2 target values for 

passenger automobiles. A CO2 target 

value shall be determined for each 

passenger automobile as follows: 

(A) For passenger automobiles with a 

footprint of less than or equal to 41 

square feet, the gram/mile CO2 target 

value shall be selected for the 

appropriate model year from the 

following table: 


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TABLE 1 TO § 86.1818–12(c)(2)(i)(A) 

Model year 

CO2 target 

value 

(grams/mile) 

2012 ...................................... 244.0 

2013 ...................................... 237.0 

2014 ...................................... 228.0 

2015 ...................................... 217.0 

2016 ...................................... 206.0 

2017 ...................................... 195.0 

2018 ...................................... 185.0 

2019 ...................................... 175.0 

2020 ...................................... 166.0 

2021 ...................................... 161.8 

2022 ...................................... 159.0 

2023 ...................................... 145.6 

2024 ...................................... 138.6 

2025 ...................................... 131.9 

2026 and later ...................... 125.6 

(B) For passenger automobiles with a 

footprint of greater than 56 square feet, 

the gram/mile CO2 target value shall be 

selected for the appropriate model year 

from the following table: 

TABLE 2 TO § 86.1818–12(c)(2)(i)(B) 

Model year 

CO2 target 

value 

(grams/mile) 

2012 ...................................... 315.0 

2013 ...................................... 307.0 

2014 ...................................... 299.0 

2015 ...................................... 288.0 

2016 ...................................... 277.0 

2017 ...................................... 263.0 

2018 ...................................... 250.0 

2019 ...................................... 238.0 

2020 ...................................... 226.0 

2021 ...................................... 220.9 

2022 ...................................... 217.3 

2023 ...................................... 199.1 

2024 ...................................... 189.5 

2025 ...................................... 180.3 

2026 and later ...................... 171.6 

(C) For passenger automobiles with a 

footprint that is greater than 41 square 

feet and less than or equal to 56 square 

feet, the gram/mile CO2 target value 

shall be calculated using the following 

equation and rounded to the nearest 0.1 

grams/mile, except that for any vehicle 

footprint the maximum CO2 target value 

shall be the value specified for the same 

model year in paragraph (c)(2)(i)(B) of 

this section: 

Target CO2 = [a × f] + b 

Where: 

f is the vehicle footprint, as defined in 

§ 86.1803; and a and b are selected from 

the following table for the appropriate 

model year: 

TABLE 3 TO § 86.1818–12(c)(2)(i)(C) 

Model year a b 

2012 ...................... 4.72 50.5 

2013 ...................... 4.72 43.3 

2014 ...................... 4.72 34.8 

2015 ...................... 4.72 23.4 

2016 ...................... 4.72 12.7 

2017 ...................... 4.53 8.9 

2018 ...................... 4.35 6.5 

2019 ...................... 4.17 4.2 

2020 ...................... 4.01 1.9 

2021 ...................... 3.94 0.2 

2022 ...................... 3.88 ¥0.1 

2023 ...................... 3.56 ¥0.4 

2024 ...................... 3.39 ¥0.4 

2025 ...................... 3.23 ¥0.3 

2026 and later ...... 3.07 ¥0.3 

* * * * * 

(3) * * * 

(i) Calculation of CO2 target values for 

light trucks. A CO2 target value shall be 

determined for each light truck as 

follows: 

(A) For light trucks with a footprint of 

less than or equal to 41 square feet, the 

gram/mile CO2 target value shall be 

selected for the appropriate model year 

from the following table: 

TABLE 4 TO § 86.1818–12(c)(3)(i)(A) 

Model year 

CO2 target 

value 

(grams/mile) 

