Document ID: EPA-HQ-OAR-2017-0189-0001
Agency: epa
Document Type: Notice
Title: Alternative Method for Calculating Off-Cycle Credits Under the Light-Duty Vehicle Greenhouse Gas Emissions Program: Applications From BMW Group, Ford Motor Co., and Hyundai Motor Group
Posted Date: 2017-06-19T04:00Z

[Federal Register Volume 82, Number 116 (Monday, June 19, 2017)]
[Notices]
[Pages 27819-27822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12737]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2017-0189; FRL-9962-95-OAR]

Alternative Method for Calculating Off-Cycle Credits Under the 
Light-Duty Vehicle Greenhouse Gas Emissions Program: Applications From 
BMW Group, Ford Motor Company, and Hyundai Motor Group

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) is requesting 
comment on applications from BMW of North American (BMW), Ford Motor 
Company (Ford), and Hyundai Motor Group for off-cycle carbon dioxide 
(CO2) credits under EPA's light-duty vehicle greenhouse gas 
emissions standards. ``Off-cycle'' emission reductions can be achieved 
by employing technologies that result in real-world benefits, but where 
that benefit is not adequately captured on the test procedures used by 
manufacturers to demonstrate compliance with emission standards. EPA's 
light-duty vehicle greenhouse gas program acknowledges these benefits 
by giving automobile manufacturers several options for generating 
``off-cycle'' carbon dioxide (CO2) credits. Under the 
regulations, a manufacturer may apply for CO2 credits for 
off-cycle technologies that result in off-cycle benefits. In these 
cases, a manufacturer must provide EPA with a proposed methodology for 
determining the real-world off-cycle benefit. These three manufacturers 
have submitted applications that describe methodologies for determining 
off-cycle credits. The off-cycle technologies vary by manufacturer and 
include thermal control technologies such as solar reflective glass/
glazing and solar reflective surface coating (paint), a high efficiency 
alternator, and an efficient air conditioning compressor. Pursuant to 
applicable regulations, EPA is making descriptions of each 
manufacturer's off-cycle credit calculation methodologies available for 
public comment.

DATES: Comments must be received on or before July 19, 2017.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ- 
OAR-2017-0189, to the Federal eRulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting 
comments. Once submitted, comments cannot be edited or withdrawn. The 
EPA may publish any comment received to its public docket. Do not 
submit electronically 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://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Roberts French, Environmental 
Protection Specialist, Office of Transportation and Air Quality, 
Compliance Division, U.S. Environmental Protection Agency, 2000 
Traverwood Drive, Ann Arbor, MI 48105. Telephone: (734) 214-4380. Fax: 
(734) 214-4869. Email address: french.roberts@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    EPA's light-duty vehicle greenhouse gas (GHG) program provides 
three pathways by which a manufacturer may accrue off-cycle carbon 
dioxide (CO2) credits for those technologies that achieve 
CO2 reductions in the real world but where those reductions 
are not adequately captured on the test used to determine compliance 
with the CO2 standards, and which are not otherwise 
reflected in the standards' stringency. The first pathway is a 
predetermined list of credit values for specific off-cycle technologies 
that may be used beginning in model year 2014.\1\ This pathway allows 
manufacturers to use conservative credit values established by EPA for 
a wide range of technologies, with minimal data submittal or testing 
requirements, as long as the technologies meet EPA regulatory 
definitions. In cases where the off-cycle technology is not on the menu 
but additional laboratory testing can demonstrate emission benefits, a 
second pathway allows manufacturers to use a broader array of emission 
tests (known as ``5-cycle'' testing because the methodology uses five 
different testing procedures) to demonstrate and justify off-cycle 
CO2 credits.\2\ The additional emission tests allow emission 
benefits to be demonstrated over some elements of real-world driving 
not adequately captured by the GHG compliance tests, including high 
speeds, hard accelerations, and cold temperatures. These first two 
methodologies were completely defined through notice and comment 
rulemaking and therefore no additional process is necessary for 
manufacturers to use these methods. The third and last pathway allows 
manufacturers to seek EPA approval to use an alternative methodology 
for determining the off-cycle CO2 credits.\3\ This option is 
only available if the benefit of the technology cannot be adequately 
demonstrated using the 5-cycle methodology. Manufacturers may also use 
this option for model years prior to 2014 to demonstrate off-cycle 
CO2 reductions for technologies that are on the 
predetermined list, or to demonstrate reductions that exceed those 
available via use of the predetermined list.
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    \1\ See 40 CFR 86.1869-12(b).
    \2\ See 40 CFR 86.1869-12(c).
    \3\ See 40 CFR 86.1869-12(d).
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    Under the regulations, a manufacturer seeking to demonstrate off-
cycle credits with an alternative methodology (i.e., under the third 
pathway described previously) must describe a

