Next Generation Fuels Act of 2021

To promote low-carbon, high-octane fuels, to protect public health, and to improve vehicle efficiency and performance, and for other purposes. 1. Short title This Act may be cited as the Next Generation Fuels Act of 2021 2. Findings Congress finds that— (1) continued increases in new automobile efficiency are needed to improve consumer welfare and reduce carbon emissions; (2) the widespread availability of low-carbon, high-octane fuel will allow continued cost-effective improvements in automobile efficiency by enabling increased engine compression ratios; (3) high-octane automobiles and low-carbon fuels are readily available to consumers at little incremental cost; (4) ethanol is a cost-effective and low-carbon octane enhancer; (5) the widespread adoption of climate-smart practices and precision technologies by United States corn producers over the past decade have further reduced the carbon intensity of conventional ethanol; (6) on average, ethanol has been estimated to have lifecycle greenhouse gas emissions that are 46 percent lower than average gasoline, with some corn ethanol achieving a 61-percent reduction compared to gasoline; and (7) ethanol has one of the highest blending octane values available in the marketplace. 3. High-octane vehicles Title II of the Clean Air Act ( 42 U.S.C. 7521 et seq. D High-Octane Vehicles 261. Definitions; applicability (a) Definitions In this part: (1) Automobile The term automobile (2) Research octane number The term research octane number (3) Manufacturer The term manufacturer (b) Applicability This part applies with respect to any motor vehicle that is introduced into commerce that— (1) is an automobile; (2) uses gasoline for propulsion or any other operation of the motor vehicle, including the engine thereof; and (3) is a model year 2026 or later motor vehicle. 262. High-octane test fuels (a) E20 certification fuel Except as provided in subsections (b) and (c), manufacturers producing motor vehicles described in section 261(b) shall use a test fuel consisting of gasoline and 19.4 to 20 volume percent ethanol with a minimum 95 research octane number in— (1) emissions testing and certification under section 206(a) of this Act; and (2) fuel economy testing and calculation procedures under section 32904(c) of title 49, United States Code. (b) E25 to E30 certification fuel As an alternative to the test fuel described in subsection (a), manufacturers producing motor vehicles described in section 261(b) may use a test fuel consisting of gasoline and 24.3 to 30 volume percent ethanol with a minimum 98 research octane number in— (1) emissions testing and certification under section 206(a) of this Act; and (2) fuel economy testing and calculation procedures under section 32904(c) of title 49, United States Code. (c) Model year 2031 and later model years Notwithstanding subsections (a) and (b), beginning in model year 2031, manufacturers of motor vehicles described in section 261(b) shall use the gasoline test fuel described in subsection (b) in— (1) emissions testing and certification under section 206(a) of this Act; and (2) fuel economy testing and calculation procedures under section 32904(c) of title 49, United States Code. (d) Formulation The test fuels described in subsections (a) and (b) shall be produced by adding neat or denatured fuel ethanol to the gasoline criteria emissions test fuel required for use in model year 2020 and later motor vehicles. (e) Test fuel equations For purposes of— (1) testing and calculation procedures under section 206(a) of this Act, the emissions of motor vehicles using the test fuels described in subsection (a) or (b) shall be based exclusively on actual measured emissions; and (2) fuel economy testing and calculation procedures under section 32904(c) of title 49, United States Code, the fuel economy of motor vehicles using the test fuels described in subsection (a) or (b) shall be determined on an energy-equivalent basis, calculated by multiplying measured fuel economy by the ratio of— (A) 114,086 British thermal units per gallon; divided by (B) the volumetric energy density of the test fuel. 263. High-octane vehicles (a) Warranty requirements Manufacturers of motor vehicles described in section 261(b) shall warrant to the ultimate purchaser and each subsequent purchaser that each such motor vehicle is designed— (1) for model years 2026 through 2030— (A) to operate with gasoline containing 10 and up to and including 25 percent ethanol by volume; and (B) to meet the design requirements under subsection (b)(1); and (2) for model year 2031 and later model