2012 ...................................... 294.0 

2013 ...................................... 284.0 

2014 ...................................... 275.0 

2015 ...................................... 261.0 

2016 ...................................... 247.0 

2017 ...................................... 238.0 

2018 ...................................... 227.0 

2019 ...................................... 220.0 

2020 ...................................... 212.0 

2021 ...................................... 206.5 

2022 ...................................... 203.0 

2023 ...................................... 181.1 

2024 ...................................... 172.1 

2025 ...................................... 163.5 

2026 and later ...................... 155.4 

(B) For light trucks with a footprint 

that is greater than 41 square feet and 

less than or equal to the maximum 

footprint value specified in the table 

below for each model year, the gram/ 

mile CO2 target value shall be calculated 

using the following equation and 

rounded to the nearest 0.1 grams/mile, 

except that for any vehicle footprint the 

maximum CO2 target value shall be the 

value specified for the same model year 

in paragraph (c)(3)(i)(D) of this section: 

Target CO2 = (a × f) + b 

Where: 

f is the footprint, as defined in § 86.1803; and 

a and b are selected from the following 

table for the appropriate model year: 

TABLE 5 TO § 86.1818–12(c)(3)(i)(B) 

Model year Maximum 

footprint a b 

2012 ............................................................................................................................................. 66.0 4.04 128.6 

2013 ............................................................................................................................................. 66.0 4.04 118.7 

2014 ............................................................................................................................................. 66.0 4.04 109.4 

2015 ............................................................................................................................................. 66.0 4.04 95.1 

2016 ............................................................................................................................................. 66.0 4.04 81.1 

2017 ............................................................................................................................................. 50.7 4.87 38.3 

2018 ............................................................................................................................................. 60.2 4.76 31.6 

2019 ............................................................................................................................................. 66.4 4.68 27.7 

2020 ............................................................................................................................................. 68.3 4.57 24.6 

2021 ............................................................................................................................................. 68.3 4.51 21.5 

2022 ............................................................................................................................................. 68.3 4.44 20.6 

2023 ............................................................................................................................................. 74.0 3.97 18.4 

2024 ............................................................................................................................................. 74.0 3.77 17.4 

2025 ............................................................................................................................................. 74.0 3.58 16.6 

2026 and later .............................................................................................................................. 74.0 3.41 15.8 

(C) For light trucks with a footprint 

that is greater than the minimum 

footprint value specified in the table 

below and less than or equal to the 

maximum footprint value specified in 

the table below for each model year, the 


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43808 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

gram/mile CO2 target value shall be 

calculated using the following equation 

and rounded to the nearest 0.1 grams/ 

mile, except that for any vehicle 

footprint the maximum CO2 target value 

shall be the value specified for the same 

model year in paragraph (c)(3)(i)(D) of 

this section: 

Target CO2 = (a × f) + b 

Where: 

f is the footprint, as defined in § 86.1803; and 

a and b are selected from the following 

table for the appropriate model year: 

TABLE 6 TO § 86.1818–12(c)(3)(i)(C) 

Model year Minimum 

footprint 

Maximum 

footprint a b 

2017 ................................................................................................................. 50.7 66.0 4.04 80.5 

2018 ................................................................................................................. 60.2 66.0 4.04 75.0 

(D) For light trucks with a footprint 

greater than the minimum value 

specified in the table below for each 

model year, the gram/mile CO2 target 

value shall be selected for the 

appropriate model year from the 

following table: 

TABLE 7 TO § 86.1818–12(c)(3)(i)(D) 

Model year Minimum 

footprint 

CO2 targetvalue 

(grams/mile) 

2012 ......................................................................................................................................................................... 66.0 395.0 

2013 ......................................................................................................................................................................... 66.0 385.0 

2014 ......................................................................................................................................................................... 66.0 376.0 

2015 ......................................................................................................................................................................... 66.0 362.0 

2016 ......................................................................................................................................................................... 66.0 348.0 

2017 ......................................................................................................................................................................... 66.0 347.0 

2018 ......................................................................................................................................................................... 66.0 342.0 

2019 ......................................................................................................................................................................... 66.4 339.0 

2020 ......................................................................................................................................................................... 68.3 337.0 

2021 ......................................................................................................................................................................... 68.3 329.4 

2022 ......................................................................................................................................................................... 68.3 324.1 

2023 ......................................................................................................................................................................... 74.0 312.1 

2024 ......................................................................................................................................................................... 74.0 296.5 

2025 ......................................................................................................................................................................... 74.0 281.8 

2026 and later .......................................................................................................................................................... 74.0 267.8 

* * * * * 

■ 5. Amend § 86.1865–12 by revising 

paragraphs (k)(2), (3), and (6) to read as 

follows: 

§ 86.1865–12 How to comply with the fleet 

average CO2 standards. 