[[Page 27820]]

methodology that meets the following criteria:
     Use modeling, on-road testing, on-road data collection, or 
other approved analytical or engineering methods;
     Be robust, verifiable, and capable of demonstrating the 
real-world emissions benefit with strong statistical significance;
     Result in a demonstration of baseline and controlled 
emissions over a wide range of driving conditions and number of 
vehicles such that issues of data uncertainty are minimized;
     Result in data on a model type basis unless the 
manufacturer demonstrates that another basis is appropriate and 
adequate.
    Further, the regulations specify the following requirements 
regarding an application for off-cycle CO2 credits:
     A manufacturer requesting off-cycle credits must develop a 
methodology for demonstrating and determining the benefit of the off-
cycle technology, and carry out any necessary testing and analysis 
required to support that methodology.
     A manufacturer requesting off-cycle credits must conduct 
testing and/or prepare engineering analyses that demonstrate the in-use 
durability of the technology for the full useful life of the vehicle.
     The application must contain a detailed description of the 
off-cycle technology and how it functions to reduce CO2 
emissions under conditions not represented on the compliance tests.
     The application must contain a list of the vehicle 
model(s) which will be equipped with the technology.
     The application must contain a detailed description of the 
test vehicles selected and an engineering analysis that supports the 
selection of those vehicles for testing.
     The application must contain all testing and/or simulation 
data required under the regulations, plus any other data the 
manufacturer has considered in the analysis.
    Finally, the alternative methodology must be approved by EPA prior 
to the manufacturer using it to generate credits. As part of the review 
process defined by regulation, the alternative methodology submitted to 
EPA for consideration must be made available for public comment.\4\ EPA 
will consider public comments as part of its final decision to approve 
or deny the request for off-cycle credits.
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    \4\ See 40 CFR 86.1869-12(d)(2).
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II. Off-Cycle Credit Applications

