Document ID: EPA-HQ-OAR-2020-0314-0001
Agency: epa
Document Type: Rule
Title: Flex-fuel Vehicle Provisions in Corporate Average Fuel Economy Regulations; Technical Correction
Posted Date: 2020-08-31T04:00Z

[Federal Register Volume 85, Number 169 (Monday, August 31, 2020)]
[Rules and Regulations]
[Pages 53676-53679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17217]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 600

[EPA-HQ-OAR-2020-0314; FRL-10012-25-OAR]
RIN 2060-AU89

Technical Correction to the Flex-Fuel Vehicle Provisions in CAFE 
Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: This direct final rule corrects an error in EPA's regulations 
for test procedures used in the Corporate Average Fuel Economy (CAFE) 
program finalized in a 2012 rulemaking. EPA established the procedures 
under the general provisions of Energy Policy and Conservation Act 
(EPCA) which authorize EPA to establish test and calculation procedures 
for CAFE. The correction clarifies the method for how flex-fuel 
vehicles are accounted for in manufacturer fuel economy calculations in 
model years 2020 and later. This correction allows the program to be 
implemented as originally intended in the 2012 rule. This rulemaking 
action is not expected to result in any significant changes in 
regulatory burdens or costs.

DATES: This rule is effective on November 30, 2020 without further 
notice, unless EPA receives adverse comment by October 15, 2020. If EPA 
receives adverse comment, we will publish a timely withdrawal in the 
Federal Register informing the public that the rule, or the relevant 
provisions of this rule on which EPA received adverse comment, will not 
take effect.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2020-0314, 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-2020-0314 in the subject line of the message.
     Fax: (202) 566-9744 Include Docket ID No. EPA-HQ-OAR-2020-
0314 on the cover of the fax.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, OAR, Docket EPA-HQ-OAR-2020-0314, Mail Code 28221T, 1200 
Pennsylvania Avenue NW, Washington, DC 20460.
     Hand Delivery/Courier: 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. 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 and faxes. 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.

FOR FURTHER INFORMATION CONTACT: Christopher Lieske, Office of 
Transportation and Air Quality (OTAQ), Assessment and Standards 
Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, 
Ann Arbor MI 48105; telephone number: (734) 214-4584; email address: 
lieske.christopher@epa.gov fax number: (734) 214-4816.

SUPPLEMENTARY INFORMATION:

I. Why is EPA using a direct final rule?

    EPA is publishing this rule without a prior proposed rule because 
we view this as a noncontroversial action and anticipate no adverse 
comment. EPA believes this to be the case because the direct final rule 
corrects an error in the regulations and the corrections will allow the 
program to be implemented as originally intended, consistent with the 
original final rule. However, in the ``Proposed Rules'' section of this 
issue of the Federal Register, we are publishing a separate document 
that will serve as the proposed rule to correct the regulations if 
adverse comments are received on this direct final rule. We will not 
institute a second comment period on this action. Any parties 
interested in commenting must do so at this time. For further 
information about commenting on this rule, see the ADDRESSES section of 
this document.
    If EPA receives adverse comment, we will publish a timely 
withdrawal in the Federal Register informing the public that this 
direct final rule will not take effect. If we receive adverse comment 
on a distinct provision of this rulemaking, we will publish a timely 
withdrawal in the Federal Register indicating which provisions we are 
withdrawing. The provisions that are not withdrawn will become 
effective on the date set out above, notwithstanding adverse

[[Page 53677]]

comment on any other provision. We would address all public comments in 
any subsequent final rule based on the proposed rule.

II. Does this action apply to me?

    This action affects companies that manufacture or sell passenger 
automobiles (passenger cars) and non-passenger automobiles (light 
trucks) as defined under NHTSA's CAFE regulations.\1\ Regulated 
categories and entities include:
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    \1\ ``Passenger car'' and ``light truck'' are defined in 49 CFR 
part 523.