* * * * * 

(k) * * * 

(2) There are no property rights 

associated with CO2 credits generated 

under this subpart. Credits are a limited 

authorization to emit the designated 

amount of emissions. Nothing in this 

part or any other provision of law shall 

be construed to limit EPA’s authority to 

terminate or limit this authorization 

through a rulemaking. 

(3) Each manufacturer must comply 

with the reporting and recordkeeping 

requirements of paragraph (l) of this 

section for CO2 credits, including early 

credits. The averaging, banking and 

trading program is enforceable as 

provided in paragraphs (k)(7)(ii), 

(k)(9)(iii), and (l)(1)(vi) of this section 

through the certificate of conformity 

that allows the manufacturer to 

introduce any regulated vehicles into 

U.S. commerce. 

* * * * * 

(6) Unused CO2 credits generally 

retain their full value through five 

model years after the model year in 

which they were generated. Credits 

remaining at the end of the fifth model 

year after the model year in which they 

were generated may not be used to 

demonstrate compliance for later model 

years. The following particular 

provisions apply for passenger cars and 

light trucks: 

(i) Unused CO2 credits from the 2016 

model year shall retain their full value 

through the 2023 model year. Credits 

from the 2016 model year that remain at 

the end of the 2023 model year may not 

be used to demonstrate compliance for 

later model years. 

(ii) Unused CO2 credits from the 2017 

through 2020 model years shall retain 

their full value through six model years 

after the model year in which they were 

generated. Credits remaining from these 

model years after six model years may 

not be used to demonstrate compliance 

for later model years. 

* * * * * 

■ 6. Amend § 86.1866–12 by— 

■ a. Revising paragraphs (b) 

introductory text and (b)(1). 

■ b. Removing paragraph (b)(2)(i). 

■ c. Redesignating paragraph (b)(2)(ii) as 

paragraph (b)(2). 

■ d. Adding paragraph (c)(3). 

The addition reads as follows: 

§ 86.1866–12 CO2 credits for advanced 

technology vehicles. 

* * * * * 

(b) For electric vehicles, plug-in 

hybrid electric vehicles, fuel cell 

vehicles, dedicated natural gas vehicles, 

and dual-fuel natural gas vehicles as 

those terms are defined in § 86.1803–01, 

that are certified and produced for U.S. 

sale in the specified model years and 

that meet the additional specifications 

in this section, the manufacturer may 

use the production multipliers in this 

paragraph (b) when determining 

additional credits for advanced 

technology vehicles. Full size pickup 

trucks eligible for and using a 


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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43809 

production multiplier are not eligible 

for the strong hybrid-based credits 

described in § 86.1870–12(a)(2) or the 

performance-based credits described in 

§ 86.1870–12(b). 

(1) The following production 

multipliers apply for model year 2017 

through 2025 vehicles: 

TABLE 1 TO § 86.1866–12(b)(1) 

Model year 

Electric vehicles 

and fuel cell 

vehicles 

Plug-in 

hybrid electric 

vehicles 

Dedicated and 

dual-fuel natural 

gas vehicles 

2017 ........................................................................................................................... 2.0 1.6 1.6 

2018 ........................................................................................................................... 2.0 1.6 1.6 

2019 ........................................................................................................................... 2.0 1.6 1.6 

2020 ........................................................................................................................... 1.75 1.45 1.45 

2021 ........................................................................................................................... 1.5 1.3 1.3 

2022 ........................................................................................................................... 2.0 1.6 2.0 

2023–2024 ................................................................................................................. 2.0 1.6 1.0 

2025 ........................................................................................................................... 1.75 1.45 1.0 

* (No multiplier credits) 

* * * * * 

(c) * * * 

(3) Multiplier-based credits for model 

years 2022 through 2025 may not 

exceed credit caps, as follows: 

(i) Calculate a nominal annual credit 

cap in Mg using the following equation, 

rounded to the nearest whole number: 

Where: 

Pauto = total number of certified passenger 

automobiles the manufacturer produced 

in a given model year for sale in any 

state or territory of the United States. 