A. Denso SAS Air Conditioning Compressor

    Using the alternative methodology approach discussed previously, 
BMW, Ford, and Hyundai are applying for credits for an air conditioning 
compressor manufactured by Denso that results in air conditioning 
efficiency credits beyond those provided in the regulations. This 
compressor, known as the Denso SAS compressor, improves the internal 
valve system within the compressor to reduce the internal refrigerant 
flow necessary throughout the range of displacements that the 
compressor may use during its operating cycle. The addition of a 
variable crankcase suction valve allows a larger mass flow under 
maximum capacity and compressor start-up conditions (when high flow is 
ideal), and then it can reduce to smaller openings with reduced mass 
flow in mid- or low-capacity conditions. The refrigerant exiting the 
crankcase is thus optimized across the range of operating conditions, 
reducing the overall energy consumption of the air conditioning system.
    The ``5-cycle'' methodology does not adequately measure the real-
world greenhouse gas reduction benefits of this compressor because the 
only one of the five tests with the air conditioner operating is 
conducted under worst-case conditions (high temperature, high solar 
load, and high humidity), not the more moderate conditions where the 
technology provides the majority of its benefits.
    In December 2014, General Motors (GM) requested off-cycle GHG 
credits for the use of the Denso SAS compressor. GM worked with Denso 
to perform bench testing of compressors with and without the 
improvements and quantified the impact, which supported an off-cycle 
credit of 1.1 grams/mile. GM substantiated these results by also 
performing vehicle tests using the AC17 procedure. After public notice 
and comment, EPA approved GM's request in September 2015.\5\
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    \5\ ``EPA Decision Document: Off-cycle Credits for Fiat Chrysler 
Automobiles, Ford Motor Company, and General Motors Corporation.'' 
Compliance Division, Office of Transportation and Air Quality, U.S. 
Environmental Protection Agency. EPA-420-R-15-014, September 2015.
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    The credits calculated for the Denso SAS compressor would be in 
addition to the credits of 1.7 grams/mile for variable-displacement A/C 
compressors already allowed under EPA regulations.\6\ However, it is 
important to note that EPA regulations place a limit on the cumulative 
credits that can be claimed for improving the efficiency of A/C 
systems. The rationale for this limit is that the additional fuel 
consumption of A/C systems can never be reduced to zero, and the limits 
established by regulation reflect the maximum possible reduction in 
fuel consumption projected by EPA. These limits, or caps, on credits 
for A/C efficiency, must also be applied to A/C efficiency credits 
granted under the off-cycle credit approval process. In other words, 
cumulative A/C efficiency credits for an A/C system--from the A/C 
efficiency regulations and those granted via the off-cycle 
regulations--must comply with the stated limits.
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    \6\ See 40 CFR 86.1868-12.
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1. BMW
    BMW is requesting an off-cycle GHG credit of 1.1 grams 
CO2 per mile for the Denso SAS compressor (the same as was 
approved for GM in 2015). BMW repeated the bench test modeling analysis 
using vehicle-specific BMW input data, and, like the original Denso 
analysis, demonstrated a benefit of 1.1 grams/mile. Like GM, BMW also 
ran vehicle tests using the AC17 test. Six tests were conducted on a 3-
series BMW, resulting in a calculated benefit of 1.2 grams/mile, thus 
substantiating the bench test results. Based on these results, BMW is 
requesting a credit of 1.1 grams/mile for all BMW vehicles equipped 
with the Denso SAS compressor with variable crankcase suction valve 
technology, starting with 2016 model year vehicles. Details of the 
testing and analysis can be found in the manufacturer's application.
2. Ford
    Ford is requesting an off-cycle GHG credit of 1.1 grams 
CO2 per mile for the Denso SAS compressor (the same as was 
approved for GM in 2015). Ford cited the bench test modeling analysis 
referenced in the original GM application, which demonstrated a benefit 
of 1.1 grams/mile. Ford also ran vehicle tests using the AC17 test. Six 
tests were conducted on a 2017 Lincoln MKC, resulting in a calculated 
benefit of 1.5 grams/mile, thus substantiating the bench test results. 
Based on these results, Ford is requesting a credit of 1.1 grams/mile 
for all 2017 and later model year Ford vehicles equipped with the Denso 
SAS compressor with variable crankcase suction valve technology. 
Details of the testing and analysis can be found in the manufacturer's 
application.
3. Hyundai
    Hyundai is requesting an off-cycle GHG credit of 1.4 grams 
CO2 per mile for the Denso SAS compressor. Hyundai repeated 
the bench test modeling

[[Page 27821]]

analysis using vehicle-specific Hyundai input data, which demonstrated 
a benefit of 1.4 grams/mile. Like the other manufacturers, Hyundai also 
ran vehicle tests using the AC17 test. Two tests were conducted on a 
Hyundai Sonata, resulting in a calculated benefit of 9.3 grams/mile, 
substantially more than the bench test results. Based on these results, 
Hyundai is requesting a credit of 1.4 grams/mile for all 2015 through 
2017 model year Hyundai Sonata models equipped with the Denso SAS 
compressor with variable crankcase suction valve technology. Details of 
the testing and analysis can be found in the manufacturer's 
application.