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                                        NAICS    Examples of potentially
              Category                codes \A\     regulated entities
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Industry............................     336111  Motor Vehicle
                                         336112   Manufacturers.
Industry............................     811111  Commercial Importers of
                                         811112   Vehicles and Vehicle
                                         811198   Components.
                                         423110
Industry............................     335312  Alternative Fuel
                                         811198   Vehicle Converters.
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\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.

III. Public Participation

    EPA will keep the record open until October 15, 2020. All 
information will be available for inspection at the EPA Air Docket No. 
EPA-HQ-OAR-2020-0314. Submit your comments, identified by Docket ID No. 
EPA-HQ-OAR-2020-0314, 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. The 
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. The 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-epa-dockets.
    The 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 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 and 
faxes. 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.
    The 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.

IV. Direct Final Rule Provisions

    This direct final rule corrects a technical error in EPA 
regulations pertaining to the treatment of model year (MY) 2020 and 
later E85 flex-fuel vehicles (FFVs) in the Corporate Average Fuel 
Economy (CAFE) program. These provisions were established in the 2012 
final rule ``2017 and Later Model Year Light-Duty Vehicle Greenhouse 
Gas Emissions and Corporate Average Fuel Economy Standards,'' where EPA 
adopted new test procedures for weighting the measured fuel economy of 
MY 2020 and later FFVs when the vehicles are tested on both E85 and 
gasoline test fuels.\2\ EPA established the procedures under the 
general provisions of Energy Policy and Conservation Act (EPCA) which 
authorize EPA to establish test and calculation procedures for CAFE.\3\
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    \2\ See 77 FR 62830 and 63127, October 15, 2012.
    \3\ 49 U.S.C. 32904(a), (c).
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    49 U.S.C. 32905 specifies how the fuel economy of dual fuel 
vehicles is to be calculated for the purposes of CAFE through the 2019 
model year. The basic calculation includes a 50/50 harmonic average 
weighting of the fuel economy for the alternative fuel and the 
conventional fuel, irrespective of the actual usage of each fuel. In a 
related provision, 49 U.S.C. 32906, the amount by which a 
manufacturer's CAFE value (for domestic passenger cars, import 
passenger cars, or light-duty trucks) can be improved by the statutory 
incentive for dual fuel vehicles is limited by EPCA to 1.2 mpg through 
2014, and then gradually reduced until it is phased out entirely 
starting in model year 2020.\4\
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    \4\ 49 U.S.C. 32906.
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    Recognizing the expiration of the special calculation procedures in 
49 U.S.C. 32905 for dual fuel vehicles, EPA established in the 2012 
rule, calculation procedures for model years 2020 and later FFVs under 
the general provisions of EPCA noted above authorizing EPA to establish 
CAFE testing and calculation procedures. EPA regulations at 40 CFR 
600.510-12(c)(2)(v) specify weighting the fuel economy measured when an 
FFV is tested on E85 and gasoline test fuel using the same weighting 
factor as is used in the greenhouse gas program for weighting 
CO2 emissions measured on the two fuels.\5\ As part of the 
2012 rule, NHTSA modified its regulations at Part 536.10 to limit the 
applicability of the EPCA limits to MYs 2019 and earlier and to state 
that for MYs 2020 and beyond a manufacturer must calculate the fuel 
economy of dual-fuel vehicles in accordance with EPA's regulations at 
40 CFR 600.510-12(c)(2)(v).
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    \5\ This weighting factor is commonly referred to as the ``F-
factor.'' The F-factor is a value specified by EPA in accordance 
with 40 CFR 600.510-12(k) based on EPA's assessment of the real-
world use of E85 over the life of the FFVs.
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    The preamble for the 2012 rule summarized EPA's approach for MY 
2020 and later as follow: ``EPA is finalizing its proposal, under its 
EPCA authority, to use the ``utility factor'' methodology for PHEV and 
CNG vehicles described above to determine how to apportion the fuel 
economy when operating on gasoline or diesel fuel and the fuel economy 
when operating on the alternative fuel. For FFVs under the CAFE 
program, EPA is using the same methodology it uses for the GHG program 
to apportion the fuel economy, namely based on actual usage of E85. As 
proposed, EPA is continuing to use Petroleum Equivalency Factors and 
the 0.15 divisor used in the MY 2012-2016 rule for the alternative 
fuels, however with no cap on the amount of fuel economy increase 
allowed.'' \6\
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    \6\ 77 FR 62653.
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    EPA noted in the 2012 preamble ``[i]n a related provision, 49 
U.S.C. 32906, the amount by which a manufacturer's CAFE value (for 
domestic passenger cars, import passenger cars, or light-duty trucks) 
can be improved by the statutory incentive for dual fuel vehicles is 
limited by EPCA to 1.2 mpg through 2014, and then gradually reduced 
until it is phased out entirely starting in model year 2020. With the 
expiration of the special calculation procedures in 49