Ptruck = total number of certified light 

trucks (including MDPV) the manufacturer 

produced in a given model year for sale in 

any state or territory of the United States. 

(ii) Calculate an annual g/mile equivalent 

value for the multiplier-based credits using 

the following equation, rounded to the 

nearest 0.1 g/mile: 

Where: 

annual credits = a manufacturer’s total 

multiplier-based credits in a given model 

year from all passenger automobiles and 

light trucks as calculated under this 

paragraph (c). 

(iii) Calculate a cumulative g/mile 

equivalent value for the multiplierbased credits in 2022 through 2025 by 

adding the annual g/mile equivalent 

values calculated under paragraph 

(c)(3)(ii) of this section. 

(iv) The cumulative g/mile equivalent 

value may not exceed 10.0 in any year. 

(v) The annual credit report must 

include for every model year from 2022 

through 2025, as applicable, the 

calculated values for the nominal 

annual credit cap in Mg and the 

cumulative g/mile equivalent value. 

■ 7. Revise the section heading for 

§ 86.1868–12 to read as follows: 

§ 86.1868–12 CO2 credits for improving the 

efficiency of air conditioning systems. 

* * * * * 

■ 8. Amend § 86.1869–12 by revising 

the section heading and paragraphs 

(b)(2), (4)(v), (vi), and (x), and 

(d)(2)(ii)(A) to read as follows: 

§ 86.1869–12 CO2 credits for off-cycle CO2

reducing technologies. 

* * * * * 

(b) * * * 

(2) The maximum allowable decrease 

in the manufacturer’s combined 

passenger automobile and light truck 

fleet average CO2 emissions attributable 

to use of the default credit values in 

paragraph (b)(1) of this section is 10 g/ 

mi through model year 2022, and 15 g/ 

mi for model years 2023 and later, 

except that manufacturers may use 15

g/mi in model years 2020 through 2022 

if they meet the definitions in 

paragraphs (b)(4)(v)(B), (vi)(B), and 

(x)(B) of this section. If the total of the 

CO2 g/mi credit values from paragraph 

(b)(1) of this section does not exceed 10 

or 15 g/mi (as applicable) for any 

passenger automobile or light truck in a 

manufacturer’s fleet, then the total offcycle credits may be calculated 

according to paragraph (f) of this 

section. If the total of the CO2 g/mi 

credit values from paragraph (b)(1) of 

this section exceeds 10 or 15 g/mi (as 

applicable) for any passenger 

automobile or light truck in a 

manufacturer’s fleet, then the gram per 

mile decrease for the combined 

passenger automobile and light truck 

fleet must be determined according to 

paragraph (b)(2)(ii) of this section to 

determine whether the applicable 

limitation has been exceeded. 

(i) Determine the gram per mile 

decrease for the combined passenger 

automobile and light truck fleet using 

the following formula: 


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CAPannual = 2.5+1 · [195,264 miles· Pauto + 225,865 · Ptruck] · 10-6 tonne 

m1e g 

annual g per mile equivalent value 2_5 . _an_n_ua_l_cr_e_di_ts 

CAP annual 

Credits x 1,000,000 Decrease=----------------

[(Prodc x 195,264) + (ProdT x 225,865)] 
43810 Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 

Where: 

Credits = The total of passenger automobile 

and light truck credits, in Megagrams, 

determined according to paragraph (f) of 

this section and limited to those credits 

accrued by using the default gram per 

mile values in paragraph (b)(1) of this 

section. 

ProdC = The number of passenger 

automobiles produced by the 

manufacturer and delivered for sale in 

the U.S. 