B. High Efficiency Alternator

    Ford is requesting GHG credits for alternators with improved 
efficiency relative to a baseline alternator. This request is for the 
2009 and later model years. Automotive alternators convert mechanical 
energy from a combustion engine into electrical energy that can be used 
to power a vehicle's electrical systems. Alternators inherently place a 
load on the engine, which results in increased fuel consumption and 
CO2 emissions. High efficiency alternators use new 
technologies to reduce the overall load on the engine yet continue to 
meet the electrical demands of the vehicle systems, resulting in lower 
fuel consumption and lower CO2 emissions. Some comments on 
EPA's proposed rule for GHG standards for the 2016-2025 model years 
suggested that EPA provide a credit for high-efficiency alternators on 
the pre-defined list in the regulations. While EPA agreed that high-
efficiency alternators can reduce electrical load and reduce fuel 
consumption, and that these impacts are not seen on the emission test 
procedures because accessories that use electricity are turned off, EPA 
noted the difficulty in defining a one-size-fits-all credit due to lack 
of data.\7\ Ford proposes a methodology that would scale credits based 
on the efficiency of the alternator; alternators with efficiency (as 
measured using an accepted industry standard procedure) above a 
baseline value could get credits from 0.2 to 1.9 grams/mile. Details of 
the testing and analysis can be found in the manufacturer's 
application.
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    \7\ See 77FR 62730, October 15, 2012.
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C. Thermal Control Technologies

1. Glass/Glazing
    Ford is requesting off-cycle credits for glass/glazing that reduces 
the amount of solar energy that is transmitted through the windows. By 
doing so, interior cabin temperatures can be reduced, which results in 
a reduction in the amount of energy needed to cool the cabin and 
maintain passenger comfort. Ford's request is fundamentally identical 
to the request submitted by Chrysler in 2013, which EPA subsequently 
approved in September of 2015.\8\
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    \8\ ``EPA Decision Document: Off-cycle Credits for Fiat Chrysler 
Automobiles, Ford Motor Company, and General Motors Corporation.'' 
Compliance Division, Office of Transportation and Air Quality, U.S. 
Environmental Protection Agency. EPA-420-R-15-014, September 2015.
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    Ford's request is for 2010 and later model year vehicles, whereas 
the credits approved for Chrysler were limited to the model years 
before 2014 (after which EPA expects that credits would be gained via 
the regulatory ``menu'', since the methodology essentially replicates 
EPA's methodology and produces similar credit values). Note that the 
regulations limit glass/glazing credits to 2.9 grams/mile for cars and 
3.9 grams/mile for trucks, and that EPA will require that these caps be 
observed for all glass/glazing credits, regardless of the regulatory 
pathway by which those credits are claimed or granted. This is also 
true for the caps specified for the total credits from thermal control 
technologies (3.0 grams/mile for cars and 4.3 grams/mile for trucks). 
The technical and engineering reasons for these limits remain 
applicable and are not rendered moot because credits are granted 
through this public process.
2. Solar Reflective Surface Coating
    Ford is requesting off-cycle credits for solar reflective paint. 
Like glass, by reducing the heat that is transmitted to the interior, 
interior cabin temperatures can be reduced, which results in a 
reduction in the amount of energy needed to cool the cabin and maintain 
passenger comfort. Ford's request is largely similar to the request 
submitted by Chrysler in 2013, which EPA subsequently approved in 
September of 2015.\9\ However, there is one significant difference. 
Chrysler noted two data points regarding the impact of reflective 
paint: A study by the National Renewable Energy Laboratory (NREL) that 
determined a cabin air breath temperature reduction of 1.2 degrees C, 
and a study by the Lawrence Berkeley National Laboratory for the 
California Energy Commission that showed a reduction of 5-6 degrees C. 
Chrysler's methodology, which EPA approved, used the more conservative 
value from the NREL study (as did EPA in our Technical Support Document 
to establish the menu values for reflective paint). Chrysler's 
methodology, which does not differ substantially from EPA's methodology 
outlined in our Technical Support Document, would produce credits of 
0.4 grams/mile, comparable to the menu values for a paint with high 
reflectivity. Ford provided test data that indicated a cabin air breath 
temperature reduction closer to the California Energy Commission study, 
and the resulting credits would be up to about 2 grams/mile for the 
highest reflectivity paint, or five times the menu credit value 
documented in EPA's Technical Support Document. EPA is particularly 
interested in comments on Ford's data and methodology for these credits 
because of the different inputs used by Ford as well as the data those 
inputs are based on and the magnitude of the requested credits compared 
to the regulatory menu of credits for this technology.
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    \9\ ``EPA Decision Document: Off-cycle Credits for Fiat Chrysler 
Automobiles, Ford Motor Company, and General Motors Corporation.'' 
Compliance Division, Office of Transportation and Air Quality, U.S. 
Environmental Protection Agency. EPA-420-R-15-014, September 2015.
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    Ford's request is for 2010 and later model year vehicles, whereas 
the credits approved for Chrysler were limited to the model years 
before 2014 (after which EPA expects that credits would be gained via 
the regulatory ``menu'', since the methodology used by Chrysler 
essentially replicated EPA's methodology and produced similar credit 
values). Note that the regulations limit the cumulative credits from 
thermal control technologies to 3.0 grams/mile for cars and 4.3 grams/
mile for trucks, and that EPA will require that these caps be observed 
for all thermal control credits, regardless of the regulatory pathway 
by which those credits are claimed or granted. The technical and 
engineering reasons for these limits remain applicable (a fact that is 
acknowledged by Ford in their application materials) and are not 
rendered moot because credits are granted through this public process 
instead of through the regulatory menu.