years— (A) to operate with gasoline containing 10 and up to and including 30 percent ethanol by volume; and (B) to meet the design requirements under subsections (b) and (c). (b) Design requirements before model year 2031 (1) Manufacturers The manufacturer of a motor vehicle described in section 261(b) shall design each such motor vehicle— (A) to use gasoline with a 95 research octane number or higher; and (B) to incorporate such devices or elements of design (including physical or other barriers, devices, or technological systems) as are determined by the Administrator to be— (i) necessary to prevent the introduction of gasoline with a research octane number that is lower than 95 into such motor vehicle; and (ii) technically and economically feasible. (2) Fuel retailers Any fuel retailer selling gasoline for use in a motor vehicle described in section 261(b) shall incorporate into the retailer’s dispensing equipment such devices or elements of design, including physical or other barriers, devices, or technological systems, as are determined by the Administrator to be— (A) necessary to ensure compatibility with the motor vehicle design requirements under paragraph (1); and (B) technically and economically feasible. (c) Design requirements for model year 2031 (1) Manufacturers Beginning in model year 2031, the manufacturer of a motor vehicle described in section 261(b) shall design each such motor vehicle— (A) to use gasoline with a 98 research octane number or higher; and (B) to incorporate such devices or elements of design (including physical or other barriers, devices, or technological systems) as are determined by the Administrator to be— (i) necessary to prevent the introduction of gasoline with a research octane number that is lower than 98 into such motor vehicle; and (ii) technically and economically feasible. (2) Fuel retailer Any fuel retailer selling gasoline for use in a model year 2031 and later motor vehicle described in section 261(b) shall incorporate into the retailer’s dispensing equipment such devices or elements of design (including physical or other barriers, devices, or technological systems) as are determined by the Administrator to be— (A) necessary to ensure compatibility with the motor vehicle design requirements under paragraph (1); and (B) technically and economically feasible. (3) EPA determination of nationwide availability The requirements of this subsection shall not take effect unless the Administrator determines that 98 research octane number gasoline can be made readily available nationwide and publishes notice of the determination in the Federal Register. Not later than December 31, 2029, the Administrator shall make a determination of whether 98 research octane number gasoline can be made readily available nationwide. If the Administrator fails to make such determination by the date specified in the preceding sentence, the Administrator is deemed to have determined that 98 research octane number gasoline can be made readily available nationwide. If the Administrator determines that 98 research octane number gasoline cannot be made readily available nationwide, the Administrator shall revisit such determination in the subsequent calendar year and shall continue to revisit such determination annually unless and until the Administrator determines that 98 research octane number gasoline can be made readily available nationwide. If the Administrator does not revisit such determination for any calendar year as required by the preceding sentence, the Administrator is deemed to have determined that 98 research octane number gasoline can be made readily available nationwide. (d) Violations (1) Manufacturers Any manufacturer who violates subsection (b)(1) or (c)(1) shall be subject to a civil penalty of not more than $5,000 for each offense. Any such violation shall constitute a separate offense with respect to each motor vehicle or fuel dispenser. (2) Fuel retailer Any fuel retailer who violates subsection (b)(2) or (c)(2) shall be subject to a civil penalty of not more than $2,500 for each offense. Any such violation with respect to each dispensing equipment unit shall constitute a separate offense. 