ProdT = The number of light trucks produced 

by the manufacturer and delivered for 

sale in the U.S. 

(ii) If the value determined in 

paragraph (b)(2)(i) of this section is 

greater than 10 or 15 grams per mile (as 

applicable), the total credits, in 

Megagrams, that may be accrued by a 

manufacturer using the default gram per 

mile values in paragraph (b)(1) of this 

section shall be determined using the 

following formula: 

Where: 

ProdC = The number of passenger 

automobiles produced by the 

manufacturer and delivered for sale in 

the U.S. 

ProdT = The number of light trucks produced 

by the manufacturer and delivered for 

sale in the U.S. 

(iii) If the value determined in 

paragraph (b)(2)(i) of this section is not 

greater than 10 or 15 grams per mile (as 

applicable), then the credits that may be 

accrued by a manufacturer using the 

default gram per mile values in 

paragraph (b)(1) of this section do not 

exceed the allowable limit, and total 

credits may be determined for each 

category of vehicles according to 

paragraph (f) of this section. 

(iv) If the value determined in 

paragraph (b)(2)(i) of this section is 

greater than 10 or 15 grams per mile (as 

applicable), then the combined 

passenger automobile and light truck 

credits, in Megagrams, that may be 

accrued using the calculations in 

paragraph (f) of this section must not 

exceed the value determined in 

paragraph (b)(2)(ii) of this section. This 

limitation should generally be done by 

reducing the amount of credits 

attributable to the vehicle category that 

caused the limit to be exceeded such 

that the total value does not exceed the 

value determined in paragraph (b)(2)(ii) 

of this section. 

* * * * * 

(4) * * * 

(v) Active transmission warm-up 

means one of the following: 

(A) Through model year 2019, and 

optionally for model years 2020–2022, 

active transmission warm-up means a 

system that uses waste heat from the 

vehicle to quickly warm the 

transmission fluid to an operating 

temperature range using a heat 

exchanger, increasing the overall 

transmission efficiency by reducing 

parasitic losses associated with the 

transmission fluid, such as losses 

related to friction and fluid viscosity. 

(B) Starting in model year 2023, and 

optionally for model years 2020–2022, 

active transmission warm-up means a 

system that uses waste heat from the 

vehicle’s exhaust to warm the 

transmission fluid to an operating 

temperature range using a dedicated 

heat exchanger. Active transmission 

warm-up may also include coolant 

systems that capture heat from a liquidcooled exhaust manifold if the system is 

segregated from the coolant loop in the 

engine block. 

(vi) Active engine warm-up means one 

of the following: 

(A) Through model year 2019, and 

optionally for model years 2020–2022, 

active engine warm-up means a system 

that uses waste heat from the vehicle to 

warm up targeted parts of the engine so 

that it reduces engine friction losses and 

enables closed-loop fuel control more 

quickly. 

(B) Starting in model year 2023, and 

optionally for model years 2020–2022, 

active engine warm-up means a system 

that uses waste heat from the vehicle’s 

exhaust to warm up targeted parts of the 

engine so that it reduces engine friction 

losses and enables closed-loop fuel 

control more quickly. Active engine 

warm-up may also include coolant 

systems that capture heat from a liquidcooled exhaust manifold if the system is 

segregated from the coolant loop in the 

engine block. 

* * * * * 

(x) Passive cabin ventilation means 

one of the following: 

(A) Through model year 2019, and 

optionally for model years 2020–2022, 

passive cabin ventilation means ducts, 

devices, or methods that utilize 

convective airflow to move heated air 

from the cabin interior to the exterior of 

the vehicle. 

(B) Starting in model year 2023, and 

optionally for model years 2020–2022, 

passive cabin ventilation means 

methods that create and maintain 

convective airflow through the body’s 

cabin by opening windows or sunroof 

when the vehicle is parked outside in 

direct sunlight. 