[[Page 53678]]

U.S.C. 32905 for dual fueled vehicles, the CAFE calculation procedures 
for model years 2020 and later vehicles need to be set under the 
general provisions authorizing EPA to establish testing and calculation 
procedures.'' \7\ The 2012 rule preamble also notes ``NHTSA interprets 
section 32906(a) as not limiting the impact of duel fueled vehicles on 
CAFE calculations after MY2019.'' \8\ The 2012 rule preamble states 
``we interpret Congress' statement in section 32906(a)(7) that the 
maximum increase in fuel economy attributable to dual-fueled 
automobiles is `0 miles per gallon for model years after 2019' within 
the context of the introductory language of section 32906(a) and the 
language of section 32906(b), which, again, refers clearly to the 
statutory credit, and not to dual-fueled automobiles generally. It 
would be an unreasonable result if the phaseout of the credit meant 
that manufacturers would be effectively penalized, in CAFE compliance, 
for building dual-fueled automobiles . . .'' \9\ EPA believes all of 
these statements from the 2012 final rule make clear EPA's intent not 
to apply the 49 U.S.C. 32906 credit limits to CAFE calculations for 
model year 2020 and later vehicles.
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    \7\ 77 FR 62830.
    \8\ 77 FR 62830.
    \9\ 77 FR 63020.
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    A discrepancy in EPA's regulations exists in section 40 CFR 
600.510-12(h), where prior to the 2012 rule, EPA codified the EPCA 
limits in EPA's regulations. These regulations specify that the impact 
of certain dual-fuel vehicles on a manufacturer's fleet CAFE 
calculations is limited to 0.0 for MY 2020 and later. EPA inadvertently 
did not revise the regulations at 40 CFR 600.510-12(h) to account for 
the 2012 rule's treatment of MY 2020 and later FFVs. The existing 40 
CFR 600.510-12(h) provisions may be read as applying the EPCA limits to 
MY 2020 and later FFVs, inconsistent with the clear intent of the 2012 
rule. This direct final rule corrects this error by making narrow 
revisions to this section of the regulations to clarify that the limits 
do not apply to MY 2020 and later FFVs, where the emissions of those 
vehicles are calculated in accordance with 40 CFR 600.510-12(c)(2)(v), 
consistent with the intent of the 2012 final rule.

V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is not an Executive Order 13771 regulatory action 
because this action is not significant under Executive Order 12866.

C. Paperwork Reduction Act

    This action does not impose any new information collection burden 
under the PRA, since it merely clarifies and corrects existing 
regulatory language. OMB has previously approved the information 
collection activities contained in the existing regulations and has 
assigned OMB control number of 2060-0104.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This rule merely clarifies and corrects 
existing regulatory language. We therefore anticipate no costs and 
therefore no regulatory burden associated with this rule.

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local or tribal governments. Requirements for the private sector do not 
exceed $100 million in any one year.