264. Misfueling (a) Prohibitions against tampering and defeat devices for motor vehicles In lieu of applying section 203(a)(3) with respect to the requirements of this part, the following shall apply: (1) No person shall— (A) remove or render inoperative any device or element of design installed on or in a motor vehicle pursuant to subsection (b)(1) or (c)(1) of section 263 prior to its sale and delivery to the ultimate purchaser; or (B) knowingly remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser. (2) No person shall manufacture or sell, or offer to sell, or install, any part or component intended for use with, or as part of, any motor vehicle, where— (A) a principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design installed on or in a motor vehicle pursuant to subsection (b)(1) or (c)(1) of section 263; and (B) the person knows or should know that such part or component is being offered for sale or installed for such use or put to such use. (b) Prohibitions against tampering and defeat devices for dispensing equipment No person shall— (1) remove or render inoperative any device or element of design installed pursuant to subsection (b)(2) or (c)(2) of section 263; or (2) sell, or offer to sell, or incorporate into, any part or component intended for use with, or as part of, any dispensing equipment, where— (A) a principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design incorporated into dispensing equipment pursuant to subsection (b)(2) or (c)(2) of section 263; and (B) the person knows or should know that such part or component is being offered for sale or incorporated for such use or put to such use. (c) Violations Any person who violates this section shall be subject to a civil penalty of not more than $2,500. Any such violation shall constitute a separate offense with respect to— (1) each motor vehicle or dispensing equipment, for purposes of subsections (a)(1) and (b)(1); and (2) each part or component, for purposes of subsections (a)(2) and (b)(2). 265. Octane standard (a) Octane standard (1) Prohibition (A) 95 research octane number marketing No person shall sell motor vehicle gasoline marketed as 95 research octane number unless such gasoline has a research octane number of 95 or greater. (B) 98 research octane number marketing No person shall sell motor vehicle gasoline marketed as 98 research octane number unless such gasoline has a research octane number of 98 or greater. (C) Deemed compliance A person, including any distributor, blender, marketer, reseller, carrier, retailer, or wholesaler shall be deemed to be in full compliance with this paragraph if it can demonstrate, through evidence deemed acceptable by the Administrator, that such person had reason to believe in good faith that the motor vehicle gasoline complied with subparagraph (A) or (B). (2) Controls (A) 95 research octane number availability Effective January 1, 2025, any person that owns, leases, operates, controls, or supervises— (i) a retail outlet at which 200,000 or more gallons of gasoline were sold during calendar year 2022 or any subsequent calendar year, shall offer for sale motor vehicle gasoline of not less than 95 research octane number at such outlet; or (ii) six or more retail outlets offering motor vehicle gasoline for sale, shall offer for sale motor vehicle gasoline of not less than 95 research octane number at not fewer than 60 percent of such retail outlets. (B) 98 research octane number availability Effective January 1, 2030, any person that owns, leases, operates, controls, or supervises— (i) a retail outlet at which 200,000 or more gallons of gasoline were sold during calendar year 2028 or any subsequent calendar year, shall offer for sale motor vehicle gasoline of not less than 98 research octane number at such outlet; or (ii) six or more retail outlets offering motor vehicle fuel for sale, shall offer for sale motor vehicle gasoline of not less than 98 research octane number at no fewer than 60 percent of such retail outlets. (b) Violations Any person that violates— (1) subsection (a)(1), (a)(2)(A)(i), or (a)(2)(B)(i) shall be subject to a civil penalty of not more than $25,000 for each day on which such violation continues; and (2) subsection (a)(2)(A)(ii) or (a)(2)(B)(ii) shall be subject to a civil penalty of not more than $2,500 per day for each retail outlet owned, leased, operated, controlled, or supervised by such person. 