* * * * * 

(d) * * * 

(2) * * * 

(ii) * * * 

(A) A citation to the appropriate 

previously approved methodology, 

including the appropriate Federal 

Register Notice and any subsequent 

EPA documentation of the 

Administrator’s decision; 

* * * * * 

■ 9. Amend § 86.1870–12 by revising 

the section heading and paragraphs 

(a)(2) and (b)(2) to read as follows: 

§ 86.1870–12 CO2 credits for qualifying 

full-size light pickup trucks. 

* * * * * 

(a) * * * 

(2) Full size pickup trucks that are 

strong hybrid electric vehicles and that 

are produced in the 2017 through 2025 

model years are eligible for a credit of 

20 grams/mile. To receive this credit in 

a model year, the manufacturer must 

produce a quantity of strong hybrid 

electric full size pickup trucks such that 

the proportion of production of such 

vehicles, when compared to the 

manufacturer’s total production of full 

size pickup trucks, is not less than 10 

percent in that model year. Full size 

pickup trucks earning credits under this 

paragraph (a)(2) may not earn credits 

based on the production multipliers 

described in § 86.1866–12(b). 

* * * * * 

(b) * * * 

(2) Full size pickup trucks that are 

produced in the 2017 through 2025 

model years and that achieve carbonrelated exhaust emissions less than or 

equal to the applicable target value 

determined in § 86.1818–12(c)(3) 

multiplied by 0.80 (rounded to the 

nearest gram/mile) in a model year are 

eligible for a credit of 20 grams/mile. A 

pickup truck that qualifies for this credit 

in a model year may claim this credit for 

a maximum of four subsequent model 

years (a total of five consecutive model 

years) if the carbon-related exhaust 

emissions of that pickup truck do not 

increase relative to the emissions in the 

model year in which the pickup truck 


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Credit (Megagrams) = [ lO x ( (Practc x 195,264) + (ProdT x 225,865) )] 

1,000,000 
Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules 43811 

first qualified for the credit. This credit 

may not be claimed in any model year 

after 2025. To qualify for this credit in 

a model year, the manufacturer must 

produce a quantity of full size pickup 

trucks that meet the emission 

requirements of this paragraph (b)(2) 

such that the proportion of production 

of such vehicles, when compared to the 

manufacturer’s total production of full 

size pickup trucks, is not less than 10 

percent in that model year. A pickup 

truck that qualifies for this credit in a 

model year and is subject to a major 

redesign in a subsequent model year 

such that it qualifies for the credit in the 

model year of the redesign may be 

allowed to qualify for an additional five 

years (not to go beyond the 2025 model 

year) with EPA approval. Use good 

engineering judgment to determine 

whether a pickup truck has been subject 

to a major redesign. 

* * * * * 

■ 10. Revise the section heading of 

§ 86.1871–12 to read as follows: 

§ 86.1871–12 Optional early CO2 credit 

programs. 

* * * * * 

PART 600—FUEL ECONOMY AND 

GREENHOUSE GAS EXHAUST 

EMISSIONS OF MOTOR VEHICLES 

■ 11. The authority citation for part 600 

continues to read as follows: 

Authority: 49 U.S.C. 32901–23919q, Pub. 

L. 109–58. 

■ 12. Amend § 600.510–12 by revising 

paragraphs (j)(2)(v) introductory text 

and (vii)(A) introductory text to read as 

follows: 

§ 600.510–12 Calculation of average fuel 

economy and average carbon-related 

exhaust emissions. 

* * * * * 

(j) * * * 

(2) * * * 

(v) For natural gas dual fuel model 

types, for model years 2012 through 

2015, the arithmetic average of the 

following two terms; the result rounded 

to the nearest gram per mile: 

* * * * * 

(vii)(A) This paragraph (j)(2)(vii) 

applies to model year 2016 and later 

natural gas dual fuel model types. 

Model year 2021 and later natural gas 

dual fuel model types may use a utility 

factor of 0.5 or the utility factor 

prescribed in this paragraph (j)(2)(vii). 

* * * * * 

[FR Doc. 2021–16582 Filed 8–9–21; 8:45 am] 

BILLING CODE 6560–50–P 


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