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[Federal Register Volume 67, Number 4 (Monday, January 7, 2002)]
[Proposed Rules]
[Pages 713-714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32260]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 538

[Docket No. NHTSA-2001-10774]
RIN 2127-AI41

Automotive Fuel Economy Manufacturing Incentives for Alternative 
FuelVehicles

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Notice of intent to issue a notice of proposed rulemaking 
(NPRM).

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SUMMARY: To provide an incentive for the production of vehicles that 
can operate on certain alternative fuels as well as on regular 
petroleum fuels, Congress established a special procedure for 
calculating the fuel economy of those vehicles for the purpose of 
determining compliance with the Corporate Average Fuel Economy 
standards. This procedure increases the fuel economy attributed to such 
``dual-fueled'' vehicles. By statute, the incentive is available 
through the 2004 model year and may be extended by up to four 
additional model years through rulemaking.
    The purpose of this document is to announce the intention to issue 
a proposal to extend the availability of the incentive for one or more 
additional model years.

FOR FURTHER INFORMATION CONTACT: The following persons at the National 
Highway Traffic Safety Administration, 400 Seventh Street, SW, 
Washington, DC 20590:
    For non-legal issues: Mr. Kenneth Katz, Consumer Programs Division, 
Office of Planning and Consumer Programs, NPS-32, Room 5320, telephone 
(202) 366-4936, facsimile (202) 493-2290.
    For legal issues: Otto Matheke, Office of the Chief Counsel, NCC-
20, Room 5219, telephone (202) 366-5263, facsimile (202) 366-3820.

SUPPLEMENTARY INFORMATION:

Background

    Congress created the Corporate Average Fuel Economy (CAFE) program 
when it enacted the Energy Policy and Conservation Act of 1975 (Public 
Law 94-163; Dec. 22, 1975). The CAFE statutory provisions, now codified 
in chapter 329 of Title 49 of the United States Code (49 U.S.C. 32901 
et seq.), mandate fuel economy standards that must be met by vehicle 
manufacturers. These standards apply separately to each manufacturer's 
annual fleet of passenger cars and to its annual fleet of light trucks 
under 8,500 lbs. gross vehicle weight rating, instead of applying to 
individual vehicles. Each manufacturer's average fuel economy is 
determined by the Environmental Protection Agency in accordance with 
procedures set forth in 49 U.S.C. 32904. Those procedures provide for 
determining the fuel economy of a manufacturer's model types produced 
in a particular model year and calculating a weighted fuel economy 
average for the manufacturer.
    Congress amended the CAFE provisions when it enacted the 
Alternative Motor Fuels Act of 1988 (``AMFA'') (Public Law 100-94; 
October 14, 1988). The purposes of AMFA were to encourage the 
development and use of methanol, ethanol and natural gas as 
transportation fuels and to promote the production of alternative fuel 
vehicles (AFVs). For the latter purpose, AMFA provides special 
procedures for calculating the fuel economy of ``dedicated'' 
alternative fuel vehicles and ``dual-fueled'' vehicles that meet 
specified eligibility criteria. ``Dedicated vehicles'' are cars or 
light trucks designed to operate exclusively either on natural gas or 
on a methanol or ethanol fuel mixture composed of at least 85 percent 
of either substance. ``Dual-fueled vehicles'' have the capability to 
operate on conventional petroleum and the capability to operate on an 
alternative fuel. Most dual-fueled vehicles produced to date are 
capable of operating on E85 (a blend of 85% ethanol and 15% gasoline) 
and either gasoline or diesel. The special calculation procedures used 
in determining the fuel economy of alternative fuel vehicles 
substantially increase the fuel economy ratings of these vehicles.
    In creating the incentive program for dual-fueled vehicles, 
Congress expressly limited both the extent to which a manufacturer can 
avail itself of the incentive in any model year as well as the duration 
of the incentives.\1\ For the 1993-2004 model years, the maximum 
increase in CAFE available to a

[[Page 714]]

manufacturer for producing qualifying dual-fueled vehicles is 1.2 miles 
per gallon.
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    \1\ Congress did not apply either of these limitations to the 
incentive program for dedicated vehicles.
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    AMFA provides that the incentive is available through the end of 
the 2004 model year. In addition, AMFA provides that the agency may 
either extend the program to model years beyond the end of the 2004 
model year or allow the program to terminate at that time. An extension 
of up to four model years is authorized. If the program were extended, 
the maximum increase in CAFE that could be attributed to the incentive 
would be limited to .9 miles per gallon in any of those model years.
    AMFA further directs that NHTSA evaluate the dual-fuel incentive 
program and provide a report to Congress analyzing the success of the 
incentive program and preliminary conclusion regarding extension of the 
program beyond the 2004 model year.

Forthcoming Actions

    In the near future, the agency plans to issue the report to 
Congress and a proposal to extend the incentive program for one or more 
additional model years.

    Issued on: December 31, 2001.
Noble Bowie,
Director, Office of Planning and Consumer Programs.
[FR Doc. 01-32260 Filed 12-31-01; 3:21 pm]
BILLING CODE 4910-59-P
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