266. Regulations (a) Regulations The Administrator shall— (1) not later than 12 months after the date of enactment of the Next Generation Fuels Act of 2021 (2) not later than 24 months after such date of enactment, finalize regulations to carry out this part. 267. Liability limitation and preemption (a) Limitation of liability A manufacturer of a motor vehicle, or a gasoline retailer, that is in compliance with the requirements of this part and the requirements of sections 203(e) and 206 of the Petroleum Marketing Practices Act, shall not be liable under any provision of this Act or any other Federal, State, or local law, including common law, for damages— (1) to or caused by a motor vehicle described in section 261(b); and (2) that would not have occurred but for the introduction of gasoline with a research octane number required by this part. (b) Preemption No State or any political subdivision of a State may adopt, continue in effect, or enforce, any provision of law or regulation— (1) requiring motor vehicles to operate using gasoline with a certain octane content, or the corresponding design of equipment for dispensing such gasoline into such motor vehicles, unless such provision of such law or regulation is the same as the corresponding provision under this part; or (2) limiting the concentration of ethanol in motor vehicle gasoline. 268. Civil actions; administrative assessment of certain penalties The provisions of subsections (b) and (c) of section 205 shall apply with respect to a violation of section 263 or 264 to the same extent and in the same manner as such provisions apply with respect to a violation of section 203(a)(3). . 4. Octane disclosure (a) High-Efficiency fuels Title II of the Petroleum Marketing Practices Act ( 15 U.S.C. 2821 et seq. 206. High-efficiency fuel and vehicle marketing requirements (a) Rule The Federal Trade Commission shall, by rule, and in consultation with persons to be regulated under this section, consumer advocates, and other stakeholders, as appropriate— (1) prescribe or revise requirements under this title relating to the certification, display, and representation of the automotive fuel rating of an automotive fuel as necessary to carry out— (A) the requirement under subsection (b); and (B) any determination made under subsection (c); (2) make the determination required under subsection (c); and (3) prescribe requirements under subsection (d). (b) Requirement The Federal Trade Commission shall require that, for purposes of this title, beginning on the date that is 180 days after the date on which the Federal Trade Commission issues a final rule under subsection (a), the automotive fuel rating of an automotive fuel with a research octane number of 95 or higher be determined only by the research octane number of such automotive fuel. (c) Labeling (1) In general The Federal Trade Commission shall prescribe requirements— (A) as the Federal Trade Commission determines necessary with respect to a display at the point of sale to ultimate purchasers of automotive fuel and a display on a motor vehicle to— (i) inform such ultimate purchaser of such automotive fuel and any purchaser or user of such motor vehicle that— (I) a model year 2026 or later motor vehicle is only warrantied to use automotive fuel with a research octane number of 95 or higher; and (II) a model year 2031 or later motor vehicle is only warrantied to use automotive fuel with a research octane number of 98 or higher; (ii) provide a warning to such ultimate purchaser of such automotive fuel and any such purchaser or user of such motor vehicle, that the use of automotive fuel with a research octane number that— (I) is lower than 95 in a model year 2026 or later motor vehicle will result in reduced fuel economy, increased exhaust emissions, and possibly engine damage; and (II) is lower than 98 in a model year 2031 or later motor vehicle will result in reduced fuel economy, increased exhaust emissions, and possibly engine damage; and (iii) inform such ultimate purchaser of such automotive fuel and any purchaser or user of such motor vehicle that— (I) a model year 2026 or later motor vehicle is warrantied to use gasoline containing up to and including 25 percent ethanol by volume; and (II) a model year 2031 or later motor vehicle is warrantied to use gasoline containing up to and including 30 percent ethanol by volume; and (B) that are applicable to— (i) a manufacturer of a new motor vehicle (or an entity making a representation in connection with the sale of such motor vehicle) with respect to a display on such motor vehicle; and (ii) an automotive fuel retailer, with respect to a display at the point of sale to an ultimate purchaser of automotive fuel. (2) Considerations In prescribing requirements under paragraph (1), the Federal Trade Commission shall ensure that such requirements are designed to be— (A) understandable to— (i) the ultimate purchaser of automotive fuel; and (ii) any purchaser or user of a model year 2026 or later motor vehicle; and (B) cost effective for automotive fuel retailers. (d) Deadlines The Federal Trade Commission shall— (1) not later than January 1, 2024, issue a proposed rule under subsection (a); and (2) not later than July 1, 2025, issue a final rule under subsection (a). . (b) Enforcement Section 203(e) of the Petroleum Marketing Practices Act ( 15 U.S.C. 2823(e) (1) by striking or a rule prescribed a rule prescribed (2) by striking of such section. of section 202, or a rule prescribed under section 206. (c) Table of contents amendment The table of contents for the Petroleum Marketing Practices Act ( 15 U.S.C. 2801 et seq. Sec. 206. High-efficiency fuel and vehicle marketing requirements. . 