III. EPA Decision Process

    EPA has reviewed the applications for completeness and is now 
making the applications available for public review and comment as 
required by the regulations. The off-cycle credit applications 
submitted by BMW, Ford, and Hyundai (with confidential business 
information redacted) have been placed in the public docket (see 
ADDRESSES section in this preamble) and on EPA's Web site at the 
following locations:

BMW: https://www.epa.gov/vehicle-and-engine-certification/bmw-compliance-materials-light-duty-greenhouse-gas-ghg-standards

[[Page 27822]]

Ford: https://www.epa.gov/vehicle-and-engine-certification/ford-compliance-materials-light-duty-greenhouse-gas-ghg-standards
Hyundai: https://www.epa.gov/vehicle-and-engine-certification/hyundai-compliance-materials-light-duty-greenhouse-gas-ghg-standards

    EPA is providing a 30-day comment period on the applications for 
off-cycle credits described in this action, as specified by the 
regulations. The manufacturers may submit a written rebuttal of 
comments for EPA's consideration, or may revise an application in 
response to comments. After reviewing any public comments and any 
rebuttal of comments submitted by manufacturers, EPA will make a final 
decision regarding the credit requests. EPA will make its decision 
available to the public by placing a decision document (or multiple 
decision documents) in the docket and on EPA's Web site at the same 
manufacturer-specific pages shown previously. While the broad 
methodologies used by these manufacturers could potentially be used for 
other vehicles and by other manufacturers, the vehicle specific data 
needed to demonstrate the off-cycle emissions reductions would likely 
be different. In such cases, a new application would be required, 
including an opportunity for public comment.

    Dated: May 16, 2017.
Byron J. Bunker,
Director, Compliance Division, Office of Transportation and Air 
Quality, Office of Air and Radiation.
[FR Doc. 2017-12737 Filed 6-16-17; 8:45 am]
BILLING CODE 6560-50-P