F. 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.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications as specified in 
Executive Order 13175. This rule only corrects and clarifies regulatory 
provisions that apply to light-duty vehicle manufacturers. Tribal 
governments would be affected only to the extent they purchase and use 
regulated vehicles. Thus, Executive Order 13175 does not apply to this 
action.

H. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to Executive Order 13045 because it is 
not economically significant as defined in Executive Order 12866, and 
because the EPA does not believe the environmental health or safety 
risks addressed by this action present a disproportionate risk to 
children. This direct final rule merely corrects and clarifies 
previously established regulatory provisions.

I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use

    This action is not subject to Executive Order 13211, because it is 
not a significant regulatory action under Executive Order 12866.

J. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs agencies to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This action modifies existing regulations to correct an error in 
the regulations and therefore involves technical standards previously 
established by EPA. The amendments to the regulations do not involve 
the application of new technical standards. EPA is continuing to use 
the technical

[[Page 53679]]

standards previously established in its rules regarding the light-duty 
vehicle GHG standards for MYs 2017-2025. See 77 FR 62960 and 85 FR 
25265.

K. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    The EPA believes that this action does not have 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). 
This regulatory action merely corrects previously established 
provisions that auto manufacturers use to demonstrate compliance for 
light-duty vehicles.

L. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

List of Subjects in 40 CFR Part 600

    Environmental protection, Administrative practice and procedure, 
Electric power, Fuel economy, Labeling, Reporting and recordkeeping 
requirements.

Andrew Wheeler,
Administrator.
    For the reasons set forth in the preamble, the Environmental 
Protection Agency is amending part 600 of title 40, Chapter I of the 
Code of Federal Regulations as follows:

PART 600--FUEL ECONOMY AND GREENHOUSE GAS EXHAUST EMISSIONS OF 
MOTOR VEHICLES

0
1. The authority citation for part 600 continues to read as follows:

    Authority:  49 U.S.C. 32901-23919q, Pub. L. 109-58.

Subpart F--Procedures for Determining Manufacturer's Average Fuel 
Economy and Manufacturer's Average Carbon-Related Exhaust Emissions

0
2. Section 600.510-12 is amended by revising paragraphs (h) 
introductory text and (h)(1) to read as follows:

Sec.  600.510-12  Calculation of average fuel economy and average 
carbon-related exhaust emissions.

* * * * *
    (h) The increase in average fuel economy determined in paragraph 
(c) of this section attributable to dual fueled automobiles is subject 
to a maximum value through model year 2019 that applies separately to 
each category of automobile specified in paragraph (a)(1) of this 
section. The increase in average fuel economy attributable to vehicles 
fueled by electricity or, for model years 2016 and later, by compressed 
natural gas, is not subject to a maximum value. The increase in average 
fuel economy attributable to alcohol dual fuel model types calculated 
under paragraph (c)(2)(v) of this section is also not subject to a 
maximum value. The following maximum values apply under this paragraph 
(h):

------------------------------------------------------------------------
                                                              Maximum
                       Model year                         increase (mpg)
------------------------------------------------------------------------
1993-2014...............................................             1.2
2015....................................................             1.0
2016....................................................             0.8
2017....................................................             0.6
2018....................................................             0.4
2019....................................................             0.2
------------------------------------------------------------------------

    (1) The Administrator shall calculate the increase in average fuel 
economy to determine if the maximum increase provided in this paragraph 
(h) has been reached. The Administrator shall calculate the increase in 
average fuel economy for each category of automobiles specified in 
paragraph (a)(1) of this section by subtracting the average fuel 
economy values calculated in accordance with this section, assuming all 
alcohol dual fueled automobiles subject to the provisions of paragraph 
(c)(2)(iv) of this section are operated exclusively on gasoline (or 
diesel fuel), from the average fuel economy values determined in 
paragraph (c) of this section. The difference is limited to the maximum 
increase specified in this paragraph (h).
* * * * *
[FR Doc. 2020-17217 Filed 8-28-20; 8:45 am]
BILLING CODE 6560-50-P