5. Advertisement of price of high-octane automotive fuel (a) In general It shall be unlawful for any person to sell or offer for sale, at retail, automotive fuel with a research octane number (as such terms are defined in section 201 of the Petroleum Marketing Practices Act ( 15 U.S.C. 2821 (b) Rulemaking (1) In general Not later than 24 months after the date of enactment of this Act, the Federal Trade Commission shall promulgate, in accordance with section 553 of title 5, United States Code, any rules necessary for the implementation and enforcement of this section. (2) Contents Such rules— (A) shall define retail most-sold (B) shall specify the manner in which the price of automotive fuel with a research octane number of 95 or greater must be displayed in order to comply with subsection (a); and (C) shall be consistent with the requirements for declaring unfair acts or practices in section 5(n) of the Federal Trade Commission Act ( 15 U.S.C. 45(n) (c) Enforcement A violation of subsection (a) shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act ( 15 U.S.C. 57a(a)(1)(B) 15 U.S.C. 41 et seq. 6. E40 retail infrastructure standard Section 9003 of the Solid Waste Disposal Act ( 42 U.S.C. 6991b (k) E40-Compatible retail infrastructure systems (1) In general The Administrator shall, not later than January 1, 2024, issue or revise, as necessary, performance standards for underground storage tank systems and dispenser systems that are brought into use on or after January 1, 2024, to require that such systems be compatible with automotive fuel consisting of gasoline and at least 40 percent ethanol by volume. (2) Compatibility Owner and operators may demonstrate the compatibility of an underground storage tank system with automotive fuel containing any concentration of ethanol through the use of a secondary containment system that is able to— (A) contain regulated substances leaked from the primary containment system until they are detected and removed; and (B) prevent the release of regulated substances to the environment at any time during the operational life of the underground storage tank system. (3) Definitions In this subsection: (A) Automotive fuel The term automotive fuel 15 U.S.C. 2821(6) (B) Compatible The term compatible (C) Dispenser system The term dispenser system . 7. Registration testing, Reid vapor pressure, and substantially similar waivers (a) Registration testing waiver Section 211(e) of the Clean Air Act ( 42 U.S.C. 7545(e) (4) Fuels consisting of gasoline and no more than 30 percent ethanol by volume that meet the requirements of subsection (f)(3) shall be deemed to have satisfied any testing regulations promulgated under this subsection and to be immediately eligible for registration under subsection (b) without further testing. . (b) Reid vapor pressure waiver Section 211(h) of the Clean Air Act ( 42 U.S.C. 7545(h) (1) in paragraph (4)— (A) in the matter preceding subparagraph (A), by inserting or more 10 percent (B) in subparagraph (C), by striking additional alcohol or (2) in paragraph (5)(A), by inserting or more 10 percent (c) Substantially similar waiver Section 211(f) of the Clean Air Act ( 42 U.S.C. 7545(f) (1) in paragraph (1)— (A) by striking subparagraph (A); and (B) in subparagraph (B), by striking (B) (2) by amending paragraph (3) to read as follows: (3) Fuels consisting of gasoline and ethanol may be introduced into commerce under this subsection for use in motor vehicles described in section 261(b), provided that the finished fuel— (A) does not exceed the warranted ethanol levels described in section 263(a); (B) meets the physical and chemical criteria specified by ASTM International Standard D4814–20 for gasoline with 15 percent ethanol; and (C) consists solely of carbon, hydrogen, oxygen, and sulfur, excepting any impurities present at trace levels that are gaseous upon combustion. ; and (3) in paragraph (4), by striking or (3) 8. Clean octane standard Section 211 of the Clean Air Act ( 42 U.S.C. 7545 (1) in subsection (d)— (A) in paragraph (1), by striking or (o) (o), or (w) (B) in paragraph (2), by striking and (o) (o), and (w) (2) by adding at the end the following: (w) Clean octane standard (1) Aromatics (A) Annual average limitation Effective beginning on January 1, 2025, it shall be unlawful for refiners or importers to sell motor vehicle gasoline that contains, on an average annual basis, an aromatic hydrocarbon concentration in excess of 17.5 percent by volume. (B) 2025 cap Effective beginning on January 1, 2025, it shall be unlawful for refiners or importers to sell motor vehicle gasoline that contains an aromatic hydrocarbon concentration in excess of 30 percent by volume. (C) 2030 cap Effective beginning on January 1, 2030, it shall be unlawful for refiners or importers to sell motor vehicle gasoline that contains an aromatic hydrocarbon content in excess of 25 percent by volume. (D) Oxygenate adjustment for gasoline blendstock For purposes of compliance with this paragraph, the aromatics volume of motor vehicle gasoline produced as blendstock for oxygenate blending may be adjusted based on the specified type and amount of oxygenate required to be added downstream. Any such adjustment shall be made through— (i) the preparation of a hand blend containing oxygenate; or (ii) any other method deemed acceptable to the Administrator. (E) Regulations (i) In general The Administrator shall promulgate regulations to implement this paragraph. (ii) Contents Such regulations shall allow for the generation of tradeable credits to meet the requirement of subparagraph (A), but any credits shall expire after not more than five years. (iii) Initial regulations Not later than January 1, 2025, the Administrator shall promulgate final regulations under clause (i). (2) Low-carbon octane (A) Prohibition Effective beginning on January 1, 2025, no refiner or importer shall introduce into commerce motor vehicle gasoline with a research octane number of 95 or higher except through the use of a fuel additive that has average lifecycle greenhouse gas emissions that (as determined by the Secretary of Energy using the version of the Argonne National Laboratory Greenhouse gases, Regulated Emissions, and Energy use in Transportation (GREET) model in effect as of the date of enactment of the Next Generation Fuels Act of 2021 (B) Regulations (i) In general The Administrator shall promulgate regulations to implement this paragraph. (ii) Contents Such regulations shall— (I) determine the baseline lifecycle greenhouse gas emissions for purposes of this paragraph; (II) determine the average lifecycle greenhouse gas emissions of sources of octane value for purposes of this paragraph; and (III) ensure that the requirements of this paragraph are met. (iii) Initial regulations Not later than January 1, 2024, the Administrator shall promulgate final regulations under clause (i). (3) Definitions (A) Baseline lifecycle greenhouse gas emissions The term baseline lifecycle greenhouse gas emissions (B) Lifecycle greenhouse gas emissions The term lifecycle greenhouse gas emissions Next Generation Fuels Act of 2021 (C) Research octane number The term research octane number . 9. New fuel effects study (a) Fuel effects study Subject to subsection (b), the Administrator of the Environmental Protection Agency shall carry out a study of the emissions effects of ethanol-blended fuels in light-duty vehicles and light-duty trucks, for the purpose of updating the Motor Vehicle Emission Simulator modeling system. In designing and conducting such study, the Administrator shall— (1) select test fuels that— (A) reflect a range of ethanol concentrations between 0 and at least 25 percent by volume; and (B) are representative of fuels that are widely available today or reasonably could be available regionally or nationally, taking into account fuel refinery operations and economics, including the cost of reformate; (2) select test vehicles that are representative of recent-model-year vehicles that include relevant technologies that are, or reasonably may come to be, in widespread use; (3) measure emission products of combustion including, at a minimum— (A) particulate matter of 2.5 micrometers in diameter or less; (B) ultrafine particulate matter of 0.1 micrometers in diameter or less; (C) nitrogen oxides; (D) total hydrocarbons; (E) nonmethane organic gas; (F) carbon monoxide; (G) benzene; (H) toluene; (I) ethylbenzene; (J) xylene; (K) 1,3–butadiene; (L) ethanol; and (M) polycyclic aromatic hydrocarbons, including at a minimum benzo(a)pyrene; (4) measure the tendency of measured emissions to form secondary organic aerosols and any other relevant secondary air pollution; and (5) consult with the Secretary of Energy, the Secretary of Agriculture, and the Secretary of Transportation (or their delegates). (b) Certification by Secretary of Energy The Administrator of the Environmental Protection Agency shall— (1) provide the proposed design of the study under subsection (a) to the Secretary of Energy for review; and (2) not commence the study until the Secretary of Energy certifies in writing that such design complies with the requirements of subsection (a). 10. Dual-fueled automobile default utilization factor (a) In general Section 32905(b) of title 49, United States Code, is amended to read as follows: (b) Duel fueled automobiles Except as provided in subsection (d) of this section or section 32904(a)(2) of this title— (1) for any model of dual-fueled automobile manufactured by a manufacturer in model years 1993 through 2019, the Administrator of the Environmental Protection Agency shall measure the fuel economy for that model by dividing 1.0 by the sum of— (A) 0.5 divided by the fuel economy measured under section 32904(c) of this title when operating the model on gasoline or diesel fuel; and (B) 0.5 divided by the fuel economy— (i) measured under subsection (a) when operating the model on alternative fuel; or (ii) measured based on the fuel content of B20 when operating the model on B20, which is deemed to contain 0.15 gallon of fuel; and (2) for any model of dual-fueled automobile manufactured by a manufacturer in model year 2023 or later, the Administrator shall measure the fuel economy for that model by dividing 1.0 by the sum of— (A) 0.79 divided by the fuel economy measured under section 32904(c) of this title when operating the model on gasoline or diesel fuel; and (B) 0.21 divided by the fuel economy measured under subsection (a) when operating the model on alternative fuel. A manufacturer may demonstrate that a higher utilization factor applies to any model of dual-fueled automobile manufactured by such manufacturer in model year 2023 or later. . (b) Exclusion from limit on maximum increase in average fuel economy attributable to dual-Fueled automobiles Section 32906 of title 49, United States Code, is amended by adding at the end the following: (c) Exclusion Subsection (a) shall not apply to the fuel economy of dual-fueled automobiles measured under section 32905(b)(2). . (c) Testing procedures Section 206(h) of the Clean Air Act ( 42 U.S.C. 7525(h) Not later than July 1, 2022, the Administrator shall amend the test procedures under this section in accordance with section 32905(b)(2) of title 49, United States Code. 11. Transfers of credits for exceeding average fuel economy standards Section 32903(g)(3) of title 49, United States Code, is amended to read as follows: (3) Maximum increase The maximum increase in any compliance category attributable to transferred credits is— (A) for model year 2021, 4.0 miles per gallon; and (B) for model year 2022 and subsequent model years, 6.0 miles per gallon. . 12. Extension and expansion of alternative fuel vehicle refueling property credit (a) In general Section 30C (1) by amending subsection (c) to read as follows: (c) Definitions For purposes of this section— (1) Qualified alternative fuel vehicle refueling property The term qualified alternative fuel vehicle refueling property (A) such property is of a character subject to the allowance for depreciation, (B) the original use of such property begins with the taxpayer, and is not used as the principal residence (within the meaning of section 121) of the taxpayer, and (C) such property is used— (i) for the storage or dispensing of a qualifying fuel into the fuel tank of a motor vehicle propelled by such fuel, but only if the storage or dispensing of the fuel is at the point where such fuel is delivered into the fuel tank of the motor vehicle, or (ii) for the recharging of motor vehicles propelled by electricity, but only if such property is located at the point where the motor vehicles are recharged. (2) Qualifying fuel The term qualifying fuel (A) any fuel at least 50 percent of the volume of which consists of natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen, or (B) any fuel mixture at least 20 percent of the volume of which consists of ethanol or biodiesel, without regard to any denaturant or kerosene used in such mixture. ; and (2) in subsection (g), by striking December 31, 2021 December 31, 2027 (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2021.

Summary: Next Generation Fuels Act of 2021 This bill supports the use of biofuels (e.g., gasoline blended with ethanol) in vehicles, including by establishing a minimum octane standard for gasoline as well as making related biofuel requirements for vehicles, their fuels, and fuel infrastructure.